BUSINESS PLAN

of
I. Introduction
a. Nature of Business
Home Sweet Home Baked Goods is a home-based bakery in Sto. Tomas,
Davao del Norte. We specialize in creating custom cakes, cupcakes, pies, and
other desserts from scratch.

b. Objectives
Home Sweet Home Baked Goods’ mission is to use locally sourced ingredients
whenever possible to create unique baked goods of uncompromising quality at an
affordable price. With our commitment to excellence and creative approach to
baking, we will provide customers with a unique experience with each visit.

c. Product Description
We will focus on creating unique flavors (gluten-free/vegan options) along
with custom designs catering specifically to individual needs. We specialize in
creating custom cakes, cupcakes, pies, and other desserts from scratch. Our
company’s focus on quality ingredients, innovative recipes, experienced baking
staff, and updated equipment sets them apart from its competitors.

II. Marketing Plan

a. Potential buyers
Home Sweet Home Baked Goods has an ideal target market that includes
both local customers and visitors to Sto. Tomas, Davao del Norte. Our company
is particularly passionate about providing locally sourced ingredients in its baked
goods, making it a natural draw for people who live in the Sto. Tomas, Davao del
Norte. The local demographic consists primarily of working professionals,
families with children, and students. These customers are looking for high-
quality desserts that cater to their individual dietary needs while also remaining
reasonably priced. Home Sweet Home Baked Goods’ emphasis on using local
ingredients appeals to this demographic as it shows to our commitment to
supporting the local economy and providing fresher products.

b. Competitors
Home Sweet Home Baked Goods will be entering a very competitive market in
Sto. Tomas, Davao del Norte. The local bakery market is saturated with many
established businesses that have been around for several years, offering a
variety of products and services. Therefore, the company must assess the
competition and identify its strengths and weaknesses in order to create
effective differentiation strategies that will allow it to stand out from the
crowd.
Home Sweet Home Baked Goods plans on delivering: locally sourced
ingredients used whenever possible combined with innovative recipes and custom
designs catering specifically towards individual needs – all at reasonable prices
that appeal both local residents and visitors alike. By leveraging these aspects
that differentiate us from other competitors in the area, Home Sweet Home
 Baked Goods should be able to position ourself as a leader in Sto. Tomas’ bakery
industry while still maintaining a competitive edge.

c. Pricing Policy
Home Sweet Home Baked Goods is a home-based bakery that offers
locally sourced ingredients and innovative recipes. Our goal is to provide our
customers with freshly made, high-quality pastries at reasonable prices. We
offer custom flavors and designs for special occasions like weddings or
birthdays as well as more traditional items such as cupcakes, cookies, pies, and
tarts. We will offer competitive prices that appeal both to local residents and
visitors alike.

d. Promotional strategies
We will use digital marketing methods such as a website, social media
platforms, and app ads to reach a wider audience. Additionally, we will create
promotional offers like discounts (e.g., 10% off orders placed online or through
our app) and free samples at the store.

III. Organizational Plan

a. Form of Organization
This is a partnership; Home Sweet Home Baked Goods is comprised of Dianne
Grace Aguipo and my husband Rogie. We have been a dynamic duo since we first
met in high school, and with our enthusiasm for baking has helped us to build an
empire out of our passion.
Me is the co-founder and head baker at Home Sweet Home Baked Goods. I
am a talented pastry chef with a keen eye for detail, ensuring that every
product we produce meets their high standards.
Rogie serves as co-founder and CEO of Home Sweet Home Baked Goods. He
brings his wealth of business knowledge, acting as a strategic partner to me by
overseeing operations, developing marketing strategies, and securing
connections with suppliers. Rogie’s dedication to customer service ensures that
every customer gets the best possible experience when ordering from Home
Sweet Home Baked Goods.

b. Organizational Chart
IV. Production or Technical Plan

a. Production Flowchart/ Process

b. Suppliers
o Mix n' bake baking Supplies (Panabo City)
o Panabo Best Bakery (Panabo City)
o Dahlia's Bakery Supplies & Frozen Products Trading (Sto. Tomas, DDN)
o Checoys Baking Supplies Tagum (Tagum City)

V. Financial Plan

a. Source of Capitalization
Home Sweet Home Baked Goods has P 100,000 capital, which is P 50,000
investment each co-founder as the start-up capital of this empire. The funding
will be dedicated for leasehold improvements, working capital, and opening
inventory. The breakout of the funding is below:
o Bakery build-out, design, and furniture, fixtures, and equipment – P
50,000
 o Opening inventory – P 10,000
o Working capital (to include 3 months of overhead expenses) – P 40,000

The following table outlines the key assumptions required in order to achieve
the revenue and cost numbers in the financials and in order to pay off the
business loan.
o Initial Number of Customers Per Day:           50
o Average Order per Customer:              P 50.00
o Annual Lease (per location):                P 30,000

b. Financial Statements

Financial Projection
 Income Statement
    FY 1 FY 2 FY 3 FY 4 FY 5
Revenues            
  Total Revenues P 360,000 P 793,728 P 875,006 P 964,606 P
1,063,382
Expenses &            
Costs
  Cost of goods P 64,800 P 142,871 P 157,501 P 173,629 P 191,409
sold
  Lease P 50,000 P 51,250 P 52,531 P 53,845 P 55,191
  Marketing P 10,000 P 8,000 P 8,000 P 8,000 P 8,000
  Salaries P 157,015 P 214,030 P 235,968 P 247,766 P 260,155
  Initial P 10,000 P0 P0 P0 P0
expenditure
  Total Expenses & P 291,815 P 416,151 P 454,000 P 483,240 P 514,754
Costs
PRETAX   P 17,563 P 329,888 P 376,249 P 439,543 P 509,737
INCOME
  Net Operating P0 P0 P0 P0 P0
Loss
  Use of Net P0 P0 P0 P0 P0
Operating Loss
  Taxable Income P 17,563 P 329,888 P 376,249 P 439,543 P 509,737
  Income Tax P 6,147 P 115,461 P 131,687 P 153,840 P 178,408
Expense
NET   P 11,416 P 214,427 P 244,562 P 285,703 P 331,329
INCOME
 Balance Sheet
    FY 1 FY 2 FY 3 FY 4 FY 5
ASSETS            
  Cash P 154,257 P 348,760 P 573,195 P 838,550 P 1,149,286
  Accounts P0 P0 P0 P0 P0
receivable
  Inventory P 30,000 P 33,072 P 36,459 P 40,192 P 44,308
  Total Current P 184,257 P 381,832 P 609,654 P 878,742 P 1,193,594
Assets
  Fixed assets P 180,950 P 180,950 P 180,950 P 180,950 P 180,950
   Depreciation P 27,160 P 54,320 P 81,480 P 108,640 P 135,800
  Net fixed assets P 153,790 P 126,630 P 99,470 P 72,310 P 45,150

TOTAL   P 338,047 P 508,462 P 709,124 P 951,052 P

ASSETS 1,238,744
LIABILITIES            
& EQUITY
  Debt P 315,831 P 270,713 P 225,594 P 180,475 P 135,356
  Accounts payable P 10,800 P 11,906 P 13,125 P 14,469 P 15,951

  Total Liability P 326,631 P 282,618 P 238,719 P 194,944 P 151,307

  Share Capital P0 P0 P0 P0 P0
  Retained earnings P 11,416 P 225,843 P 470,405 P 756,108 P 1,087,437

TOTAL   P 338,047 P 508,462 P 709,124 P 951,052 P

LIABILITIE 1,238,744
S & EQUITY
c. Financial Ratios
Ratio Analysis
Sales Growth 0.00% 11.01% 11.30% 7.60%
Percent of Total Assets        
Inventory 10.14% 9.85% 8.92% 3.60%
Other Current Assets 0.00% 0.00% 0.00% 35.60%
Total Current Assets 66.35% 70.47% 76.68% 43.70%
Long-term Assets 33.65% 29.53% 23.32% 56.30%
Total Assets 100.00% 100.00% 100.00% 100.00%
         
Current Liabilities 15.39% 11.46% 10.41% 32.70%
Long-term Liabilities 27.72% 18.80% 10.21% 28.50%
Total Liabilities 43.11% 30.26% 20.62% 61.20%
Net Worth 56.89% 69.74% 79.38% 38.80%
Percent of Sales        
Sales 100.00% 100.00% 100.00% 100.00%
Gross Margin 71.28% 72.20% 72.22% 60.50%
Selling, General & 67.99% 65.97% 63.75% 39.80%
Administrative Expenses
Advertising Expenses 1.66% 2.13% 2.49% 3.20%
Profit Before Interest and 5.76% 9.64% 12.58% 0.70%
Taxes
Main Ratios        
Current 4.31 6.15 7.37 0.98
Quick 3.65 5.29 6.51 0.65
Total Debt to Total Assets 43.11% 30.26% 20.62% 61.20%
Pre-tax Return on Net 24.19% 37.47% 40.61% 1.70%
Worth
Pre-tax Return on Assets 13.76% 26.14% 32.24% 4.30%
Additional Ratios Year 1 Year 2 Year 3  
Net Profit Margin 3.29% 6.23% 8.47% NA
Return on Equity 16.93% 26.23% 28.43% NA
Activity Ratios        
Inventory Turnover 10.91 8.59 8.74 NA
Accounts Payable Turnover 9.52 12.17 12.17 NA
Payment Days 27 33 28 NA
Total Asset Turnover 2.93 2.94 2.66 NA
Debt Ratios        
Debt to Net Worth 0.76 0.43 0.26 NA
Current Liab. to Liab. 0.36 0.38 0.5 NA
Liquidity Ratios        
Net Working Capital P 73,547 P 94,188 P 129,843 NA
Interest Coverage 5.45 12.91 26.25 NA
Additional Ratios        
Assets to Sales 0.34 0.34 0.38 NA
Current Debt/Total Assets 15% 11% 10% NA
Acid Test 3.65 5.29 6.51 NA
Sales/Net Worth 5.15 4.21 3.36 NA
Dividend Payout 0 0 0 NA