Business

Plan
1
RIENTAL RICE
Rice farming and rice mill business plan
Executive Summary
To be located in Banus,
Gloria Oriental Mindoro,
Philippines. Oriental Rice Mill is a
rice farm and rice mill that will be
specialized mainly on production
and processing well packaged
goods for domestic or national
consumption.
3
Introduction
Rice is a staple food across several
countries around the world. This makes it
a very important area of investment
among investors. With different varieties
to choose from, investors have taken
advantage of this crop to grow their
investments.

4
ORIENTAL RICE
"Committed to selling you good
products with great service at
best value"
5
Objectives
- Give our costumers quality trice
and service at a fair competitive
price.
- Create a safe environment that a
rice dealer must attain.
- To provide jobs within the
community.

6
Vision
To be a famous rice dealer that offers
quality rice and service.

Mission
Mission is to commercially produce
and process rice under the best
conditions, while maintaining the
highest standards of quality
recommended by the relevant
regulatory bodies.

7
Theories of Change
Through this business, it could lessen the
burden of making two ends meet. People who
needs extra work (milling helper, and delivery boy)
will be employed to regularly help them to cope up
with the everyday life. Furthermore, since the
product is not imported but instead it is mainly
from the owners rice farm and other variety are
bought at local farmers around the business
location, the suggested retail price has a wide
margin from the business whole sale marketing
price, to give a better income to retailers.
This will be beneficial not only to the owner
of the business but also to the community and the
retailers.
8
Products and
Services
Other service
The sole product will be - Offers rice
the production of rice processing for
on a commercial scale. other farmers.

9
Growth Strategy
There will be increased in number
of local stores that the business will supply
rice. The team will introduce the products
to other target establishments. Other
variety of rice will be considered to add in
the product list after studying its feasibility
and depends on the demand of the
target market.

10
Competition
The biggest competitor of the
business are other new entrants who might
also introduce their own product in the target
market. Based on the market analysis, the
product has an edge over its competitors.
Price is justified, good delivery time and quality
product delivered and innovative and
creative marketing strategy.

11
Risk
The business could possibly encounter the
following risks : new entrants and cost in the market is a
critical element. This is also an increasingly factor which
not only increases opportunity but also the threat of new
entrants and stiff competition in the target market.
Furthermore, the unpredictable calamities is also a big
factor that might affect the rice farm. The production of
the product is highly dependent to the condition of the
farm ready for harvest.

12
 Lorem

Target
Household
ipsum

Market
With the large market for rice Lorem
domestically, our target scope is SOCIETY
ipsum
considerably wide. Apart from those congue
along the rice value chain we will be
targeting domestic consumers that Lorem Eateries
Schools
include households, eateries, hotels and ipsum and Hotels

schools. Basically a big chunk of Society.

However, for the start of the business the
specific target market will be Camp
Vicente Lim, Canlubang Laguna at
Commonwelt Market, Manila.
13
Target market

14
Public and Advertisement
Strategies
Led by a strong marketing department, we will be
using the latest tools (such as social media platforms)
in promoting our products and services. This is aimed
at ensuring that more consumers know about the
service we offer. By adopting efficient and effective
publicity and advert strategies, our costumer base will
grow significantly within relative short time.

15
The TEAM
This business will be operated by the
owner. A delivery personnel will be the one to
manage the delivery of the product to the market
and costumers. Then a milling operator and boy
helper for the processing of the Product. Also the
retailers are included in the team.

16
ORIENTAL RICE
INPUTS AND OUTPUTS

17
Financial
Plan
Step 1: Initial Investment
This is composed of the financial
investment which will be utilized for purchasing
the capital assets and to sustain the costs of
goods sold and the operating expenses.
Financial Investment. The initial investment will
be 1,500,000.00 from the saving of the Owner.
These will be utilize to purchase the capital assets
(P 1, 252, 500) and for the raw materials for the
cost of goods to be sold and for the
maintenance of the operating expenses/costs.

19
CAPITAL ASSETS
Materials Peso (P)
Warehouse/Solar dryer 200,000.00

Machine/Milling Device and weighing scale 100,000.00

Service Car (for delivery) 200,000.00

Rice bag sewing machine 2,500.00

Permits
- NFA Registration 20,000.00
- Sanitary Permit
- Bureau of Fire Permit
- Municipal Permit
- DTI/ BIR Permit
- Insurance

Subtotal Costs P 522,500.00

20
CAPITAL ASSETS

Other Expenses Peso (P)

Electricity and Maintenance 30,000.00

Cash on Hand (Palay Buying) 700,000.00

Subtotal Costs P 730,000.00

TOTAL CAPITAL ASSETS P1,252,500.00

21
Estimated expenses
BUYING (PALAY) COST

Dinorado (150 sacks x 50 kilos x P15/kilo) P 112,000.00

Red Rice (250 sacks x 50 kilos x P31/kilo) 387,000.00

Sinandomeng (100 sacks x 50 kilos x P13/ kilo) 65,000.00

RC18 (100 sacks x 50 kilos x P13/kilo 65,000.00

218 (100 sacks x 50 kilos x P13/kilo 65,000.00

SUBTOTAL P695,000.00

HAULING COST
Dinorado (150 sacks x P20/sack) P3,000.00

Red Rice (250 sacks P20/sack) 5,000.00

Sinandomeng (100 sacks x P20/sack) 2,000.00

RC18 (100 sacks x P20/sack) 2,000.00

218 (100 sacks x P20/sack) 2,000.00

22
SUBTOTAL P14,000.00
Estimated expenses
DRYING COST
Dinorado (150 sacks x P20/sack) P3,000.00
Red Rice (250 sacks P20/sack) 5,000.00
Sinandomeng (100 sacks x P20/sack) 2,000.00
RC18 (100 sacks x P20/sack) 2,000.00
218 (100 sacks x P20/sack) 2,000.00
SUBTOTAL P14,000.00

23
Estimated expenses

MILLING OF THE PALAY COST

Dinorado [(6750 kilos (dry) ÷ 80 kilo)/cavan of P10,546.875
rice x 50/kilos x P2.50/kilo]
Red Rice[(11250 kilos (dry) ÷ 80 kilo/cavan of 17,578.125
rice) x 50/kilos x P2.50/kilo]
Sinandomeng[(4500 kilos (dry) ÷ 80 kilo/cavan 7031.25
of rice) x 50/kilos x P2.50/kilo]
RC18 [(4500 kilos (dry) ÷ 80 kilo/cavan of rice) x 7031.25
50/kilos x P2.50/kilo]
218 [(4500 kilos (dry) ÷ 80 kilo/cavan of rice) x 7031.25
50/kilos x P2.50/kilo]
SUBTOTAL P 49, 218.75
Rice Bag (400 sacks x P11.00) P4,400.00
TOTAL EXPENSES P 776,618.75

24
Step 2: Estimating Rice price per bag
(DINORADO)
Supplier 1 Supplier 2 Supplier 3 Average Price

Other
Competitors
(2600+2800
Price 2600 2800 2400 2600
+2400)/3

The above table shows that, the retails prices of the competitors were
collected, compared then the average. The above is the average of three
different Suppliers available in the market is P2,600.00. Considering the value
of the costs of goods sold, then the sales price value was estimated lower as
possible to the actual market price of competitors to whom target customers
are availing so keeping the P2,700.00 per cavan whole sale price of Oriental
Rice is reasonable. 25
Step 2: Estimating Rice price per bag
(DINORADO)
OTHER SUPPLIER PRICE
2900

2800

2700

2600

2500

2400

2300

2200
SUPPLIER 1 SUPPLIER 2 SUPPLIER 3

26
Step 2: Estimating Rice price per bag
(RED RICE)

Supplier 1 Supplier 2 Supplier 3 Average Price

Other
Competitors
(4000+3800
Price 4000 3800 3500 3766.67
+3500)/3

The above table shows that, the retails prices of the competitors were
collected, compared then the average. The above is the average of three
different Suppliers available in the market is P3,766.67. Considering the value
of the costs of goods sold, then the sales price value was estimated lower as
possible to the actual market price of competitors to whom target customers
are availing so keeping the P3,700.00 per cavan whole sale price of Oriental
Rice is reasonable. 27
Step 2: Estimating Rice price per bag
(RED RICE)
OTHER SUPPLIER PRICE
4100
4000
3900
3800
3700
3600
3500
3400
3300
3200
SUPPLIER 1 SUPPLIER 2 SUPPLIER 3
28
Step 2: Estimating Rice price per bag
(SINANDOMENG)
Supplier 1 Supplier 2 Supplier 3 Average Price

Other
Competitors
(2500+2200
Price 2500 2200 1800 2166.67
+1800)/3

The above table shows that, the retails prices of the competitors were
collected, compared then the average. The above is the average of three
different Suppliers available in the market is P2,166.67. Considering the value of
the costs of goods sold, then the sales price value was estimated lower as
possible to the actual market price of competitors to whom target customers
are availing so keeping the P2,200.00 per cavan whole sale price of Oriental
Rice is reasonable. 29
Step 2: Estimating Rice price per bag
(SINANDOMENG)
OTHER SUPPLIER PRICE
3000

2500

2000

1500

1000

500

0
SUPPLIER 1 SUPPLIER 2 SUPPLIER 3

30
Step 2: Estimating Rice price per bag
(RC18)
Supplier 1 Supplier 2 Supplier 3 Average Price

Other
Competitors
(2500+2200
Price 2500 2200 1800 2166.67
+1800)/3

The above table shows that, the retails prices of the competitors were
collected, compared then the average. The above is the average of three
different Suppliers available in the market is P2,166.67. Considering the value of
the costs of goods sold, then the sales price value was estimated lower as
possible to the actual market price of competitors to whom target customers
are availing so keeping the P2,200.00 per cavan whole sale price of Oriental
Rice is reasonable. 31
Step 2: Estimating Rice price per bag
(RC18)
OTHER SUPPLIER PRICE
3000

2500

2000

1500

1000

500

0
SUPPLIER 1 SUPPLIER 2 SUPPLIER 3

32
Step 2: Estimating Rice price per bag
(218)
Supplier 1 Supplier 2 Supplier 3 Average Price

Other
Competitors
(2500+2200
Price 2500 2200 1800 2166.67
+1800)/3

The above table shows that, the retails prices of the competitors were
collected, compared then the average. The above is the average of three
different Suppliers available in the market is P2,166.67. Considering the value of
the costs of goods sold, then the sales price value was estimated lower as
possible to the actual market price of competitors to whom target customers
are availing so keeping the P2,200.00 per cavan whole sale price of Oriental
Rice is reasonable. 33
Step 2: Estimating Rice price per bag
(218)
OTHER SUPPLIER PRICE
3000

2500

2000

1500

1000

500

0
SUPPLIER 1 SUPPLIER 2 SUPPLIER 3

34
Estimate sales (semi monthly)
Dinorado
85 cavans of rice x P 2700.00/cavan = P 229,500.00
Red Rice
140 cavans of rice x P 3700.00/cavan = P 518,000.00
Sinandomeng
56 cavans of rice x P2200.00/cavan = P 123,200.00
RC18
56 cavans of rice x P2200.00/cavan = P 123,200.00
218
56 cavans of rice x P2200.00/cavan = P 123,200.00

Total Sale (Semi-monthly) P1,116,900.00

35
Step 3: Estimated Cost of Goods Sold
Particulars (Dinorado) Particulars (Red Rice)

Palay P 112,000.00 Palay P387,500.00

Hauling 3000.00 Hauling 5000.00

Drying 3000.00 Drying 5000.00

Milling 10,546.875 Milling 17,578.125

Packaging Material 935.00 Packaging Material 1540.00

Total Cost of Goods Sold P129,481.875 Total Cost of Goods Sold P416,618.125

Particulars (Sinandomeng)
Palay P65,000
Hauling 2000.00
Drying 2000.00
Milling 7,031.25
Packaging Material 616.00
Total Cost of Goods Sold P76, 647.25
36
Step 3: Estimated Cost of Goods Sold
Particulars (RC18)
Palay P65,000
Hauling 2000.00
Drying 2000.00
Milling 7,031.25
Packaging Material 616.00
Total Cost of Goods Sold P76, 647.25

Particulars (218)
Palay P65,000
Hauling 2000.00
Drying 2000.00
Milling 7,031.25
Packaging Material 616.00
Total Cost of Goods Sold P76, 647.25
37
Step 3: Total Cost of Goods Sold (semi-monthly)
Cost of Goods Sold

Dinorado P 129,481.875

Red Rice 416,618.125

Sinandomeng 76, 647.25

RC18 76, 647.25

218 76, 647.25

Total Cost of Goods Sold P 776, 041.75

38
Step 4: Computation of Profit

Profit is sales minus COGS. Profit margin is profit divided by

sales then time 100%.

Total Sale (Semi-monthly) P 1,116,900.00

Total COGS - 776,041.75

Profit P 340,858.25
Profit Margin 30%

39
Step 5:Computed Operating Costs.
Operating costs are all other costs not directly related to the product being
sold but are needed to run the business.
Operating Costs (semi-monthly)

Peso (P)
Electricity and Maintenance 30,000.00

Diesel / estimate per cavan 8000.00

(P1000 (Diesel)/ 50 cavans) (400 cavan)
Helpers/ Operators 7200.00
[400 cavans of Rice x P18/cavans]

TOTAL OPERATING COSTS P 45,200.00

40
Step 6:Computed Operating Profit.
(semi-monthly)
Operating profit is Profit minus operating costs. Operating profit margin is
operating profit divided by sales x 100%.
Total Operating Costs P45,200.00

TOTAL PROFIT 340,858.25

TOTAL OPERATING PROFIT P295,658.25

OPERATING PROFIT MARGIN

26%
41
Step 7:Computed Interest Cost.

None because I only have cash investment,

In this case, the proponent will not have any
loan.

42
Step 8: Forecasted Profit.
Sales 2019 2020 2021 2022 2023 2024
Price per cavan (Dinorado)
P2,700.00 P2,700.00 P2,700.00 P2,835.00 P2,976.75 P3,125.75

Growth 0% 0% 5% 5% 5%

Number of sold annually (cavans) 2040 2064 2112 2160 2232 2280
Annual Growth 1% 2% 3% 4% 55
Price per cavan (Red Rice)
P3,700.00 P3,700.00 P3,700.00 P3,885.00 P4,079.00 P4,283.00

Growth 0% 0% 5% 5% 5%
Number of sold annually (cavans) 3360 3390 3460 3560 3700 3885
Annual Growth 1% 2% 3% 4% 5%
Price per cavan (Sinandomeng)
P2,200.00 P2,200.00 P2,200.00 P2,310.00 P2,425.5 P2546.775

Growth 0% 0% 5% 5% 5%
Number of Sold annually (cavans) 1344 1357 1384 1425 1482 1556
Annual Growth
1% 2% 3% 4% 5%

43
Step 8: Forecasted Profit.
Sales 2019 2020 2021 2022 2023 2024
Price per cavan (RC18)
P2,200.00 P2,200.00 P2,200.00 P2,310.00 P2,425.5 P2546.775

Growth 0% 0% 5% 5% 5%
Number of Sold annually (cavans) 1344 1357 1384 1425 1482 1556
Annual Growth
1% 2% 3% 4% 5%

Price per cavan (218)

P2,200.00 P2,200.00 P2,200.00 P2,310.00 P2,425.5 P2546.775

Growth
0% 0% 5% 5% 5%

Number of Sold annually (cavans)

1344 1357 1384 1425 1482 1556

Annual Growth
1% 2% 3% 4% 5%

Total Sales P26,810,400.00 P27,072,000.00 P27,638,800.00 P29,537,850.00 P32,519,438.00 P35,654,510.80

Annual Sales Growth 0.97% 2% 6.12% 9.34% 8.65%

44
Step 8: Forecasted Profit.
2019 2020 2021 2022 2023 2024
COGS
COGS of P3,107,565.00 P3,138,640.00 P3,201,412.80 P3,297,455.184 P3,429,353.40 P3,600,821.00
Dinorado

Growth 1% 2% 3% 4% 5%
COGS of Red P9,998,835.00 P10,098,823.35 P10,300,799.82 P10,609,823.81 P11,034,216.76 P11,585,927.6
Rice

Growth 1% 2% 3% 4% 5%
COGS of P1,839,534.00 P1,857,929.34 P1,895,087.927 P1,951,940.558 P2,030,018.172 P2,131519.081
Sinandomeng

Growth 1% 2% 3% 4% 5%
COGS of RC18 P1,839,534.00 P1,857,929.34 P1,895,087.927 P1,951,940.558 P2,030,018.172 P2,131519.081

Growth 1% 2% 3% 4% 5%
COGS of 218 P1,839,534.00 P1,857,929.34 P1,895,087.927 P1,951,940.558 P2,030,018.172 P2,131519.081

Growth 1% 2% 3% 4% 5%
45
Step 8: Forecasted Profit.

2019 2020 2021 2022 2023 2024

Total COGS P18,625,002.00 P18,811,251.37 P19,187,476.4 P19,763,100.12 P20,553,624.67 P21,581,305.84

Annual Growth 5% 10% 15% 20% 30%

Profit P8,185,398.00 P8,206,748.63 P8,351,323.596 P7,774,749.884 P11,965,813.33 P14,073,204.96

Profit Margin 30% 30.51% 30.58% 33.09% 36.80% 39.47%

46
Step 9: Forecasted Operating Profit.
This will be the forecasted operating profit for the next 5 years.
Year 2019 2020 2021 2022 2023

OPERATING COSTS

Electricity and Maintenance P30,000.00 P30,000.00 P30,000.00 P30,000.00 P30,000.00

Growth 0% 0% 0% 0%
Diesel (estimated per cavan) 8000.00 of Diesel 8020.00 of Diesel 8200.00 of Diesel 8480.00 of Diesel 8600.00 of Diesel
[P1000 (Diesel)/50 cavans]

Growth 1% 2% 6% 3%

Helpers and Operators 7200.00 7200.00 7200.00 7200.00 7200.00

[400 cavans of Rice x
P18/cavans

Growth 0% 0% 0% 0%

Total Operating Costs P45,200.00 P45,220.00 P45,400.00 P45,680.00 P45,800.00

(semi-monthly)
Total Annual Operating P1,084,800.00 P1,085,280.00 P1,089,600.00 P1,096,320.00 P1,099,200.00
Costs 47
Step 9: Forecasted Operating Profit.
This will be the forecasted operating profit for the next 5 years.

Year 2019 2020 2021 2022 2023

Total Operating Profit P3,547,899.00 P2,313,474.00 P2,012,722.00 P1,519,640.00 P1,600,000.00

(annual)
Operating Profit Margin 13.23% 8.54% 7.28% 5.14% 4.92%
(annual)

Profit P4,632,699.00 P3,398,754.00 P3,102,322.00 P2,615,960.00 P2,699,200.00

48
Step 10: Computed Net Value and
Payback Period.
This will show approximately the net
income of the business from the first year
until the period that the initial investment was
already back. The cumulative net value is the
accumulated net value from the first year to
the next year and so on.

49
YEAR 2019 2020 2021 2022

Total Operating
P3,547,899.00 P2,313,474.00 P2,012,722.00 P1,519,640.00
Profit
Total Initial Cash P1,500,000
Investment
Total Initial debt 0.00
Investment
Annual Debt 0.00
Payment
Capital
Investment
Equipment and P522,500.00
Permits
Electricity and 30,000.00
Maintenance
Cash on Hand 700,000.00
(Palay buying)
Total Capital P1,252,500.00
Investment
Net Value P2,295,399.00 P2,313,474.00 P2,012,722.00 P1,519,640.00
50
Cumulative Net Value P4,608,873.00 P6,621,595.00 P8,141,235.00
The initial investment of P1,252,500.00 will
be gained back in full by 2020 which is
the 2nd year of the business. This can be
seen from the computed cumulative net
value on 2020 which reaches the amount
of P4,608,873.00

51
 Year of Payback

INITIAL INVESTMENT
(P1,252,500.00)
9000000
8000000
7000000
6000000
5000000
4000000
3000000
2000000
1000000
0
2018.5 2019 2019.5 2020 2020.5 2021 2021.5 2022 2022.5

The owner, expects “payback” on the 2nd year of the business.

52
Milling service
Minimum milling per day is 30 sacks

32 kls of Rice/sack X P 96.00 (per sack)

P3.00/kilo

Expenses

Diesel / estimate per P 15.00

sack
Helpers/ Operators (10% 10.00
per sack)
Total expenses per
sack P 25.00
Electric bill/
maintenance monthly P 3000.00

53
Milling service (Extra Income)
Sale per sack
P 96.00
Expenses per sack
25.00

Income
P 71 . 00

P71.00 x 30 sacks /daily

P 2, 130.00
income for milling
Daily income x 26
days/monthly 55, 380.00
Monthly expenses - 3,000.00
bills/maintenance
Monthly income 52, 380.00
x 12

Total income (annual) P 628, 560.00

54
Sample product packages

55
Thank you!
Maquinto, Neremie C.
neremiemaqs@yahoo.com

56