ii

TABLE OF CONTENTS

Page
TITLE PAGE i
TABLE OF CONTENTS ii
LIST OF TABLES v
LIST OF FIGURES vii
Chapter
1. INTRODUCTION
Objective of the Study 1
Methodology 1
Scope and Limitation of the Study 2
2. EXECUTIVE SUMMARY
Brief Description of the Project 3
Project’s Contribution to the Economy 4
3. MARKETING PLAN
Description of the Product 5
Comparison of the Product with its Competitors 5
Location 5
Market Area 7
Market Customer 7
Total Demand 7
Historical Demand 7
Projected Demand 8
Historical Supply 8
Projected Supply 9
Demand and Supply Analysis 9
Market Share 10
Historical Price 11
 iii

Projected Selling Price 11

Sales Revenue 11
Marketing Strategy 12
Promotional Measures and Marketing 13
Distribution Strategy 14
Pricing Strategy 14
4. PRODUCTION PLAN
Production Process 15
Business Layout 17
Tools and Equipment 18
Furniture and Fixtures 18
Sources of Equipment 19
Terms and Condition of Purchase Equipment 19
Leasehold Improvement 19
Depreciation 21
Planned Capacity 21
Future Capacity 21
Projected Cost of Raw Materials Needed 22
Raw Materials Availability 23
Direct Labor 23
Utility Expense 24
Projected Utility Expense 24
Rent Expense 25
Factory Overhead 25
Annual Projected Production Cost 26
Operating Expense 27
Selling and Administrative Salary Expense 27
Honorarium Expense 27
Store Supplies 28
 iv

Business Permits 29
Summary of Projected Operating Expense 30
5. ORGANIZATION AND MANAGEMENT PLAN
Forms of Business Enterprise 31
Management and Organization Structure 31
6. FINANCIAL PLAN
Financial Plan 34
Mode of Financing 34
Major Assumption 36
Projected Income Statement 37
Projected Balance Sheet 38
Projected Cash Flow Statement 39
Gross Profit Ratio 40
Net Profit Ratio 40
Return on Asset 41
Payback Period 41
ANNEX
A. Historical Demand
B. Projected Demand
C. Projected Supply
D. Market Share
 v

LIST OF TABLES

Table Page
1 Brief Profile of the Proponents 3
2 Historical Demand 8
3 Projected Demand 8
4 Historical Supply 9
5 Projected Supply 9
6 Demand -Supply Analysis 10
7 Market Share 10
8 Historical Selling Price 11
9 Projected Selling Price 11
10 Sales Revenue 12
11 Promotional Expense 13
12 Projected Promotional Expense 14
13 Tools And Equipment 18
14 Furniture and Fixture 18
15 Leasehold Improvement 19
16 Depreciation & Amortizaton 20
17 Projected Cost of Direct Materials 22
18 Annual Cost of Direct Materials 23
19 Direct Labor 23
20 Projected Annual Direct Labor 24
21 Utility Expense 24
22 Projected Annual Utility Expense 24
23 Rent Expense 25
24 Factory Overhead 25
25 Annual Projected Production Cost 26
26 Projected Annual Selling and Administrative Salary 27
 vi

Expense
27 Projected Annual Honorarium Expense 27
28 Store Supplies 28
29 Taxes & Licenses Breakdown 29
30 Projected Taxes & Licenses 29
31 Summary of Projected Operating Expense 30
32 Job Qualification 33
 vii

LIST OF FIGURES

Figure Page
1 The Vicinity Map 6
2 Production Process 15
3 Business Layout 16
4 The Organizational Structure 32
 Chapter 1

INTRODUCTION

Objective of the Study

This study aimed to determine how feasible the Cha SiuBao business

in the Tagum City particularly near Tagum National High School. The said

study also considers the nature and extent of the market according to its

production, technical, appropriate management aspect and the financial

aspect as well.

The proponents conducted the study in order to:

 Identify the current and the future demand as well as the supply of the

proposed business.

 To determine if the said business is feasible or not.

 Laslty, to provide fair and reasonable price to customers according to

the quality of food and services.

Methodology

The study is conducted through surveys regarding the area and its

population, interviews and undergone formal meeting with the business

owners/proprietor. The proponents also used guide questions by the survey to

have more reliable results for the proposed business and also to consider its

possible similarities to their competitors in putting up this kind of business.

Consequently, the proponents decided to conduct such activity in order to

 2

come up with the accurate data needed in the study. The said method

provides easy way for the proponents to comply necessary data needed for

the completion of the study.

Scope and Limitation of the Study

The proponents focused on the four aspects of a feasibility study.

Mainly, they are the marketing, technical/production,

organization/management and financial aspects. The proponents have done

critical scrutinization at their very best in order to come up with realistic

analysis and recommendations. Nevertheless, all recommendations are

based on the data provided by the proponents of this study. They have limited

their focus on the said aspects in order for them to easily distinguish what are

necessary and what are not in conducting the study. The study is conducted

within the vicinity of Visayan Village Tagum City near Tagum National High

School.
 Chapter 2

EXECUTIVE SUMMARY

Brief Description of the Project

Cha SiuBao is a business that offers Baked Siopao where in revenue is

derived from customers who buy the product that they offered. The amount

paid depends on the cost of raw materials used in the product with additional

gross profit margin. The business will be located near Tagum National High

School. The proposed business will offer Baked Siopao that satisfies the

needs and wants of the customers.

Table 1
Brief Profile of the Proponents

Educational
Name Address
Background

Prk. 6, Poblacion, New

Ivylenn Roselle Alberca BS Accountancy
Corella

Prk. Malinawon 2, Briz,

John Kenneth Penonia BS Accountancy
Tagum City

Bermudez Subd., Apokon,

Rizza Grace Gallega BS Accountancy
Tagum City

Cendela Mae Manog BS Accountancy Mawab, Comval Province

Prk. 1- B, Mabini Street,

JessaDadula BS Accounting Technology
Tagum City

Shina Mae Dalisay BS Accountancy Cuambogan

 4

Project’s contribution to the economy (Socio-economic aspect)

Baked Siopao provides contribution to the Philippine economy by

sustaining government projects and programs through taxes, license and

permits that are paid to the collecting sector. It also reduce unemployment

rate through providing employment to unemployed individuals. Through this,

the proposed business can somehow make significant contributions to the

economy.
 Chapter 3

MARKETING PLAN

Description of the Product

Cha SiuBao offers Baked Siopao in at affordable prices. The business

ensures that the customer will have tasty snacks that will satisfy their hunger.

This product provides satisfaction for all the individuals who want to have

some snacks in a very affordable cost.

Comparison of the Product with its competitors

The product is currently offered outside UM Tagum College Mabini

Gate. However, the said product of them is quite unique because they are the

first to serve that certain product in that locality. This product would be famous

not just for people on the go or students on a budget but also to those people

that belong to the said area. It has a low cost of production without sacrificing

the quantity and quality of the product.

Location

The proposed business will be located near Tagum National High

School. The proponents chose this site because of the high population in the

area which is very accessible to the individuals of the said location. Figure 1

shows the vicinity map of proposed business.

 6

BIGLAANG GWAPO
BARBER SHOP

M. BERMUDEZ ST.

TAGUM CITY NATIONAL HIGH

LONGSKIE
STORE

OFFSHORE
ENTERPRISES

SCHOOL
JIRAH EATERY

SARI-SARI
STORE
( NO NAME )

CHA SIUBAO
LOCATION

Figure 1. The Vicinity Map

 7

Market Area

The area covered by this business is typically the City of Tagum particularly

near the Tagum City National High School.

Main Customer

The main customers of this business are the students of Tagum City National

High School, and households in the urban area.

Total Demand

Presented in table 2 is the historical data gathered and analyzed by the

researchers regarding the trend of the baked siopao to those consumers for the past

three (3) years. In addition, the said data in table 2 were used as the basis for the

projected demand of the baked siopao for the next three (3) years. As you can see,

on table 3, the future demand for the baked siopao is increasing which shows a

favorable effect for the manufacturers of the baked siopao.

Historical Demand

Table 2 shows the historical demand of baked siopao for the past three (3)

years. The proponents gathered data with regards to the total students population of

Tagum City National High School thru the Principal’s office. Based on the interview

conducted, 92% of the target populace patronized the product. There were 375

interviewees and 346 of them responded that they are purchasing siopao at least

ten times (10) a month.

 8

Table 2
His tor ical Dem and
Aver age Num ber s of
Total Dem and
Year Students Per centage of s iopao per
(No. of s iopao)
Client (92%) m onth
2015 5,524 5,082 10 609,840
2016 5,031 4,629 10 555,480
2017 6,195 5,699 10 683,880

Projected Demand

Based on the historical demand, it shows an average increase of 7.10% in

the past three (3) years. Based on this trend, the projected demand shows that there

will be a 7.10% increase for the next three (3) years. Table 3 presents the projected

demand and it is computed through moving average method.

Table 3
Pr ojected Dem and

Pr ojected
Bas ed
Year Incr eas e Dem and
Year
(No. of Siopao)
2018 683,880 48,555 732,435
2019 732,435 52,003 784,438
2020 784,438 55,695 840,133

Historical Supply

For the historical supply the proponents identified one (1) existing businesses

with the same nature as the proposed business. Table 4 shows the competitor’s

supply for the past three (3) years.

 9

Table 4
His tor ical Supply
School
Year
Canteen
2015 60,000
2016 72,000
2017 84,000

Projected Supply

The projected supply will be the basis in determining the average percentage

increase in supply for the first three (3) years of business operation. Base from the

table above, it shows an average increase of 18.30% in the past three (3) years.

Table 5 shows the projected supply of the proposed business and it is computed

through the moving average method.

Table 5
Pr ojected Supply

Pr ojected
Bas ed
Year Incr eas e Supply
Year
(No. of Siopao)
2018 84,000 15,372 99,372
2019 99,372 18,185 117,557
2020 117,557 21,513 139,070

Demand and Supply Analysis

In table 6, demand is higher than supply and it is rapidly increasing and this

signifies that there is a need to create a Siopao store in the area. This means that,

there is a great feasibility of starting up a Cha SiuBao store in the area.

 10

Table 6
Dem and -Supply Analys is
Uns atis fied
Year Dem and Supply
Dem and
His tor ical
2015 609,840 60,000 549,840
2016 555,480 72,000 483,480
2017 683,880 84,000 599,880
Pr ojected
2018 732,435 99,372 633,063
2019 784,438 117,557 666,881
2020 840,133 139,070 701,063

Market Share

Market share is based on the contribution of the business in the market. The

basis of getting the production capacity is based on the capacity of the proposed

business to produce the product. The projected production capacity is 1,000 siopao

per day which is 240,000 per year. Table 7 shows the details.

Table 7
Mar k et Shar e
Uns atis fied Mar k et Selling
Year
Dem and Shar e Capacity
2018 633,063 37.91% 240,000
2019 666,881 37.91% 252,815
2020 701,063 37.91% 265,773
 11

Historical Selling Price

Table 8 shows the historical selling price for the last three (3) years.

Table 8
His tor ical Selling Pr ice
Year Selling Pr ice
2015 10
2016 10
2017 10

Projected Selling Price

The proponents will increase the price every year by P1.00 due to the

assumption that the cost of raw materials, direct labor and corresponding overhead

will increase yearly.

Table 9 shows the projected selling price for the first three (3) years.

Table 9
Pr ojected Selling Pr ice
Year Selling Pr ice
2018 10
2019 11
2020 12

Sales Revenue

Table 10 shows the sales revenue of the business. The data stated are

based on the computation from the total number of pieces produced per year.

Supply capacity is multiplied by selling price to get the total sales.

 12

Table 10
Sales Revenue
Supply Selling
Year Total Sales
Capacity Pr ice
2018 240,000 10 2,400,000
2019 252,815 11 2,780,960
2020 265,773 12 3,189,276

Marketing Strategy

Our product the Bake siopao is committed to achieve customers delight

through safe and quality product in affordable prices.

The proponents plan to execute a broader marketing strategy to build name

and better relationship with the target customers through free website and facebook

in order to reach wider range of possible customers. This will be of great help for

them to know the concept behind our product the Bake soipao. It will also provide

good communication relationship in ways that, we will be giving information and they

will be giving comments and suggestions for product improvements and other

concerns.
 13

Promotional Measures and Marketing

The proponents suggested the following promotional activities.

Table 11
Promotional Expense
PROMOTION OBJECTIVE DESCRIPTION TIMELINE BUDGET
To introduce
350 pieces for
Distribution of the product to
the whole
flyers and a large 1st week ₱1,050
week will be
leaflets number of
given away
costumers.

Advertisement To reach
Use facebook
via Free wider range of
for ₱0
website & possible
advertisement
Facebook costumers

Opening
promo buy 5
Buy 5 get 1 To attract 1st day of the
get 1 for free ₱500
free costumers operation
for the 1st 50
costumers only

For every
purchase of
To build 6pcs bake
Back to
deeper siopao get 1 1st day of
School ₱2,500
customer ballpen for free school (June)
Giveaways
relationship (1st 50
costumers for
June)

TOTAL ₱4,050.00

Table 12 shows the projected promotional expense for the first three (3) years.
 14

Table 12
Pr ojected Pr om otional
ExpensTotal
Year e

20 4,050
2019 2,500
2020 2,500

Distribution Strategy

The business uses direct selling for distribution to the customer on which the

target market can directly acquire the products. The location is accessible in

distribution of the product for the convenience of the students, employees and

households. The product will be assemble to order to insure the product is new and

warm.

Pricing Strategy

The selling price per serving of Baked Siopao is based on the raw materials

used. It is very affordable for the target market.

The price of the Baked Siopao will be dependent on how the market price of

the main ingredients is. Any change of the price of the Baked Siopao products will

be taken into consideration to the factor that measures the consumers’ capability to

purchase the product.

 15

Chapter 4

PRODUCTION PLAN

Production Process

In preparing the Baked Siopao, the raw materials that are being used in the

operation are good quality in order to produce baked siopao for the customers.

In production process, the first thing to do is to mix together in a bowl the

warm water, 1 tablespoon of sugar and yeast. Let stand for 5 minutes. Second,

combine the flour, rest of sugar and baking powder. Add the liquid to the dry

ingredients and the 3 tablespoon shortening. Mix well until a dough forms. Third,

turn dough out onto a lightly floured surface. Knead the dough for 5 minutes or until

smooth and elastic. Coat the dough with oil and place in a bowl. Cover the bowl with

plastic wrap and let the dough rise for an hour or until it doubled in size. Fourth,

punch the dough down and turn it out onto a floured surface. Roll into a log and

divide into 8-10 equal portions. Form one into a ball and then using hand of rolling

pin; flatten it into about 4-5 inch circle leaving a small bulge in the middle. Scoop a

table spoon of filling and place it in the middle. Gather the ends towards the middle

from one side until you reach the other end closing the filling in. Pinch and twist to

seal the ends together o top. Repeat with the remaining dough balls. Let them rest

for 5-10 minutes. Fifth, instead of steaming, bake the buns for 15 to 20 minutes in an

oven.
 16

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Punchtogether
the the
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rest the
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warm
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leaving an hour
a small or until
bulge in theit doubled in size.a table
middle. Scoop
spoon of filling and place it in the middle. Gather the ends
towards the middle from one side until you reach the other end
closing the filling in. Pinch and twist to seal the ends together o
top. Repeat with the remaining dough balls. Let them rest for 5-
10 minutes.

Figure 2. Production Process

 17

Business Layout

Figure 3 shows the layout of the Cha SioBao, the stall design that will be use

for the operation of the business.

K
N
A
T

L
U
S
A
G
S

Y
A
R
T

N
E
V
O
S
I
U
G
N
I
T
X
E
E
R
I
F

WASHING FREEZER STORAGE CABINET

AREA
COMFORT TABLE FOR BAKING
ROOM

EXIT

DOOR WINDOW FOR CASHIER’S

CUSTOMER TABLE

Figure 3. Business Layout

 18

Tools and Equipment

Table 13 shows the tools and equipment needed in the business operation.

The very important consideration is to buy a good quality product to avoid delay

operations.

Table 13
Tools And Equipm ent
Par ticular s Quantity Unit Cos t Total Cos t
Oven 1 25,000.00 25,000.00
Electric Mixer 1 30,000.00 30,000.00
Baking Sheet 32 300.00 9,600.00
Tray Stand 2 7,000.00 14,000.00
Gas Tank 1 2,500.00 2,500.00
Freezer 1 10,000.00 10,000.00
TOTAL 91,100.00

Furniture and Fixture

Table 14 shows the furniture and fixture that are being acquired. It will be

used in the business operation.

Table 14
Fur nitur e and Fixtur e
Par ticular s Quantity Unit Cos t Total Cos t
Baking Table 1 1,500.00 1,500.00
Cashier’s Table 1 500.00 500.00
Chair 3 300.00 900.00
Storage Cabinet 1 1,500.00 1,500.00
Ceiling Fan 1 5,300.00 5,300.00
TOTAL 9,700.00
 19

Sources of Equipment

The equipment to be used in the proposed business will be acquired in

Davao City.

Terms and Condition of Purchase Equipment

It has a 2 year warranty and if the said equipment has factory defect. It can

be returned to the store within 1 month where they purchase it and the store will

replace it immediately.

Leasehold Improvement

The proposed business will rent a space for production and selling for a start-

up operation. Table 15 shows the materials used for improving the said store.

Table 15
Leas ehold Im pr ovem ent
Par ticular s QTY COST TOTAL
Lumber 5 25.00 125.00
Plyw ood 3 250.00 750.00
Hollow block 12 8.00 96.00
Cement 2 280.00 560.00
Paint 2 450.00 900.00
Paint brush 2 50.00 100.00
Nails 1kilo 70.00 70.00
Glass Window 1 2,200.00 2,200.00
Water pipe line 3m 283.00 283.00
Faucet 2 70.00 140.00
Stainless Kitchen Sink 1 800.00 800.00
Worker Salary 3,500.00
TOTAL 9,524.00
 20

Table 16
Depr eciation & Am or tizaton
Es t. Us eful
Par ticular s Am ount 2018 2019 2020
Life
Tools and Equipm ent
Oven 25,000.00 15 1,666.67 1,666.67 1,666.67
Electric Mixer 30,000.00 10 3,000.00 3,000.00 3,000.00
Baking Sheet 9,600.00 5 1,920.00 1,920.00 1,920.00
Tray Stand 14,000.00 10 1,400.00 1,400.00 1,400.00
Gas Tank 2,500.00 5 500.00 500.00 500.00
Freezer 10,000.00 10 1,000.00 1,000.00 1,000.00
Sub-Total 91,100.00 9,486.67 9,486.67 9,486.67
Leas ehold Im pr ovem ent 9,524.00 10 952.40 952.40 952.40
Fur nitur e and Fixtur e
Baking Table 1,500.00 5 300.00 300.00 300.00
Cashier’s Table 500.00 5 100.00 100.00 100.00
Chair 900.00 3 300.00 300.00 300.00
Storage Cabinet 1,500.00 5 300.00 300.00 300.00
Ceiling Fan 5,300.00 5 1,060.00 1,060.00 1,060.00
Sub-Total 9,700.00 2,060.00 2,060.00 2,060.00
Unus ed Stor e Supplies
Calculator 300.00 3 100.00 100.00 100.00
Fire Extinguisher 3,500.00 5 700.00 700.00 700.00
Sub-Total 3,800.00 800.00 800.00 800.00
Total 114,124.00 13,299.07 13,299.07 13,299.07
 21

Depreciation

Table 16 shows the depreciation expense of the tools, equipment, furniture

and fixtures and a particular items in store supplies also the amortization of

leasehold improvement within 3 years. Each item has an economic life span and

proponents used straight line method for depreciation.

Planned Capacity

The proponents made some plan about the location, building source of

finance, price, product promotion, and channel distribution. They selected their

location at Visayan Village, Tagum City because it has the highest population in

Tagum City. They will place their advertisements through Facebook. They will

distribute their product near Tagum City National High School so that the students

can get easily access. They are confident that their products and services will be

satisfying. Their pricing policy will be reasonable and channel of distribution will be

convenient, so their target customers will easily get.

Future Capacity

They mainly want to produce bake siopao. It is a sole proprietorship

business. Initially they prepare their business plan for 3 years. Next 3 years they

target that they capture 37.91% of total market share. When their business will start,

the product will be produce at that time. They wish to achieve so much customers

and consumers response in 1 year. It will be their betterment to their business. They

get best wishes from their target customers and to those clients who are patronizing

their products.
 22

Projected Cost of Raw Materials Needed

Table 17 shows the raw materials cost needed for the baked siopao to be

used in the business operation. Herewith is the breakdown of the cost of its

ingredients. Also the freight in is included to this cost.

Table 17
Pr ojected Cos t of Dir ect Mater ials
Par ticular Des cr iption Qty per year Total Cos t
Dough
Flour Sack 240.00 180,000.00
Yeast Pack (500g) 1,500.00 142,500.00
Eggs Tray 600.00 102,000.00
Salt Sack 3.75 1,125.00
Butter Bar 3,000.00 330,000.00
Sugar Sack 30.00 37,500.00
Skim Milk Sack 60.00 150,000.00
Chick en Filling
Chicken Kilo 1,500.00 202,500.00
Oil Kilo 60.00 3,300.00
Onion Pcs 6,000.00 30,000.00
Garlic Cloves 12,000.00 12,000.00
Soy Sauce Kilo 525.00 13,125.00
Sugar Sack 1.72 2,145.00
Oyster Sauce Liter 375.00 131,250.00
Cornstarch Kilo 60.00 5,160.00
Egg Tray 1,000.00 170,000.00
Fr eight-In 4,800.00 4,800.00
TOTAL 1,517,405.00
 23

Table 18 shows the annual projected cost of raw materials. It is assumed that

the cost will increase by 2% every year due to unpredictable events.

Table 18
Annual Cos t of Dir ect Mater ials
Year Am ount
2018 1,517,405.00
2019 1,547,753.10
2020 1,578,708.16

Raw Materials Availability

The raw materials being used in the operation is purchased every week to

ensure that the ingredients used are new and to prevent spoilage of the raw

materials.

Direct Labor

Table 19 shows the annual salaries expense for the employee. Based on the

data, the salary rate per month is totaled P13,000.00. Table below presented the

total annual salaries expense.

Table 19
Dir ect Labor

No. of No. of
Salar y/
Pos ition em ploye m onths Total
m onth
e per year
Baker 8,000.00 1 12 96,000.00
Assistant Baker 5,000.00 1 12 60,000.00
Total 156,000.00
 24

Table 20 shows the annual direct labor for the workers. The proponents

assumed to increase their salaries to 1% per year.

Table 20
Pr ojected Annual Dir ect Labor
Year Am ount
2018 156,000.00
2019 157,560.00
2020 159,135.60

Utility Expense

Table 21 shows the utility expense incurred by the proposed business.

Table 21
Utility Expens e
Utility Sour ce Bas is Rate Total
Water TWD Cubic Meter per
150.00 1,800.00
Electricity Daneco Kw h 900.00 10,800.00
Gas LPG Tank 3,500.00 42,000.00
Total 54,600.00

Projected Utility Expense

Table 22 presents the Annual Utility Expense for the business operation. The

proponents assume that every year the utility expense increase to 3% due to the

unpredictable events.

Table 22
Pr ojected Annual Utility Expens e
Year Am ount
2018 54,600.00
2019 56,238.00
2020 57,925.14
 25

Rent Expense

Table 23 shows the rent expense per year based on the data gathered,

allocated with P8,000.00 per month.

Table 23
Rent Expens e
Year Am ount
2018 96,000.00
2019 96,000.00
2020 96,000.00

Factory Overhead

Table 24 presented Factory Overhead of the business incurred in the

business for succeeding year. It is presented as the yearly production cost of the

proposed business.

Table 24
Factor y Over head
Par ticular s 2018 2019 2020
Utility Expense 54,600.00 56,238.00 57,925.14
Rent Expense - FOH 67,200.00 67,200.00 67,200.00
Depreciation (Tools
9,486.67 9,486.67 9,486.67
and Equipment)
Amortization (Lease-
952.40 952.40 952.40
hold Improvement)
Total 132,239.07 133,877.07 135,564.21
 26

Annual Projected Production Cost

Presented in Table 25 is the annual projected production cost for a bake

siopao. As per projection, the cost of raw materials per unit will assume to increase

by 2% per year due to the possible increases of the raw materials in the market.

Table 25
Annual Pr ojected Pr oduction Cos t
Par ticular s 2018 2019 2020
Supply Capacity 240,000 252,815 265,773
Raw Materials per unit 6.32 6.45 6.58
Direct Labor cost per unit 0.65 0.62 0.60
Factory Overhead cost 0.55 0.53 0.51
Total Cost per unit 7.52 7.60 7.69
Total Cos t 1,804,800.00 1,921,390.86 2,043,794.24
 27

Operating Expense

The proposed business of the proponents identified the possible operating

expenses incurred in the future.

Selling and Administrative Salary Expense

Table 26 shows the annual salary of the cashier with only one (1) number of

employee, the proponent allocated P5,000.00 per month assumes to increase the

amount by 5% per year.

Table 26
Pr ojected Annual Selling and Adm inis tr ative Salar y Expens e
Year Am ount
2018 60,000.00
2019 63,000.00
2020 66,150.00

Honorarium Expense

Table 27 shows the Honorarium of the bookkeeper, the proponents allocated

P500.00 per month and assumes to increase by 10% per year.

Table 27
Pr ojected Annual Honor ar ium Expens e
Year Am ount
2018 6,000.00
2019 6,600.00
2020 7,260.00
 28

Store Supplies

Table 28 shows the Store Supplies that are needed for the operation. It identifies the unit cost annual cost of supplies for the

next three (3) years.

Table 28
Stor e Supplies
2018 2019 2020
Par ticular s Unit Cos t
Quantity Annual Cos t Quantity Annual Cos t Quantity Annual Cos t
Apron 50.00 6 300.00 6 300.00 6 300.00
Mittens 75.00 2 150.00 2 150.00 2 150.00
Tong 25.00 2 50.00 2 50.00 2 50.00
Ballpen 10.00 3 30.00 3 30.00 3 30.00
Hairnet 10.00 24 240.00 24 240.00 24 240.00
Record Book 130.00 1 130.00 1 130.00 1 130.00
Dishw ashing Detergent 25.00 12 300.00 12 300.00 12 300.00
Paper Bag 25.00 1,200 packs 30,000.00 1,200 packs 30,000.00 1,200 packs 30,000.00
Official Receipt 128.00 10 1,280.00 10 1,280.00 10 1,280.00
Books of Account 100.00 1 100.00 1 100.00 1 100.00
Calculator 1 100.00 1 100.00 1 100.00
Fire Extinguisher 1 700.00 1 700.00 1 700.00
Total 33,380.00 33,380.00 33,380.00
 29

Business Permits

Table 29 Shows the business permit to start the proposed business legally. It

is assumed to increase by 2% per year.

Table 29
Taxes & Licens es Br eak dow n
Par ticular s Am ount
BIR
Annual Registration Fee 300.00
Document Stamp Tax 15.00
Bus ines s Per m it
Refreshment Parlor 1,000.00
Garbage Fee 700.00
Medical Fee 400.00
Sanitary Fee 300.00
Inspection Fee 100.00
Fire Fee 250.00
LFIF 350.00
ESPF 33.00
DMF 100.00
Occupational Permit 810.00
Engineering Fee 593.00
TOTAL 4,951.00

Table 30
Pr ojected Taxes & Licens es
Year Am ount
2018 4,951.00
2019 5,050.02
2020 5,151.02
 30

Summary of Projected Operating Expense

Table 31 below shows the summary of operating expense incurred in the business for succeeding year. It is presented

yearly and operating expense of the proposed business during its operation.

Table 31
Sum m ar y of Pr ojected Oper ating Expens e
Par ticular s 2018 2019 2020
Depreciation - Furnitures and Fixtures 2,060.00 2,060.00 2,060.00
Promotional Expense 4,050.00 2,500.00 2,500.00
Honorarium 6,000.00 6,600.00 7,260.00
Selling and Administrative Salary Expense 60,000.00 63,000.00 66,150.00
Rent Expense - Selling & Administrative 28,800.00 28,800.00 28,800.00
Store Supplies 33,380.00 33,380.00 33,380.00
Taxes & Licenses 4,951.00 5,050.02 5,151.02
Total 139,241.00 141,390.02 145,301.02
 Chapter 5

ORGANIZATION AND MANAGEMENT PLAN

Form of Business Enterprise

The business shall be registered as CHA SIU BAO BAKESHOP which has a

location at Mangga, Visayan Village in front of Tagum City National High School. The

type of business will be a sole proprietorship business. This type of business lies

entirely in the hands of the owner. The decision making is easy because there is no

intervention by the other and enjoy his profit and suffers at any losses incurred. The

proponents believe that this form of business is better for this type of business.

Management and Organization Structure

The owner is responsible for the direction and control of all works in

implementation and guidelines in the organization and also responsible for hiring any

employees who meet the requirements of the organization. While the cashier takes

charge in receiving and handling cash, records the amount of sales and maintaining

the security of cash. On the other hand, the master baker monitors and operates all

baking equipment, follow health and sanitation standards and in addition, the helper

takes responsible in doing some things that assisting the baker as well as doing the

dish and maintaining the cleanliness of the kitchen. Figure 2 shows the

organizational structure of the Cha Siu Bao Bakeshop.

 32

Owner/Manager

Bookkeeper

Baker Assistant baker Cashier

Figure 4. The Organizational Structure

 33

Table 31 shows the job qualification of the different positions with their

respective qualifications and responsibility for the proposed business.

Table 32
Job Qualification
Position Qualification Responsibilities
Owner Responsible for all employees
within the store and are present
to ensure the shop runs without
hitch. Need communication skills
as constant with other members
of staff and customers.
Cashier -Female with pleasing
personality Needs to have multitasking and
-at least 21 to 35 years old be able to focus the attention in
-at least college level more places than one. Very
-Computer literate discreet and trustworthy.
Baker -Male
-at least 21 years old and Responsible for making sure
above producing a good quality of
-with experienced product that satisfies the
-Physically fit customers need.
-Graduated at any
vocational course related
in baking, cooking or
pastry.
Assistant -Male -Responsible for making sure
Baker -at least 20 years of age that the dishes, pots and pans
and above are cleaned on a daily basis.
-at least high school Requires a lot of hard work and
graduate usually work under harsh and
-physically fit and healthy desirable conditions.
-Responsible to help the member
and the staff of the store, hard
work, and diligent his work task.
 Chapter 6

FINANCIAL PLAN

Financial Aspect

Financial aspect is to determine and identify the financial condition of the

proposed business for the next three years of operation and the proposed

business is profitable.

Mode of Financing

The owner will invest money amounting to P161,452.60 to the business and

the amount will be used in utilizing and running the business.

 35

The proposed business needs a total capital requirement of

P161,452.60 to start the business operation.

Total Project Cost

Pre – operating Expense

Business Permit 4,951.00

Initial Fixed Capital Cost

Tools and Equipment 91,100.00
Furnitures and Fixtures 9,700.00
Leasehold Improvement 9,524.00 110,324.00
Total Initial Capital Cost 115,275.00

Initial Working Capital

Promotional Expense 4,050.00
Store Supplies 6,515.00
Direct Materials 31,612.60
Gas 3,500.00
Total Initial Working Capital 45,677.60

Cash on Hand 500.00

Total Working Capital 161,452.60

 36

Major Assumption

1. Market share is assumption to have a 37.91%of the total demand on the

first year.

2. Selling price in baked siopao is assumed to increase by 10% every year.

3. Projection is computed using Moving Average Method.

4. Depreciation is computed using Straight Line Method.

5. Direct labor cost is assumed to increase by 1% per year.

6. Selling and Administrative Salary expense is assumed to increase 5% per

year.

7. Honorarium is assumed to increase by 10% per year.

8. Weekly purchasing of raw materials.

9. Purchasing of raw materials assumed to increase 2% per year.

10. Utility expenses assumed to increase 3% per year.

11. Business permit assumed to increase 2% per year..

12. The business will operate 20 days per month.

13. Drawing is equal to the 95% of the net income of the business.
37
 37

CHA SIU BAO

PROJECTED INCOME STATEMENT
FOR THE YEAR ENDED DECEMBER 31, YEAR 2018 – 2020

Year 2018 Year 2019 Year 2020

Sales
Baked Siopao Sales 2,400,000.00 2,780,960.46 3,189,275.80

Less: Cost of Siopao Sold

Raw Materials 1,517,405.00 1,547,753.10 1,578,708.16
Direct Labor 156,000.00 157,560.00 159,135.60
Overhead 132,239.07 133,877.07 135,564.21
Total Cost of Siopao 1,805,644.07 1,839,190.17 1,873,407.97

Gross Profit 594,355.93 941,770.29 1,315,867.83

Less: Operating Expenses
Depreciation - Furnitures and Fixtures 2,060.00 2,060.00 2,060.00
Promotional Expense 4,050.00 2,500.00 2,500.00
Honorarium 6,000.00 6,600.00 7,260.00
Selling and Administrative Salary Expense 60,000.00 63,000.00 66,150.00
Rent Expense - Selling & Administrative 28,800.00 28,800.00 28,800.00
Store Supplies 33,380.00 33,380.00 33,380.00
Taxes & Licenses 4,951.00 5,050.02 5,151.02
Total 139,241.00 141,390.02 145,301.02
Net income 455,114.93 800,380.27 1,170,566.81

CHA SIU BAO

 38

PROJECTED BALANCE SHEET

FOR THE YEAR ENDED DECEMBER 31, YEAR1 - YEAR3

Year 2018 Year 2019 Year 2020

Asset:
Current Asset
Cash 83,383.42 136,701.50 208,528.90
Unused Store Supplies 3,000.00 86,383.42 2,200.00 138,901.50 1,400.00 209,928.90
Non – Current Asset (Fixed Asset (Net)
Tools and Equipment 91,100.00 81,613.33 72,126.67
Less: Depreciation 9,486.67 81,613.33 9,486.67 72,126.67 9,486.67 62,640.00
Furniture and Fixture 9,700.00 7,640.00 5,580.00
Less: Depreciation 2,060.00 7,640.00 2,060.00 5,580.00 2,060.00 3,520.00
Leasehold Improvement 9,524.00 8,571.60 7,619.20
Less: Amortization 952.40 8,571.60 952.40 7,619.20 952.40 6,666.80
Total Asset 184,208.35 224,227.36 282,755.70

Owner’s Equity
Capital Beginning 161,452.60 184,208.35 224,227.36
Add: Net Income 455,114.93 800,380.27 1,170,566.81
Total 616,567.54 984,588.62 1,394,794.17
Less: Drawing 432,359.19 760,361.26 1,112,038.47
Total Owner’s Equity 184,208.35 224,227.36 282,755.70

CHA SIU BAO

PROJECTED CASH FLOW STATEMENT
 39

FOR THE YEAR ENDED DECEMBER 31, YEAR 2018 – 2020

Year 2018 Year 2019 Year 2020

Cash flow from Operating Activities
Siopao Sales 2,400,000.00 2,780,960.46 3,189,275.80
Less:
Purchase of Raw Materials 1,517,405.00 1,547,753.10 1,578,708.16
Payment of Direct Labor 156,000.00 157,560.00 159,135.60
Utility Expense 54,600.00 56,238.00 57,925.14
Rent Expense 67,200.00 67,200.00 67,200.00
Promotional Expense 4,050.00 2,500.00 2,500.00
Honorarium 6,000.00 6,600.00 7,260.00
Selling And Administrative Salary Expense 60,000.00 63,000.00 66,150.00
Rent Expense - Selling & Administrative 28,800.00 28,800.00 28,800.00
Store Supplies Expense 32,580.00 32,580.00 32,580.00
Taxes & Licenses 4,951.00 1,931,586.00 5,050.02 1,967,281.12 5,151.02 2,005,409.92
Net Cash provided by Operating Activities 468,414.00 813,679.34 1,183,865.88

Cash flow from Financing Activities

Initial Investment 161,452.60
Less: Drawing 432,359.19 760,361.26 1,112,038.47
Net Cash provided/used by Financing Activities (270,906.58) (760,361.26) (1,112,038.47)

Cash flow from Investing Activities

Less:
Purchase of Tools and Equipment 91,100.00
Purchase of Store Suplies 3,800.00
Purchase of Furniture and Fixtures 9,700.00
Payment for Leasehold Improvement 9,524.00 114,124.00 - -
Net Cash provided/used by Investing Activities (114,124.00) 0.00 0.00

Net Increase (Decrease) 83,383.42 53,318.08 71,827.41

Add Cash Balance Beginning - 83,383.42 136,701.50
Cash Balance Ending P 83,383.42 P 136,701.50 P 208,528.90
Gross Profit Ratio

Gross profit ratio shows the relationship between sales and the cost of the

products sold. It measures the ability of the company to control cost and inventories

manufacturing products and to pass along price and increases through sales to

customers. CHA SIU BAO gross profit margins shows a positive sign that in

favorable to the company as to the part of the owner.

Gross Profit
Gross Profit Ratio 
Net Sales

Year 2018 Year 2019 Year 2020

594,355.93 941,770.29 1,315,867.83

= = =
2,400,000.00 2,780,960.46 3,189,275.80

= 24.76% = 33.86% = 41.26%

Net Profit Ratio

Net profit margins measures the

probability after considering all expenses. Cha Siu Bao net profit margin

increase year 1, 2 and 3 operations.

Net Profit
Net Profit Ratio 
Net Sales

Year 2018 Year 2019 Year 2020

455,114.93 800,380.27 1,170,566.81

= = =
2,400,000.00 2,780,960.46 3,189,275.80

= 18.96% = 28.78% = 36.70%

Return on Asset

Return on asset indicates of how profitable the company is relative to its total

asset. It gives an idea as to how efficient management is at using its assets to

generate earnings. CHA SIU BAO return on the asset on the year 1, 2 and 3 shows

that it is increasing the percentage of return asset on its operation.

Net Profit
Return on Asset 
Ave. Asset

Year 2018 Year 2019 Year 2020

455,114.93 800,380.27 1,170,566.81

= = =
149,166.18 204,217.86 253,491.53

= 3.05 = 3.92 = 4.62

Payback Period

Payback period is the time in which the initial cash outflow of an investment is

expected to be recovered from the cash inflows generated by the investment.

Initial Investment
Payback Period  x12
Cash Inflow per Period

Year 2018

161,452.60
= x 12
468,414.00

= 4 mos.
ANNEX
Annex A

Historical Demand

No. Of Samples
Ave. %  = (375 / 346) x 100 = 92%
No. Of Yes

Total Demand  Total Population  Ave. %  No. Of Siopao per Year

2015 = 5524 x 92% x 120 = 609,840

2016 = 5031 x 92% x 120 = 555,480

2017 = 6195 x 92% x 120 = 683,880

Annex B

Projected Demand

Historical Current Year - Historical Previous Year

Ave. % 
Historical Previous Year

555,480 - 609,840 683,880 - 555,480

= + = 7.10%
609,840 555,480

2018 = (683880 x 7.1%) + 683880 = 732,435

2019 = (732435 x 7.1%) + 732435 = 784,438

2020 = (784438 x 7.1%) + 784438 = 840,133

Annex C

Projected Supply

Historical Current Year - Historical Previous Year

Ave. % 
Historical Previous Year

2018 = (84000 x 18.3%) + 84000 = 99,372

2019 = (99372 x 18.3%) + 99372 = 117,557

2020 = (117557 x 18.3%) + 117557 = 139,070

Annex D

Market Share

Unsatisfie d demand  Projected Demand - Projected Supply

= 732435 - 99372 = 633,063

Selling Capacity  Production capacity x No. of days operation

= 1000 x 240 = 240,000

Market Share = Selling Capacity  Unsatisfie d Demand

240,000
= = 37.91%
633,063