Chapter 1

INTRODUCTION

Objective of the study

This study aimed to determine how feasible the “Ukay-Ukaya Ko Bi” business

in the Magnaga, Pantukan, Davao De Oro particularly near in national

highway and the marketability of its products and services. 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 future

demand as well as the supply of the proposed business, analyze the

competitiveness of the business in the market, provide fair and reasonable

price to customers according to the quality of the service and to determine if

the said business is feasible or not.

Methodology

This study conducted through surveys by gathering all the necessary data and

information in terms of the area and its population at Magnaga, Pantukan,

Davao De Oro. The proponents provide structured questionnaires to the

random respondents that will give reliable results to the entire study and aided

them on how they answer the guide questions. Moreover, the researchers

interviewed some existing business that was the same from conducted study.

1
Scope and Limitation of the Study

“Ukay Ukaya Ko Bi” business is conducted within the vicinity of Magnaga,

Pantukan, Davao De Oro. Residents were covered as part of the

respondents. The proponents focused on four aspects: the marketing,

production, management and financial aspects. The proponents examined the

information thoroughly in order to come up with realistic analysis and

recommendations.

2
 Chapter 2

Executive Summary

Brief Description of the Project

“Ukay-Ukaya ko bi” is a business that offers affordable and comfortable

clothes wherein revenue is derived from customers who buy the product

offered. The amount paid depends on the cost of clothes per kilo or bundle

with additional gross profit margin. The business will be located near

Magnaga National High School. The proposed business will offer clothes and

comfortable bedding that satisfies the needs and wants of the customers.

Table 1

Brief Profile of the Proponents

Name Educational Address

Background

Pia T. Suril Bachelor of Science in Magnaga, Pantukan

Accountancy Davao De Oro
Bachelor of Science in Magnaga, Pantukan
Phebe Zallia P. Radjac Accountancy Davao De Oro

Bachelor of Science in Prk. Orchids Mankilam

Emery G. Puno Accountancy Tagum City

Bachelor of Science in
Ana Jane R. Baret Accountancy

3
 Bachelor of Science in
Elira Ji Villegas Accountancy

Chapter 3

MARKETING PLAN

Description of the Product

“Ukay-ukaya Ko Bi” offers affordable and comfortable clothes that are

suitable for any occasion. The said business guarantees its customer to

provide clothes that respond to current fashion trends and it also provides

pillow, pillow covers, curtains, bed sheets, etc. All of these products provide

satisfaction to customers who want to purchase materials in a very affordable

price.

Comparison of Product with its competitors

Compared to the competitors, our product is more affordable and more

stylish. This is quite unique because the said location has a total population of

10,000 individuals and most of them had to go to Kingking, Pantukan to

purchase just to purchase clothes.

Location

The proposed business will be located at Barangay Magnaga, Pantukan

Davao De Oro near Magnaga National High School. The proponents chose

this site because of its high population and this location is at the center area

of the said barangay.

4
 MAGNAGA
BARANGGAY HALL

MAGNAGA
NATIONAL HIGH
SCHOOL

SURIGAO - DAVAO COASTAL ROAD

MAGNAGA
DEJAN’S ELEMENTARY
STORE SCHOOL

UKAY-UKAYA
THIS SITE
KO BI

5
 Figure 1. Shows the vicinity map of the proposed business

Market Area

The area covered by this business is typically the whole Barangay

Magnaga, near Magnaga National High School.

Main Customer

The main customers of this business are the students of Magnaga

National High School.

Total Demand

Presented in table 1 is the historical data gathered and analyzed by the

researchers regarding the trend of the Ukay-ukay to those consumers for the

past three (3) years. Consequently, the said data in table 2 were used as the

basis for the projected demand of the Ukay-ukay for the next three (3) years.

As you can see on table 2, the future demand for the Ukay-ukay is increasing

which shows a favorable effect for the selling of Ukay-ukay.

6
Historical Demand

Table 1 shows the historical demand of ukay-ukay for the past three (3)

years. The proponents gathered data with regards to the total student’s

population of Magnaga National High School thru the Principal’s and

Registrar’s office. Based on the interview conducted, 80% of the target

populace patronized the business. There were 400 interviewees and 320 of

them responded that they are purchasing Ukay-ukay at least seven times (7)

a month.

Table 1

Historical Demand

Average Frequency

Year Students Percentage of purchase per Total Demand

Client (80%) year

2016 1,100 880 24 21,120

2017 1,300 1,040 24 24,480

7
 2018 1,600 1,280 24 30,720

Projected Demand

Table 2 presents the projected demand and it is computed through the

moving average method. Based on the historical demand, it shows an

average percentage increase of 23% in years 1, 2, and 3.

Table 2

Projected Demand

Projected

Demand

Year Based Year Average % (No. of pieces per

Increases bundle of Ukay-

ukay)

1 30,720 25% 38,400

2 38,400 25% 48,000

8
 3 48,000 23% 50,000

Historical Supply

For the historical supply, the proponents identified only one (1) existing

business with the same nature as the proposed business situated at the

center of the barangay near Catholic church that operates (5) days per week.

Table 3 shows the competitor’s supply for the past three (3) years.

Table 3

Historical Supply

Year Competitor

2016 26,000

2017 28,000

2018 30,000

9
Projected Supply

The projected supply will be the basis in determining the average

percentage increase in supply for the past two (3) years of business

operation. Base from the table above, it shows an average increase of 23%.

Table 4 shows the projected supply of the proposed business and it is

computed through the moving average method.

Table 4

Projected Supply

Year Based Year Increase Projected Supply

32,400
1 30,000 8%

8%
2 32,400 34,992

3 34,791 8% 37,791

10
Demand and Supply Analysis

In Table 5, demand is higher than supply and it is rapidly increasing and

this signifies that there is a need to create an ukay-ukay store in the area.

This means that, there is a great feasibility of starting up “Ukay-Ukaya Ko Bi”

store in the area.

Table 5

Demand-Supply Analysis

Unsatisfied
Year Demand Supply
Demand

Historical Value

2016 1,620
20,240 19,500

2017 4,960
23,920 20,000

2018
9,720
29,440 21,000
Projected Value

1 32,400
6,000
38,400

2
34,992 13,008
48,000
3 37,791

11
 50,000 12,209

Market Share

Table 6 shows Market share that is computed by dividing the selling

capacity by the unsatisfied demand. The base of getting the selling capacity is

based on the capacity of the proposed business to sell the product.

Table 6

Market Share

Year Unsatisfied Market Share Selling Capacity

Demand

6,000
1 30% 20,000

13,008
2 59% 22,000

12,209
3 51% 24,000

12
Projected Selling Price

Table 7 indicates the Projected Selling Price of each item of pants, jacket,

blouses and shirts, skirt and dress that is offered by “Ukay-Ukaya Ko Bi”. It is

assumed to increase P5 per year.

Table 7

Projected Selling Price

Items Year 1 Year 2 Year 3

52.00
Pants 50.00 65.00

42.00
Jacket 40.00 55.00

32.00
45.00
Blouses and shirts 30.00

32.00
Skirt 30.00 45.00

42.00
Dress 40.00 55.00

13
Sales Revenue Forecast

Table 8 shows the sales revenue of the year 1 of the “Ukay-ukaya ko bi”

business. The data stated are based on the computation from the total

number of pieces purchased per year. Supply capacity is multiplied by selling

price to get the total sales. The total sales of the items are P650, 000.

Table 8

Sales Revenue

Year 1

Particulars Share in Quantity Selling Total Sales

percentage Price

Pants 5,000 45.00 P 225,000

25%

Jacket 2,000 35.00 70,000

10%

Blouses and
6,000 25.00 150,000
shirts 30%

Skirt 20% 4,000 25.00 100,000

Dress 15% 3,000 35.00 105,000

Total 100% 20,000 P 650,000

14
Sales Revenue Forecast

Table 9 shows the sales revenue of the year 2 of the “Ukay-ukaya ko bi”

business. The data stated are based on the computation from the total

number of pieces purchased per year. Supply capacity is multiplied by selling

price to get the total sales. The total sales of the items are P 869,000.

Table 9

Sales Revenue

Year 2

Particulars Share in Quantity Selling Price Total Sales

percentage

Pants 25% 5,500 52.00 P 286,000

Jacket 10% 2,200 42.00 92,400

Blouses and 30% 6,600 32.00 211,200

shirts

Skirt 20% 4,400 32.00 140,800

Dress 15% 3,300 42.00 138,600

Total 100% 22,000 P 869,000

15
Sales Revenue Forecast

Table 10 shows the sales revenue of the year 3 of the “Ukay-ukaya ko bi”

business. The data stated are based on the computation from the total

number of pieces purchased per year. Supply capacity is multiplied by selling

price to get the total sales. The total sales of the items are P 1,260,000.

Table 10

Sales Revenue

Year 3

Particulars Share in Quantity Selling Price Total Sales

percentage

Pants 25% 6,000 65.00 P 390,000

Jacket 10% 2,400 55.00 132,000

Blouses and 30% 7,200 45.00 324,000

shirts

Skirt 20% 4,800 45.00 216,000

Dress 15% 3,600 55.00 198,00

Total 100% 24,000 P 1,260,000

Summary of Sales

16
 Table 11 shows the summary of total sales revenue for the years 1, 2, and

3.

Table 11

Summary of Sales

Year Total Sales

1 P 650,000

2 869,000

3 1,260,000

Marketing Strategy

Our business is committed to achieve affordable and good quality

clothing. The proponents plan to execute a broader marketing strategy to

17
 build name and have better relationship with the target customers through

free website and facebook in order to reach wider range of possible

customers.

Table 12

CALENDAR OF MARKETING ACTIVITIES

..
Strategy Key Action Items Assigned To By When Budget
Business Group Read and become Site. Director January 14
Presentations familiar with the and Employer
Marketing Manual. Liaison

Research the local Janaury 24

labor market.

Prepare and print February 24

sales materials
(brochures, etc.).
Make general March 30
information
presentations to
group.
Charter Business Identify 100 Employer January 14
Solicitation businesses for Charter Liaison
Business solicitation.

Enter these 100 January 24

businesses into a
contact management
system.

Start Charter March 30

Business solicitation
with 25 mailing per
week and follow-up.

Annual Marketing Identify Marketing Site Director January 24

Plan Development Team
Draft Plan March 30

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

18
in the distribution of the product for the convenience of the students,

employees and households. The product will be assembled in order to ensure

the products are affordable.

Pricing Strategy

“Ukay-ukay” wares are sold in bales by traders. A bale may consist of

anywhere from 500-1000 different articles of clothing, and may be sorted into

specific kinds like women’s blouses, men’s shirts, kid’s wear, pants, jackets

and others. The price of bales depends on the number of clothes each bale

has or the quality of clothes they carry. Some bales of 1000 pcs are sold at

Php11, 000-15,000, plus shipping price. At this rate, the investment is around

Php11-15 per piece of clothing.

Basic “ukay” wares like shirts and blouses in Metro Manila are priced at

an average of Php75. Clearance sales may see the prices drop by at most

50%. But even when sold at a discount, entrepreneurs can still profit from a

sale because of the very low initial investment. Whether sold ‘fresh’ (within 3-5

days after the opening of the bale) or in a 3-for-100 bargain, the entrepreneur

can still profit or expect a return of investment amounting to 2-4x the original

cost per piece of clothing.

Pricing “ukay” wares definitely depends on an

entrepreneur’s diskarte (business acumen) – how he or she deals with

customers while balancing the flow of income and the disposal of stocks.

Provided an entrepreneur knows how to use his or her diskarte to manipulate

these factors, then return of investment can be maximized for each bale.

19
Project contribution to the economy (Socio-economic aspect)

Ukay-ukay nowadays is a very affordable source of fashionable yet

durable clothing material for those with relatively low incomes. Some people

would resort to buying ukay-ukay items because the latter are relatively

homogenous with the brand new garments and accessories that may be

bought in relatively high-class stores and shopping malls. Philippine-made

textiles and garments are said to be 30 percent more expensive than their

counterparts in the market, due partly to the inefficient local production and

technology processes as well as their relatively low productivity (Go 2002).

The textile and garments industry still needs adequate provisions for the

training of as well as incentives for workers, technological efficiency,

development in market production, and creation of regulating bodies. It will be

tougher for these local firms to compete against the ukay-ukay sellers. To

protect the local garments, textiles and clothing industries, President Gloria

Macapagal-Arroyo banned the entry and sale of ukay-ukay items in the

market. This created discontent among their patrons, who look at ukay-ukay

goods as the most affordable in the market (Philippine Star 2002). This also

entailed some implementation cost on the side of the government. While

authorities have every legal right to confiscate and even burn such items,

ukay-ukay stall owners managed to remain unscathed by relocating outside

Metro Manila—to locations not usually monitored by the Department of Trade

and Industry (DTI) and the Department of Social Welfare and Development

(DSWD).

Chapter 4

Distribution plan

20
Distribution Aspect

This chapter shows the process of purchasing the products for the

business. The first step is purchasing second hand apparels like clothes,

bags, shoes and etc. Second, the proponents will set the price of the clothes,

bags, shoes and etc. Third, the items or products will display in the store and

lastly, the payment of the customers. Furthermore, this chapter discusses the

acquisition of Fixed Capital, Equipment and Furniture and Fixtures with their

corresponding cost and also the expenses of the business operation all

throughout the duration.

Source of Equipment

The equipment that is using can be found at the shopping malls in Tagum

City. The proponents will have an easily access to purchase the equipment

that are needed to the business.

Purchasing
second hand
21
apparel
 Pricing the
clothes

Display the
Items

Payments

Figure 2. Technical Process

Planned Capacity

22
 Table 13 shows the planned capacity of the business and it will increase

by 23% each year.

Table 13

Planned Capacity

Year Planned Capacity

1 20,000

2 22,000

3 24,000

Terms and Condition of Purchase Equipment

In purchasing the equipment, it should be in a cash basis as well as, the

proponents will allocate the maintenance and repair of the equipment so that

it will avoid delay or inconvenience in the business operation.

Store Lay-out

The location of the proposed business is at Magnaga, Pantukan, Davao

de Oro. The beneficial of the proposed business is that, the place is easy to

access to the customers and the business is near from national road. Figure 3

will show the lay-out of the store.

23
 Fitting Room

Stock Room

Cashier

Display

Area

ENTRANCE/EXIT

Figure 3

Store Lay-out

24
Fixed Capital

Table 14 shows the equipment and furniture and fixtures which to be

used in the business operation.

Table 14

Fixed Capital

Equipment

Particulars Quantity Unit Cost Total Amount

Ceiling Fan 2 P 1,999.00 P 3,998.00

CCTV 1 15,000.00 15,000.00

Sub-Total P 18,998.00

Furniture and Fixtures

Table 1 P 500.00 P 500.00

Hangers 42 dozen 100.00 4,200.00

Mannequin 4 3,500.00 14,000.00

Chair 2 350.00 700.00

Sub-Total P 19,400.00

Grand Total P 38,398.00

Life of Fixed Capital

25
 Table 15 shows the estimated life and corresponding depreciation of the

equipment and furniture and fixtures.

Table 15

Life of Fixed Capital

Equipment
Estimated
Particulars Amount Life of Year 1 Year 2 Year 3
Asset
Ceiling Fan P 3,998.00 5 P 799.60 P 799.60 P 799.60

CCTV 15,000.00 5 3,000.00 3,000.00 3,000.00

Sub-Total P 18,998.00 P 3,799.60 P 3,799.60 P 3,799.60

Furniture and Fixtures

Table P 500.00 2 P 250.00 P 250.00

Hangers 4,200.00 3 1,400.00 1,400.00 P 1,400.00

Mannequin 14,000.00 4 3,500.00 3,500.00 3,500.00

Chair 700.00 2 350.00 350.00

Sub-Total P 19,400.00 P5,500.00 P5,500.00 P 4,900.00

Grand
P38,398.00 P 9,299.60 P 9,299.60 P 8,699.60
Total

Total Purchases

26
 Table 16, 17 and 18 show the total purchases of supply for the first three

years. The total amount of purchases in year 1 is P 170,000, year 2 is P

297,000 and the total amount in years is P 444,000.

Table 16

Year 1

Quantity Cost of
Particulars Selling Price Original Price
Purchases Purchases

Pants 50.00 10 50,000

5,000
Jacket 40.00 10 20,000
2,000
Blouses and
30.00 5 30,000
shirts 6,000
Skirt 30.00 10 40,000
4,000
Dress 40.00 10 30,000
3,000
TOTAL 170,000
20,000

Table 17

Year 2

Quantity Cost of
Particulars Selling Price Original Price
Purchases Purchases

Pants 15 82,500
5,500 55.00
Jacket 15 33,000
2,200 45.00
Blouses and
10 66,000
shirts 6,600 35.00
Skirt 15 66,000
4,400 35.00
Dress 15 49,500
3,300 45.00
TOTAL 297,000
22,000
Table 18

Year 3

27
 Quantity Cost of
Particulars Selling Price Original Price
Purchases Purchases

Pants 6,000 20 120,000

60.00

Jacket 2,400 20 48,000

50.00

Blouses and 7,200 15 108,000

shirts 40.00

Skirt 4,800 20 96,000

40.00

Dress 3,600 20 72,000

50.00

TOTAL 24,000 444,000

28
Utility Expense

Presented in Table 19 is the possible utilities expense to be incurred by

the proposed business and it is estimated to increase 5% per year.

Table 19

Utility Source Basis Rate per Total Amount

Month (Annually)

Power Supply DANECO Kilowatt P 1,500.00 P 18,000.00

hour

Water Supply Barangay Cubic Metres 250.00 3,000.00

Magnaga

TOTAL P 21,000.00
Utilities Expense

Projected Utilities Expense

29
 Table 20 shows the projected utilities expense for the first three years.

The total amount projected utilities expense in year 1 is P 21,000.00 and

assumed that it will increase by 5% per year.

Table 20

Projected Utilities Expense

Year Amount

1 P 21,000.00

2 22,050.00

3 23,152.50

Rent Expense

Table 21 shows the rent expense of the building where the business firm

is located and it is assumed to increase by 5% per year.

Table 21

Rent Expense

Year Amount

1 P 60,000.00

2 63,000.00

3 66,150.00

Repairs and Maintenance

30
 The proponents make sure that they have purchased of high quality

equipment. This is to avoid errors in terms of business operations. The

proponents decided to allocate P 3,000.00 for its maintenance to make sure

that all of the equipment to be used would function well and it assumed to

increase 10% per year

Table 22

Repairs and Maintenance

Year Amount

1 P 3,000.00

2 3,300.00

3 3,630.00

Supplies Expense

31
 Table 23 shows expenses of supply that will be used by the business.

This will serve as a tool for completing everyday transactions.

Table 23

Supplies Expense

Particulars Unit Cost Quantity Annual Cost

Ball pen P 190.00 P 380.00

2 boxes

Calculator 385.00 770.00

2 pcs

Garbage Bins 105.00 2 pcs 210.00

Dust Pan 150.00 1 150.00

Garbage 45.00 2 rolls 90.00

Cellophane

Broom 50.00 2 pcs 100.00

Record Book 160.00 320.00

2 pcs

Plastic Bag 70.00/ream 3,500.00

50 reams

TOTAL P 5,520.00

Projected Store Supplies Expense

32
 Table 24 shows the projected store supplies expense of the business. It

will increase by 5% per year.

Table 24

Projected Store Supplies Expense

Year Amount

1 P 5,520.00

2 5,796.00

3 6,085.80

Business Permit and Licenses

Table 25 shows the Business Permit and Licenses which is important in

the establishment in order to the starting business to be legal. It is assumed

that the business permit will increase by 5% due to the changes in capital.

Table 25

Business Permit and Licenses

Year Total Amount

1 P 3,000.00

2 3,150.00

3 3,307.50
Transportation Expense

33
 Table 26 shows the Transportation Expense of the business which is

used in purchasing necessary material for the operation of the business and

the proponents assumes that it will increase by 5% per year.

Table 26

Transportation Expense

Year Total Amount

1 P 24,000.00

2 25,200.00

3 26,460.00

Salaries and Wages

34
 Table 27 shows the salaries and wages of the employees where the

monthly salary of cashier is P 90,000.00 while the saleslady and sales boy is

P 72,000.00.

Table 27

Salaries and Wages

Employees Rate per Day Monthly Salary Annual Salary

Cashier P 250.00 P 7,500.00 P 90,000.00

Sales lady 200.00 6,000.00 72,000.00

Sales boy 200.00 6,000.00 72,000.00

TOTAL P234,000.00

Projected Salaries and Wages

Table 28 shows the projected salaries and wages of the employees where

there is no increase of their salary every year.

Table 28

Projected Salaries and Wages

Employees Year 1 Year 2 Year 3

Cashier P 90,000.00 P 90,000.00 P 90,000.00

Sales lady 72,000.00 72,000.00 72,000.00

Sales boy 72,000.00 72,000.00 72,000.00

TOTAL P234,000.00 P 234,000.00 P234,000.00

Benefits Contribution

35
 Table 29 shows the Benefits Contribution of the employer where the total

yearly contribution is P 32,640.00.

Table 29

Phil Health SSS Premium Pag-ibig

Contribution Contribution Contribution

EE ER EE ER EE ER Total
Employees Monthly Monthly Monthly Monthly Monthly Monthly Yearly
Share Share Share Share Share Share Contributio
n

Cashier P150.00 P150.00 P340.00 P680.00 P150.00 P150.00 P11,760.00

Saleslady/ 150.00 150.00 300.00 600.00 120.00 120.00 P10,440.00

sales boy
Benefits Contribution

Total Projected Contribution

36
 Table 30 shows the Total Projected Contribution and in every year there is

no increase of the contribution.

Table 30

Total Projected Contribution

Employees Year 1 Year 2 Year 3

Cashier P 11,760.00 P 11,760.00 P 11,760.00

Saleslady 10,440.00 10,440.00 10,440.00

Sales Boy 10,440.00 10,440.00 10,440.00

TOTAL P 32,640.00 P 32,640.00 P 32,640.00

Bookkeeper Honorarium

Table 31 shows the Honorarium of the Bookkeeper annually and it has a

total amount of P 6,000.00 per year with no increase yearly.

Table 31

Bookkeeper Honorarium

Year Total Amount

1 P 6,000.00

2 6,000.00

3 6,000.00

Summary of Expenses

37
 Table 32, 33, and 34 shows the summary of operating expenses of the

proposed business.

Table 32

Summary of Operating Expenses

Year 1

Particulars Operating Expense

Depreciation Expense P9,299.60

Utilities Expense 21,000.00

Repairs and Maintenance 3,000.00

Store Supplies Expense 5,520.00

Rent Expense 60,000.00

Permit and Licenses 3,000.00

Transportation Expenses 24,000.00

Benefit Contribution 32,640.00

Salaries and Wages 234,000.00

Bookkeeper Honorarium 6,000.00

Advertisement 2,250.00

TOTAL P 400,709.90

Summary of Expenses

38
 Table 33

Summary of Operating Expenses

Year 2

Particulars Operating Expense

Depreciation Expense P 9,299.60

Utilities Expense 22,050.00

Repairs and Maintenance 3,300.00

Store Supplies Expense 5,796.00

Rent Expense 63,000.00

Permit and Licenses 3,150.00

Transportation Expenses 25,200.00

Benefit Contribution 32,640.00

Salaries and Wages 234,000.00

Bookkeeper Honorarium 6,000.00

Advertisement 2,250.00

TOTAL P 406,685.60

Summary of Expenses

Table 34

39
 Summary of Operating Expenses

Year 3

Particulars Operating Expense

Depreciation Expense P 8,699.00

Utilities Expense 23,152.50

Repairs and Maintenance 3,630.00

Store Supplies Expense 6,085.80

Rent Expense 66,150.00

Permit and Licenses 3,307.50

Transportation Expenses 26,460.00

Benefit Contribution 32,640.00

Salaries and Wages 234,000.00

Bookkeeper Honorarium 6,000.00

Advertisement 2,250.00

TOTAL P 458,419.80

40
 Chapter 5

Organization and Management Aspect

Form of Business Enterprise

“Ukay-Ukaya ko bi” is a partnership form of business. It is a formal

arrangement by two or more persons binds themselves to contribute money,

property or industry to a common fund with the intention of dividing profits

among themselves. In business and partnership law, contribution may refer to

a capital contribution, which is an amount of money or assets given to a

business or partnership by the partners. The capital contribution increases the

owner or partner’s equity interest in the entity. Profits and losses earned by

the business are allocated to the partners based on the provisions of

the partnership agreement.

Management and Organization Structure

Partners appointed after the constitution of partnership may execute all

acts of administration. Fig. 4 shows the organizational structure of the

business.

41
 MANAGER

Bookkeeper

Sales Cashier
Lady/Men

Figure 4

Organizational Structure

42
Management Qualification and Functions

The table below shows the qualification and functions of the workers. This

would help sthem to know their duties and responsibilities in order to do their

tasks properly.

Position Job Description Job Specification

Manager ● Develops business ● Had broad

management goals knowledge in

and objectives that merchandising

tend to growth and business.

prosperity. ● Know how to handle

● Enforce policy to employees and

cultivate an customers.

environment that ● Establish and

makes employees maintain the desired

accountable for their professional ethos

action. when in a work

● Communicate and place.

motivate employees

while establishing

appropriate

methods to evaluate

job performance.
Sales lady/Men ● Assist customers ● At least a high

and must be able to school graduate

answer questions or ● Had knowledge of

43
 concerns. customer service

● Any complaints and sales.

must be handled ● Had experience in

professionally and retail and business

must communicate administration.

properly. ● With good manners

and right conduct.

Cashier ● Scan the customer’s ● Have knowledge of

selections, ensure basic accounting.

that prices and ● Customer service or

quantities are Cashier experience.

accurate, accept ● Ability to handle

payments, issue transactions

receipts, answer accurately and

inquiries, and responsibly.

provide helpful

information to

customers.

● Processing refunds

and exchanges,

resolving

44
 complaints. Also,

wrapping purchases

to ensure safe

transport.
Bookkeeper ● Recording ● Accounting

transactions such graduate and

as income and trustworthy.

outgoings, and

posting them to

various accounts.

Chapter 6

Financial Plan

Financial Aspect

45
Major Assumption

1. The Market share per year is 30%, 59% and 51% of the total unsatisfied

demand.

2. Depreciation is computed by using the straight line method.

3. Salaries and wages is P 19,500.00 each month.

4. Honorarium of Bookkeeper is assumed to be P 6,000.00.

5. Utility expense assumed to increase by 5% each year.

6. Rent expense assumed to increase by 5% each year.

7. Repair and Maintenance expense assumed to increase by 5% each year.

8. Store Supplies expense assumed to increase by 5% each year.

9. Business Permit is P3,000.00 on the first year and assumed to increase

by 5% each year.

10. Transportation expense assumed to increase by 5% each year.

11. Benefits and contribution expense assumed to increase by 5% each year.

Total Projected Cost

The proposed business of the proponents needs P 150,000.00 to support

the operation of the business.

46
Pre- operating Expense
Business Permit P 3,000.00
Initial Fixed Capital Cost
Equipment P 37,566.00
Furniture and Fixtures 19,400.00 P 56,966.00
Initial Working Capital (one month)
Cost of Purchases P 14,167.00
Operating Expenses (one month)
Utilities Expense P 1,750.00
Repair and 250.
Maintenance 00
460.
Store Supplies 00
5,000.
Rent Expense 00
Transportation 2,000.
Expense 00
2,720.
Benefits Contribution 00
500.
Bookkepeer Honorarium 00
19,500.
Salaries and Wages 00
187.
Advertisement 50 P 32,367.50
106,500.
TOTAL 50
Add 43,499.
: Cash on Hand 50
P150,000
TOTAL INVESTMENT COST .00

Ukay Ukaya Ko Bi
Projected Income Statement
For the year ended December 31, Year 1-3

47
 YEAR 1 YEAR 2 YEAR 3
Sale
s P 650,000.00 P 869,000.00 P 1,260,000.00
Less: Cost of Sales 170,000.00 206,800.00 268,800.00
Gross Profit P 480,000.00 P 662,200.00 P 991,200.00
Operating Expense

Utilities Expense P 21,000.00 P 22,050.00 P 23,152.50

Repair and Maintenance 3,000. 3,300. 3,630.0
Expense 00 00 0
5,520. 5,796. 6,085.8
Store Supplies Expense 00 00 0
60,000. 63,000. 66,150.0
Rent Expense 00 00 0
3,000. 3,150. 3,307.0
Permit and Licenses 00 00 0
24,000. 25,200. 26,460.0
Transportation 00 00 0
32,640. 32,640. 32,640.0
Benefits Contribution 00 00 0
6,000. 6,000. 6,000.0
Bookkeeper Honorarium 00 00 0
234,000. 234,000. 234,000.0
Salaries and Wages 00 00 0
9,299. 9,299. 8,699.6
Depreciation Expense 60 60 0
2,250. 2,250. 2,250.0
Advertisement 00 00 0
Total Operating Expense P 400,709.60 P 406,685.60 P 412,374.90

NET INCOME P 79,290.40 P 255,514.40 P 578,825.10

48
 Ukay Ukaya Ko Bi

Projected Cash Flow

For the year ended December 31, Year 1-3

Cash Inflow YEAR 1 YEAR 2 YEAR 3

Sales Revenue P 650,000.00 P869,000.00 P 1,260,000.00

Less:Cash Outflows

Cost of Sales P 170,000.00 P 206,800.00 P 268,800.00

Fixed Asset 38,398.00 0.00 0.00

Utilities Expense 21,000.00 22,050.00 23,152.50

Repair and Maintenance
Expense 3,000.00 3,300.00 3,630.00

Store Supplies Expense 5,520.00 5,796.00 6,085.80

Rent Expense 60,000.00 63,000.00 66,150.00

Permit and Licenses 3,000.00 3,150.00 3,307.00

Transportation 24,000.00 25,200.00 26,460.00

Benefits Contribution 32,640.00 32,640.00 32,640.00

Bookkeeper Honorarium 6,000.00 6,000.00 6,000.00

Salaries and Wages 234,000.00 234,000.00 234,000.00

Advertisement 2,250.00 2,250.00 2,250.00

TOTAL P 599,808.00 P 604,186.00 P 672,475.30

Net Increase in Cash P 50,192.00 P 264,814.00 P 587,524.70

Add: Cash Balance, Beg 150,000.00 200,192.00 465,006.00

Ending Cash Balance P 200,192.00 P 465,006.00 P 1,052,530.70

Ukay Ukaya Ko Bi

49
 Projected Balance Sheet
As of December 31, Year 1-3

ASSET

YEAR 1 YEAR 2 YEAR 3

Current Asset
Cash P 200,192.00 P 465,006.00 P 1,052,530.70
Non-Current Asset
Equipment P 18,998.00 P 18,998.00 P 18,998.00
Acc. Depreciation 3,799.60 7,599.20 11,398.80
Furniture and Fixtures 19,400.00 19,400.00 19,400.00
Acc. Depreciation 5,500.00 11,000.00 15,900.00

Total Non-Current Asset P 29,098.40 P 19,798.80 P 11,099.20

TOTAL ASSET P 229,290.40 P 484,804.80 P 1,063,629.90

Owner's Equity

Capital, Beg. P 150,000.00 P 229,290.40 P 484,804.80

Add: Net Income 79,290.40 255,514.40 578,825.10
TOTAL OWNER'S EQUITY P 229,290.40 P 484,804.80 P 1,063,629.90

Financial Ratio Analysis

50
 In determining the projected performance of the proposed business, the

financial ratios are important which will reflect the feasibility of the study.

Gross Profit Ratio

The Gross profit ratio for the first three years of business operations of the

proposed business are 73%, 76%, and 78% respectively. Below show the

proposed business performance in the succeeding years.

Gross Profit Ratio:

Year 1 Year 2 Year 3

Gross Profit
P 480,000.00 P 662,200.00 P 991,200.00

Divide: Net Sales

P 650,000.00 P869,000.00 P 1,260,000.00

73% 76% 78%

Net Profit Ratio

The net profit ratios of the first three years of operation of the proposed

business are 22.44%, 33.20%, and 39.25% respectively. Below show the

proposed business will be efficient in converting the sales into actual profit.

Net Profit Ratio:

Year 1 Year 2 Year 3

51
 Net Profit
P 79,290.40 P 255,514.40 P 578,825.10

Divide: Net Sales

P 650,000.00 P869,000.00 P 1,260,000.00

12.20% 29.40% 46%

Return on Investment

The Return on investment results to 34.45%, 52.70% and 54.42%

respectively. The computation shows below.

Return on Investment

Year 1 Year 2 Year 3

Net Income
P 79,290.40 P 255,514.40 P 578,825.10

Divide: Total
Assets P 229,290.40 P 484,804.80 P 1,063,629.90

34.45% 52.70% 54.42%

Annex A

52
Formula:

 Ave. Increase Percentage

Total no. consumable per year less based year divided by based year.

Historical Demand

= 30,720 (2018) - 24,480 (2017)

24,480 (2017)

= 25%

Historical Supply

= 30,000 (2017) – 28,000 (2018)

28,000 (2017)

= 8%

 Market Share Percentage

Unsatisfied demand divided by selling capacity.

Year 1

6,000 ÷ 20,000 = 30%

Year 2

13,008 ÷ 22,000 = 59%

Year 3

12,209 ÷ 24,000 = 51%

53