BUSINESS PLAN FOR JUICE MIXES

Executive Summary

Business Name : MLG Enterprises

Business Address : RH 4, General Luna Street, Cotabato City

Nature of Business : Juice Making

Form of Business : Single Propreitorship

Proponent : Ms. Mavii Garciano

Objectives

The project seeks to achieve the following:

 Turn in profits from the first year of operations.

 Maintain a 65% gross margin.

Marketing Aspect

The venture MLG Enterprise, proposed a product PiñaCoolAda. It is a creamy-cool blend

of pineapple and coconut. One sip of a refreshing PiñaCoolAda will take you to a beach

lovers’ paradise you’ll never want to leave. Each serving will be put into a creative

package of transparent plastic wrap.

The business will cater to people who want to quench their thirst by drinking coolers.

Such customers vary in age, although our location which is next to a high school campus

means that our clientele will most likely be high school students. PiñaCoolAda

will be sold at an introductory price of P35.00 in the first year to generate

consciousness towards the product and encourage the target market to patronize the juice. The

business will use flyers and posters to advertise the product.

Technical Aspect

The venture will be set up at RH 4, General Luna Street, Cotabato City in between two

high school campuses and just a block away from a college campus. A food cart will be

put up for the proposed business.

The main ingredients of the PiñaCoolAda will be coconut cream, pineapple juice blend,

pineapple and banana. The business will require weighting scales, measuring cups and

spoons, blender, knives, chopping boards, hair net, plastic hand gloves and transparent

warps.

Organizational Aspect

The business will be a single proprietorship. It will register as a BMBE with the Cotabato

City government to avail for tax exemptions privileges. The proponent will make all the

decisions and handle the aspects of the operations.

 Financial Aspect

The project will cost P20,000. The proponent will use her own funds to start the business.

MARKETING PLAN

The Product

The proposed business aims to sell pineapple juice mix. The product will come in a 16 oz

bottle. It is a creamy cool-blend of pineapple and coconut which will be a thirst

quenching juice cooler. It will bear the brand name, PiñaCoolAda and will be

produced and sold in Cotabato City during its first three years.

Target Market

PiñaCoolAda will target individuals from high-lower up to high income classes. There

are no specifications as to the gender and age of the target market for they differ, but the

students are the most probable ones to patronize since the product store will be

strategically placed next to a high school campus and is just a few blocks away from a

university.
The Market Situation

Because of the rising case of global warming and Cotabato City being one of the cities

going up to 42°C, many cafés and stores offering cold beverages have emerged. Those

stores offer different types of beverages ranging from sodas, shakes, coolers, frappes,

milk teas and anything that quenches the thirst of the customers.

 Demand

Ever since cafes became a trend and food-tography have gained many likes from

social media, people had already been enthusiastic on discovering new and unique

dishes as well as refreshers not only to satiate their hunger but also to fill-in their

facebook and instagram feeds with #Foodtography posts. In this case, the market for

juice mixes is getting bigger and bigger especially in places of high temperature like

Cotabato. People will not only be looking for something cold to quench their thirst

but also something delicious and healthful.

 Supply

When in comes to fruit juices, there are a lot of brand names and products that come

in mind. There’s eight o’clock, tang, nesfruta, etc. but if you talk about natural fruit

juices, there are only so little we can think about.

The competitors then of PiñaCoolAda will be the natural fruit drinks sold in the City

that already have an established name for their stores. Most of them are sidelines of

fruit stand owners.

 Marketing Strategies

 Objectives

The planned business aims to capture at least 20% of the student population who will

purchase PiñaCoolAda at least thrice a week. The estimated size of the market for

PiñaCoolAda in the first year is 50,000 cups.

Schedule 1-A: Projected Sales Summary Schedule

(volume and value)

Year M O N T H

Total Selling Total

1 1 2 3 4 5 6 7 8 9 10 11 12 Units Price Peso

(PhP) Sales
140 140 140 140 140 140 140 140 140 140 140 416 1680 35 58,800

The business projects 40% raise in the demand for PiñaCoolAda for the second year and

50% increase in demand is estimated for the third year.

Schedule 1-B: Projected Sales Summary Schedule

(volume and value)

Year M O N T H

Total Selling Total

2 1 2 3 4 5 6 7 8 9 10 11 12 Units Price Peso

(PhP) Sales
196 196 196 196 196 196 196 196 196 196 196 196 2,352 37 87,024

Schedule 1-C: Projected Sales Summary Schedule

(volume and value)

Year M O N T H

Total Selling Total

3 1 2 3 4 5 6 7 8 9 10 11 12 Units Price Peso

(PhP) Sales
294 294 294 294 294 294 294 294 294 294 294 294 3,528 39 137,592

 Product Strategies

The more known fruit juices with brand names are packed in square plastic wraps.

PiñaCoolAda will be packaged uniquely in a transparent wrap and unlike those

processed, to-be mixed fruit juices, PiñaCoolAda will be made directly from pineapple
 chunks, naturally mixed. PiñaCoolAda suggest the guarantee that the customer will

have a cooling sensation upon sipping the fruit juice.

 Place Strategies

The known fruit juices are being sold in supermarkets, groceries, and sari-sari stores

nationwide. The natural fruit juice and shake products in Cotabato put up their own

stores usually along fruit stands.

The proposed business will be located in RH 4, General Luna Street, in between two

high school campuses and just a block away from a college campus.

PiñaCoolAda will be sold straight to end-users who will purchase it directly from the

store.

 Price Strategies

The next table will show you the price in Cotabato the existing fruit juice mixes

Brand Name Net Weight Price

(Oz)
Pineapple juice 16 20
Pinasarap 18 30
Pineapple Shake 16 35
Pilipiña 16 45
 The proposed business will consider both internal and external factors in setting the

price of PiñaCoolAda. It will initially consider the production and selling costs, the

selling price of the competitors and the market price.

The proponent will sell the product for an introductory price of P35.00 in the first

year.

Table 1: Projected Sales (Volume and Value)

Year 1 Year 2 Year 3
Planned sales volume 1,680 2,352 3,528
35.00 37.00 39.00
X selling price per unit 58,800 87,024 137,592

Total Sales

The proposed business does not intend to expand credit within the first three years.

 Promotional Strategies

The well-known fruit juice brands promote their through tri-media. Aside from posting

on billboards, flyers, posters, newspapers and other print ads, they also advertise

through different Medias such as radio, television and the internet. They even use

celebrities and social media influencers to endorse their products.

The fruit juices sold in Cotabato City are promoted through word of mouth and

tarpaulins.

For the product to make a noise to the market, it will be promoted using print ads, such

as tarpaulins to be placed on malls and along the highway and outside of school
 campuses. Flyers will also be distributed outside campuses and inside the malls. The

business will also promote their product by word of mouth.

Table 2. Selling Expenses

Year 1 Year 2 Year 3
2,000 5,000 8,500
Sales Commissions 1,000 1,000 1,000
500 300 400
Advertising 2,500 3,000 4,500
200 300 250
Posters, flyers
500
Packaging 6,200 9,600 15,150
Transportation expense

Sales promotions

Sponsorship

Total Selling Expenses

TECHNICAL PLAN

Plant Location

The proposed business will be put up at RH 4, General Luna Street, Cotabato City in

between two high school campuses and just a block away from a college campus. It

will be located at a crossing where there are a lot of passerbies.

Process Description

Following is the step-by-step process for the manufacture of PiñaCoolAda fruit juice.
 Step Description
1 Prepare the materials and utensils
2 Put 1 cup of crushed ice in a blender
3 Add 1 oz. of coconut cream to the blender
4 Add 3 oz of pineapple juice to the blender
5 Blend the ingredients together
6 Pour inside the plastic wrap

Property, Plant and Equipment

Production activity will be done at the physical store which will have a separate

installation for electricity and water lines.

The business will require weighting scales, measuring cups and spoons, blender,

knives, chopping boards, hair net, plastic hand gloves and transparent warps.

Table 3: Fixed Investment and Depreciation Schedule

Acquisition Qty Total Life Annual Depreciation
Cost Cost Span Charges
(in
years)
Year1 Year2 Year3
Building Improvements 1,000 300 300 300
Machines/ eqpt./ Tools
Weighting scales, 1 400 10 50 50 50
measuring cups and 2 100 5 10 10 10
spoons
Blender
2 900 8 300 300 300
Knives 2 100 2 20 20 20
chopping board
2 100 2 20 20 20
hair net
plastic hand gloves 2 100 1 70 70 70
transparent warps. 1 box 100 1 90 90 90
50 500 1 20 20 20

Total Bldg. Improvements, 2,120 580 580 580

Machines/ Eqpt./ Tools
Furniture and Fixtures
Working tables 2 1,000 8 150 150 150
Wooden Stools
Existing
Total Furniture and
Fixtures 1,000 150 150 150

Office Furniture and

Equipment
Office desk 1 500 5 150 150 150
Office chairs 2 800 5 150 150 150
Display rack 1 1,000 5 200 200 200
Personal computer existing
Printer
existing

Total Office Euipment & 2,300 500 500 500

Furniture
GRAND TOTAL 6,420 1,230 1,230 1,230

Production Schedule

Production of PiñaCoolAda will be done on a daily basis with at least 30 units per

day.

Table 4: Production Schedule

Year 1 Year 2 Year 3
Planned sales volume, in units 1,680 2,352 3,528
100 150 250
Add: Desired ending in FG inventory, in units 0 100 150
1,780 2,402 3,628
Less: Beginning FG inventory, in units

Units to be produced
  Raw Materials

Schedule 3: Direct Raw Materials Requirement

Direct Material Purchase cost/unit of Quantity needed/ unit Cost/unit to be
(A) material to be produced produced
(B) (C) (D)
Crushed ice 5.00/ block 0.100 0.10
Coconut cream 50.00/kg 0.030 3.5
Pineapple juice 100.00/kg 0.060 10
Direct material cost per unit 13.6
 Table 5: Direct Material Cost
Year 1 Year 2 Year 3
Units to be produced 1,680 2,352 3,528
x Direct material cost per unit 13.6 13.6 13.6
Total direct material cost 22,848 31,987.2 47,980.8

Since production of PiñaCoolAda will be done on a daily basis with at least 30 units

per day, it is important for the proposed business to have materials ready for use.

Materials will be purchased every 15 days. The desirable level of inventory to keep is

shown on the next page.

Schedule 3-A: Inventory Schedule for Direct Materials, Year 1

Direct Material Purchase cost per unit Quantity to keep in Cost of material in

(PhP) stock (kg) stock (PhP)

Crushed ice 5.00/ block 45 100
Coconut cream 50.00/kg 13.5 500
Pineapple juice 100.00/kg 27 800
Desired ending inventory of direct materials for Year 1 1,400

Schedule 3-B: Inventory Schedule for Direct Materials, Year 2

Direct Material Purchase cost per unit Quantity to keep in Cost of material in

(PhP) stock (kg) stock (PhP)

Crushed ice 5.00/ block 65 200
Coconut cream 50.00/kg 20.4 700
Pineapple juice 100.00/kg 29 1100
Desired ending inventory of direct materials for Year 2 2,000

Schedule 3-C: Inventory Schedule for Direct Materials, Year 3

Direct Material Purchase cost per unit Quantity to keep in Cost of material in

(PhP) stock (kg) stock (PhP)

Crushed ice 5.00/ block 80 300
Coconut cream 50.00/kg 25 1000
Pineapple juice 100.00/kg 31 2800
Desired ending inventory of direct materials for Year 3 4,100
 Table 6: Direct Material Purchases
Year 1 Year 2 Year 3
Total direct cost 1,680 2,352 3,528
Add: Direct materials ending inventory 1,400 2,000 4,100
Less: Direct materials beginning inventory 0 1,400 2,000
Total direct materials purchases 3,080 2,952 5,628

 The proposed business will need two workers. The workers will be working hand in

hand on the stall for 7 hours. One for entertaining customers and jotting down their

orders and the other one for preparing them.

Activity Time to complete No. of workers

(in minutes) needed

Prepare the materials and utensils .30 1
Put 1 cup of crushed ice in a blender .30 1
Add 1 oz. of coconut cream to the blender .30 1
Add 3 oz of pineapple juice to the blender .30 1
Blend the ingredients together 2.0 1
Pour inside the plastic wrap 1.0 1
Total no. of minutes to produce one order 5.0

Table 7: Manpower Requirement

No. of workers Rate per month Annual rate
Direct Labor 2 800.00.00 9,600.00

Manager 1 (owner) 2,000.00 24,000.00

Total 2,800.00 33,600.00

Table 8: Cost of Production

Year 1 Year 2 Year 3
Direct materials 1,680.00 2,352.00 3,528.00
Direct labor 9,600.00 12,412.00 19,200
Production overhead
Depreciation of production eqpt. 730 730 730
Transportation Expense 1500.00 1500.00 1500.00
 Total cost of production 13,510 16,994 24,958

Table 9: Production Cost per Unit

Year 1 Year 2 Year 3
Total cost of production 13,510 16,994 24,958
/ Units to be produced 1,780 2,402 3,628
Production cost pe-1r unit 7.60 7.07 6.88

Table 10: Finished Goods Ending Inventory

Year 1 Year 2 Year 3
Production cost per unit 7.6 7.07 6.88
x Desired FG ending inventory 100 150 250
Value of FG ending inventory 760 1060.5 1720

Table 11: Cost of Goods Sold

Year 1 Year 2 Year 3
Total production cost 13,510 16,994 24,958
Add: FG beginning inventory 0 760 1060.5
Total cost of goods available for sale 13,510 17,754 26,019
Less: FG ending inventory 760 1060.5 1720
Total cost of goods sold 12,750 1 6,694 24,299

ORGANIZATIONAL PLAN

Legal Form

The proposed venture will start as a very informal undertaking. It will be a single proprietorship

with the owner-proponent making all the decisions and assuming all the functions. This is the

first business operated by the proponent. She intends to register the proposed business with the

local government as a BMBE.

Schedule 4: Licenses, Permits, and Registration Expenses

Type of business Fees Transportation Incidental Total

permit expenses expenses

Barangay certificate 300.00 300.00
 Business permit from 1100.00 20.00 25.00 1,145.00

the LGU
DTI certificate 600.00 20.00 25.00 645.00
BIR certificate 600.00 20.00 150.00 770.00
BMBE certificate 1,000.00 20.00 50.00 1,070.00
3,930.00

Table12: Pre-operating Expenses

Total licenses, permits, and registration expenses 3,930.00
Consultancy fess 1,500.00
Trial production runs 4,000
Installation of utilities 150.00
Total pre-operating expenses 9,580.00

Manpower

The owner-proponent will run and manage the proposed business by herself. Since this is her

first time running a business, she will have to seek help and ask for incites on her other friends

who have also run their own businesses successfully. Looking for workers will not be a hard task

since the nature of work and working hours will be light.

Table 13: Administrative Expenses

Year 1 Year 2 Year 3
Salaries and wages 9,600.00 9,600.00 9,600.00
Amortization of pre-operating Expenses 1,500.00 1,500.00 1,500.00
Depreciation of the office furniture 500.00 500.00 500.00
Total administrative expenses 11,600 11,600 11,600

The chart below gives an overview of the different activities that the proponent will undertake

before she will start actual operations.

W E E K
1 Prepare business plan 1 2 3 4 5 6 7 8 9 1 1 12

0 1
2 Put up capital
3 Improvement of physical store
4 Acquire equipment and tools
 5 Purchase raw materials
6 Hire and train workers
7 Register with the government
8 Consult packaging expert
9 Trial run
10 Test the market
11 Statrt operation

FINANCIAL PLAN

Table 14: Total Project Cost

Dept Equity

Total pre-operating expenses 9,580.00

Fixed Investment 6,420.00
Working Capital 4,000.00
Total Project Cost 20,000.00 20,000.00

The proponent will raise funds from the financial help of family, close friends and her own

savings.

Table 15: Projected Income Statement

Year 1 Year 2 Year 3
Total Sales 58,800 87,024 137,592
Less: cost of goods sold 15,610.00 20,396.00 26,891.5
Gross profit from sales 43,190 66,628 110,700
Less: selling expenses 8,500 13,600 20,800
Less: administrative expenses 11,600 11,600 11,600
Net income before tax 23,090.00 41,428 78,300
 Less: Tax (exempted as a BMBE) 0 0 0
Net profit 23,090.00 41,428 78,300

The proposed business looks promising in the basis of the projected income for the first three

years.

Table 16: Projected Cash Flow

Pre-operating Year 1 Year 2 Year 3
Cash Inflows
Owner’s equity 20,000.00      
Cash sales   58,800 87,024 137,592
Total cash inflows 20,000 58,800 87,024 137,592
Cash Outflows
Pre-operating expenses 9,580.00      
Fixed investment 6,420.00      
Materials purchases   3,080 2,952 5,628
Direct labor   9,600.00 12,412.00 19,200
Production overhead minus   2500 2500 2500

Depreciation and direct materials

Selling & administrative expenses 15,800.00 19,200 24,750

minus depreciation and amortization

of pre-operating expenses
Total cash outflow 16,000.00 30,980.00 37,064.00 52,078.00

NET CASH FLOW 4,000 27,820 49,960 85,514

Add: Beginning cash balance 0 5,000 8,987 31,987
Ending cash balance 4,000 32,820 58,947 117,501

Table 16: Projected Balance Sheet

Pre-operating Year 1 Year 2 Year 3
ASSETS
Cash 4,000 32,820 58,947.00 117,501
Raw materials inventory 0 1,400 2,000 4,100
Finished goods inventory 0 760 1060.5 1720
Total current assets 4,000 34,980 62,008 123,321
Property, plant and equipment 6,420.00 6,420.00 5,190 3,960
Less: accumulated depreciation 0 1,230 1,230 1,230
NET PROPERTY, PLANT & 6,420 5,190 3,960 2,730
 EQUIPMENT
Pre operating expenses 9,580.00 9,580.00 8,080.00 6,580.00
Less: accumulated depreciation 0 1,500.00 1,500.00 1,500.00
NETPRE-OPERATING 9,580.00 8,080.00 6,580.00 5,080.00

EXPENSES 20,000 48,250 72,548 131,131

TOTAL ASSETS
LIABILITIES & OWNER’S

EQUITY
Owner’s Equity 20,000.00 20,000.00 20,000.00 20,000.00
Retained Earnings (loss)   28,250.00 52,547.50 111,131.00
TOTAL LIABILITIES & 20,000 48,250 72,548 131,131

OWNER’S EQUITY

Financial Analysis

Ratio Year 1 Year 2 Year 3

Equity to assets 0.464 0.326 0.203
Gross profit to sales 0.393 0.476 0.569
Net operating income to sales
Net operating income to equity