BUSINESS PLAN FOR MAKI NI INANG

A Business Plan Submitted to the Faculty of Joji Ilagan International School of Hotel
and Tourism Management, General Santos City

In Partial Fulfilment of the Requirements in the Course

ENTREPRENEURSHIP IN TOURISM AND HOSPITALITY MANAGEMENT

By

YPRILLE KAYE H. SUMATRA

JIESEL MAE A. ESCASINAS
DENIEL JAN P. PILAR
JESSICA V. ESMAEL
PAUL M. SOLEDAD
GRACE B. BALILI

BACHELOR OF SCIENCE IN HOSPITALITY MANAGEMENT

ALADIN M. IBRAHIM, DM
Adviser

SEPTEMBER 2022
 Executive Summary

Brief Description of the Project

Many Filipinos specifically, in General Santos City loves anime and Japanese
culture which can be observed in various cosplay events that are being held here in
General Santos City. Moreover, there are a lot of sushi businesses and stores that
offers sushi that also shows a lot of demand for it. Through our product we had found
an innovative way to make the sushi became a Filipino dish.

Our group has thought that we must create a sushi made of Filipino foods
which includes Longganisa, Tapa, Adobo, Bulad, Adobo flakes, salted egg, salted
tomato, pickled cucumber and quail egg. To specify it an innovative Filipino sushi is
composed of various layers the first layer is the Nori, then followed by a rice that
envelops the Filipino viands such as Adobo flakes, Tapa and such. These Filipino
viands will be put in a minimal size to ensure that the food can be eaten without any
problem and also so that each components will be intact and will not scatter.

Through this innovative Filipino sushi we are able to have an easier access in
food because the sushi will be two in one which is composed of rice and viands.
Through this all the customers will be full and will enjoy the new innovative food with
wonders and fulfillment in their stomach. Therefore, the prices , ideas and the
innovation of the products will surely be enjoyed by customers.

Brief Profile of the Entrepreneur

The entrepreneurs will be the students of Joji Iligan International School of

Hotel and Tourism Management under the course of Bachelor in Science in Tourism
Management. The entrepreneurs are from General Santos City which is the Tuna
Capital of the Philippines. The entrepreneurs has the skills related to the business
which is food production. They have a background in basic food production and
preparetion which is required for the said project.

Project’s Contribution to the Economy

This project will help the economy to have more economic sales, stable
economic income, provide new valuable products that will surely enjoy by the
citizens. In addition, through this kind of project this will provide new jobs that will
help the economy to stabilize. Moreover, this kind of businesses or also known as
small business create a new path for innovation. By having new innovation people
will think of it as another way to encourage people to have innovations that will surely
help the economic growth and income. These small businesses become larger
someday which will surely benefit the economy in long-term basis.
 SECTION 1

1.1 Description of the Product

The Maki Ni Inang is a maki bar located in Lagao along Digos – Makar Road fronting

Mcdonalds, Lagao, General Santos City. The design of the maki bar projects

traditional Japanese sushi bar with hint of Filipino culture atmosphere for customers.

The aesthetic of the maki bar depicts an interior industrial environment. The

company chose darker tones and hard materials to complement light timber and

natural bamboo, and an open kitchen concept overlooking the restaurant that allows

customers to watch the sushi chef at work.  House of Maki offers Filipino Japanese

fusion maki. It is a maki made of Filipino dishes which includes pork longganisa, beef

tapa, adobo flakes, and pork tocino. To specify it is an innovative Filipino maki,

composed of various layers. The first layer is the Nori, then followed by Jasmine rice

that envelops the Filipino viands such as the adobo flakes, tapa, and such. These

Filipino viands will be put in a minimal size to ensure that the food can be eaten

without any problem and that each component will be intact and not scatter. The

company is a partnership among a group of friends that started with an idea to start

a business.

1.2 Comparison of the Product with its Competitors

The Maki Ni Inang’s product has a distinct twist. The company incorporated

traditional Filipino breakfast into Japanese Maki. The Pinoy innovative maki differs

from its competitors in that it is paired with Filipino dishes that are well-loved by

Filipinos. With this, it has its own edge and Filipino style that will undoubtedly be

loved by Filipinos because it is convenient and is a two-in-one dish. The business

will ensure high quality ingredients are used in the product. Maki Ni Inang intends to

sell it at a lower price than other maki/sushi competitors. Vendors who compete for
the same potential market by selling the same goods to the same customers are said

to be direct competitors. These includes Robata Gensan, Oishi Ramen Ta Bai,

Ichiban Gensan, Shokudo Gensan, and Kaizu.

1.3 Location

The business will be located in Barangay. Lagao along Digos – Makar Road fronting

Mcdonalds, Lagao, General Santos City. This location was chosen for the following

reasons: the production operation can be easily checked and observed by the

owners; it is near establishments that can be easily accessed by students,

professionals, and passersby; and it is near various establishments such as offices,

hospitals, and others that can be easily accessed by everyone nearby.

Figure 1.1 Location

1.4 Market Area

Geographic Segmentation

This factor reinforces the marketing strategy by allowing products or services to be

targeted based on the location of their customers. Geographic divisions such as

countries, regions, cities, colleges, or areas are used to better understand and

market to their target audience. Owners of “Maki Ni Inangi” plans to locate their

business in along Digos – Makar fronting Mcdonald, Baranagy Lagao, General

Santos City. Maki Ni Inang will also distribute its product near Joji Ilagan

International School of Hotel and Tourism Management. This area has been

selected because: (1) Maki Ni Inang target market are passersby along the road (2)

It is beneficial to the store because it offers products that will surely love by the

students, passersby, and other customers especially those who loves to eat sushi.

1.5 Main Customers

The target audience for Maki Ni Inang is anyone aged 20 to 49 who is passing

through Lagoa, General Santos City on the Pan-Philippines Highway. Our company

sells a delicious Filipino - Japanese sushi fusion for those who enjoy sushi and want

to try our sushi at a reasonable price. We intend to sell our sushi to people who

enjoy sushi, such as students and employees who rush to get to school and work.

They will enjoy our sushi because, as we all know, students nowadays enjoy

watching Japanese dramas and anime. For this reason, students will become

interested in sushi, especially now that we have combined it with other Filipino

dishes. Students are always pressed for time and have little time to eat, and we all

know how simple and quick sushi is to make. Also eating sushi is not messy, you

can eat it in one bite. Somehow students can get small nutrients in sushi. our

packaging is easy to carry when you’re on work or school. Sushi is also not messy;

you can eat it in one bite. Sushi contains trace nutrients that students can obtain.

When you're at work or school, our packaging is convenient to transport.

According to the market size stated below from demographic size year 2015, there

will be 267, 403 people aged 20 to 49 in the City of General Santos. Only 5% of the

total demographic size will be accumulated. Maki Ni Inang has only around 13,

Age Group Population Males Females

20-29 years old 114,350

30-39 years old 85,812 132,364.485 135,030.515

40-49 years old 67,241

Total 267,403 132,364.485 135,030.515

370.15 customers because others have been captured by other competitors.

Figure 1.2 Main Customer

1.6 Total Demand

The business gathered a small survey. The result of the survey is that 2 out of the 10

people will not try to eat sushi. Now they apply the idea of the small survey to the

total demand. The total population of the General Santos City is 267,403 aging from

20 to 49. They are assuming that 30% are the one who interested in sushi nor the

one who haven’t tried sushi. The 30% is 80,221 but we cannot say that all of that

30% people well immediately go to sushi restaurant or go to our restaurant, because

they have a lot of competitors. They are targeting the 5% of that 30%. The 5% is only

4813 people around the General Santos City but we cannot say that 5% will go to

the said establishments. They estimated that in a month, 155 people per day will go

either to the competitors nor to other businesses.

Direct competitors Daily Capacities (per pieces)

Shokudo Gensan 144
Robata gensan 104
Ichiban gensan 240
 Kaizu 96
Oishi Ramen Ta Bai 160
TOTAL OF: 744 x .05 = 37
744 + 37 = 781

1.7 Market Share

According to the total demand of Maki sold every day, there are 781 maki sold every

day in General Santos City. Maki Ni Inang has yet to establish a brand, the

conservative percentage used to calculate the market share is 5% which results in

total of 37 pieces. Maki Ni Inang has only around 37 sushi every day because others

have been captured by the other competitors.

1.8 Selling Price

Maki Ni Inang is affordable but still delicious, even though the pricing varies

depending on what flavor or toppings they want to eat. A 5% profit mark up on the

total production cost is sufficient, and when it comes to delivery, perhaps an 8%

profit mark up on the total product cost is sufficient the standard price starts in 100 to

150 pesos.
1.9 Sales Forecast

If the total demand per day is 744 orders and the projected potential market size is

5%, the result would lead us to a potential market size of 37 orders per day, that is

744 orders x 0.5/100. To give an allowance for possible errors, only 80% of the

projected market size is being used for the first month of operation. That is, 37

orders x 80/100 or 30 orders per day, or 900 orders in a month.

Furthermore, the company estimated that the number of orders will increase by 15%

every month. Since, the product is classified into sushi with one flavor and multiple

flavors, the estimated allocation is 60% and 40% of the total orders, respectively.

Monthly Projected Sales

Order in Units Amount

Total 40% 30% 20% 10% 100 112 115 122

Jan 900 360 270 180 90 36,000 30,240 20,700 10,980

Feb 1,035 414 311 207 104 41,400 34,832 23,805 12,688

Mar 1,190 476 357 238 119 47,600 39,984 27,370 14,518

Apr 1,369 548 411 274 137 54,800 46,032 31,510 16,714

May 1,575 630 473 315 158 63,000 52,976 36,225 19,276

Figure 1.3 Sales Forecast

1.10 Promotional Measures

The promotional measures that the business will use to promote Maki Ni Inang to

customers will include the use of social media, personal promotion, and advertising.
To make the actions that will be used in promotional measures that can help in

marketing the product known to the customers, we will be giving out flyers, using

posters, and regularly posting updates in social media platforms such as Facebook

and Instagram, as well as offering delivery service so that customers who can't visit

the store physically can still get the chance to try the product.

1.11 Marketing Strategy

The marketing strategy of House of Maki is based on the following strategies:

a) Product Strategy – it has cost reduction; it will use lower cost of ingredients

but

has the but still has high quality products and services

that can offer the customers; it is to simplify the

manufacturing process.

- high standards on products and services

- listening to customers suggestions for more improved

product

- training and workshop seminar to improve employees

work skills

b) Pricing Strategy - competitive pricing; charge less or more than the

competitors

offer, but ensuring to give the best and high-quality taste

of product to the customers.

- Penetration pricing: setting the product prices at a low

cost the once the business gained a sizeable market

share, can adjust the pricing of the products

 c) Promotion Strategy – usage of social media platforms by posting, updating

and

customers feedbacks regarding the product and services

the business offers

- Offering low delivery service payment

- prompt, courteous & efficient service

d) Distribution Strategy – usage of food truck rental to nearby locations

- Setting up booths in food events

- Delivery distribution

1.12 Marketing Budget

Maki Ni Inang will have a large budget to promote and distribute the company's

product to customers. It will primarily rely on the use of social media platforms to

promote the product through satisfied customers' feedback and other promotional

advertisements that can help the business be known to the customers. As a result,

the business's ingredients, equipment, services, and transportation will be

expensive.

Marketing Budget
Semi-Annual Marketing Budget (2022)
Promotion Strategies
Social Media Websites
6,000
Flyers
8.00/pc x 1000 pcs 8,000
Posters
50.00/pcs x 100 pcs 5,000
Product Strategies
Kitchen Equipment 5,000
Trainings and Workshop for Employees
2,000/person 4,000
Packaging
Design and Printing Package 7,000
Place/Distribution Strategies
Delivery Distribution
8,000
Total Marketing Budget 43,000

Figure 1.3 Social Media Facebook Page

Figure 1.4 Social Media Instagram

Figure 1.5 Flyer
Figure 1.6 Poster
 Figure 1.7 Packaging

SECTION 2

2.1 Production Process

The production process of the making maki as it follows:

Preparation time: 10 minutes, Cooking time: 20 minutes

1. In a small bowl, combine the rice vinegar, sugar, and salt then stir well
until all the ingredients will be dissolved.
2. Pour the vinegar-sugar-salt mixture on the sushi rice then mix well. Set
aside.
3. Lay one sushinori (shiny side down) on a flat surface
4. Scoop some sushi rice and spread over the sushinori (make sure to
distribute the rice evenly)
5. Cover the mat (or bamboo mat) with plastic (such as cling wrap)
6. Place the mat on a flat surface then put the sushinori with rice over the
mat. The part that has the rice should be facing down.
7. Arrange the crabstick, cucumber, carrot, mango, and the desired Filipino
dish (adobo flakes, toccino, beef tapa, etc.) in the center of the sheet
8. Grab the edge of the mat, keeping the fillings in place with your fingers,
and roll it into a tight cylinder, using the mat to shape the cylinder. Set
aside.
9. Continue doing the process until all the rice are used.
10. Trim the edge of the rolled sushi then cut the cylinder in half using a sharp
knife
11. Slice each maki in equal sizes.
12. Place in a serving plate then serve with soy sauce and wasabi.
2.2 Fixed Capital

Per Month
Php
Stall Rent 3000
The equipment needed for production will have a capacity of 92kg and the

equipment will be the rice cooker, bamboo mat, and frying pan. The equipment

needed for production will have a capacity of 92kg per day or 1,840 kg per month,

assuming 20 working days and will be produced in a single batch.

Rice Cooker 1,200

Bamboo Mat 800
Frying Pan 1,150
Various small tools and furniture 1,000
Total Fixed Assets Php 4150

2.3 Life of Fixed Capital

The life of the stall rent is 20 years and for the equipment, because of its regular

contact with heat and chemicals, five years. The depreciation charge will be 5% on

stall rent and 20% on equipment.

The annual depreciation cost, assuming no scrap value, will therefore be:

5% of 3,000 (stall equipment) Php150

20% of 4,150 (equipment) Php830
Annual depreciation cost: Php 2 980
or monthly depreciation cost: Php 81.66
2.4 Maintenance and Repairs
 Because of the simplicity of the equipment used, almost all servicing and

repairs can be dined in nearest maintenance shops. The equipment will be produced

and bought one of the prominent malls in General Santos City. Any repairs and

damaged beyond warranties will be needed to be done in maintenance shops but

until then the mall can still replace the equipment bought in the mall.

2.5 Sources of Equipment

The Maki Ni Inang will entrust its equipment to various provider. The cost of facilities

and equipment is expected to be at least Php 476,899.00. All the equipment will be

bought from nearby shopping mall and local shops that sells high quality products.

2.6 Planned Capacity

100% of the equipment will be utilized and will be working 12 hours a day, 5 times a
week.

2.7 Future Capacity

Machines and equipment should be used properly, maintain its quality, and should

be used as much as possible. This keeps the business work properly and steady.

Crisis and other dangerous unlucky times, it should be fix quickly as possible. This is

to avoid big issues and unpleasant scenarios; this also can improve the development

of the business and its production.

2.8 Terms and Conditions of Purchase Equipment

In running and preparing for the different items in the menu, the company needs to

purchase equipment for daily operations. The company will purchase this equipment

from appliance stores. It plans to have a hire purchase mode of payment or

installation plan. Payment will be made in installments. The company will make an

initial down payment and pays balance plus interest in installments. With this
possession of the equipment is given to the buyer immediately. The company will

pay a certain amount every month for the said equipment that was purchased. The

length of payment will be finished until the last installment will be settled.

2.9 Factory Location and Layout

The company is a maki bar located in Lagao along Digos – Makar Road fronting
Mcdonalds, Lagao, General Santos City.

Figure 2.1 Maki ni Inang Floor Plan

Figure 2.2 Maki ni Inang Interior 1

Figure 2.3 Maki ni Inang Interior 2

Figure 2.4 Maki ni Inang Exterior

Figure 2.5 Maki ni Inang Kitchen 1

 Figure 2.6 Maki ni Inang Kitchen 2
2.10 Raw Materials Needed

For daily production level of the following raw materials are required:

Garlic 0.25kg
Beef tapa 1kg
Chicken 1kg
Cucumber 1kg
Black pepper 0.25kg
Garlic powder 0.25kg
Cornstarch 0.25kg
Carrots 1kg
Jasmine rice 3kg
Mango 2kg
Crabstick 1kg
Toccino 1kg
Longganisa 1kg
13kg

Cooking Oil 900ml

Soy Sauce 34ml
Rice Vinegar 240ml
Kikkoman 60ml
White Vinegar 74ml
Red coloring 20ml
1328ml
 Eggs 12pcs
Salted Eggs 12pcs
Nori Sheet 3 packs
27 pcs/ packs

2.11 Cost of Raw Materials

Oil 41/kg
Beef Tapa 140/kg
Chicken Adobo 130/kg
Cucumber 36/kg
Carrots 48/kg
Jasmine Rice 25/kg
Mango 143/kg
Crabstick 95/pack
Eggs 30/pcs
Chorizo 37/kg
Garlic 55/kg
Toccino 130/kg
Longganisa 79/kg
Nori Sheet 139/pack

Cost of raw materials per month:

Oil 15mlx20 days at 41/kg 12,300

Beef Tapa 1kgx20 days at 140/kg 2,800
Chicken Adobo 1kgx20days at 130/kg 2,600
Cucumber 1kgx20days at 36/kg 720
Carrots 1kgx20 days at 48/kg 960
Jasmine Rice 3kgx20 days at 25/kg 1,500
Mango 1kgx20 days at 143/kg 2,860
Crabstick 1kgx20days at 95/pack 1,900
Eggs 12pcsx20 days at 30/pcs 7,200
Garlic 0.5kgx20 days at 55/kg 120
Toccino 1kgx20days at 130/kg 2,600
Longganisa 1kgx20 days at 79/kg 1,580
Nori Sheet 3packsx20 days at 139/pack 8,340
Total cost of raw materials 50,540

2.12 Raw Materials Availability

The owners of the business have contacted a direct source of rice, Filipino dishes,

Japanese ingredients, and other ingredients that are needed in the city, and because

this product can easily be found, consistent availability is ensured. To maintain the

establishment’s continued production, the proprietor keeps a constant stock of rice,

Filipino dishes and Japanese ingredients sufficient to one month. This equates to 1

kilograms per day x 24days per month, or 24 kilograms of rice necessary to run the

aforementioned, whilst the Filipino dishes (longganisa, beef tapa, adobo flakes,

chorizo) equates 1 kilogram each per day x 24 days per month, or 24 kilograms for

the whole month.

Type of Materials Suppliers Unit Price

Jasmine Rice SM Supermarket 326
Beef Palengke 290
Chicken Palengke 185
Cucumber Palengke 12
Carrots Palengke 20
Mango Palengke 120
Crabstick SM Supermarket 149
Eggs SM Supermarket 295
Garlic Palengke 25
Cooking Oil SM Supermarket 124
Pork Palengke 230
Iodized Salt SM Supermarket 10
Sugar SM Supermarket 64
Kikkoman SM Supermarket 128
Rice Vinegar SM Supermarket 84
Nori Sheet KCC Supermarket 139
Red Food Coloring SM Supermarket 43
Soy Sauce SM Supermarket 55
White Vinegar SM Supermarket 15
Cornstarch SM Supermarket 27
Black Pepper SM Supermarket 50
Garlic Powder SM Supermarket 18
Wasabi SM Supermarket 77
Figure 2.7 Raw Materials Availability

2.13 Labor

Maki Ni Inang hire 2 part time workers to assist and with the production and oversee

the operations. The owners of Maki Ni Inang will also participate in the productions

themselves and will manage and produce the products that will be served to the

customers. Furthermore, the 2 part time workers will be paid for their labor service.

2.14 Cost of Labor

The owners of the business will pay their selves a wage of Php 500 and will pay the

part timers a Php 450 per day as a salary for their assistance and service in the

business.
Indirect Labor:
Owners/ Manager 500
Direct Labor:
2 Part timer workers @ 400 each 800
Total Cost of Labor 1,400
2.15 Labor Availability

Finding enough people with light skills to meet rising demand for an economy's

goods and services. The number of available trained and skilled workers. This

means that the demand for skilled trades is increasing, and other companies are

looking for candidates who have the skills required to complete the job requirements.

Labor costs vary depending on job location, availability of skilled labor, contract

wage regulations, labor requirements, general market condition, and if labor is not

available locally, as is often the case in remote areas, then labor must be imported

from another location.

2.16 Labor Productivity

Workers will be more motivated if they can see a clear path to advancement.

Employees spend a significant amount of their lives at work. So, make the office as

welcoming and appealing as possible. Everyone communicates at work, and it is

likely the simplest thing you can do with your employee, as some have a short

attention span. Creating a break and outing plan for employees twice a year will

relieve stress and allow them to relax. Maintain regular meetings to keep employees

up to date on their work status.

2.17 Factory Overhead Expenses

Overhead Expenses consists of:

Labor 800
Materials 2000
Equipment 5000
Ingredients 10,000
Transportation 2000
Total Overhead per Month 19,900
2.18 Production Cost
Production cost for a kilo of maki can be calculated as follows:
1. Raw Materials per month (Step 2.11)

Oil 15mlx20 days at 41/kg 12,300

Beef Tapa 1kgx20 days at 140/kg 2,800
Chicken Adobo 1kgx20days at 130/kg 2,600
Cucumber 1kgx20days at 36/kg 720
Carrots 1kgx20 days at 48/kg 960
Jasmine Rice 3kgx20 days at 25/kg 1,500
Mango 1kgx20 days at 143/kg 2,860
Crabstick 1kgx20days at 95/pack 1,900
Eggs 12pcsx20 days at 30/pcs 7,200
Chorizo 1kgx20 days at 37/kg 740
Garlic 0.5kgx20 days at 55/kg 120
Sesame Oil 15mlx20 days at 12/kg 1,200
Salted Egg 12pcsx20days at 13/pcs 3,120
Toccino 1kgx20days at 130/kg 2,600
Longganisa 1kgx20 days at 79/kg 1,580
Nori Sheet 3packsx20 days at 139/pack 8,340
50,540

2. Direct Labour – 2 persons at 400 (Step 2.14) 800

Sub Total 800
3. Factory Overhead Expenses per Month (Step 2.17)
Labor 800
Electricity and water 1000
Maintenance 500
Trasportation of Raw Materials 350
2,650
 SECTION 3

3.1 Form of Business

The company is a partnership among a group of friends that started with an idea to

start a business. A contract between two or more company partners is known as a

partnership agreement. The agreement serves as a framework for the partners’

rights, obligations, and profit and loss allocation. A business partnership agreement

outlines each partner’s responsibilities and gives clear guidelines for how the

company will operate. The agreement also specifies the general partnership terms,

including capital contributions, withdrawals.

3.2 Organizational Structure

OWNER

MANAGER

Labor 1 Labor 2

Figure 3.1 Organizational Chart

3.3 Business Experience and Qualifications of the Entrepreneur

In order to start and run a business, the business owners must be skilled,

knowledgeable, and familiar with the industry. By ensuring that the business

proponents are skilled and knowledgeable, they can maintain a stable and overcome

various challenges that may arise during the business process. For a business or

institution to survive and grow, the people who run it must have the necessary

qualifications and experience. Management's determination, willingness,

competence, and ability are critical to the company's success. An entrepreneur

should have skills and knowledge in a specific field before entering the business

world. Here are the things they must do before being hired and beginning their life as

an entrepreneur.

 Creating and recognizing job requirements

 Organize hiring process

 Procurement and branding

 Interview evaluation and execution

 Screening and job proposal

 On boarding new employees for success

3.4 Pre – Operating Activities

We have listed down the following flow of the tasks/ activities to be undertaken

before we can operate the business:

1. Preparing business plan – 1 week

2. Registering the business – 3 days

3. Applying for the loan and approval – 2 weeks

4. Contracting equipment suppliers – 1 week

5. Contracting raw materials suppliers and purchasing it – 1 week

6. Checking the equipment – 2 days

7. Checking raw materials – 2 days

8. Trial production – 2 weeks

The owners intend to begin this operation immediately after approving our

emergency loans and contacting the supplier of the equipment and raw materials.

3.5 Pre – Operating Expenses

Training of workers is not necessary since the food production is simple and it only

requires basic cooking skills. The owners of the business have basic skills and

cooking and is convenient to produce the maki. Some costs will be used in business

registrations and conducting some survey to determine and compare the difference

between the company and the competitors. These costs are as it follows:

Pre – Operating Expenses

Registration Cost 500
Survey Cost 1000
Transportation Cost 500
Training Cost 300
2,300
3.6 Office Equipment

Maki Ni Inang is a fully equipped bar that provides the highest quality of service and

product to its customers. Chairs, tables, appliances, kitchen tools and equipment,

sinks, storage racks and shelving, storage containers, ranges and ventilations, food

preparation counters, safety equipment, washing equipment, and gas and stoves will

be provided. These items are required in order to produce, service, and satisfy

customers.
3.7 Administrative Expenses

Monthly Administrative Expense consists of:

Labor Salary 800
Supplies/ Equipment 2,000
Transportation 500
Water and Electricity 1,000
Ingredients 5,000
Total 9,300

SECTION 4

4.1 Capital Requirement (Project Cost)

Php

4.1.1 Fixed Assets (step 2.2)

1. Stall Rent 4,000

2. Machinery & Equipment 10,000

3. Office Equipment 1,000

4. Small tools and Furniture 2,000

Total Fixed Assets 17,000 17,000

4.1.2 Pre-Operating Expenses (step 3.5) 2,300

4.1.3 Working Capital

Value of one month of raw material (RM) stocks (step 50,540

2.11)
Value of finished goods (F/G) stocks 1/2 month 15,000
of production (step 2.18)
Value of work-in-process (W/P) for one day (each 700
batch of Maki needs to be moulded into finished)
products within one day, otherwise it will become
production time x daily production rate x cost/2, or 1 3500
day x 120 kg x LC12.50/2
Value of goods distributed but not yet paid for. This 15,000
will be another 1/2 month’s production 120 kg x 10
days x cost price LC12.50
Value of cash needed for operation. This will be the 33,400
cost of 1 month of labour (step 2.14), overheads
(step 2.17), marketing budget (step 1.12) and
Total Working Capital 118,140 118,140

Total Capital Requirement Php 134,440

4.2 Financing Plan and Loan Requirement

Ms. Balili plans to contribute Php 16,000 covering the cost of the stall rent,
machinery equipment and the pre-operating expenses. A loan will be required
for the rest of the project cost.

Particulars Owner’s Loan Total

Equity

Fixed Capital (in Php)

Stall Rent Expense 4,000 - 4,000

Machinery & Equipment 10,000 - 10,000
Office Equipment 1,000 - -
Small tools and furniture 2000
Pre-Operating Expenses - - 2,300

Working Capital - 118,140 118,140

Total 17,000 118,140 134,440

Percent 28% 72% 100%

Figure 4.1 Financing Plan and Loan requirement

4.3 Security for Loan

Mr Soledad has an existing land where his water refilling station and the store are
situated. This has an appraised market value of Php 20,000. In addition, his father
has five hectares of untenanted land valued at Php 50,000. This land will be pledged
as security against the loan.
4.4 Profit and Loss Statement
Php
SALES: 120 kg per day x 20 days per month x 12 2,812,901
months x LC14, or unit selling price (step 1.9)
Less:
Raw Materials: Php 50,540 x 12 months (step 2.11) 606,480

Labour: Php 1400 x 5 x 52 (step 2.14) 364,000

Overheads: Php 19,900 x 12 months (step 2.17) 238,800 1,209,280
GROSS PROFIT 1,603,621

Less:
Marketing (step 1.12) (Php 43,000 x 2) 86,000
Administrative Cost (step 3.7) (Php 9,300 x 12
months) 111,600 197,600

OPERATING PROFIT 1,406,021

Less: Interest Expense (step 4.6) 7,002

NET PROFIT 1,399,019
 4.5 Cash Flow Statement

Projected Profit or Loss Statement

Y1 Y2 Y3 Y4 Y5 Y6
₱ ₱ ₱ ₱ ₱ ₱
2,812,901.0 3,234,836.1 3,720,061.5 4,278,070.8 4,919,781.4 5,657,748.6
Sales 0 5 7 1 3 4
1,209,28
1,354,852.0 1,522,260.0 1,714,779.0 1,936,176.0 2,190,782.0
0.00
COGS* 0 0 0 0 0

1,603,621.0 1,879,984.1 2,197,801.5 2,563,291.8 2,983,605.4 3,466,966.6

Gross Profit 0 5 7 1 3 4
Less: Operating
Expenses 197,600.00 197,600.00 197,600.00 197,600.00 197,600.00 197,600.00

Operating 1,406,021.0 1,682,384.1 2,000,201.5 2,365,691.8 2,786,005.4 3,269,366.6

Income 0 5 7 1 3 4
Less: Interest
Expense 7,002.00 5,601.00 4,201.00 2,800.00 1,400.00 -
₱ ₱ ₱ ₱ ₱ ₱
1,399,019.0 1,676,783.1 1,996,000.5 2,362,891.8 2,784,605.4 3,269,366.6
Net Profit 0 5 7 1 3 4

Y1 Y2 Y3 Y4 Y5 Y6
Direct Cost 970,480 ₱1,116,052.00 ₱1,283,459.80 ₱1,475,978.77 ₱1,697,375.59 ₱1,951,981.92
Overhead 238,800 238,800 238,800 238,800 238,800 238,800
*Cost of Goods Sold 1,209,280 1,354,852 1,522,260 1,714,779 1,936,176 2,190,782

PROJECTED CASH FLOW STATEMENTS

(PHP)

Pre- YEAR
 Particulars
Operatin
g
Period
1 2 3 4 5

CASH INFLOW

Equity (step 4.2) 17,000 - - - - -

Borrowings (step 4.2) 118,140 - - - - -
Cash Sales (step 1.10)* 2,812,901 3,234,836 3,720,061 4,278,071 4,919,781
Collection of A/R (step 1.10)* - - - - -

Other Income - - - - -

Total Cash Inflow 135,140 2,812,901 3,234,836 3,720,061 4,278,071 4,919,781

CASH OUTFLOW

Pre-operating expenses 2,300 - - - - -

Purchase of fixed assets 17,000 - - - - -
Direct Costs - 970,480 1,116,052 1,283,460 1,475,979 1,697,376
Factory/operational overheads - 238,800 238,800 238,800 238,800 238,800

Operating Expenses - 197,600 197,600 197,600 197,600 197,600

Loan amortisation - 7,002 5,601 4,201 2,800 1,400
Total Cash Outflow 19,300 1,413,882 1,558,053 1,724,061 1,915,179 2,135,176

NET CASH INFLOW (OUTFLOW) 115,840 1,399,019 1,676,783 1,996,000 2,362,892 2,784,605

CASH BALANCE BEGINNING - 115,840 1,514,859 3,191,642 5,187,642 7,550,534

CASH BALANCE ENDING 115,840 1,514,859 3,191,642 5,187,642 7,550,534 10,335,139

 4.6 Balance Sheet

Pre-Operating YEAR
Particulars
Period
1 2 3 4 5

ASSETS
Current Assets
Cash 115,840 1,514,859 3,191,642 5,187,642 7,550,534 10,335,139

Raw Materials Inventory - 50,540 50,540 50,540 50,540 50,540

Work-in-Process Inventory - 700 700 700 700 700
Finished Goods Inventory - 15,000 15,000 15,000 15,000 15,000
Accounts Receivable - - - - - -
Total Current Assets 115,840 - - - - -
Fixed Assets
Stall rent 4,000 4,000 4,000 4,000 4,000 4,000
Small tools and Furniture 2,000 2,000 2,000 2,000 2,000 2,000
Equipment 10,000 10,000 10,000 10,000 10,000 10,000
Vehicles - - - - - -
Office Equipment 1,000 1,000 1,000 1,000 1,000 1,000
Less: Accumulated Depreciation - - - - - -
Net Fixed Assets - - - - - -
Total Fixed Assets 17,000 - - - - -
Other Assets
Pre-operating expenses 2,300 - - - - -
Goodwill - - - - - -
Patents - - - - - -
TOTAL ASSETS 137,440 1,598,099 3,274,882 5,270,882 7,633,774 10,418,379

LIABILITIES
Current Liabilities
Accounts Payable - - - - - -
Loans Payable - 23,628 23,628 23,628 23,628 23,628
Total Current Liabilities - 23,628 23,628 23,628 23,628 23,628
Long Term Liabilities
Loans Payable 120,440 120,440 120,440 120,440 120,440 120,440
Total Long Term Liabilities 120,440 120,440 120,440 120,440 120,440 120,440
OWNER’S EQUITY
Capital Beginning 17,000 17,000 17,000 17,000 17,000 17,000
Accumulated Capital - 698,647 1,592,931 2,657,464 3,917,674 5,402,797
Add: Net Profit after Tax - 397,356 905,981 1,511,433 2,228,177 3,072,839
Less: Withdrawal/Dividends - - - - - -
Total Owner’s Equity - 213,960 487,834 813,849 1,199,787 1,654,607
TOTAL LIABILITIES AND EQUITY 137,440 1,598,099 3,274,882 5,270,882 7,633,774 10,418,379

PROJECTED BALANCE SHEET

4.7 Loan Repayment Schedule
The loan of Php70,000 will be paid over a 5 - year period. The repayment
schedule is as follows:

Year Amount of Instalment Interest Total

Principal Due Amount
Outstanding at 10%

1 118,140 23,628 7,002 30,630

2 94,512 23,628 5,601 29,229
3 70,884 23,628 4,201 27,829
4 47,256 23,628 2,800 26,428
5 23,628 23,628 1,400 25,028

Total 118,140 21,004 139,144

4.8 Break-even Point (BEP)

The break-even point can be calculated as follows

2,812,901
1. Annual Sales (step 4.4)

2. Annual Fixed Costs:

Owner’s salary Php 1,00/month 12,000

Labor Salary Php 800/month 9,600
Annual interest 7,002
Other overheads Php 700/month 8,400
Marketing and administrative cost 627,600

664, 602 664,602

3. Annual Variable Costs:

Raw materials 606,480

Direct labour 364,000

970,480 970,480

Annual Sales x Annual Fixed Costs

 = BEP (Annual Sales)
Annual Sales - Annual Variable Costs

2,812,901 x 664,602
= Php 1,014,676
2,812,901 – 970,480

Dividing this figure by the selling price per unit or kg gives the BEP (Annual
Production).

1,014,676
= 10,147 kg of suhi
100

1,014,676
= 9,069 kg of suhi
112

1,014,676
= 8,823 kg of suhi
115

1,014,676
= 8,317 kg of suhi
122

This is 50% (60/120 kg per day) of the planned production capacity of 120 kg
per day. Or, it can also be calculated by BEP Percentage as the following:

Annual Fixed Costs x 100

= BEP (Percentage)
Annual Sales - Annual Variable Costs

664,602 x 100
= 30.07%
2,812,901 – 970,480

BEP in annual sales = BEP % x annual sales Php

= 30.07% x 2,812,901
= Php845,839
4.9 Return on Investment (ROI)

The ROI for this project is as follows:

Annual Net Profit 29,558 (step 4.4)

= x 100
Total Capital Requirement 134,440 (step 4.1)

= 22%
ROI is, therefore, %.
The return on owner’s investment (ROI) is:

Annual Net Profit 29,558

= x 100 = 105.6%
Owner’s Investment 28,000

ROI is, therefore, 105.6%.

4.10 Financial Analysis

Considering the product of the business features, the estimate sales of the product,
estimated realistic cost sales, and the financial projection of the business is feasible.
The entrepreneurs of the business can foresee the vision of continuing the business
as it is stable and considered viable.