A FEASIBILITY STUDY OF ESTABLISHING INSULIN PLANT MILK TEA AND

PASTRY BUSINESS IN GENERAL SANTOS CITY

Presented to the Senior High School Faculty

Of Notre Dame of Dadiangas University

Integrated Basic Education Department

In Partial Fulfillment of the Requirements

In Business Finance

And Fundamentals of

Accountancy, Business and Management II

By

Andrade, Andre S.

Batiancilla, Kristine C.

Chua, Quancy Carina L.

Cabañog, Kristine G.

Estabillo, Princess Joy I.

Ishmael, Naise F.

Navarro, Jarden Q.

Roma, Pauline Angela M.

Yares, Princess Rose D.

October 2018
 DEDICATION

This feasibility study is dedicated,

To our family

Who have always stood by us through thick and thin and

who always support us in all our undertakings it may be financially, mentally,

emotionally, physically and spiritually.

To our friends and classmates

Who always extend their hands for assistance without counting the cost and who

are keep rooting us.

To our ALMA MATER

Who gives us motivation and became our second home.

THE ALMIGHTY GOD

Who always gives us wisdom and knowledge.

“Be strong and courageous.

Do not be afraid or terrified

Because of them, for the Lord

Your God goes with you; He will

Never leave or forsake you.”

Deuteronomy 31:6

THE RESEARCHERS
ACKNOWLEDGEMENT

The researchers gratefully acknowledge the following distinguished

personalities they have been privileged to work with, whose expressions of

support and personal impact on their have in no small way helped make this

study possible.

To Mr. Ronel Gevero, for his unending support from the beginning of

conducting this study until it published. He also gives them encouragement to

move on despite all the challenges and difficulties. Also for the guidance in the

completion of this study;

To their families, for providing the needs of the researchers financially,

emotionally, physically, mentally and spiritually;

Their friends and loved ones, for letting the researchers smile despite all

the difficulties and for sharing their worthwhile experiences in conducting

research which gave them the inspiration to move on; to their other fellow

classmates, for spreading good vibes in the class and others who were not

mentioned, for believing in their capacity to finish the work;

And most of all, to the Almighty God, for all the blessings he bestowed

upon them which became their strength and guidance in conducting the study.

THE RESEARCHERS
 Table of Contents
Chapter 1

INTRODUCTION...............................................................................................................1

Background of the Study................................................................................................1

Objectives of the Study..................................................................................................2

Scope and Limitations....................................................................................................4

Chapter 2

THE INDUSTRY AND ITS ANALYSIS.............................................................................5

Industry Background......................................................................................................5

International................................................................................................................5

National.......................................................................................................................6

Local...........................................................................................................................7

Review of Related Literature..........................................................................................8

The Generation of Milk Tea Lovers............................................................................8

Milk Tea in the Philippines..........................................................................................8

Milk Tea As a Business..............................................................................................8

Industry Services..........................................................................................................13

Major Players of the Industry.......................................................................................13

Industry Analysis..........................................................................................................15

Barriers to Entry........................................................................................................15
 Threats to Substitute................................................................................................15

Bargaining Power to the Supplier.............................................................................17

Bargaining Power to the Customers........................................................................18

Chapter 3

MANAGEMENT AND ORGANIZATION.........................................................................20

Form of Business Organization....................................................................................20

Organizational Structure..............................................................................................22

Personnel Qualifications..............................................................................................22

Personnel Duties and Responsibilities........................................................................26

Personnel Salary Structure..........................................................................................32

Summary of Pre-operating Activities...........................................................................32

Time Table...................................................................................................................36

Chapter 4

MARKETING FEASIBILITY............................................................................................37

Market Research and Analysis....................................................................................37

Target Market...........................................................................................................37

Market Size and Trends...........................................................................................38

Competition..............................................................................................................39

Estimated Market Share...........................................................................................39

Market Strategy............................................................................................................40
 General Description of the Product..........................................................................41

Service/Product........................................................................................................42

Pricing Strategy............................................................................................................44

Promotion Strategy......................................................................................................44

Advertising/Promotion..............................................................................................44

Sales Promotion.......................................................................................................49

Key Success Factors................................................................................................49

Chapter 5

TECHNICAL FEASIBILITY.............................................................................................51

Technical Process........................................................................................................51

Raw Materials...........................................................................................................51

Service Process........................................................................................................52

Location Analysis.........................................................................................................52

Location Map............................................................................................................53

Vicinity Map..............................................................................................................54

Establishment Layout...............................................................................................55

Product/Service Needs................................................................................................56

Facilities....................................................................................................................56

Equipment................................................................................................................58

Utilities......................................................................................................................61
Chapter 6

FINANCIAL FEASIBILITY..............................................................................................62

Financial Statement and Analysis................................................................................62

Financial Statement..................................................................................................62

Financial Analysis........................................................................................................75

Profitability Ratio Analysis......................................................................................75

Turnover Ratio Analysis..........................................................................................77

Leverage Ratio Analysis........................................................................................78

Liquidity Ratio Analysis..........................................................................................79

Sources and Uses of Funds...................................................................................80

Budgeting Plans.....................................................................................................81

Chapter 7

SOCIO-ECONOMIC........................................................................................................82

Possible Effects to the Economy.................................................................................82

 LIST OF FIGURES

Figure 1. Organizational Structure...................................................................................22

Figure 2. Estimated Market Share...................................................................................40

Figure 3. Company Logo.................................................................................................42

Figure 4. Location Map....................................................................................................53

Figure 5. Vicinity Map......................................................................................................54

Figure 6. Establishment Layout.......................................................................................55

LIST OF TABLES

Table 1. Personnel Salary Structure................................................................................32

Table 2. Time Table.........................................................................................................36

LIST OF EXHIBIT

Exhibit 1. Projected Statement of Comprehensive Income.............................................65

Exhibit 2. Projected Cash Flow Statement......................................................................72

Exhibit 3. Projected Balance Sheet.................................................................................73

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Chapter 1

INTRODUCTION

This part will discuss the background of the study, objectives of the study

and the scope and limitations.

Background of the Study

Recent concerns about health conditions among the population today is

the result of lifestyle trends where people opt to live in a fast-paced system. We

are in an advanced technological evolution where even preparing food is not

anymore included in the daily activity, instead we rely on fast food and related

food shops for an instantaneous source of our food and beverages, hence posing

some dangers to our health and one of these is hyperglycemia which is very

common even in the young adults.

The Insulin Plant Milk Tea is a palatable and mild tasting beverage that is

appealing in the gustatory sense of the consumers. It is made from 100% organic

powdered insulin plant, non-fat milk and organic flavor extracts (vanilla,

strawberry, chocolate, mocha cappuccino, pandan). The product offers multiple

health benefits and it is made for the satisfaction of the consumers as they drink

milk teas without any worries about the negative side effects of the ingredients.

Costus igneus, commonly known as insulin plant, reduces blood sugar

levels, bringing them down towards normal as concluded in the study of Shetty,

A., (2010) entitled Effect of the insulin plant (Costus igneus) leaves on
 2

dexamethasone-induced hyperglycemia. In the study, the consumption of leaves

will decrease the blood glucose levels, and diabetics who consumed the leaves

of this plant confirmed about the effectiveness of the blood sugar levels being

low.

Non-fat milk eliminates cholesterol, saturated fats and some of the

calories found in whole milk or low-fat milk (Annigan, 2018). It is a rich source of

high-quality protein which maintains the lean body mass due to its ability to

contain the essential amino acids. Also, minerals like calcium and phosphorus

which composes the non-fat milk supports the structure of the bones and teeth

and obviates osteoporosis. It also produces vitamins A, B and D. Vitamin A is

beneficial for the eyes and skin. Vitamin B is an energy provider to the body.

Vitamin D lessens the risk of cardiovascular diseases

The generation of today faces health-related problems because of their

food intake. With this kind of matter, the researchers intend to conduct a

feasibility study of establishing Insulin Plant Milk Teas and Pastry business in

General Santos City as well as to fabricate strategies for the profitability of the

proposed business.

Objectives of the Study

The objectives of the study is to meet the demands of the consumers, as

this study will gauge the interest of the consumers to the product that is not only

good to the taste, but also provides health benefits. It will examine the strengths

and weaknesses of the business, as well as the threats and opportunities that the

business will face, and determine its capacity level to compete in the industry.
 3

Furthermore, the study will comprehend the financial benefits, costs and

operational activity to accomplish the goal of the product. It will prove that the

particular proposal is salient to the economic and industrial standpoint. This study

will serve as an assessment to the new product’s effectivity and impact to the

society before its implementation. Moreover, it will analyzes the research about

its marketing feasibility and strategies to meet the customer’s demands.

The objectives of the study in different aspects are the following:

I. Management and Organizational Aspect

 To properly handle the organization, the personnel, and the staff of the business

in an effectual way

 To integrate management styles with effectivity and efficiency

 To manage the business that is competitive to the industry

II. Technical Aspect

 To be able to provide the facilities and equipment that are needed for the

production process

 To be able to apply the correct methods and system in producing the products

III. Marketing Aspect

 To be able to promote the products to the target market

 To encourage the customers about the benefits they can get from the products

IV. Financial Aspect

 To properly allocate the financial resources of the business to the operational

activity
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 To produce more revenue yearly

 To provide business funds for future expenses

V. Socio-Economic Aspect

 To provide the most accessible source of materials to generate income

 To utilize the materials found in the localities that possess a medicinal value

whereby promoting health for the consumers

Scope and Limitations

This study will focus on the production of Insulin Plant Milk Tea in General

Santos City. This study considered the industry background internationally,

nationally and locally, management and organization, marketing feasibility,

research and strategies, financial feasibility and budgeting plans, and

socioeconomic aspect of the business which aims to know the possible effects of

establishing the business to the economy. The dissemination of the product will

be through direct selling and orders from the consumers within the area of

General Santos City and the vicinity of it who are amenable to purchase the

product.
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Chapter 2

THE INDUSTRY AND ITS ANALYSIS

This chapter analyzes the industry as a whole. It emphasizes the new

products offered by the business, the capacity of the business to be competitive

enough in the industry, major factors that affects the operation of the business,

the market and the government.

Industry Background

Foods that are sweet are the causes for a person to have health risks. It

increases the glucose levels in the blood and may cause diabetes (Caterson,

2011). One way to lessen the worry of the diabetics with drinking beverages and

eating pastries is to add the powdered insulin plant as an ingredient. It has a

medicinal value and lessens the glucose level in the blood (Shetty, Choudhury, &

Kotian, 2010). Milk tea and pastry industry exists because not only they give

gustatory satisfaction but it also offers health benefits.

International

Milk tea, and its family of bubble teas, has been around for decades in

various forms. The most popular style of milk tea originated in Taiwan back in the

1980s and is a simple blend of black tea, creamer and sugar. Since then,

however, this once simple drink has turned into a revolutionary tea canvas that

has allowed tea lovers to pair their favorite teas with a myriad of creamers,

flavors and sweeteners. But that is not even the best part. It’s also incredibly
 6

popular and provides phenomenal profit margins for tea retailers (Hernandez,

2017).

What makes tea click to consumers is because of its unique flavor and its

health benefits. The enterprise’s success also shows that the milk tea industry is

not a dying trend, but rather a promising industry to venture into. Anything sweet

is what the generation nowadays rummage for. Since milk tea is relatively

sweeter and milder beverage that coffee, most of the people appreciate the after

taste. It is one of the reasons why the industry continues to prosper (Paguio,

2014).

National

The milk tea craze continues to grow in the Philippines, as a result of the

rapid expansion of selling milk tea. As consumers shift their consumption to

healthy products, milk tea is benefiting from a positive reputation in terms of

health and wellness. However, more than health benefits, such as improving

digestion and avoiding illness, consumers have also shown concern to consume

products with an appealing taste.

Increase in urbanization and innovation drive the expansion of this market.

The increase in demand from millennials, thanks to the supply of in-store

bakeries, conjointly contributes to the expansion. In-store bakeries cut back the

gap between non-public brands and leading brands. Health issues create a

threat to the present market, because the fat content in pastries could result in

fleshiness and heart issues. Hence, to draw in the health acutely aware

population, the vendors introduced healthier varieties with less fat content.
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Growth in home baking is additionally a restraint to the present market, because

it reduces the demand for prepacked pastries. The rising demand for freshly

baked pastries is thought-about as a chance during this market, together with a

rise in on-line sales and new product launches (Daya, 2017).

An increase within the size of the center category population as well as a

growing income and an oversized proportion of young customers can drive the

demand for convenient and quick-eat workplace and Cereals product. Cookies

and Cakes, Pastries & Sweet Pies are the leading classes within the Filipino

workplace and Cereals market that is predicted to register a high rate of growth

(Santos, 2015).

Local

Like any different booming cities, General Santos city is thought in concert

of the fastest growing cities of the country and investors square measure slowly

invasive the city. To put into perspective, consumers say they're willing to pay

additional for workplace items with healthier profiles. By capitalizing on trends in

shopper tastes, bakeries and milk teas of all sizes will increase their margins and

keep in business (Padillo, 2016).

 8

Review of Related Literature

This part will show the related literature after the thorough and in-depth

search done by the researchers

The Generation of Milk Tea Lovers

According to (Farro, 2014), milk tea shops are famous in this generation

wherein people can hang out and spend their leisure time.

The generation of tea does not only target consumers, but it also entices

entrepreneurs and potential franchisees.

Milk tea shops are comfortable and gives a fun and cozy environment

wherein people can socialize and do not tend to be serious and formal. Aside

from its environment, milk tea has milder and sweeter taste than a coffee. It is

click to the consumers because of its taste and health benefits.

Milk Tea in the Philippines

In the past year, tea shops are increasing in the industry, effectively

becoming the biggest food and beverage trend of 2011. Milk tea is affordable

than a cold designer coffee (Consuji & Capili, 2011).

Milk Tea As a Business

  

Originally from Hong Kong, Happy Lemon was brought to the country by a

group of Chinese-Filipino businessmen who have been friends since grade

school and college: Kelvin Gaisano, Kristine Gaisano, Smart Gilas player/TV

host Chris Tiu, Andy See, Wesley Pardilla, and Edward Go.
 9

The young entrepreneurs share a common love for milk tea. Since there

are only a few restaurants which serve good quality milk tea in the Philippines,

they went abroad in search for the best cup of milk tea. Then, Kelvin got an idea.

“Why don’t we put up a milk tea business?” he suggested. All agreed. But finding

the perfect brand to bring to the Philippines was the challenge.

Chris Tiu related: “Filipinos, to some extent, have already been introduced

to milk tea, but we want them to develop a deeper appreciation for it by offering

quality beverages that boast of unique and delicious flavors, made from the

freshest ingredients from around the world.”

Kelvin Gaisano added: “We know there are risks involved. But we also

believe that there is an under-served market for milk tea.”

In their quest to find the best milk tea, the seven young businessmen went

everywhere and tried different milk tea brands. One day, they chanced upon

Happy Lemon, a Hong Kong-based milk tea business that has been in the

market since 2006.

As they waltzed inside the store and started looking at the menu, they

knew they had found “The One.” They agreed to bring the brand home to the

Philippines.

However, it wasn’t an easy task. Tiu shared that they had to wait long

before the franchise was finally granted to them. “It was a long process of

courtship,” he said. “For one, we didn’t know who to contact for the franchising.

Two, only one of us, Andy See, knows how to speak straight Mandarin.”
 10

They sent letter after letter. They followed up each letter with calls, but

they received no reply at all until September 2009 when someone from the

Happy Lemon headquarters in Hong Kong informed them that they were open to

the idea of establishing Happy Lemon in the Philippines.

In November 2010, Happy Lemon opened its door to Filipino milk tea

lovers, including those who are curious about the brand. A quick look at the

beverage menu is enough to pique one’s curiosity.

Using the good quality tea leaves imported from China which are freshly

brewed every day, Happy Lemon has several milk tea variants such as the

Lemon Series, recommended for those who feel thirsty; the Rock Salt Cheese,

their best-seller; the plain Milk Tea series; Mousse Spin, which is more popular

among the younger ones; Cocoa & Coffee, which is more chocolate and coffee

based with several toppings; and the exotic Specialty Drinks and Fresh Tea

drinks, which are less sugary and specially made for health conscious

individuals.

For former King Eagle and current television host Chris Tiu, it was a love

for bubble tea that led to joining the Gaisano family and their partners in bringing

Hong Kong’s Happy Lemon brand to local shores. “In Vancouver, Canada, the

tea places are really packed. Here, it’s always been about coffee, so we think

that there’s room for Filipinos to learn to appreciate tea,” he shares.

“We knew there was a risk coming into it, but we also knew that there was

an under-served market,” adds Happy Lemon chairman Kelvin Gaisano.

 11

Moonleaf Tea Shop was introduced by Adrian Adriano, who was a student

in Taiwan when he noticed just how prolific the tea industry was in Taipei. Long

gone were the days of the pearl drinks that contained artificial flavoring and

artificial powder — today’s specialty teas are all-natural and brewed fresh before

they are served.

“There is a huge difference,” says Reagan Tan, CEO of Bubble Tea.

“Years back, there was a health craze where the benefits of tea were

touted,” recalls Thysz Estrada, marketing head for Moonleaf. “But Filipinos never

really caught on the whole ‘brew it yourself’ thing. And then bubble tea came.”

Along with the renaissance of one of the world’s most-consumed

beverages (second only to good old H2O) came experimental blends that were

tea-based. “Bubble tea is simply milk tea with pearls, shaken to frothy perfection,”

Thysz explains. These use tea notes such as jasmine, assam and oolong as their

bases. “We also just added another flavor to our menu called Yocca, a yogurt

drink.”

Reagan counts strawberry, taro and honeydew as the fastest flavors from

the Bubble Tea Milk Tea line, while Tea ology will be adding new flavors like

jasmine tea sangria and roasted corn milk tea to their already-extensive list of

offerings.

Besides bubble tea, yogurt-infused variants have become staples in tea

stores — one of Chris Tiu’s personal favorites is Happy Lemon’s lemon yogurt

with aloe. “It depends on my mood, but if I want to perk myself up a bit, I like the
 12

cocoa milk tea with puff cream and the milk tea with crispy cocoa. And If I’m not

too full yet and I want something filling, I’d go for the rock salt cheese green tea.”

Fruit blends have gained ground as well — Serenitea’s Peter Chen

includes grapefruit black, grapefruit Yakult, passionfruit and green apple from

their Serenifuit line in the best-selling list.

At the moment, Serenitea is the sole tea store that has ventured with one

alcohol-infused variant: the Green Tea Blast, which is mixed with beer.

“No, it’s definitely not just a fad,” Chris opines. “People are starting to

appreciate tea for its nutritional value. Now, of course, they’re more health-

conscious, so I can definitely understand if in the next few years the shift to tea-

based drinks would be more drastic. That’s how we see the market picking up —

a lot of Filipinos are really getting into it.”

Sheryll Sobremonte, one of the owners of Tea ology, says, “People have

been increasingly inclined to look for healthy yet delicious products, and specialty

teas are able to meet these needs.”

With the industry picking up steam, consumers have ceased overlooking

the benefits of drinking tea and begun expressing interest in coffee and soda’s

more health-friendly alternative. While tea may potentially be pitted against

coffee in the future, Reagan believes that they are not competitors. “Consumers

don’t need to choose between the two,” Reagan explains. “They can take coffee

at certain times of the day and tea at other times, which is what we observe from

our clients.”
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Industry Services

The Green Café provides all the essential office amenities to run or start the

business. It offers a vibrant, flexible workspace setting, high-quality food and

drink, comfortable workstations, business secure / high-speed Internet and a

dedication to making your business and your day easier.

The Green Café Services:

 Training / Educational Space

 Event / Training Space

 Audio / Visual equipment

Benefits for your business:

 Flexible Workspace

 No Membership Fees Required

 No Office Lease

 Reduced Business Costs

 Increased Productivity

 Networking with professionals

Major Players of the Industry

This section focuses on the major players of the industry in General

Santos City. It discusses five aspects such as management, market, technical,

financial and socio-economic aspect.

 14

There are many registered operating milk tea and pastry in General

Santos City. The researchers will provide three major players of the industry

namely iTea, Chatime and Tea Leaf.

iTea

The business is located at the second floor of the Al Fresco strip of

SM City General Santos. This is one of the major players that offer

services related to Milk Tea and Pastry business.

In their management and organization, iTea is a Sole Proprietorship

owned by Mr. Avel Manansala. The business has two (2) workers. The

business operates for five (5) years.

In their marketing aspect, iTea offers fruit tea combinations, cold

coffee drinks and milk shakes, all reasonably priced (less than P100). The

business has loyal customers due to its satisfactory products and

services.

In technical aspect, the business gets the product from Manila.

Customers may avail their products by visiting them.

In financial aspect, the business began from the interest of the

owner. He is willing to invest for the business to become successful.

They pay for a total of two thousand five hundred (2,500) pesos for

their monthly rent, electricity and water.

In socio-economic aspect, they are paying taxes.

 15

Industry Analysis

This will discuss the barriers to entry, threats of substitute, bargaining

power of the suppliers, and bargaining power to the customers.

Barriers to Entry

Barriers to Entry are designed to prevent potential competitors from

entering the market. Some barriers to entry are placed by the government, while

others could be related to cost. The barriers to the entry of establishing Insulin

plant milk teas and pastries are the following:

 Capital Costs: The investment to the property, plant and equipment of the

business is expensive.

 Economies of Scale: There is a risk for the business to compete with a well-

known products and brands of milk teas and pastries.

 Legal Barriers to Entry: The government, before releasing BIR, can create legal

barriers because of granting copyrights, patents and exclusive rights.

 Marketing Barriers: The uniqueness, brand reputation, and advertisements of the

other competitors might be a barrier for the business to establish similar

products.

 Vertical Integration: Some of the businesses have control over the purchases of

their raw materials. This can make it hard for the business to rummage suppliers.

Threats to Substitute

A substitute product is one that may offer the same or similar benefits to a

company as a product from another industry. The threat of a substitute is the

level of risk that a company faces from replacement by its substitutes. For more
 16

generic, undifferentiated products the threat is always higher that from more

unique products. A company that has several possible substitutes that can easily

be switched to have little control over the prices it sets or how it chooses to sell

the product.

In the case of Insulin Plant Milk Tea and Pastries, the threat of substitutes

is has a strong force. The external factors that contribute to the strong force of

the threat of substitutes are the following:

 The switching costs are low for the consumers because there are more

affordable drinks and attractive substitutes.

 Substitutes are priced more reasonably, which can cause for the consumers to

switch products. Insulin plant milk teas and pastries are expected to be costly

due to its medicinal value. This can be a barrier for the business to raise prices

and can lead to profit loss because of consumer migration.

 The product performance of the substitute products may function at the same or

higher level in the taste preference of the consumers which is a risk for a

customer to switch over products.

 The strategy of differentiation of the products of other businesses is a threat for

the business because other brands offers more products than a tea and a pastry.

Customers can be easily satisfied with the different features of a substitute

product.

 Brand Loyalty of the customers is a risk for the business because other

customers might not want to try the insulin plant milk tea and pastries because

they are already satisfied with what they know.

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Bargaining Power to the Supplier

In the industry, suppliers compete by raising prices to serve high quality

supplies or reduce the quality for a lower cost. These suppliers can be powerful

through the manipulation of the profitability if businesses are not able to

rummage for a good number of suppliers or unable to recover the monetary

increases and demands of the supplier.

Insulin Plant Milk Teas and Pastries faces the strong force of the bargaining

power to the suppliers. This refers to the effect of the suppliers to the business.

In the case of the Insulin Plant Milk Teas and Pastries, these are the following

external factors which are the contributors for the strong force of the bargaining

power of customers:

 There is a low variety of suppliers nationally (strong force).

 The supplies provided are distinctive, making the size of individual suppliers

moderate (moderate force).

 Average overall supply (moderate force).

The bargaining power of the suppliers is a significant factor that influences the

Insulin Plant Milk Tea and Pastries business. Suppliers can raise the prices of

the supplies because of its low availability. Insulin plants have medicinal value

which can help the diabetics lower their blood glucose levels. This can be a

reason for the strong force of bargaining power to the suppliers. The distinctive

characteristic of insulin plant makes the overall supply moderate because of the

time factors of the plants’ harvest.

 18

Bargaining Power to the Customers

In the Five Forces analysis model, this force relies on the individual and

grouped consumers’ influence to the business. Buyers compete with the

supplying industry by bargaining down prices and forcing higher quality. Insulin

Plant Milk Tea and Pastries will have the strong force or bargaining power to the

customers. In the case of Insulin Plant Milk Tea and Pastries, these are the

following external factors which are the contributors for the strong force of the

bargaining power of customers:

 The products are fairly undifferentiated (strong force).

 There are few switching costs a buyer can face (strong force).

 The buyers are sensitive in prices but demands higher quality (moderate force).

 The buyer can have backward integration to the suppliers (moderate force).

 There are several substitutes available on market (strong force).

 The buyer is unable to get similar product and supplies from other suppliers

(moderate force).

The bargaining power of buyers is one of the most significant factors that

affect the Insulin Plant Milk Tea and Pastries business. Customers can shift to

other brands because there are more affordable teas and pastries on the market.

Customers can also shift to several substitutes available on the market such as

instant beverages, drinks, and pastries from other tea shops, coffee shops,

bakeries and restaurants. Buyers can face few switching costs because there

can be more suitable products and substitutes for the consumers’ taste.
 19

It is moderate since the insulin plant milk teas and pastries are beneficial to

the health, the reason why consumers might become more conscious with their

health while having desserts. However, the products are not differentiated

because it only offers milk teas and pastries, which will become a threat to the

business because of the presence of the substitutes and businesses with high

number of product differentiation. The buyers are sensitive in the quality and the

prices of the products. The prices of the insulin plant milk teas and pastries will

be a bit costly because of the medicinal value of the insulin plant, which is the

main ingredient of the products. It is a distinctive plant which is costly because of

its availability. The customers have a moderate ability for backward integration

from the suppliers. They can be able to demand for lower costs if they have

knowledge of suppliers of the ingredients. With this, the buyers can have similar

products because of the simple ingredients.

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Chapter 3

MANAGEMENT AND ORGANIZATION

This chapter presents the feasibility of establishing insulin plant milk

tea and pastry business in General Santos City. The business is accomplished

with extensive planning strategies. Coordination is firstly considered with

attaining organizational goals. The successful events executed by the

organization are due to the strict guidelines, clear division of labor and delegation

of authority to the managers.

This part includes the following: form of business organizations,

organizational structure, personnel qualifications, duties, responsibilities, salary

structure, summary of pre-operating activities and timetable.

Form of Business Organization

The form of Business Organization for the Insulin Plant Milk Teas and

Pastries is General Partnership. General Partnership is an arrangement by which

partners have their agreement on sharing their assets, profits and financial and

legal liabilities of a business. Such partners have unlimited liability, which means

their personal assets are liable to the partnership's obligations. This kind of form

of business is also easy to establish

Just like some other form of businesses, general partnership has

advantages and disadvantages. Some advantages are; businesses as

partnerships do not have to pay income tax; each partner files the profits or
 21

losses of the business on his or her own personal income tax return. This way

the business does not get taxed separately. There is also an increased ability to

raise funds when there is more than one owner and much wider pool of

knowledge, skills, and contacts. And lastly, there is an improvement in

management.

However, if there are advantages, there are also disadvantages. Some of

the disadvantages are; Partners are jointly and severally liable for the actions of

other partnership obligations including contracts, torts, and breaches of trust.

Joint and several liability means that if a third party were to sue the partners, the

third party can sue any one of the partners without suing all of them. If a partner

has been sued but cannot pay the third party the full amount, the third party may

collect the money from the remaining partners. Second, each partner is

individually liable for the debts and obligations of the business; if the business

does not have enough assets to pay back business debts, creditors can take the

personal assets of the partners. Third, a partner cannot transfer interest in the

business without the unanimous consent of the partners. And lastly, partnerships

can potentially be unstable because of the danger of dissolution if one partner

wants to withdrawal from the business or dies (Garrison, 2018).

 22

Organizational Structure

Owner

Operating Manager

General Manager

Marketing/Sales
Finance Manager Chef Executive
Manager

Bookkeeper Pastry Chef

Cashier(s) Barista

Guard(s)

Server(s)

Figure 1. Organizational Structure

Personnel Qualifications

I. Owner

 Can offer an array of skills in strategic vision implementation, business/ financial

acumen, talent acquisition and empowerment, leadership, performance analysis,

marketing, campaign management, advertising, problem solving and software

management

 Has good conduct and good grooming and is healthy

 23

 Has to learn how to run as an effective business owner

 Know where to find help With starting a business

 Has to think like a manager

II. Operating Manager

 Must participate in personnel matters, generation administration, and business

planning

 Must be graduated a bachelor’s degree in business/marketing field

III. General Manager

 Must have the knowledge in the industry

 Must have good communication skills and good health condition

 Has the ability to direct people

 Must be a team-player

 Must have skills in time management

 Has the ability to solve a certain problem

 Must have the ability to have good relationships to others

 Must have the ability to prioritize

 Must be fair in dealing any cases and most importantly, he/ she must be

competent and fit for the job

 Must have a degree in any business related course

IV. Finance Manager

 Must have a degree in business finance/accountancy

 Must have an experience for at least 2-3 years in financial industry

 24

 Good in accountancy, business, economics, mathematics and statistics

 Excellent in communication and presentation skills

 Must have problem-solving skills and initiative

 Must have negotiations skills

 Has the ability to influence others

 Has strong attention to details

 Must have a capacity to make quick but rational decisions

 Must be healthy and has good grooming

V. Chef Executive, Pastry Chef, Barista

 Must be knowledgeable and skilled on the field

 Must have at least college experience about business and culinary arts

 Must have at least participated in different training programs

 Pastry chefs and baristas should have at least 3-5 years’ experience while the

Executive Chef should have at least 5-6 years’ experience in restaurants/cruise

ship

 Must completed the on-the-job training

 Must be hardworking and creative

 Must know how to manage time efficiently and effectively

 Must possess good conduct and good grooming

 Must be healthy

VI. Marketing/Sales Manager

 Must have a degree in any business related courses

 25

 Must have at least 2 years of experience in marketing/advertising/brand

management or sales

 Must participate in personnel matters, generation administration, and business

planning

 Must be healthy and has good grooming

VII. Bookkeeper

 Must have a degree in any business related courses

 Must have enough knowledge about how the business run and must know all the

accounting precautions

 Must have at least 2-3 years’ experience as a bookkeeper

 Must be healthy and has good grooming

 Must have participated different training programs

 Must have a good communication skills and must be friendly

VIII. Cashier(s)

 At least college graduate

 Must have a good communication skills, good grooming, must be friendly and

polite to others or must possess good conduct

 Must have a basic knowledge about accountancy

IX. Security Guard(s)

 Must have a license for the job

 Must be physically fit and knowledgeable about the dos and don’ts of an

establishment
 26

 Must have attended several trainings and programs about the said job

 Must be from a legal agency of guards

 Must have 1-2 years of experience and at least college/high school graduates

X. Server(s)

 At least college graduate

 Must have a good communication skills, good grooming and must be friendly,

bubbly and polite to costumers

Personnel Duties and Responsibilities

I. Owner

A business owner’s job duties can run the gamut from hiring staff to arranging

financing. Specific activities will vary according to the business’ category, size

and industry. Daily job duties might include reviewing sales reports and

financials, and comparing them to goals set out in short- and long-term plans.

Owners can then direct activities of sales or production employees to better meet

the objectives. In general, business owners are responsible for the growth,

stability, direction and daily operation of the business.

II. Operating Manager

The second-highest ranking in a business is the operating manager. The

task of an operating manager is to execute daily operations of the business and

has the second responsibility after the owner He sets the standards of the

business and work with the owner and general manager for assurance that the
 27

processes, trainings, and quality of the products are reflecting to the standards.

They receive reports and overviews that are data-based which are the financial

statements, revenues and even aspects of the company’s performance that

needs improvement.

III. General Manager

General/operations managers maintains the status of the business by

working with location personnel and upper management to ensure that the

standards of the business operation are being met. He oversees the cleanliness

of the location, inventory that are being supplied and sold to the customers. They

are responsible for the secured maintenance of cash deposits.

The general manager is responsible of controlling the budget for the

business. He manages the work of the personnel and the staff and he manages

the wages that are being compensated. He also manages the hiring of staff and

gives the promotions. Trainings are implemented by them for the new

employees. He reports this to the COO to help for the improvement of the

strategies for the future of the business. Customer service skills are salient for

this position because they regularly interact with the customers.

IV. Finance Manager

Finance managers develop and monitor departmental budgets. They

make relevant financial forecasts for their company. They work with other

managers and their staff to establish their company’s future budgets. Their

department keeps track of ongoing expenses to make sure that they are not over

the budget. They ask relevant managers for clarification when their departmental
 28

expenses have surpassed the established budget. They are responsible for

accurate and timely reporting of various. They must take ownership of various

projects and delegate them to their staff. They follow up with their staff regarding

project progress.

They must ensure that all projects meet established deadlines. They must

conduct performance evaluations in a timely manner and provide timely feedback

to their staff. They must have prior management or supervisory experience in the

same industry. They must have strong leadership and interpersonal skills. They

must have excellent oral and written communication skills. They must be able to

build strong teamwork. They must be comfortable making presentations and

leading various staff meetings.

V. Chef Executive

Chef Executive provides highest quality of cuisine. He is the one responsible

for smooth running of the kitchen. He provides satisfactory quality of the product,

also provides reports to the general manager and/or to the food and beverages

director. He must be able to motivate, train and develop supervisors and culinary

staff to establish higher than the expected food preparation. Also, he is the one

who teaches the preparation of the recipes and improvement of the cuisine. He

should provide direction to the staff to avoid disaster thus chef executive must

understand the employee positions to perform their duties properly including the

setting performance standards and monitoring the performance of the staffs if

they are performing well to determine appropriate replacement to fill gaps.

 29

VI. Barista

Barista is in charge in making hot and/or cold beverages such as coffee,

espresso drinks, blended coffees and tea. He must maintain the cleanliness and

must sanitize their work area such as utensils and equipment. They must provide

description in the beverages. Barista must know how to demonstrate the use of

retail equipment like espresso machine. If there is lack of product, Barista must

restock the product display.

VII. Pastry Chef

Pastry chef is the one in charge of making pastries. He must ensure that the

pastries that they have has a good quality. It requires planning of what they

should make according to the season. He manages all day-to-day operation of

the pastry and bakery section of the kitchen. He gives assistance in the

production and ensure the hygiene standard in the pastry and bakery section and

also checks the stocks of the pastry if there is enough supply. Supervision and

coordination in the activities of cooks and workers is very essential.

VI. Coordinate Marketing/Sales Manager

Sales and marketing managers may play a dual role, as sales and

marketing are usually two different departments or functions. Marketing is the

development of ideas to reach people and sell products. Sales is the actual

implementation and use of those ideas developed by marketing to sell the

product. Sales and marketing managers must possess a high level of knowledge

and insight into what customers want and need, as well as what customers don't

even know they want or need yet.

 30

The role of a sales and marketing manager is very involved in both

generating ideas for new products or just finding a better way to sell an old

product. Sales and marketing managers are also involved in selling products on

the market, so they are directly involved in their company's success. A creative

and diligent mind can go a long way in this profession.

VIII. Bookkeeper

The bookkeeper develops system to account for financial transactions by

establishing a chart of accounts; defining bookkeeping policies and procedures.

He also maintains subsidiary accounts by verifying, allocating, and posting

transactions. He balances subsidiary accounts by reconciling entries maintains

general ledger by transferring subsidiary account summaries, historical records

by filing documents, balances general ledger by preparing a trial balance;

reconciling entries, prepares financial reports by collecting, analyzing, and

summarizing account information and trends and complies with federal, state,

and local legal requirements by studying requirements; enforcing adherence to

requirements; filing reports; advising management on needed actions. He also

contributes to team effort by accomplishing related results as needed.

IX. Cashier(s)

Cashiers must count the money in cash drawers at the beginning of the shift

to avoid dearth. Cashiers are in charge in receiving payments of the customer in

return cashiers must furnish receipts to the customers. Cashiers must greet the

customers when they enter in the establishments. Moreover, they must maintain

the orderliness and cleanliness of the area. Cashiers must know the prices of the
 31

products. When the customers have minor complaints, cashiers are in charge in

resolving the problems

X. Security Guard(s)

The security guard secures premises and personnel by patrolling property;

monitoring surveillance equipment, inspecting buildings, equipment, and access

points; permitting entry. He obtains help by sounding alarms, prevents losses

and damage by reporting irregularities; informing violators of policy and

procedures. He completes reports by recording observations, information,

occurrences, and surveillance activities; interviewing witnesses; obtaining

signatures and maintains environment by monitoring and setting building and

equipment controls. He also maintains organization's stability and reputation by

complying with legal requirements, ensures operation of equipment by

completing preventive maintenance requirements; following manufacturer's

instructions, troubleshooting malfunctions, calling for repairs, evaluating new

equipment and techniques.

XI. Server(s)

A server's responsibilities depend greatly on the business; however, in all

cases, his or her primary duty is to provide good customer service, take orders,

and deliver food. In most situations, servers are expected to answer questions

regarding the menu. They work closely with other staff and the kitchen staff to

ensure the restaurant is operated efficiently.

In restaurants with revolving menus, servers may need to meet with kitchen

staff or managers daily prior to service to discuss that day's offerings. Topics in
 32

these meetings may include specials, food preparation, and ingredients used,

especially if they may be a potential allergen to some diners. Additional duties of

a restaurant server may also include:

 Processing payment

 Greeting customers

 Cleaning tables and dining area

 33

Personnel Salary Structure

Salaries and wages are the compensation for the employees who have

worked to serve the business and the customers.

Gross Pay Benefits

No. of
Employees Pay per SSS PAG-IBIG Total Pay
Employees PhilHealth
month
Chief
Executive 1 15,000.00 412.5 545 300 13,742.50
Officer
Chief
Operating 1 15,000.00 412.5 545 300 13,742.50
Officer
General
2 14,000.00 385 508.7 280 12,826.30
Manager
Finance
1 13,500.00 371.25 490.5 270 12,368.25
Manager
Chef
2 12,500.00 343.75 454.2 250 11,452.05
Executive
Marketing
1 12,000.00 330 436 240 10,994.00
Manager
Pastry Chef 3 10,000.00 275 363.3 200 9,161.70
Barista 2 9,000.00 247.5 327 180 8,245.50
Bookkeeper 1 9,000.00 247.5 327 180 8,245.50
Cashier 2 8,086.00 222.365 290.7 161.72 7,411.22
Guard 1 8,086.00 222.365 290.7 161.72 7,411.22
Server 3 8,086.00 222.365 290.7 161.72 7,411.22
Table 1. Personnel Salary Structure
Summary of Pre-operating Activities

Before the firm becomes utterly ready to become a business, it undergoes

a lot of process and thinking in order for the business to have regular and

consistent activities, pursuits, practices and procedures so that it will last for a

long term in the industry. Before the actual operation, there must be a

consideration in the sales and marketing, production process, general and

 34

administrative structure, pre-operating costs and expenses, as well as the future

operating revenue. The pre-operating activities include the following:

Formulate Marketing Strategy

The Insulin Plant Milk Tea and Pastries will engage in a perpetual

marketing program for the purpose of continual growth of the business and

establish profitability. Through launch marketing, it is a tool for promotion and

advertisement to make people be aware of the existence of the business, build

human traffic and establish good brand reputation. The strategies to be

implemented are the following:

Setting Sales Strategy

Sales Strategy must be set in order to attain the target sales. In the

industry staff salaries that are 10% higher than the average is a good way to

attract the best people. Attitude is very momentous thus, we have to be friendly

to our co-work mates. Also, the enthusiastic staff have to make sure that the

customers are feel welcome and appreciated. We must avoid making the

customer wait, to assure that we have great services and also as an assurance

that we provide the best quality.

Manage Human Resources

Human Resource Management includes the human resource planning

wherein the company defines the job specification which determines the people

and their skills that is highly needed for the business to run smoothly. Job

description is a part of human resource planning wherein it elaborates the tasks

of the employees in order to achieve the organizational goal. Job qualifications

 35

must also be considered so that the employees that will penetrate the company

are trustworthy because of their intellect and competence.

Planning Production Process

The costs and expenses for the production, process for distribution and

pricing of the company’s product will be reckoned. It will measure the company’s

capability to handle the operating expenses and manufacturing costs. These

include the materials and supplies that will be purchased, repair and

maintenance expenses, labor and utilities expenses, and other expenses that are

necessary for the process of fabrication. The non-production operational

expenses like administrative expenses, finance cost and other expenses. It will

address the customer’s demands for a beneficial product with a satisfying cost.

Furthermore, the company will departmentalize the sales, advertising and

promotion, customer service and public relations. These are the marketing

activities that is vital and must be collaborated.

Invest Property, Plant and Equipment

Launching a company necessitates capital investment and expenses from

invested equipment purchases for administrative purposes which are expected to

be utilized for an extended period of time. These are the tangible assets like

property, plant, and equipment. The enterprise will also include intangible assets

and capital distribution like royalties, rentals, dividends and interest.

Planning Future Operating Revenue

Operating revenues will be estimated. It is the income earned from the

selling of the products or the sale of an asset. It determines the business’s profit
 36

margins so that the company will be able to measure the future costs and

revenues. This will prevent plausible monetary challenges and bankruptcy of the

company. Moreover, this can open the business for branching. More branches of

the business will be established so that there will be more consumers resulting to

more revenue.
 37

Time Table

Activities Jan Feb Mar Apr May June July Aug Sep Oct Nov Dec

Invest
Property,
Plant and
Equipment
Manage
Human
Resources
Setting
Sales
Strategy
Formulate
Marketing
Strategy

Planning
Future
Operating
Revenue
The time table presented the span and duration of the pre-operating

activities that should be done before the commencement of the actual business

operation.

There is 7 months allotted for the investment of property, plant and

equipment. Managing human resources is good for 3 months. Formulating

marketing strategy and setting sales strategy will be done in 5 months. Lastly,

there will be 4 months allotted for planning future operating revenue.

Table 2. Time Table

 38

Chapter 4

MARKETING FEASIBILITY

This study presents the over-all feasibility of the marketing aspect of the

study. It discusses the market research and analysis which covers the target

market, market size and trends, competition, and estimated market share. It also

talks about the general description of the product and sales and distribution

strategy.

Market Research and Analysis

Target Market

As additional folks have gotten more and more conscious of what they

absorb and are acutely aware concerning their health, additional folks are shifting

towards healthy drinks and bubble tea is one amongst them. This suggests that

there's an enormous target market waiting to be grabbed.

This is not a drink which will be restricted to simply an explicit age vary,

because it is taken by virtually everybody. The strategic location in General

Santos has ensured that the business are favorable in its target markets.

Therefore, the researchers tend to provide products and services to the

subsequent cluster of people:

 Students

 Young professionals

 Households

 Corporate Executives
 39

 Business people

 Sports men and women

 Young adults

Market Size and Trends

The market is segmented into artisanal and in-store bakers and milk tea

makers, whereas the artisanal cakes and milk teas are a unique point in fueling

the demand, the forthcoming trend of in-store bakeries and milk tea shops might

provide growth opportunities. The in-store bakeries and milk tea shops provide a

one-stop shop resolution providing pastries and alternative work things. Recent

trends of designer product and continuous innovations in product offerings are

seemingly to keep the trade alive.

Consumer preference for food acts because the biggest driving issue for

any food connected trade. The market could take a success if user’s

consumption habits amendment over time attributable to such dependencies.

Healthy diet trends could impede the trade growth. However, continuous

innovations to bake healthy product with low-calories could sustain growth. Some

bakers provide little bite-sized pastries for folks preferring on-the-go snacks. The

high convenience provided by such product is additionally expected to catapult

demand over the forecast amount. The pastries section is predicted to be the

very best contributor of revenue over the forecast amount.

The increase in urbanization and innovation drive the expansion of this

market. The increase in demand from millennials, because of the provision of in-
 40

store bakeries, additionally contributes to the growth. In-store bakeries cut back

the gap between non-public brands and leading brands. Health considerations

create a threat to this market, as the fat content in pastries might cause fat and

heart issues. Hence, to draw in the health aware population, the vendors

introduced healthier varieties with less fat content. Growth in home baking and

milk tea making is additionally restraint to the present market, because it reduces

the demand for packaged pastries. The rising demand for freshly baked pastries

and healthy milk teas are often thought-about as a chance during this market, in

conjunction with a rise in on-line sales and new product launches.

Competition

Green Café is a form of monopolistic competition because it sells

differentiated products even if it serves a similar purpose which is to provide

beverages and desserts to the consumers. Green Café products are

differentiated in such a way that it has different quality because it is made up of

insulin plant, the location of the establishment is convenient to its target markets,

and the style of the venue is unique.

Estimated Market Share

From the total market of the Starbucks, Café Amoree, Emoji Coffeeshop,

Blugre Coffee existing in the city of General Santos, it is expected that Green

Café will have 10% of market share shown in the figure 1 on the next page.
 41

Esti mated Market Share

Green Café

Café Amoree

Others
Starbucks

Emoji Coffeeshop

Blugre Coffee

Green Café Café Amoree Starbucks

Emoji Coffeeshop Blugre Coffee Others

Figure 2. Estimated Market Share

The pie chart above shows the estimated market share of 10% for Green

Café, 8% for the Café Amoree, 15% for Starbucks, 7% for the Emoji Coffeeshop,

12% for the Blugre Cofee and 48% for other related industry.

Market Strategy

In this generation, successful organizations are managed through

promoting products and identifying the satisfaction of the customers’ needs. A

marketing strategy that enables the accomplishment of an organization’s mission

and objectives of becoming efficient and effective should be developed.

The establishment will provide products and services that will address the

needs of the consumers. A thorough promotional tools will influence the clients to
 42

try the products like advertisements in the form of radiobroadcasting, tarpaulins,

brochures, leaflets, print media, and websites.

General Description of the Product

This section will show the general description and service features and the

quality of services of the proposed Insulin plant milk tea and pastry business. It

also presents the company name

Company Name

The name Green Café is used to indicate that the products made

are not only to supply the satisfaction of the gustatory sense of the

consumers but also to provide health benefits as the milk tea and pastry

products are made up of Insulin Plant, which is helpful for person with

blood sugar level problems.

Company Vision-Mission Statement

Vision

At Green Café, family and friends get to spend time with each

other’s company as they enjoy the good taste of the products and

desirable ambiance. We believe that we can create a positive

relationships and experiences that extend our tea house all over the world.

Mission

 To sell pristine, healthy and scrumptious pastries and milk teas

made up of insulin plant to match our exceptional luxuriant,

sustainable environment
 43

 To greet or acknowledge every customer within 30 seconds who

chooses to enjoy their leisure time in our café

 To provide an amicable, collaborative and gladdening ambiance by

the workers

 To keep our concept and offering green, breathtaking, relaxing and

sustainable

 To integrate the fresh and maintainable practices in all our

management including the proper waste and segregation, as well

as the materials

 To improve the quality of family and acquaintance bond in our area

Company Logo

The business is named as Green

Café to indicate that the products are made

from herbal ingredients specifically Insulin

plant, as portrayed by the leafy background

of the logo. There is a cup above the name

to signify the products offered which are milk

teas and pastries.

Figure 3. Company Logo

Service/Product

The business has evolved to provide milk teas and pastries to the

consumers that can provide health benefits such as lowering the blood

glucose levels and is good for all types of customers. Also, the designs of
 44

the venue will provide a heathy form of relaxation and recreation because

of the authentic plants that will be placed. Thus, the services and products

provided by the business will address the following:

 Healthy products that cater consumers with health problems related

to high blood glucose level

 Relaxation and recreational spot of the consumers

Service or Product Quality

The quality of the products and services that the business will

render will meet the certain basic requirement that satisfies the

consumers. Assurance department will exist to monitor the outgoing

products for consumer acceptability. With this, the business will

incorporate features that will improve products and make them free from

any deficiencies.

With the utilization of the most advanced technology, the products

will surely be handled with accuracy of its taste and measure of the

ingredients in its consumption. The staff will also check the defective

packs of supplies, discolored powders or wrong measure of ingredients.

The business will prevent the bad quality of the services and products

because it affects consumers’ confidence, image, sales and survival of the

business. Although the pricing strategy is high, it is assured with the best

quality of products.
 45

Pricing Strategy

 Flexible Pricing

It needs to use a spreadsheet or specialized program. The business can

raise or lower the prices of certain items in order to achieve the profit that the

business needs. The business can adjust the menu more frequently to reflect

your costs. By changing prices in small increments and featuring high profit

items as daily specials, the firm can design the prices to help increase sales

of certain items.

 Customer Loyalty Discounts

This strategy builds loyalty and repeat business by offering customers

something for free or a discount. The business could offer discounts, or a free

dessert to all who is loyal in the business. The business can also grow

customer loyalty by offering membership discount cards, or by using “buy ten

get one free" punch cards.

Promotion Strategy

It aims to achieve local market awareness and establish good brand

image through managers of public relations who disseminate the information of

the updates of the establishment.

Advertising/Promotion

 Local Media

 ABS-CBN Magandang Umaga South Central Mindanao

 46

 Local Print Media

 Brigada Newspaper

 Inquiry News General Santos

 Local Broadcast Media

 Brigada News FM 89.5

 MOR 92.7 ABS-CBN Corporation

 Bombo Radyo

 Website

It will market the Insulin Plant Milk Tea and Pastries by disseminating

information about the interesting facts of teahouse industry, a map to the store,

store hours, special events and coffee and pastry recipes. The social media tools

are the following:

 Facebook Page

 Twitter Page

 Sampling

Sampling activities will be conducted by the business in the purpose of

introducing the range of drink options as well as pastry options of Insulin Plant

Milk Teas and Pastries.

 Samples will be distributed on the streets to the passer-by.

 Samples will be given to the passer-by on the day of the opening.

 The business will provide free milk teas to selected government offices, radio

stations, local broadcasting stations, and local print media who have helped

promoting the business.

 47

 On the day of the opening, each customers are given either 1 free drink or 1 free

pastry.

 There will be a distribution of discount coupons that are only limited into 100

persons.

 Community Involvement

The business will be involving to the community to make it an integral part to

the community. With these, the mission of the business will be reached because

of the opportunities taken to forge important contacts with key people. The goals

with involving to the community are the following:

 Conduct fund-raising activities

 Sponsor local sports teams

 By taking an active role in the Chamber of Commerce

 Support fair trade to create decent working conditions, satisfactory prices,

working sustainability for the farmers.

 Gift Items

Whoever will buy milk teas and pastries worth the amount of Php 1000.00 will

be offered gift items like a small canvass artwork by the artisans who produced

the décor furnishings or a free tea cup with a tea spoon and plate supplied by the

suppliers of the equipment.

 Gift Cards

In order to stimulate cash flow, discount cards, frequency cards as well as

gift cards must be promoted as a program. These cards promote loyalty of the

customers which is helpful for the revenue of the business.

 48

Discount cards are utilized to build loyalty among specific organizations

who helped with the investments like members of the local Chamber of

Commerce and other government public servers.

Frequency cards are utilized to reward the loyal consumers of the

products because of the specified frequency of visits and orders. This can

promote the loyalty of the customer. The customers will be rewarded with the gift

items as mentioned above.

Recorded by the industry, pre-paid and re-loadable cards are known for

other chain restaurants and convenience stores. These cards promote loyalty

and helps for the relevant increase of percentage of sales.

With the help of the computerized sales and inventory system, the usage

and allocation of expenses to the marketing will be tracked and monitored.

 Sidewalk Dining

Outside dining is a promotional way because it provides the customers a

scene they could look at that makes them check the tea house for the first time.

Sidewalk Dining is a good experience for the customers. Americans have

commenced to embrace this kind of dining that is originated in Europe.

 Direct mail

Brochures will be given one-on-one to the target audience to promote the

opening shop of the business and introduce the products and its flavors so that

people will become aware of the advantages of drinking the milk teas and eating

pastries that are made by 100% insulin plant. Through this, the business is able
 49

to communicate to the people directly and the one who receives the information

are controlled and counted.

 Superior Location

The Insulin Plant Milk Tea and Pastries will be located at Santiago Boulevard,

General Santos City where there is high traffic location because it is nearby

student population. The lifestyle patterns of those who come to the area are

traced, and these information are helpful because it is the center of General

Santos City where most of the city’s population are gathered for school, for work,

and for leisure activities. The shop is situated in front of the SM General Santos

where there is high human traffic and it is a good gauge because of the feasibility

of building business in the area. This is in front of the major road and can be

easily located by the local drivers. There is no need for paying exorbitant rental

costs from the malls but the short distance from it makes the business enjoy the

customer traffic. Parking spots will be provided. Gas stations are in the vicinity of

the area. The rent of the location will cover the building maintenance, utilities and

security.

 Desirable ambiance

The interior design of the Insulin Plant Milk Tea and Pastries are ceramic

products which will give a vintage look for a tearoom. These will make people

feel the relaxing ambiance, with the mellow kind of music paired with a desirable

aroma to match the atmosphere. The interior design will be based on the looks of

Scandinavian woods as well as the furniture and decorations. There will be long

ceramic bars, ceramic squared shelves, dim teacup lights, and houses made of
 50

woods. Books will also be displayed in the book shelves for general usage.

Canvasses containing facts about the milk tea industry, cakes and pastries

industry and insulin plant trivia will be displayed in any area. With this, not only

the customers can have a break time from the real world stressors but they can

also learn about the industry background and educational facts.

 Portable Kiosk

During special events and community activities, the business will publicize the

existence of the shop by making profitable portable kiosks. This can also be used

for mall booths. The kiosk will offer samples and cater inquiries of the possible

customers.

Sales Promotion

Adding mobile kiosk and bringing Green Café into the special events,

farmer’s markets, art shows can increase the sales. Establishing milk tea and

pastry service at local business by selling gift cards, frequency cards, pre-paid

cards, and offer discounts is more efficient for the customer to build trust to the

company. As an active community member we have to be visible in order to

check the consistency of the company having a survey to know the customer

feedback of what the company need to improve.

Key Success Factors

These are the factors that help the company reach its success.

 Strategic Focus (Leadership, Management, Planning)

 51

The leaders and the managers of the business must be

competent enough so the business will be organized and has

collaborative management.

 People (Personnel, Staff, Learning, Development)

The staff and employees must be well-rounded and have

good attitude and competence.

 Operations (Processes, Work)

The process of operations must be convenient to the

customers. They should experience instant services.

 Marketing (Customer Relations, Sales, Responsiveness)

The promotion of the products must be effective and

responded by the increase number of consumers of the products.

 Finances (Assets, Facilities, Equipment)

The facilities of the business must be convenient to the

users so that the system is fast-paced and the customers will be

satisfied.
 52

Chapter 5

TECHNICAL FEASIBILITY

This chapter presents the technical feasibility of the proposed Green Café.

It includes technical process, raw materials and service process.

Technical Process

The technical process will describe the servicing process, raw materials,

as well as the product.

Raw Materials

These are the following raw materials which are needed for the operation

of Green Café:

 Powdered Insulin Plant

 Authentic Flavors

 Juice Syrups

 Tapioca Pearls

 Toppings

 Supplies and Equipment

 53

Service Process

Green Café offers a variety of milk tea and pastries. The customers will

order and there is a “pay as you order” rule. Then, the customers will wait for the

servers to serve their orders as they can enjoy the ambience and read books for

the relaxation and recreational purposes.

Location Analysis

This part shows the location of the proposed business.

 54

Location Map
 55

Figure 4. Location Map

 56

Vicinity Map
 57

Figure 5. Vicinity Map

 58

Establishment Layout

Figure 6. Establishment Layout

 59

Product/Service Needs

This part shows the facilities, equipment, utilities and waste disposal

method of Green Café.

Facilities

These are the relevant areas of the entity and building wherein the

production and services are being occurred.

 Receiving counter (drive thru)

After ordering, the customer may proceed with his/her vehicle to the

receiving counter; where he/she will get his/her order.

 Receiving counter (dine in)

After ordering, the costumer may proceed to the receiving counter after

his/her name and order is announced/called.

 Tree with bookshelves

A huge tree, with books on it where you can read, is one of our cafe's

main attraction. We did not only want to satisfy the booklovers but also the nature

loving people and, of course, preserving a huge, and a beautiful tree is a great

way to promote the love of nature and environment.

 Stairs

The stairs that would take the customers to a nature loving space where

they can read books, enjoy and appreciate the beauty of nature.
 60

 Comfort room

A clean and odor-free comfort room is what our cafe would also offer you.

It consists one toilet with a bidet, a sink, and a mirror. Our comfort room is also

for both men and women.

 Waste bin

A cabinet type waste bin that has a segregation system where the

biodegradable, non-biodegradable, and recyclables are separated.

 Parking area

It consists of 9 columns and has enough space to get in and out easily.

 Drive thru

Our cafe wants to satisfy all people so our cafe has a drive thru for those

people that does not have enough time or in hurry.

 Entrance/ Exit-

A wooden door with a touch of art will welcome you to our cafe and will

make you want to know what is inside.

 Counter 1 and 2

It is where our dine-in customers will pay and order.

 Counter 3

It is where our drive-thru customers will pay and order.

 Pastry shelves

It is where our pastry products are being endorsed to our customers.

 61

 TV

A huge flat screen tv, mounted on a wall behind the counter, is where we

play our advertisements for our products.

Equipment

It comprises the needed appliances for the entity’s production of products.

 Water Dispenser- a device that cools and dispenses water

 Cups and Lids- cups is a small, bowl shaped container for drinking. Lid is a

removable or hinged cover for the top of a container

 Shaking Cup- a container where you can mix your chosen ingredients

 Measuring Scoop- a spoon used to measure an amount of an ingredients, its

either liquid or solid

 Powder Container- plastic vessel or bottle, often used to store liquids, powders

and etc.

 Tapioca Container- this is where we put or store our tapioca balls or pearls

 Stovetop or Burner- used for cooking or heating that operates by burning fuel or

using electricity

 Cooking Pot- a vessel, with or without a lid, used to cook food

 Strainer- used to separate solid matter to liquid

 Blender- device used to mix things together

 Sealer Machine- used to seal products, packaging and etc.

 Pumps for Syrup- used to measure how much syrup to apply or add
 62

 Air Conditioner- a machine that removes the warm air and replace it with cool or

humid air

 Speaker- a device that can produce sound or music

 Vacuum Cleaner- collects dust and small particles from floors and other

surfaces

 Telephone- a system or device that can connect or contact people

 Tables and Chairs- these are the things that our customers should occupy

 Mixers- the same with blenders, a device that can mix foods

 Oven- this is where we heat or cook our food

 Dough Proofer- a warming chamber used in baking

 Bake ware- tins, trays and any other items placed in the oven during baking

 Small wares- this consists of any kinds of kitchenware

 Dough Sheeter- rolls out pieces of dough to a desired thickness

 Bread Slicer- equipment designed to cut bakery products already prepared

(cooked) into several slices

 Refrigerator- this is where we kept cool and used to store foods and drinks

 Doughnut cake fryer- this is where we cooked our donut and keep them dry

 Display Case- a cabinet, used to display objects or food for viewing

 Wood top work table- a table at which one may work

 63

Estimated
Equipment Cost Unit Cost Quantity
Timeline
Water Dispenser 5,363 5,363 1 15
Cups & Lids 1.25 150,000 120,000 1
Shaking Cup 1,695 8,475 5 5 
 Measuring Scoop 710 2,130 3 5
Powder Container 256 3,840 15  5
Tapioca Container 1,310 1,310 1  5
Stove Top or
4,620 9,240 2  10
Burner
Cooking Pot 1,234 4,936 4  8
Strainer 579 1,158 2  5
Blender 5,875 17,625 3  5
Sealer Machine 1,100 1,100 1  10
Pumps for Syrups 1,715 1,715 1  10
Air Conditioner 19,499 58,497 3  8
Speaker 3,200 9,600 3  7
Vacuum Cleaner 1,049 1,049 1  10
Telephone 3,479 6,958 2  10
Tables and Chairs 5,685 113,700 20  10
Mixers 13,041 13,041 1  8
Oven 33,749 33,749 1  8
Dough proofer 31,400 31,400 1  7
Bakeware 3,995 11,985 3  7
Smallwares 145 10,875 75  7
Dough sheeter 31,500 31,500 1  8
Bread slicer 31,499 31,499 1  7
Refrigerator 12,999 12,999 1  10
Doughnut cake
14,898 14,898 1  6
fryer
Display case 7,399 7,399 1  10
Wood Top Work
2,299 6,897 3  10
Table
Total   602,938    

Utilities

Water 833.33 x12 10,000

 64

Electricity 3,000 36,000

Communicatio
n 685 8,220
Total 54,220
 Chapter 6

FINANCIAL FEASIBILITY

This section presents the financial feasibility of the proposed Green Café.

It shows the performance of the business in allocation and utilization of the

financial resources to determine the ability of the company to continue and

survive in the market. It includes necessary information for the users of financial

statements such as Financial Statements and its analysis, sources and uses of

funds and budgeting plans. These would determine whether the proposed

business is feasible and profitable.

Financial Statement and Analysis

This part presents the projected financial statements of the business

which is necessary for the users of financial statements because it is the basis of

economic decisions. This is a factual information which is true and accurate. It

will show the cash flow statement, income statement and balance sheet.

Financial Statement

The projected income statement determines the financial status of the

proposed business from its operational activity usually in one fiscal year. It

contains the projected income, total operating expenses as well as the net

income or net loss of the business.

Income Statement

An income statement shows the result of operations for a given periods. It

consists of the Revenue, Costs and Expenses.

 66

This is relevant for the users of financial statements such as creditors,

owners, management, employees, suppliers, investors, government and

competitors to understand and analyze the financial status and position of the

business.

During the first year of operation, the entity will earn a gross profit of Php

6,440,904.00 from the different pastries and milk teas made from insulin plant

and will increase by 1.03% in the following years. Total operating expenses of

the first year reached to Php 2,809,813.00 and will increase by 1% in the

following years. The Net income during the first year is Php 2,541,764, Php

2,676,430 on the second year, Php 2,813,662 on the third year, Php 2,961,670

on the fourth year and Php 3,108,498 for the fifth year. (See Exhibit 1)

Income Statement Accounts

 All revenues are computed based on the 12 operating month per year. It is

expected to increase 1% annually.

 Salaries are budgeted to Php 2,353,114.08 yearly.

 Advertising is budgeted Php 10,000 for five years.

 Insurance of the building is amounted to Php 50,000 every year.

 Office Supplies is budgeted Php 3,810 annually.

 Utilities Expense is amounted to Php 54,220 for the first year and expected to

grow yearly.
 67

Cash Flow Statement

The Statement of Cash Flows summarizes the cash receipts and cash

disbursements of the proposed Green Café. It summarizes the cash activities of

the business by classifying cash inflows and cash outflows of the operating,

investing and financing activities of the business. It shows the net increase and

decrease of cash in a given period and the cash balance at the end of the period.

This allows the management to assess the ability of the business to generate

cash and project future cash flows. (See exhibit 2)

Balance Sheet Accounts

The projected balance sheet or statement of financial position shows the

financial condition of a company as of a given time. It contains the resources of

the business which is called assets, as well as the liabilities which are the

payables of the business and the investment and withdrawals of the owner. (See

exhibit 3)

Balance Sheet Accounts

 Income Tax Rate is 30% per annum.

 There are three partners who will contribute for the funds with the total amount of

Php 4,000,000.

 Profit and loss will be divided in the ratio of 0.5:0.375:0.125 to Pauline Roma,

Kristine Batiancilla and Quancy Chua respectively.

 68

Exhibit 1

GREEN CAFÉ
Projected Income Statement
For Five Years
Revenues Schedule Year 1 Year 2 Year 3 Year 4 Year 5
6634131.1 6833155.0
Revenues 1 6,440,904 2 5 7038149.705 7249294.2
6634131.1 6833155.0
Total Income 6,440,904 2 5 7038149.705 7249294.2

Less
Operating Expenses
13th Month Pay 2 214,016 214,016 214,016 214,016 214,016
Advertising Expenses 10,000 10,000 10,000 10,000 10,000
Business Licenses 2,235 2,235 2,235 2,235 2,235
Depreciation Expense 3 28,961.30 28,961.30 28,961.30 28,961.30 28,961.30
Insurance 25,000 25,000 25,000 25,000 25,000
Office Supplies Expense 4 3,810 3,810 3,810 3,810 3,810
2353114.0 2353114.0 2,353,114.0
Salaries and Wages 5 2,353,114.08 8 8 2,353,114.08 8
SSS, PhilHealth and
Pag-ibig 6 118,456.80 118,456.80 118,456.80 118,456.80 118,456.80
Utilities Expense 54,220 55,067 58,045 51,600 52,990
Total Operating Expenses 2,809,813 2,810,660 2,813,638 2,807,193 2,808,583
Income Before Tax 3,631,091 3,823,471 4,019,517 4,230,957 4,440,711
1147041.2 1205855.0
Less: Tax 30% 1089327.246 8 6 1269286.958 1332213.3
Net income 2,541,764 2,676,430 2,813,662 2,961,670 3,108,498

Exhibit 1. Projected Statement of Comprehensive Income

 69
Revenue Demanded/ Monthly Yearly
Forecast Price Month Income Income Schedule 1

Total Revenue
Pastries
Croissants 510 90 45,900 550,800
Pies 499 87 43,413 520,956
Danishes 359 90 32,310 387,720
Macarons 210 78 16,380 196,560
Eclairs 320 84 26,880 322,560
Strudels 399 81 32,319 387,828
Canoli 259 90 23,310 279,720
Pretzels 250 90 22,500 270,000
Tarts 350 36 12,600 151,200
Profiteroles 360 72 25,920 311,040
Milk Tea
Flavors 90
Honeydew 155 90 13,950 167,400
Watermelon 155 87 13,485 161,820
Strawberry 155 90 13,950 167,400
Mango 155 78 12,090 145,080
Apple 155 84 13,020 156,240
Peach 155 81 12,555 150,660
Chocolate 155 90 13,950 167,400
Lemon 200 90 18,000 216,000
Taro 200 36 7,200 86,400
Pomegranate 200 72 14,400 172,800
Earl Grey 200 90 18,000 216,000
Oolong 200 87 17,400 208,800
Roasted 170 90 15,300 183,600
Jasmine 170 78 13,260 159,120
Lychee 170 84 14,280 171,360
Macha 170 81 13,770 165,240
Thai 170 90 15,300 183,600
Pearl 170 90 15,300 183,600
Total Income       6,440,904
 70

No. of Gross Pay per Total 13th Month

Employees Employees month Pay
Chief Executive Officer 1 15,000.00 15,000
Chief Operating Officer 1 15,000.00 15,000
General Manager 2 14,000.00 28,000
Finance Manager 1 13,500.00 13,500
Chef Executive 2 12,500.00 25,000
Marketing Manager 1 12,000.00 12,000
Pastry Chef 3 10,000.00 30,000
Barista 2 9,000.00 18,000
Bookkeeper 1 9,000.00 9,000
Cashier 2 8,086.00 16,172
Guard 1 8,086.00 8,086
Server 3 8,086.00 24,258
Total   214,016
Schedule 2

13th Month Pay

Schedule 3

Depreciation Expense

Unit Estimated
Equipment Cost Quantity Depreciation
Cost Timeline

Water Dispenser 5,363 5,363 1 15 357.53

Stove Top or Burner 4,620 9,240 2 10 462
Sealer Machine 1,100 1,100 1 10 110
Air Conditioner 19,499 58,497 3 8 2,437.38
Speaker 3,200 9,600 3 7 457.14
Vacuum Cleaner 1,049 1,049 1 10 104.9
Telephone 3,479 6,958 2 10 347.9
113,70
Tables and Chairs 5,685 20 10 568.5
0
Mixers 13,041 13,041 1 8 1,630.13
 71

Oven 33,749 33,749 1 8 4,218.63

Dough proofer 31,400 31,400 1 7 4,485.71
Bakeware 3,995 11,985 3 7 570.71
Smallwares 145 10,875 75 7 20.71
Dough sheeter 31,500 31,500 1 8 3,937.50
Bread slicer 31,499 31,499 1 7 4,499.86
Refrigerator 12,999 12,999 1 10 1,299.90
Doughnut cake fryer 14,898 14,898 1 6 2,483
Display case 7,399 7,399 1 10 739.9
Wood Top Work Table 2,299 6,897 3 10 229.9
411,74
Total 9 28,961.3

Schedule 4

Office Supplies Expense

Tot
Office al
Supplie Quanti Cos
s ty Price t
Ballpen 30 6 180
Bond
Paper 6 160 960
Correctio
n Tape 10 35 350
Cutter 3 15 45
Fastener 1 25 25
Filing
rack 3 110 330
Folder 30 5 150
Journal
Book 3 25 75
Marker 5 25 125
Pencil 10 4 40
Permane
nt
Marker 5 35 175
Ruler 3 6 18
Scissors 3 25 75
Sharpen 2 20 40
 72

er
Stamp 1 35 35
Stamp
pad 1 50 50
Stamp
pad ink 3 32 96
Staple
remover 3 42 126
Staple
wire 3 35 105
Stapler 3 25 75
Trash
Bin 5 125 625
Thumb
Tacks 5 7 35
Workshe
et 3 25 75
3,81
Total     0

Schedule 5

Salaries and Wages

No. of
Employe Pay per Annual
Employees es month Salary
Chief
13,742.
Executive
50
Officer 1 16,4910
Chief
13,742.
Operating
50
Officer 1 16,4910
General 12,826.
Manager 2 30 307,831.2
Finance 12,368.
Manager 1 25 1,48419
Chef 11,452.
Executive 2 05 274,849.2
Marketing 10,994.
Manager 1 00 131,928
9,161.7
Pastry Chef 3 0 329,821.2
Barista 2 8,245.5 197,892
 73

0
8,245.5
Bookkeeper 1 0 9,8946
7,411.2
Cashier 2 2 177,869.16
7,411.2
Guard 1 2 88,934.58
7,411.2
Server 3 2 266,803.74
2,353,114.
Total     08
 74

Schedule 6

SSS, PhilHealth and PAG-IBIG

Monthly Yearly
Employees Contribution Contribution
Chief Executive
Officer 1,105.00 13,260
Chief Operating
Officer 1,105.00 13,260
General
Manager 1,031.30 12,375.6
Finance
Manager 994.5 11,934
Chef Executive 920.8 11,049.6
Marketing
Manager 884 10,608
Pastry Chef 736.9 8,842.8
Barista 663 7,956
Bookkeeper 663 7,956
Cashier 589.3 7,071.6
Guard 589.3 7,071.6
Server 589.3 7,071.6
Total   118,456.8
 75

Exhibit 2

GREEN CAFÉ
Projected Statement of Cash Flow
For Five Years

Pre-
operating Year 1 Year 2 Year 3 Year 4 Year 5
Cash Flow from
Operating Activities
Revenue   6,440,904 6634131.12 6833155.054 7038149.705 7249294.196
Less Payment
for

13th Month Pay 214,016 214,016 214,016 214,016 214,016

Advertising
Expenses 10,000 10,000 10,000 10,000 10,000
Business
Licenses 2,235 2,235 2,235 2,235 2,235
Depreciation
Expense 31,381.17 31,381.17 31,381.17 31,381.17 31,381.17

Insurance 25,000 25,000 25,000 25,000 25,000

Office Supplies
Expense 3,810 3,810 3,810 3,810 3,810
Salaries and
Wages 2,353,114.08 2353114.08 2353114.08 2,353,114.08 2,353,114.08
 76

SSS, PhilHealth
and Pag-ibig 118,456.80 118,456.80 118,456.80 118,456.80 118,456.80

Utilities Expense 54,220 55,067 58,045 51,600 52,990

Total Operating
Expenses   2,812,233 2,813,080 2,816,058 2,809,613 2,811,003
Net Cash Balance
from Operation   3,628,671 3,821,051 4,017,097 4,228,537 4,438,291
Cash Flow from
Investing
Activities
Property, Plant
and Equipment 1,098,995.00
Purchase of
Furniture and
Fixture 150,000
Net Cash Balance
from Investing 1,248,995.00
Cash Flow from
Investing
Activities
Partners
Investment 4,000,000
Net Cash Balance
from Financing
Net increase
(decrease) in cash 2,751,005 3,628,671 3,821,051 4,017,097 4,228,537 4,438,291
Cash Balance,
Beginning 2,751,005 877,666 2,943,385 1,073,712 3,154,825
 77

Cash Balance,
Ending 2,751,005 877,666 2,943,385 1,073,712 3,154,825 1,283,466

Exhibit 2. Projected Cash Flow Statement

 78

Exhibit 3
GREEN CAFE
Projected Balance Sheet
For Five Years

Pre-
Schedule operating Year 1 Year 2 Year 3 Year 4 Year 5

ASSETS

Current Assets

Cash 2,751,005 877,666 2,943,385 1,073,712 3,154,825 1,283,466

Total Current Assets 2,751,005 877,666 2,943,385 1,073,712 3,154,825 1,283,466

           

Non Current Assets

Property, Plant and
Equipment 7 1,098,995 1,098,995 1,098,995 1,098,995 1,098,995 1,098,995
Furniture and
Fixture 8 150,000 150,000 150,000 150,000 150,000 150,000

Less:
Accumulated
Depreciation 3 31,381.17 62762.34 125524.68 251049.36 502098.72
Total Non Current
Assets 1,248,995 1,280,376 1,311,757 1,374,520 1,500,044 1,751,094
 79

Total Assets 4,000,000 2,158,042 4,255,142 2,448,232 4,654,869 3,034,560

Shareholder's equity

Beginning Capital 4,000,000 4,000,000 2,158,042 4,255,142 2,448,232 4,654,869

Net income (loss) 0 1,841,958 2,097,100 1,806,911 2,206,638 1,620,310

Withdrawal
Total Shareholder's
Equity 4,000,000 2,158,042 4,255,142 2,448,232 4,654,869 3,034,560

Exhibit 3. Projected Balance Sheet

 80

Schedule 6

Cost of Equipment

Total Estimated
Equipment Cost Quantity Cost Life
Air Conditioner 28,000 3 84,000 8
Computer Set 17,865 3 53,595 5
Printer 5,000 3 15,000 5
DVD Player 2,000 1 2,000 5
Printing
Calculator 1,600 2 3,200 5
Refrigerator 11,800 1 11,800 8
Speaker 1,800 2 3,600 5
Vacuum Cleaner 10,000 1 10,000 5
Water Dispenser 6,000 3 18,000 7
Telephone 1,500 2 3,000 5
120,00
Van 0 1 120,000 10

Schedule 7

Cost of Furniture and Fixtures

Quantit Estimated
Furniture Cost y Total Cost Life
File Cabinet 1,500 3 4,500 8
Office Tables 3000 10 30,000 10
Office Chairs 2,500 15 37,500 7
Big Tables 4,000 5 20,000 5
Chairs 250 200 50,000 8
Assorted Linen
Cloth 250 32 8,000

Total 11,500 150,000

 81

Financial Analysis

To substantiate the three major financial statement, the financial analysis

using profitability ratio analysis and liquidity ratio analysis has been provided.

Profitability Ratio Analysis

Profitability Ratio measures the overall efficiency and performance of the

company on its capability of generating revenue from its operational activities

that are conducted because of the availability of assets and resources. This can

affect the decision of the investors whether they want to invest more because of

the company’s profitability. This will include the Gross Profit Ratio, Operating

Profit Margin, Net Profit Margin and Return on Assets.

Gross Profit Ratio

Gross Profit Ratio, otherwise called Gross Margin Ratio, measures the

percentage of mark-up that a company adds to the cost of goods sold which will

affect the operating expenses related to the sale of the goods.

Gross Profit
Gross Profit Ratio=
Net Sales

  Year 1     Year 2     Year 3     Year 4     Year 5  

6833155.05 7038149. 7249294.1
  6,440,904     6634131.12     4     705   96  

  3,631,091     3,823,471     4,019,517     4,230,957   4,440,091  

  178%     174%     170%     166%     163%  

The gross profit ratio is 178%, 174%, 170%, 166% and 163% respectively.
 82

Operating Profit Margin

Operating Profit Margin measures the percentage of operating income

after being deducted by the cost of goods sold and operating expenses. This is

an indication of the company’s efficiency and effectiveness in managing its

expenses at its sales level.

Operating Income
Operating Profit Margin=
Net Sales

  Year 1     Year 2     Year 3     Year 4     Year 5  

2,943,38 1,073,71 3,154,82 1,283,46
  877,666     5     2   5   6  

3,631,09 3,823,47 4,019,51 4,230,95 4,440,09

  1     1     7     7   1  
  24%     77%     27%     75%     29%  

The operating profit margin are 24%, 77%, 27%, 75% and 29% respectively.

Net Profit Margin

Net Profit Margin, otherwise known as Return on Sales, measures the

percentage of net income from net sales after all income has been added and all

operating and other expenses has been deducted.

Net Income
Net Profit Margin=
Net Sales

  Year 1     Year 2     Year 3     Year 4     Year 5  

  2,541,764     2,676,430     2,813,662     2,961,670   3,108,498  

 83

  3,631,091     3,823,471     4,019,517     4,230,957   4,440,091  

  0.7     0.7     0.7     0.7     0.7  

The net profit margin or return on Sales is stable. It is 70% for five years.

Return on Assets

Return on Assets, otherwise called Return on Investment, measures the

company’s efficiency in utilizing its available assets and resources in order to

generate revenue

Net Income
Return on Assets=
Average Total Assets

Assets at the Beginning of the Year+ Assets at Ending of the Year

Average Total Assets=
2

  Year 1     Year 2     Year 3     Year 4     Year 5  

  2,541,764 2,676,430 2,813,662 2,961,670 3,108,498  

  3,079,021     3,206,592     3,351,687     3,551,551   3,844,715  

  =82.55%     =83.47%     =83.95%     =83.39%     =80.85%  

The rate return for five years are 82.55%, 83.47%, 83.95%, 83.39% and

80.85% respectively. The return on assets improved from year 1 to year 3.

 84

Turnover Ratio Analysis

Turnover Ratio Analysis signifies how efficient and effective a company is

in using their assets in order to generate revenue. The formula of the turnover

ratio analysis is:

Revenue
Turnover=
Total Assets

Year 1     Year 2     Year 3     Year 4     Year 5

6,440,904     6634131.1     6833155.1     7038149.7   7249294.2
2,158,042     4,255,142     2,448,232     4,654,869   3,034,560
2.984605     1.5590856     2.7910574     1.5119973     2.3889114

The turnover ratios for 5 years are 2.98, 1.56, 2.79, 1.51, 2.39

respectively. It signifies the efficiency in using the resources, thus a measure of

efficiency of asset in generating revenue.

Leverage Ratio Analysis

Leverage Ratio Analysis measures the relation between investment

shares of the partners. The formula is presented below.

Total Assets
Leverage Ratio=
Shareholders' equity

Year 1     Year 2     Year 3     Year 4     Year 5

2,158,042 4,255,142   2,448,232     4,654,869     3,034,560
2,158,042 4,255,142   2,448,232     4,654,869   3,034,560
1     1     1     1     1

The leverage ratio for five years is consistently 1.

 85

Liquidity Ratio Analysis

Liquidity Ratios measure the ability of the company to meet its current

obligations as they fall due. The test for liquidity ratio is the current ratio and the

quick ratio for more severe test of the liquidity of the business.

 Payback Period

Payback Period in business and economics refers to the length of time it

takes for an investment project to record its own initial cost out of the cash

receipts. Cash receipts are equal to the net income plus the depreciation

expense.

Payback Period= Investment/Cash Returns

=4,000,000/2,570,725.3

=1.56 or 2 years

Cash Returns= Net Income + Depreciation Expense

= 2,541,764 + 28,961.30

=2,570,725.3

As shown by the results above, it can be concluded that the total

investment 4,000,000 will be recovered within 2 years.

 86

Sources and Uses of Funds

In order to have efficient and effective operational activities, the business

is responsible of the proper usage of the financial assets and resources. This will

avoid the losses of the business and maintain or improve its financial stability.

One of the major sources of financial resources are the banks and lending

institutions. Banks and financial institutions require the presentation of liquidity

ratio, solvency ratio, and profitability ratio of the company and make sure that it is

favorable before they extend credit. These are financial ratios that are used to

compare a company’s current financial position and performance with those of

past years and identify strengths and weaknesses. This is to ascertain the return

of money together with the interest because of the company’s financial capability.

Owners of the company are also distributors of the financial resources.

They invest money and other assets in order for the operating activities of the

business to run smoothly.

All partners in Green Café gave capital contributions.

Name of Partner Contributions

Pauline Angela M. Roma Php 2,000,000

Kristine C. Batiancilla Php 1,500,000

Quancy Carina L. Chua Php 500,000

TOTAL Php 4,000,000

 87

Budgeting Plans

Each partner is responsible in decision-making with the proper allocation

and utilization of the limited financial resources of the company. Future plans and

development are decided by the partners. Operating revenues will be calculated

and determine the future costs and revenues of the business. This will avoid

monetary challenges of the company. If the establishment will be able to handle

financial resources efficiently and effectively, then there is a possibility of opening

more branches for more revenue.

Budgeting plans also include the employees and workers’ point of views

because they have knowledge about the operational activities of the business.
 Chapter 7

SOCIO-ECONOMIC

This chapter contains the possible effects of the business to economy. It

discusses the primary ways for the business to contribute to its nation which

gives encouragement for financial independence, innovation and create

employment opportunities.

Possible Effects to the Economy

There is a big impact of the proposed business in the community. The

nation’s stability will be predicated upon a stable economy and the financial

strength derived from the proposed business. Some of the possible effects of the

proposed business to the economy are the following:

 It generates a broad variety of new employment opportunities.

 It stimulates local or national economy and encourage others to take the same

leap toward becoming a business owner.

 Because of establishing the business in the local community, it continues to

support economic prosperity.

 The business harbors the entrepreneurial spirit by attracting individuals who

invent new products or improve pre-existing products.

All of these indicate that the proposed business will benefit not only the

owners and investors but they also give benefits to the economy, local

community and the public.

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I. Personal Background

Name: Princess Rose D. Yares

Birth Date: November 04, 2000

Nationality: Filipino

Civil Status: Single

Gender: Female

Phone Mobile: 09462419648

Address: Zone 10 B Brgy. Fatima, General Santos City

Father: Roel R. Yares

Mother: Jennet D. Yares

II. Educational Status

Senior High School: Notre Dame of Dadiangas University

Marist Avenue, General Santos City

Accountancy, Business and Management

SY: 2018 present

Junior High School: General Santos City National High School

Calumpang, General Santos City
SY: 2013- 2017
Elementary School: Koranadal Central Elementary School
Dr Jose Rizal St, Poblacion, Koronadal City, South
Cotabato
SY: 2007 – 2013
 I. Personal Background

Name: Chua, Quancy Carina L.

Birth Date: March 20,1999

Nationality: Filipino

Civil Status: Single

Gender: Female

Phone Mobile: 09957712321

Address: Block 14 Lot 13 Guijo Street Rosario Village Lagao General Santos City

Mother: Lorelei Chua

II. Educational Status

Senior High School: Notre Dame of Dadiangas University

Marist Avenue, General Santos City

Accountancy, Business and Management

SY: 2018 (Present)

Junior High School: Notre Dame of Dadiangas University

IBED-Lagao Campus San Pablo Street

General Santos City

SY: 2013-2017

Elementary School: Notre Dame of Dadiangas University

IBED-Lagao Campus San Pablo Street

General Santos City

SY: 2008-2011
 I. Personal Background

Name: Roma, Pauline Angela M.

Birth Date: November 23, 2000

Nationality: Filipino

Civil Status: Single

Gender: Female

Phone Mobile: 09238682705

Address: Agan Homes Phase I, Brgy, San Isidro, General Santos City

Mother: Melba M. Roma

Father: Jose Wilfredo C. Roma

II. Educational Status

Senior High School: Notre Dame of Dadiangas University

Marist Avenue, General Santos City

Accountancy, Business and Management

SY: 2018 (Present)

Junior High School: Holy Trinity College

Daproza Avenue, General Santos City

SY: 2013-2017

Elementary School: Holy Trinity College

Daproza Avenue, General Santos City

SY: 2007-2013
I. Personal Background

Name: Andrade, Andre S.

Birth Date: June 7, 2000

Nationality: Filipino

Civil Status: Single

Gender: Male

Phone Mobile: 09457894786

Address: Agan Homes Phase I, Brgy, San Isidro, General Santos City

Father: Arnold C. Abdrade

Mother: Anarose S. Andrade

II. Educational Status

Senior High School: Notre Dame of Dadiangas University

Marist Avenue, General Santos City

Accountancy, Business and Management

SY: 2018 (Present)

Junior High School: General Santos City National High School

SY: 2013-2017

Elementary School: H. N. Cahilsot Central Elementary School

SY: 2007- 2013

I. Personal Background

Name: Kristine Chelsea G. Cabañog

Birth date: July 17, 2000

Birthplace: General Santos City

Nationality: Filipino

Civil Status: Single

Gender: Female

Phone Mobile: 09276155248

Address: Blk 12 Lot 8 Phase 6 Doña Soledad Subdivision, Labangal, GSC

Father: Robert Allan M. Cabañog

Mother: Marites G. Cabañog

II. Educational Status

Senior High School: Notre Dame of Dadiangas University

Marist Avenue, General Santos City

Accountancy, Business and Management

SY: 2018 (Present)

Junior High School: Notre Dame of Dadiangas University-IBED Lagao

San Pablo St., Lagao, GSC

SY: 2013-2017

Elementary School: Francisco Oringo Sr. Elementary School

Oringo Subdivision, City Heights, GSC

2007-2013
I. Personal Background

Name: Princess Joy I. Estabillo

Birth date: January 30, 2001

Birthplace: Kiamba Sarangani Province

Nationality: Filipino

Civil Status: Single

Gender: Female

Phone Mobile: 09772110091

Address: Dacville Phase 2, Brgy. Mabuhay GSC

Father: Sulpicio B. Estabillo

Mother: Julieta I. Estabillo

II. Educational Status

Senior High School: Notre Dame of Dadiangas University

Marist Avenue, General Santos City

Accountancy, Business and Management

SY: 2018 (Present)

Junior High School: Holy Trinity College

Daproza Avenue, General Santos City

SY: 2013-2017

Elementary School: Holy Trinity College

Daproza Avenue, General Santos City

SY: 2007-2013
I. Personal Background

Name: Jonaisa F. Ishmael

Birth date: June 18, 2001

Birthplace: Calumpang, General Santos City

Nationality: Filipino

Civil Status: Single

Gender: Female

Phone Mobile: 09772110091

Address: Purok Banisil Tambler, GSC

Father: Monier B. Ishmael

Mother: Geraldine F. Ishmael

II. Educational Status

Senior High School: Notre Dame of Dadiangas University

Marist Avenue, General Santos City

Accountancy, Business and Management

SY: 2018 (Present)

Junior High School: General Santos City National Highschool

Rizal Street, Calumpang, GSC

SY: 2013-2017

Elementary School: Calumpang Central SDA Elementary School.

Purok Christian Village, Makar - Siguel Rd, GSC

SY: 2007-2013
I. Personal Background

Name: Jime Jarden Q Navarro

Birth Date: January 10, 2001

Birth Place: Anas Subdivision Lagao, GSC

Nationality: Filipino

Civil Status: Single

Gender: Female

Phone Mobile: 09054003890

Address: Anas Subdivision Lagao, GSC

Mother: Diosa Q. Navarro

Father: Francisco G. Navarro

II. Educational Status

Senior High School: Notre Dame of Dadiangas University

Marist Avenue, General Santos City

Accountancy, Business and Management

SY: 2018 (Present)

Junior High School: Notre Dame of Dadiangas University- IBED

San Pablo Street, Lagao GSC

SY: 2013-2017

Elementary School: UCCP Pag-ibig Christian School of Lagao

Brgy. San Isidro, General Santos City

SY: 2007-2013
 I. Personal Background

Name: Batiancila Kristine C.

Birth Date: November 23, 2000

Nationality: Filipino

Civil Status: Single

Gender: Female

Phone Mobile: 09509395470

Address: Brgy. Mabuhay, Klinan 5, General Santos City

Mother: Marilou C. Batiancila

Father: Rey D. Batiancila

II. Educational Status

Senior High School: Notre Dame of Dadiangas University

Marist Avenue, General Santos City

Accountancy, Business and Management

SY: 2018 (Present)

Junior High School: Notre Dame of Dadiangas University

Lagao, General Santos City

SY: 2013-2017

Elementary School: Canonico Antonio Institute

Brgy. Conel, Sitio Nopol, General Santos City

SY: 2007-2013