A BUSINESS PLAN OF DAVE’S LECHON MANOK LOCATED AT

PUROK 01, BRGY AGUINALDO, LAAK, DAVAO DE ORO, PHILIPPINES

Presented to

The Faculty of Entrepreneurship Department

Compostela Valley State College

Main Extension Class

Laak, Davao De Oro Province, Philippines

In Partial Fulfillment

Of the Requirements for the Degree

Bachelor of Science in Entrepreneurship

DELA PENA, DAVE C.

POLICARPIO, JANICE J.

AMBAN, GLENN C.

MONTARGO, JARIL B.

DE LEON, JOEL T.
 ACKNOWLEDGMENT

Proponents of DAVE’S LECHON MANOK business want to extend the

warmest gratitude of appreciation for those individuals who impart their

contributions with regards to the business. First and foremost, proponents want

to express deepest gratitude to the almighty God who imparted and granted the

knowledge and understanding to the proponents to accomplish the study

successfully. To all the dearest partners and readers who imparted their time in

order for the proponents to build their plans gradually, your supports are much

appreciated. Thanks to the families who offers unconditional love wholeheartedly

and providing the basic needs especially with the financial problems the team is

going through during the study . Thank you to all the classmates and friends who

also contributed their efforts to the team by sharing their knowledge and ideas.

Proponents also want to show greatest gratitude to their co - members,

who helps each other through sharing each ideas in order to accomplish the

study. Thanks to the adviser Ma’am Juma P. Wabingga, and to the instructor

Ma’am Jean R. Caballero who are always there to correct all the mistakes of the

proponents.Thank you also to the financial analyst Sir Cherwin Sejuela for being

approachable and willing to help the team to understand the financial statement

of the study.

Once again, thank you so much for exerting efforts on helping the team

from the start of the study until the end. Thank you!
 TABLE OF CONTENTS

ACKKNOWLEDGMENT ----------------------------------------------------------------------i

APPROVAL SHEET ----------------------------------------------------------------------------ii

EXECUTIVE SUMMARY ---------------------------------------------------------------------1

1. Brief Description of the Project --------------------------------------------------------2

A. Profile of the Entrepreneurs --------------------------------------------------------2

B. Projects Contribution to the Economy -------------------------------------------3

INTROODUCTION -----------------------------------------------------------------------------4

1. Objectives of the Project ---------------------------------------------------------------5

2. Methodology ------------------------------------------------------------------------------5

3. Scope and Limitation of the Study --------------------------------------------------6-7

CHAPTER I

GENERAL COMPANY PROFILE -----------------------------------------------------------8

Vision -----------------------------------------------------------------------------------------8

Mission ---------------------------------------------------------------------------------------8

Goals ------------------------------------------------------------------------------------------9

Enterprise Objectives ---------------------------------------------------------------------9

Business Philosophy ----------------------------------------------------------------------9

 Business Size ------------------------------------------------------------------------------10

Legal Form of Business Ownership --------------------------------------------------10

CHAPTER II

MARKETING PLAN ----------------------------------------------------------------------------11

A. Marketing Aspect ------------------------------------------------------------------------11

1. Description of the Products --------------------------------------------------------12

2. Proposed Location ------------------------------------------------------------------13

3. Market Area ---------------------------------------------------------------------------15

A. Target Market --------------------------------------------------------------------15

B. Historical Demand --------------------------------------------------------------16

C. Projected Demand ---------------------------------------------------------17-18

D. Historical Supply ---------------------------------------------------------------19

E. Projected Supply ----------------------------------------------------------------20

F. Supply and Demand Analysis -----------------------------------------------22

G. Market Share --------------------------------------------------------------------25

4. Competition Analysis ---------------------------------------------------------------25

B. Marketing Plan --------------------------------------------------------------------------26

1. Marketing Objectives ---------------------------------------------------------------26

 2. SWOT Analysis -----------------------------------------------------------------27-28

3. Marketing Strategies ---------------------------------------------------------------

28

A. Product Strategy -----------------------------------------------------------------28

B. Promotional Strategy -----------------------------------------------------------29

C. Pricing Strategy -----------------------------------------------------------------29

D. Distribution Strategy ----------------------------------------------------------31

4. Sales Forecast ---------------------------------------------------------------------31

5. Marketing Budget --------------------------------------------------------------32-33

CHAPTER III

PRODUCTION PLAN -------------------------------------------------------------------------34

1. Production Process -------------------------------------------------------------------------34

2. Property, Plant, and Equipment ---------------------------------------------------------35

3. Depreciation of Property, Plant and Equipment -------------------------------------35

4. Repairs and Maintenance ----------------------------------------------------------------36

5. Factory/ Store Equipment ----------------------------------------------------------------37

6. Store/ Factory Layout ----------------------------------------------------------------------38

7. Rent/ Lease Expense ----------------------------------------------------------------------39

8. Raw Materials and Its Cost ------------------------------------------------------------40-42

9. Raw Materials Availability -----------------------------------------------------------------46

10. Inventory Management -------------------------------------------------------------------47

11. Utilities Expense ----------------------------------------------------------------------------47

12. Cost of Labor --------------------------------------------------------------------------------49

13. Labor Availability ----------------------------------------------------------------------------49

14. Other Operating Expenses ---------------------------------------------------------------50

15. Production Cost -----------------------------------------------------------------------------51

CHAPTER IV

ORGANIZATION AND MANAGEMENT PLAN ----------------------------------------53

1. Form of Business ---------------------------------------------------------------------------53

2. Organizational Structure ------------------------------------------------------------------55

3. Business Experience and Qualification of the Entrepreneur --------------------56

4. Administrative Personnel -----------------------------------------------------------------56

5. Office Layout --------------------------------------------------------------------------------57

6. Pre-Operating Activities -------------------------------------------------------------------58

7. Administrative Expenses ------------------------------------------------------------------58

CHAPTER V

FINANCIAL PLAN ----------------------------------------------------------------------------64

1. Capitalization Requirement---------------------------------------------------------------64

2. Total Project Cost --------------------------------------------------------------------------65

3. Major Assumptions -------------------------------------------------------------------------66

4. Projected Financial Statements ---------------------------------------------------------67

i. Projected Income Statement -----------------------------------------------------67

ii. Projected Balance Sheet ---------------------------------------------------------68

iii. Projected Cash Flow --------------------------------------------------------69-70

iv. Statement of Owner’s Equity --------------------------------------------------70

5.Financial Ratios and Analysis--------------------------------------------------------71-72

6.Return on Investment ---------------------------------------------------------------------72

7. Project Feasibility --------------------------------------------------------------------------72

ENVIRONMENTAL AND SOCIAL IMPACT ANALYSIS -----------------------------73

REFERENCES ----------------------------------------------------------------------------------74

APPENDICES --------------------------------------------------------------------------------75-87

BODY OF THE TEXT --------------------------------------------------------------------------

TIMETABLE ---------------------------------------------------------------------------------------
 LIST OF FIGURES

FIGURE Page

Product----------------------------------------------------------------------------------------- 12

Vicinity Map----------------------------------------------------------------------------------- 14

Target Market --------------------------------------------------------------------------------- 15

Distribution Strategy-------------------------------------------------------------------------- 31

Production Process ---------------------------------------------------------------------------34

Store Layout ------------------------------------------------------------------------------------38

Proposed Organizational Structure -------------------------------------------------------55

Office Layout -----------------------------------------------------------------------------------57

 LIST OF TABLE

TABLES Page

Profile of the Entrepreneur (s) --------------------------------------------------------2

Historical Demand-----------------------------------------------------------------------16

Historical Demand of Regular Lechon Manok -----------------------------------16

Historical Demand of Special Lechon Manok ------------------------------------17

Projected Demand-----------------------------------------------------------------------17

Projected Demand of Regular Lechon Manok ----------------------------------18

Projected Demand of Special Lechon Manok -----------------------------------19

Historical Supply-------------------------------------------------------------------------19

Historical Supply of Regular and Special Lechon Manok --------------------20

Projected Supply------------------------------------------------------------------------20

Projected Supply of Regular Lechon Manok ------------------------------------21

Projected Supply of Special Lechon Manok ------------------------------------21

Supply and Demand Analysis ------------------------------------------------------22

Supply and Demand Analysis of Regular Lechon Manok -------------------23

Supply and Demand Analysis of Special Lechon Manok --------------------24

Market Share-----------------------------------------------------------------------------25
Competition Analysis---------------------------------------------------------------------25

Product Costing of Regular Lechon Manok ---------------------------------------29

Product Costing of Special Lechon Manok ----------------------------------------30

Sales Forecast-----------------------------------------------------------------------------31

Marketing Budget-------------------------------------------------------------------------32

Property, Plant, and Equipment ------------------------------------------------------35

Schedule of Depreciation-Property, Plant and Equipment --------------------35

Repairs and Maintenance --------------------------------------------------------------36

Sources of Equipment -------------------------------------------------------------------37

Rent Expense Forecast -----------------------------------------------------------------39

Raw Materials of Regular Lechon Manok ----------------------------------------40-42

Raw Materials of Special Lechon Manok -----------------------------------------43-45

Raw Materials Availability ----------------------------------------------------------------46

Utilities Expense ----------------------------------------------------------------------------47

Utilities Expense Forecast ---------------------------------------------------------------48

Cost of Labor --------------------------------------------------------------------------------49

Other Operating Expense -----------------------------------------------------------------50

Production Cost ----------------------------------------------------------------------------51-52

Requirements for Business Registration --------------------------------------------54

Administrative Personnel ----------------------------------------------------------------56

Administrative Expenses -----------------------------------------------------------------58-62

SSS,PHIC,PAGIBIG -----------------------------------------------------------------------63

13TH Month Pay ------------------------------------------------------------------------------64

LIST OF APPENDICES

APPENDIX Page

Appendix A Population letter -------------------------------------------------------------75

Appendix B Population data --------------------------------------------------------------76

Appendix C Sample Size ------------------------------------------------------------------77

Appendix D Purchase Frequency Computation ----------------------------------78-79

Appendix E Survey Questionnaire Result ----------------------------------------------80

Appendix F Respondent Profile -----------------------------------------------------------81

Appendix G Average Increase of Demand ---------------------------------------------82

Appendix H Competitor Survey Questionnaire ----------------------------------------83

Appendix I Average Increase and Decrease of Supply -----------------------------84

Appendix J Production Capacity Computation---------------------------------------85-86

Appendix K Depreciation of PPE ----------------------------------------------------------87
 APPROVAL SHEET

This Business Plan entitled “DAVE’S LECHON MANOK” located in the

Purok 01, Brgy Aguinaldo, Laak, Davao De Oro, Philippines, prepared and
submitted by DELA PEÑA DAVE, POLICARPIO JANICE, AMBAN GLENN,
MONTARGO JARIL and DE LEON JOEL. In partial fulfilment of the
requirements for the degree of Bachelor of Science in Entrepreneurship has
been examined and is hereby endorsed.

JUMA B. PELICANO, LPT

Adviser

PANEL OF EXAMINERS
Approved by the panel of Examiners on Oral Examination with a grade of ____.
(PRINTED NAME OF THE PANEL) (PRINTED NAME OF THE PANEL)
Panel Member Panel Member

(PRINTED NAME OF THE PANEL) (PRINTED NAME OF THE F.A)

Panel Member Financial Analyst

Accepted and Approved in Partial fulfilment of the requirements for the degree of
Bachelor of Science and Entrepreneurship.

JUMA B. PELICANO, LPT

Program Coordinator

JUANITA C. LEOPOLDO, DBA

Program of Head
 EXECUTIVE SUMMARY
Propose business will be selling delicious, affordable and Pinoy made
lechon manok that is still popular and will be in demand in the target market. The
proposed business was considered by the proponents of the business plan
because it saw the potential to be profitable because of its demand especially if
there occasion such as birthdays, fiesta, graduations or even just on a daily
basis . Here in Philippines, there are many fast food restaurants with this type of
business, but despite the influx of them, they still remain successful despite the
fierce competition in the market because there are still many consumer because
of the natural passion of the Filipinos in this food.
The purpose of this business plan is to study the potential income of the
propose business named ‘Dave’s Lechon Manok’. The first chapter of the
business plan contains situational analysis about the product. It discusses a brief
background about the product and the brief description of the project, as well as
its objectives. Second chapter is the marketing plan of a proposed business
including the marketing aspect and evaluation of the target market and analysing
the competition between the propose business and its competitor. On the third
chapter which is Production Plan, it details the production process, equipment
and its cost and the computation of the production cost. The fourth chapter
discusses the organization and management plan including all the requirements
needed to form a business and the equipment needed for store layout. Last part
is the financial plan, It details the preparation of financial statements and
analysis.Last part is the environmental and social impact analysis which
discusses the effect of the business to the environment and to the society.

1
 1. Brief Description of the Project

Dave’s Lechon Manok is the propose business name. It is from the first

name of a proponent where the propose business is named after him because

he is known in the place where the business was planned to be built. However,

consumers are more confident because they already know the business owner.

The project to be build will require initial capital of approximately ₱50,000.

2. Profile of the Entrepreneur

Table 1.Profile of the Entrepreneurs

NAME EDUCATIONAL ADDRESS

BACKGROUNDS/EXP
ERIENCES
1. Dela Pena, Dave C. College Level/Dealer Aguinaldo,Laak, DDO
2. Policarpio, Janice J. College Level/ a former Kidawa,Laak, DDO
seller of frozen
products
3. Amban , Glenn C. College Level/Sari-sari El Katipunan, Laak, DDO
store owner
4. Montargo, Jaril B. College Level/Sari-sari El Katipunan, Laak, DDO
store owner
5. Deleon, Joel College Level/Egg Kaligutan, Laak, DDO
delivery

2
3. Projects Contribution to the Economy

The propose business will help the economy by providing the opportunity

to individuals to be able to work meet the needs of the community and above all

business can counterpart in the economy through taxes paid by the business

which helps with the expenditures of government towards the development of the

country that will greatly benefit by the people.

3
 INTRODUCTION

Lechon Manok is a Cebu staple dish invented in the mid-1980s. It has

become popular all over the country because of its unique flavor, affordability,

and availability. It is a long - run variety of business. Selecting a proper spot is

the favor gold mine for any business. Any capital spent on a concept can take

time to possess the comeback of an investment (Business alert: 2014). Filipinos

can easily adapt to different food presented by the different countries Roasted

chicken or lechon manok, as translated in a Filipino dictionary, was among the

top popular delicacies in the Philippines seventy years ago, it has retained its

status up to now. Moreover, lechon manok is not new to the Filipinos. It serves

as a popular food choice to everyone from young to adult in all walks of life. The

lechon manok industry is a powerful business to try. In order to properly function

and develop, an enterprise needs manager who can well understand the

economic environment that it operates in (Adesina and Djato, 2005).

As reflected in the research of Chaochuy, it is loved by nine out of ten

Filipinos because of its simplicity in cooking, yet appetizing taste, not only that, it

mirrors the creative minds of natives in terms of food cooking. When it comes to

the health benefits, chicken meat is commonly regarded both by health

professionals and the general public as healthful type of meat; it is well - liked

and the consumption is increasing. Chicken meat is lean, protein - rich and good

source of important micronutrients such as zinc and vitamin B12.

The proponent of the propose business has decided to build a lechon

manok shop because it is easy to invest and besides that, the raw materials to

4
be used in production are always available in the market. In addition, the

proponents have discovered an area where there is a potential to be the target

market of the business.

1. Objectives of the Project

The main purpose of this project is to determine the feasibility of the

project and the capacity of a location whether it is suitable to build a business

and to determine its current marketing status. Another objective of the project

is to study whether the proposed business can meet its operating costs as well

as its other financial expenses. In addition to the focus of the project is its

thorough study of how to grow the business.

2. Methodology

The population data was requested by the proponents in the barangay.

Due to the need to adhere to the protocols implemented by the government, the

proponents decided to divide the survey into two. Half will online and half were

distributed printed survey questionnaires to households not covered by the online

survey. After the survey respondents answer it, it will be collected again the next

day. This was done to avoid face-to-face discussions between respondents and

proponents. The online survey was conducted in all areas with an internet

connection using Google form. Using the stratified sampling method, the

5
proponents took the sample size of every purok of the barangay using the

Raosoft calculator and that was the basis for the survey. The proponents also

distributed printed survey questionnaires for competitors and then collected them

afterward to use as a basis for analyzing demand and supply.

3. Scope and Limitation of the Study

All respondents surveyed were all registered in the Barangay Aguinaldo,

Laak, Davao De Oro, but the 2021 data provided by the barangay to the

proponents were only estimated for the reason that they could not yet provide

exact data. The survey was conducted only for the primary target customers of

the propose business registered in the barangay, not including people from other

areas that are temporarily staying in the barangay such as banana plantation

workers located directly in the barangay. The propose target market has two

special barangay still covered by it, but the survey did not reach it because the

barangay could not provide data to the proponents. The study, on the other hand,

consider passers - by from other barangays as additional customers of the

business.

The study also includes the marketing plan of the proposed business

which discusses the marketing aspect and all its areas such as the proposed

location, description of the product and analyze the marketing as well as the

competitor. Apart from this, the study also discusses the production plan of the

propose business including its production process, propose fixed assets that the

business needs to acquire as well as its other operating costs. Human resources

6
also included which discusses how the business can acquire employees. The

largest part covered by the study is the financial plan where it discusses all

expenses. Capitalization and preparation of financial statements as a whole.

CHAPTER 1

GENERAL COMPANY PROFILE

Currently, the market status that the business will enter is more

developed than before. There are many different businesses are entering

because the area is now more accessible. When it comes to customer needs,

the product offered by the business is a big help for them because they no

longer have to go to the city or municipality to buy freshly cooked food because

they already have it in the place itself.

The proponents of the propose business have become even more

determined to build a business because of the perceived potential of the current

market area especially that customer are now more able to buy the product due

to the increasing percentage of those who have jobs.

Vision

To be the number one provider of freshly cooked lechon manok in the

Davao de Oro.

7
Mission

To provide quality finished products that will be able to meet customers

expectation and satisfy them according to the value they exchange.

Goals

 To provide customer satisfaction

 To increase sales

 Business expansion

Enterprise Objectives

 Provide quality products

 Have additional employees

 Building customer relationship

Business Philosophy

“Exceeding customer expectation is always the priority of our business”

Since in a business, customers are the most import part of it, they need to be

given value and need to go beyond what they expect in a business.

8
Business Size

Micro Enterprise

Micro Enterprise is a small business started with a small amount of capital

usually coming from bank or other organization and it operates with fewer than

10 people. It is usually operating in a local area.

Legal Form of Business Ownership

The propose business to establish is a sole proprietorship. Common form

of business ownership which only one individual acquires all the benefits and

risks of running an enterprise this form of ownership is easy to form, and owners

enjoy sole control of the business profits. Hence, the propose business is under

the ownership of Mr. Dave C. Dela Peña

9
 CHAPTER II

MARKETING PLAN

To promote the business marketing techniques will be applied. In order to

reach target customer, the propose business will use different strategies like

distribution of fliers and putting a tarpaulin in front of the store two weeks before

it opens.

A. Marketing Aspect

The propose location of the business is quite far from the municipality. It

will take 30 minutes to reach the said municipality so people find it difficult to

shop especially for food due to the distance of the market.Currently,there are

only few sellers of freshly cooked food in the propose location .

10
1. Description of Products

Figure 1 Product

The propose business will offer a product which is Lechon Manok which

is different from what is usually sold in the market because it has additional

innovation. If the lechon manok that is usually sold is just plain, this product of

the propose business is more special because it is stuffed with longganiza of

even though there is a slight difference in price than the regular lechon manok

that the propose business also offers, the consumer will be more satisfied and

the propose business will have competitive advantage over the competitors.

11
2. Proposed Location

Dave’s Lechon Manok is located at Purok 01 Brgy Aguinaldo Laak Davao

De Oro. The propose business chose the location because it is surrounded by

many nearby barangays that can also be target market customers of the

business. The location also has potential due to its improved marketing status

and increasing business opportunities.

12
Figure 2: Vicinity Map

13
2. Market Area

This chapter shows the extent and capacity of the target market whether there is

a shortfall in its demand and supply both historical and projected as well as how

much it has raised and lowered in its market share.

A. Target Market

The chart below shows the data of Barangay Aguinaldo, Laak, Davao De

Oro. Out of 236 sample size population, 230 of it says yes to our product and that

was indicated below per purok.

Target Market
Purok 01
Purok 02
18 Purok 03
8% 20
9% Purok 04
25 23
11% 10% Purok 05
15 19
7% Purok 06
8%
Purok 07
8
3% 18 Purok 08
16 29 8%
7% 13% 22 Purok 09
10%
Purok 10
17
7% Purok 11
Purok 12

Figure 3: Target Market

14
 B. Historical Demand

The table below shows the total demand of the products from the previous

household population of the target market with 97% of customers and a

frequency of 124 per year.

Table 2 Historical Demand

YEAR POPULA - % OF NO. OF PURCHASE TOTAL

TION/ CUSTOMER CUSTOMER FREQUENCY DEMAND

HOUSEHOLD PER YEAR

2018 509 97% 494 124 61,256

2019 528 97% 512 124 63,488

2020 571 97% 554 124 68,696

See Appendix B for the population data, appendix C for computation of sample

size, and appendix D for purchase frequency computation.

Table 3 below is showing the total historical demand of Regular Lechon Manok

from the previous years with a frequency of 100 per year.

Table 3. Historical Demand of Regular Lechon Manok

YEAR POPULATIO % OF NO. OF PURCHASE TOTAL

N PER CUSTOMERS CUSTOMERS FREQUENCY DEMAND

HOUSEHOLD

15
 PER YEAR

2018 509 97% 494 100 49,400

2019 528 97% 512 100 51,200

2020 571 97% 554 100 55,400

Table 4 shows the total historical demand of Special Lechon Manok from the

past 3 years household population with a frequency of 24 per year.

Table 4 Historical Demand of Special Lechon Manok

YEAR POPULATION % OF NO. OF PURCHASE TOTAL
CUSTOMERS CUSTOMERS FREQUENCY
PER DEMAND
PER YEAR
HOUSEHOLD
2018 509 97% 494 24 11,856

2019 528 97% 512 24 12,288

2020 571 97% 554 24 13,296

C. Projected Demand

Table 5 below shows the 3 year projection of the demand of the products with an

average percent increase of 5.55% from the base year.

16
Table 5 Projected Demand

YEAR BASE YEAR AVERAGE% PROJECTED

INCREASE DEMAND

2021 2020 68,696

2022 2021 5.55% 72,509

2023 2022 5.55% 76, 533

2023 5.55% 80, 781

See appendix G for the computation of average% increase for demand.

Table 6 shows the projected demand of Regular Lechon Manok with an average

percent increase of 5.55% from the base year.

Table 6 Projected Demand of Regular Lechon Manok

YEAR BASE YEAR AVERAGE % PROJECTED

INCREASE DEMAND

2021 2020 55,400

2022 2021 5.55% 58,475

2023 2022 5.55% 61,720

5.55% 65,145

17
Table 7 shows the projected demand of Special Lechon Manok with an average

percent increase of 5.55% from the base year.

Table 7 Projected Demand of Special Lechon Manok

YEAR BASE YEAR AVERAGE % PROJECTED

INCREASE DEMAND

2021 2020 13,296

2022 2021 5.55% 14,034

2023 2022 5.55% 14,813

2023 5.55% 15,635

D. Historical Supply

Table 8 is showing the total supply of the competitor from the past 3 years of its

operation.

Table 8 Historical Supply

COMPETITOR YEAR 1 YEAR 2 YEAR 3

2018 2019 2020

Bana-Bana Lechon manok 1,000 1,200 2,400

TOTAL 1,000 1,200 2,400

18
See appendix H for the competitors data.

Table 9 shows the increasing supply of Regular Lechon Manok from the past 3

years while the Special Lechon Manok supply remains zero.

Table 9 Historical Supply of Regular and Special Lechon Manok

PRODUCT YEAR 1 YEAR 2 YEAR 3

REGULAR 1,000 1,200 2,400

SPECIAL 0 0 0

TOTAL 1,000 1,200 2,400

E. Projected Supply

Table 10 is showing the 3 year projection of supply of both Regular and Special

Lechon Manok with an average percent increase of 35% from the base year.

Table 10 Projected Supply

YEAR BASE YEAR AVERAGE % PROJECTED

INCREASE SUPPLY

19
 2021 2020 2,400

2022 2021 35% 3,240

2023 2022 35% 4,374

2023 35% 5,905

See appendix I for the computation of average increase and decrease of supply.

Table 11 shows the 3 year projection of the supply of Regular Lechon Manok

with an average increase of 35% from the base year.

Table 11 Projected Supply of Regular Lechon Manok

YEAR BASE YEAR AVERAGE % PROJECTED

SUPPLY
INCREASE

2021 2020 2,400

2022 2021 35% 3,240

2023 2022 35% 4,374

2023 35% 5, 905

20
Table 12 is showing the 3 year projection of the supply of Special Lechon Manok

with an average percent increase of 35% from the base year.

Table 12 Projected Supply of Special Lechon Manok

YEAR BASE YEAR AVERAGE % PROJECTED

INCREASE SUPPLY

2021 2020 0

2022 2021 35% 0

2023 2022 35% 0

2023 35% 0

F. Supply and Demand Analysis

Table 13 shows the computation of the projected and historical demand and

supply which resulted to the unsatisfied demand of the products.

Table 13 Supply and Demand Analysis

YEAR (1) DEMAND (2) SUPPLY (3) UNSATISFIED

DEMAND

(4)=(2)-(3)

Historical

1 61,256 1,000 60,256

21
 2 63,488 1,200 62,288

3 68,696 2,400 66,296

Projected

1 72,509 3,240 69,269

2 76,533 4,374 72,159

3 80,781 5,905 74,876

Table 14 is showing the computation of the historical and projected demand and

supply of Regular Lechon Manok which resulted to the unsatisfied demand of

the product.

Table 14 Supply and Demand Analysis of Regular Lechon Manok

YEAR DEMAND SUPPLY UNSATISFIED

(1) (2) (3) DEMAND

( 4 )= ( 2 )- ( 3 )

HISTORICAL

2018 49,400 1,000 48,400

2019 51,200 1,200 50,000

2020 55,400 2,400 53,000

22
PROJECTED

2021 58,475 3,240 55,235

2022 61,720 4,374 57,346

2023 65,145 5,905 59,240

Table 15 is showing the computation of both projected and historical demand

and supply of Special Lechon Manok which resulted to the unsatisfied demand

of the product.

Table 15 Supply and Demand Analysis of Special Lechon Manok.

YEAR DEMAND SUPPLY UNSATISFIED

(1) (2) (3) DEMAND

( 4 )= ( 2 ) - ( 3 )

HISTORICAL

2018 11,856 0 11,856

2019 12,288 0 12,288

2020 13,296 0 13,296

PROJECTED

2021 14,034 0 14,034

2022 14,813 0 14,813

23
 2023 15,635 0 15,635

G. Market Share

Table 16 shows the market share of the products per year from its production
capacity and unsatisfied demand.

Table 16 Market Share

YEAR UNSATISFIED PRODUCTION MARKET

DEMAND CAPACITY SHARE

2021 69,269 4,488 6.48%

2022 72,159 4,547 6.30%

2023 74,876 4,607 6.15%

See appendix J for the computation of production capacity.

4. Competition Analysis

Table 17 Competition Analysis

24
 Competitors Strengths Weaknesses

 The business  Business is

owner is well sometimes closed.

known in the  Ever changing

location staff.

 The business has

already

established a

good relationship

with the

customers.

 Has an on time

supplier of

chicken.

B. Marketing Plan

This section will discuss the methods of marketing the product and what

strategies will be used when it comes to pricing and distributing the product. This

includes analyzing its strengths and weaknesses as well as its opportunities and

strengths. It also details the sales forecast and marketing budget of the

proposed business.

25
1. Marketing Objective

 To improve its ROI and increase its market share, during its operation.

 To increase its company profits after 1 year.

 To attract customers in order to increase sales.

 To increase the lifetime value of the customers.

2. SWOT Analysis

STRENGTHS

 Business has enough capital base, dedicated employees and knowledge

factor to perform its business processes.

 Size and price of the product that give satisfaction to the customer.

 Unique innovation of the product.

 Aside from producing product with good quality, the tenderness and

juiciness of the lechon manok can make the customer repeat purchase.

 The business complied the requirements needed in starting a business like

permits from municipal and Department of Trade and Industry, and

employees are required to undergone medical examination to give

assurance to the customers that the business is providing a healthy

personnel.

26
WEAKNESSES

 Financial aspects as to waging the employees.

 Lacking of preparation that results to delayed orders.

 Business management is lack of experience when it comes in managing the

propose business.

OPPORTUNITIES

 The propose business will expand and have additional branches in other

areas.

 Demand of the product will increase it sales on holiday seasons.

 Business will have its own poultry to produce product itself.

 Opportunity of the business to develop its market when the location will

become a city.

 More customers will be loyal to the business.

THREATS

 Decrease in demand if the raw materials increases.

 Lack of supply if chicken disease widespread.

 Decreasing demand during Lenten seasons.

 Natural calamities can temporarily halt the operation.

27
3. Marketing Strategies

A. Product Strategy

The propose business will offer an innovative version of Lechon Manok.

Unlike the usual Lechon Manok in the market, proposed product is unique due to

its innovation of stuffing longganiza inside the chicken. This is the thought

strategy of the business to attract customers.

B. Promotional Strategy

To advertise the product, the propose business use different techniques

as a communication vehicle to market the product. Fliers will be distributed to

target customer 2 weeks before the stores opens and a tarpaulin will be placed

in the store so that customers can recognize the product offered by the

business.

C.Pricing Strategy

Cost - based Pricing

Propose business will use this pricing method in which the price of a product is

based on the cost of production, manufacturing and distribution.

Table 18 Product Costing

Regular Lechon Manok
PARTICULARS UNIT COST
Direct Material Cost/unit 144.82

28
 Direct Labor Cost /unit 14.71
Factory Overheads/unit 2.51
Variable Cost 162.04
Monthly Production Capacity X 220
Total Variable Cost 35,649.19
Selling and Admin Expenses ＋
6,087.83
Total Production Cost 41,737.02
Total Units Produced ÷ 220
Cost per Unit ₱189.71
% Mark up ＋ 30％
Selling Price per unit ₱246.63

Cost-based pricing Formula:

Total Cost ＋Mark up % = Selling Price

Special Lechon Manok

PARTICULARS UNIT COST
Direct Material Cost 160.28
Direct Labor Cost/unit 14.71
Factory Overheads/unit 2.51
Variable Cost / unit 177.50
Monthly Production Capacity × 154
Total Variable Cost 27,335.14
Selling and Admin Expenses ＋
6,087.83
Total Production Cost 33,422.97
Total Units Produced ÷ 154
Cost per unit ₱ 217.03
% Mark up ＋

29
 30%
Selling Price per Unit ₱282.14

D. Distribution Strategy

Direct Distribution

The proposed business will distribute its products to its own store and

directly sends it to the customers.

Acquiring Production Product

Raw Materials Processing Distribution

Figure 4: Distribution Strategy

4. Sales Forecast

30
 Table 19 shows the 3 year forecast of the products with 1.32% increase in

quantity per year and the selling price is remain unchanged for the whole

projection.

Table 19 Sales Forecast

YEAR SELLING QUANTITY AMOUNT TOTAL
PRICE

REG S REG. S REG. SPECIAL

2021 246.6 282.1 2,640 1,848 ₱651,097.00 ₱521,398. ₱ 1,172,496.

00 00

2022 246.6 282.1 2,675 1,872 ₱659,692.00 ₱528,281. ₱1,187,973.

00
1.32% 00
2023 246.6 282.1 2,710 1,897 ₱668,400.00 ₱535,254. ₱ 1,203,654.
00 00
1.32%

5. Marketing Budget

The table below is showing the marketing budget of the propose venture for the

next 3 years.

Table 20. Marketing Budget

PARTICULARS COST QUANTITY YEAR 1 YEAR 2 YEAR

PER 3
UNIT
Fliers 2.00 200 400.00 418.00 437.00

31
Tarpaulin (2x3) 1 230.00 240.00 251.00
230.00
TOTAL 630.00 658.00 688.00

CHAPTER III

32
 PRODUCTION PLAN

This chapter details all the raw materials and equipment to be use in production

process. It also discusses all the expenses of the propose venture prior to its

operation and the management of all the materials and labor.

1. Production Process

STEP 1
Acquiring Raw Acquire first all the the materials
materials needed.

STEP 2
Preparing the raw Marinate the chicken for 2 hours and
materials prepare all the ingredients and other
materials.

STEP 3

Stuffing all the Stuff the chicken with all the

ingredients in the ingredients such as longganiza for
chicken special lechon and other spices.

STEP 4
Roasting the Roast the chicken for more or less 2
chicken hours or until it become cooked.

STEP 5
Product Product will ready to distribute to the
Distribution end customers.

Figure 5 Production Process

2. Property, Plant, and Equipment

33
The table below shows the total cost of the equipment of the propose venture.

Table 21 Property, Plant, and Equipment

PARTICULARS UNIT COST QUANTITY TOTAL COST
Lechon Machine 20,000.00 1 20,000.00
Freezer 8,000.00 1 8,000.00
TOTAL 28,000.00

3. Depreciation of Property, Plant, and Equipment

This table shows the schedule of depreciation of the equipment for the next 3

years.

Table 22 Schedule of Depreciation - Property, Plant, and Equipment

PARTICULARS TOTAL ESTIMATED DEPRECIATION
COST USEFUL
LIFE
YEAR 1 YEAR 2 YEAR 3
Lechon Machine 20,000.00 8 years 2,500.00 2,500.00 2,500.00
Freezer 8,000.00 8 years 1,000.00 1,000.00 1,000.00

See appendix M for the full computation of Depreciation.

4. Repairs and Maintenance

34
Table 23 shows the total cost of repairs and maintenance of the equipment for

the next 3 years with an increase of 4.5% per year.

Table 23 Repairs and Maintenance

Particular Unit cost RAM % increase per year
expense

Lechon Machine 20,000.00 1,200.00 4.5%

Freezer 8,000.00 1,200.00 4.5%

YEAR TOTAL COST

2021 2,400.00
2022 2,508.00
2023 2,621.00

5. Factory/ Store Equipment

35
The table below shows the equipment’s supplier and its price during purchase.

Table 24 Sources of Equipment

EQUIPMENT SPECIFICA - PURCHASE NAME OF TERMS
SUPPLIER/ OF
TION PRICE/ EST.
DONOR PURCH
MARKET ASE

VALUE
Lechon Heavy duty 20,000.00 Roberto Cerro N/A
machine electric grill

Freezer CRF - 60FD 8,000.00 Maria Ardez C. N/A

Dela Pena

6. Store Layout

3 ft

36
 5
ft

2 ft

6 ft 4 ft

Figure 6 Store Layout

The figure shows the store layout of the propose business which is based on the
measurement of the lechon machine.

7. Rent Expense

The table below shows the total cost on rent expense of the commercial space.

Table 25 Rent Expense Forecast

PARTICULARS COST PER MONTH TOTAL COST PER YEAR

Commercial 200.00 2,400.00

Space

37
 YEAR MONTHLY COST ANNUAL COST
2021 200.00 2,400.00
2022 200.00 2,400.00
2023 200.00 2,400.00

8. Raw Materials and Its Cost

The tables below are showing the total cost per month and year of the raw

materials to be used in Regular Lechon Manok production with 1.32% increase in

quantity per year.

Table 26 Raw Materials of Regular Lechon Manok

Year 1
RAW CLASSIFI UNIT QUANTI - TOTAL TOTAL
MATERIALS TY
CATION COST COST/ COST/

38
 MONTH YEAR
Chicken Dressed 170.00 176 kls 29,920.00 359,040.00
chicken
Lemon soda 21.00 20 bottles 420.00 5,040.00
Kalamansi 30.00 7.5 kls 225.00 2,700.00
Soy sauce 38.00 12.5 liters 475.00 5,700.00
Magic sarap 48.00 0.5 dozen 24.00 288.00
Sugar Brown 52.00 1.5 kls 78.00 936.00
Black pepper Ground 300.00 .125 kls 37.50 450.00
Garlic 110.00 2 kilos 220.00 2,640.00
Lemon grass 10.00 18.5 kls 185.00 2,220.00
Sili Red 200.00 .205 kls 41.00 492.00
Cellophane 1 x 10 10.00 2 bags 20.00 240.00
1 x 10
Sando bag small 20.00 2 bags 40.00 480.00

TOTAL 31,685.50 380,226.00

Year 2
RAW CLASSIFI- UNIT QUANTITY TOTAL TOTAL
COST COST PER COST PER
MATERIALS CATION 1.32%
MONTH YEAR

Chicken Dressed 170.00 178kls 30,260.00 363,120.00

Lemon soda 21.00 20.2 bottles 424.2 5,090.40

39
Kalamansi 30.00 7.59 kls 227.70 2,732.40
Soy sauce 38.00 12.66 ltrs 481.08 5,772.96
Magic sarap 48.00 0.506 doz. 24.28 291.36
Sugar Brown 52.00 1.51 kls 78.52 942.24
Black Pepper Ground 300.00 0.126kls 37.8 453.6
Garlic 110.00 2.02 kls 222.2 2,666.4
Lemon grass 10.00 18.74 kls 187.4 2,248.8
Sili Red 200.00 0.207 kl 41.4 496.8
Cellophane 1 x 10 10.00 2.02 bags 20.2 242.4
Sando bag small 20.00 2.02 bags 40.4 484.8

TOTAL 32,045.18 384,542.16

Year 3
RAW CLASSIFI- UNIT QUANTI- TOTAL TOTAL
MATERIAL CATION TY COST PER COST PER
COST
S MONTH YEAR
1.32%
Chicken Dressed 170.00 180 kls 30,600.00 367,200.00

40
 Lemon soda 21.00 20.46bots 429.66 5,155.92
Kalamansi 30.00 8.91 kls 267.3 3,207.6
Soy sauce 38.00 12.8 ltrs 486.4 5,836.8
Magic sarap 48.00 0.512doz. 24.57 294.84
Sugar Brown 52.00 1.52 kls 79.04 948.48
Black Ground 300.00 0.127 kls 38.1 457.2
pepper
Garlic 110.00 2.04 kls 224.4 2,692.8
Lemon grass 10.00 20.06 kls 200.6 2,407.2
Sili Red 200.00 0.209 kls 41.8 501.6
Cellophane 1 x 10 10.00 2.04 bags 20.4 244.8
Sando bag small 20.00 2.04 bags 40.8 489.6
TOTAL 32,453.07 389,436.84

Tables below are showing the total cost per month and year of the raw materials

to be used in Special Lechon Manok production with an increase of 1.32% in

quantity per year.

Table 27 Raw Materials of Special Lechon Manok ( Year 1 )

RAW CLASSIFI - UNIT QUANTI - TOTAL TOTAL
MATERIALS TY
CATION COST COST/ COST/

41
 MONTH YEAR
Chicken Dressed 170.00 123 kls 20,910.00 250,920.00
Longganiza Chicken 170.00 12 kls 2,040.00 24,480.00
Lemon soda 21.00 14 bots 294.00 3,528.00
Kalamansi 30.00 5.25 kls 157.50 1,890.00
Soy sauce 38.00 8.75 ltrs 332.50 3,990.00
Magic sarap 48.00 .35 doz. 16.8 201.60
Sugar Brown 52.00 1.05 kls 54.60 655.20
Black pepper Ground 300.00 .087 kl 26.10 313.20
Garlic 110.00 1.4 kls 154.00 1,848.00
Lemon grass 10.00 13.12 kls 131.20 1,574.40
Sili Red 200.00 .14 kl 28.00 336.00
Cellophane 1 x 10 10.00 1.4 14.00 168.00
bags
Sando bag small 20.00 1.4 28.00 336.00
bags
TOTAL 24,186.70 290,240.4

Year 2
RAW CLASSIFI- UNIT QUANTITY TOTAL TOTAL
MATERIALS CATION COST COST PER COST PER

42
 1.32% MONTH YEAR
Chicken Dressed 170.00 125 kls 21,250.00 255,000.00
Longganiza Chicken 170.00 12.15 kls 2,065.5 24,786.00
Lemon soda 21.00 14.18 bots 297.78 3,573.36
Kalamansi 30.00 5.31 kls 159.3 1,911.6
Soy sauce 38.00 8.86 ltrs 336.68 4,040.16
Magic sarap 48.00 0.354 doz 16.99 203.88
Sugar Brown 52.00 1.06 kls 55.12 661.44
Black pepper Ground 300.00 0.088 kls 26.4 316..8
Garlic 110.00 1.41 kls 155.1 1,861.2
Lemon grass 10.00 13.29 kls 132.9 1,594.8
Sili Red 200.00 0.141 kls 28.2 338.4
Cellophane 1 x 10 10.00 1.41bags 14.1 169.2
Sando bag small 20.00 1.41 bags 28.2 338.4
TOTAL 24,566.27 294,795.24

Year 3
RAW CLASSIFI- UNIT QUANTITY TOTAL TOTAL
MATERIALS CATION COST COST PER COST PER

43
 1.32% MONTH YEAR
Chicken Dressed 170.00 127 kls 21,590.00 259,080.00
Longganiza Chicken 170.00 12.31 kls 2,092.7 25,112.4
Lemon soda 21.00 14.36 bots 301.56 3,618.72
Kalamansi 30.00 5.38kls 161.4 1,936.8
Soy sauce 38.00 8.97 ltrs 340.86 4,090.32
Magic sarap 48.00 0.358doz 17.18 206.16
Sugar Brown 52.00 1.07 kls 55.64 667.68
Black pepper Ground 300.00 0.089kls 26.7 320.4
Garlic 110.00 1.42 kls 156.2 1,874.4
Lemon grass 10.00 13.46 kls 134.6 1,615.2
Sili Red 200.00 0.142 kls 28.4 340.8
Cellophane 1 x 10 10.00 1.42 bags 14.2 170.4
Sando bag small 20.00 1.42 bags 28.4 340.8
TOTAL 24,947.84 299,374.08

9. Raw Materials Availability

Table 28 shows the estimated market value of the raw materials as well as its

suppliers.

Table 28 Raw Materials Availability

RAW MATERIALS PURCHASE NAME OF SUPPLIER TERMS OF
PRICE/

44
 EST.MARKET PURCHASE
VALUE
Chicken 170.00/kilo JRC Meatshop Good quality
( Monkayo )
Longganiza 170.00/kilo JRC Meatshop Fresh
( Monkayo )
Lemon soda 21.00/800 ml Hista store ( Laak ) Good quality
Kalamansi 30.00/kilo Monkayo market Fresh
Soy sauce 38.00/liter Durian Mktng. Good quality
( Monkayo
Magic sarap 48.00/dozen Durian Mktng. Good quality
Sugar 52.00/kilo Durian Mktng. Good quality
Black pepper 300.00/kilo Durian Mktng. Good quality
Garlic 110.00/kilo Monkayo market Good quality
Lemon grass 10.00/kilo Monkayo market Fresh
Spring onions 20.00/kilo Monkayo market Fresh
Kulikot 200.00/kilo Monkayo market Fresh
Sili 200.00/kilo Monkayo market Fresh
Oling 150.00/kilo Sisimon Buy&sell Good quality
Cellophane 1 x 10 10.00/bag Durian mktng. Good quality
Sando bag (small) 20.00/bag Durian mktng. Good quality

10. Inventory Management

45
 Since the propose business will be selling highly perishable goods, it will

then establish a proper inventory at the end of the week to ensure and maintain

the quality of the product.

11. Utilities Expense

The table below shows the total annual cost of the following utilities and its

sources.

Table 29 Utilities Expense

PARTICULARS SOURCE BASIS RATE TOTAL COST
Light NORDECO PER 400.00 4,800.00
MONTH
Water Reservoir PER 50.00 600.00
MONTH
Uling Sisimon Buy & PER 200.00 2,400.00
Sell MONTH
Transportation - PER 250.00 3,000.00
Allowance MONTH
Communication ( - PER 199.00 2,388.00
Load) MONTH
TOTAL 13,188.00

This table is showing the annual cost of the utilities for the next 3 years with an

increase of 4.5% per year.

Table 30 Utilities Expense Forecast

PARTICULARS YEAR 1 YEAR 2 4.5% YEAR 3 4.5%

46
 Light 4,800.00 5,016.00 5,242.00
Water 600.00 627.00 655.00

Uling 2,400.00 2,508.00 2,621.00

Transportation 3,000.00 3,135.00 3,276.00

Allowance
Communication 2,388.00 2,495.00 2,607.00
(Load)
TOTAL 13,188.00 13,781.00 14,402.00

12.Cost of Labor

This table shows the cost of labor of the 2 employees of the propose venture with

an annual cost based on 20 working days per month.

Table 31 Cost of Labor

POSITION NO. OF RATE NO. OF WAGE ANNUAL

47
 EMPLOYEE WORKING PER
DAYS/
PER MONTH COST OF
MONTH
DAY WAGES
Manager 1 360. 00 20 7,200.00 86,400.00
Production
worker/
1 300.00 20 6,000.00 72,000.00
cashier
TOTAL 2 660.00 13,200.00 158,400.00

13. Labor Availability

The propose location is far from the municipality and city, so when there is

this type of business to work with that the workers are close by, it is a great

opportunity for them because they do not have to go far to work. That is why in

the propose business location many workers are available.

14. Other Operating Expenses

This table is showing the total cost of the following supplies to be used in

operation.

48
Table 32 Other Operating Expenses

PARTICULARS UNIT COST QUANTITY TOTAL COST

Tong 90.00 1 90.00

Knife 150.00 1 150.00

Basin 100.00 2 200.00

Pale 150.00 2 300.00

Dipper 25.00 2 50.00

Cutting Board 150.00 1 150.00

TOTAL 940.00

15. Production Cost

The table below shows the total cost of production for the whole projection period

including direct materials, direct labor and factory overhead.

Table 33Production Cost

49
PARTICULARS SALES IN VOLUME UNIT TOTAL DIRECT COSTS
(in kg) COST
(DM
20x1 20x2 20x3 cost/o 20x1 20x2 20x3
rder)
DIRECT
MATERIALS
Regular LM 2,640 2,675 2,710 144.8 382, 387, 392,
2 313 378 492
Special LM 1,848 1,872 1,897 160.2 296, 300, 304,
8 201 110 072
678, 687, 696,
532 489 563
DIRECT LABOR
Kitchen Staff 72,000 72,000 72,000
SSS,PAGIBIG,
PHIC
8,880 8,880 8,880
13TH Month Pay 6,000 6,000 6,000
86,880 86,880 86,880
OVERHEAD
COSTS
Other Kitchen
Materials and
940 1,034 1,137
Supplies
COGS 766, 775, 784,
352 403 581
CHAPTER IV

ORGANIZATION AND MANAGEMENT PLAN

50
This chapter discusses about the form of business that the proponents plan to

build and the permits needed prior to its operation. It also details the

qualifications of the employees and determines how much the propose business

needs when it comes to human resources and how many workers will be

needed.

1. Form of Business

The establish business is a sole proprietorship and before it can legally operate,

it must first be registered with the barangay by obtaining a Barangay Business

Permit and then register it with the municipal by obtaining the Mayor,s Business

Permit and registering the business name with Department of Trade and Industry

( DTI ).

The table below shows all the requirements for business registration and its

corresponding amounts. The data was gathered by the proponent from its source

who is currently working at the municipality of Laak. The said source is working

at business permits and licenses releasing section.

Table 34 Requirements for Business Registration and Its Amount

PARTICULARS AMOUNT
BARANGAY

51
 Purok Clearance 20.00
Community Tax Certificate 50.00
Barangay Clearance 50.00
Barangay Business Clearance 150.00
MUNICIPAL
Fire Safety 122.00
Municipal Assessor Certification 80.00
Tax Clearance 150.00
MPDO 80.00
MENRO 80.00
BFP 500.00
Business Name Registration DTI 200.00
Registration Fee 1,350.00
Documentary Stamp 15.00
TOTAL 2,847.00

2. Organizational Structure

MANAGER 52
 CASHIER PRODUCTION
WORKER

Figure 7 Propose Organizational Structure

Figure 7 shows the Propose Organizational Structure of the business. The

structure is composed of two administrative personnel and one production

worker.

3. Business Experience and Qualifications of the Entrepreneur.

53
 Entrepreneur of the propose business is a college level and currently taking

Bachelor of Science in Entrepreneurship and a former owner of a sari - sari store

for 3 years.

4. Administrative Personnel

Table 35 Administrative Personnel

POSITION JOB SPECIFI JOB NUMBER OF SALARY
DESCRIPTION EMPLOYEES RATE
CATION
Manager  Must hold a  Managing
bachelor’s staff;
degree in planning
business and
administrati evaluating
on or similar department 1 360.00/day
subject. activities.
Cashier/  Basic math  Bagging
Production skills and items,colle
worker ability to cting
handle payment
transactions and giving
accurately appropriate
and change 1 300.00/day
responsibly
 Handling
 High school production
level and equipment,
ability to assembling
operate and
manufacturi inspecting
ng machine. machinery
parts.

54
5. Office Layout

55
 8 ft

5 ft 6 ft

Figure 8 Office Layout

The figure 8 shows the office layout of the propose business .

6. Pre - Operating Activities and Expenses

Prior to the business operation, activities will be done such as processing of

barangay and municipal business permits and also fixing the rental of the office.

The proponents will prepare an amount of more or less ₱ 3,500.00 for these

activities.

7. Administrative Expenses

The tables below shows the 3 year forecast of the administrative expenses of the

propose venture. This includes the salaries, office supplies, kitchen and cleaning

supplies and the utilities expense and their corresponding percent of increase per

year.

56
Table 36 Administrative Expenses

Year 1
PARTICULARS UNIT COST QUANTITY COST PER ANNUAL
MONTH BUDGET
SALARIES 360. 00 1 7,200.00 86,400.00
OFFICE
SUPPLIES
Record Book 55.00 1 55.00 55.00
Ballpen 85.00 1 85.00 85.00
(Boxes)
Stapler 175.00 1 175.00 175.00
Staple wire 45.00 5 45.00 225.00
Calculator 175.00 1 175.00 175.00
KITCHEN
AND
CLEANING
SUPPLIES
Mop 125.00 2 125.00 250.00
Water Bottle 85.00 4 85.00 340.00
Brooms 55.00 2 55.00 110.00
Rags 15.00 5 15.00 75.00
Dust pan 50.00 2 50.00 100.00
Trash Bins 90.00 3 90.00 270.00
Disposable 99.00 5 99.00 495.00
Gloves(Packs)
Tissues 250.00 12 250.00 3,000.00
TOTAL 5,355.00
UTILITIES
Water 50.00 1 50.00 600.00
Light 400.00 1 400.00 4,800.00

57
 Uling 200.00 1 200.00 2,400.00
Transportation 250.00 1 250.00 3,000.00
Allowance
Communication 199.00 1 199.00 2,388.00
(Load)
TOTAL 13,188.00

Year 2
PARTICULARS UNIT COST QUANTITY COST PER ANNUAL
MONTH BUDGET
SALARIES 0% 0%
Manager 360. 00 1 7,200.00 86,400.00
OFFICE 4.5% 0%
SUPPLIES
Record book 57.47 1 57.47 57.47
Ballpen 88.8 1 88.8 88.8
(Boxes)
Stapler 182.87 1 182.87 182.87
Staple wire 47.02 5 47.02 235.1
Calculator 182.87 1 182.87 182.87

58
TOTAL 747.11
KITCHEN AND
CLEANING
SUPPLIES
Mop 130.6 2 130.6 261.2
Water Bottles 88.8 4 88.8 355.2
Brooms 57.4 2 57.4 114.8
Rags 15.6 5 15.6 78.00
Dust pan 52.25 2 52.25 104.50
Trash Bins 94.05 3 94.05 282.15
Disposable 103.4 5 103.4 517.00
Gloves
Tissues 261.25 12 261.25 3,135.00
TOTAL 4,847.85
UTILITIES 4.5%
Water 52.25 1 52.25 627.00
Light 418.00 1 418.00 5,016.00
Uling 209.00 1 209.00 2,508.00
Transportation 261.25 1 261.25 3,135.00
Allowance
Communication 207.9 1 207.9 2,494.80
(Load)
TOTAL 13,781.00

59
Year 3
PARTICULARS UNIT COST QUANTITY COST PER ANNUAL
MONTH BUDGET
SALARIES
Manager 360. 00 1 7,200.00 86,400.00
OFFICE 0%
SUPPLIES
Record book 60.05 1 60.05 60.05
Ballpen 92.79 1 92.79 92.79
(Boxes)
Stapler 191.09 1 191.09 191.09
Staple wire 49.13 5 49.13 245.65
Calculator 191.09 1 191.09 191.09
TOTAL 780.67
KITCHEN AND 4.5%
CLEANING
EXPENSES
Mop 136.47 2 136.47 272.94
Water Bottles 92.79 4 92.79 371.16
Brooms 59.98 2 59.98 119.96
Rags 16.30 5 16.30 81.5
Dust pan 54.60 2 54.60 109.2
Trash Bins 98.28 3 98.28 294.8
Disposable 108.05 5 108.05 540.25
Gloves
Tissues 273.00 12 273.00 3,276.00
TOTAL 5,065.00
UTILITIES 4.5%
Water 54.60 1 54.60 655.2

60
 Light 436.8 1 436.8 5,241.00
Uling 218.4 1 218.4 2,620.8
Transportation 273.00 1 273.00 3,276.00
Allowance
Communication 217.25 1 217.25 2,607.00
( Load)
TOTAL 6,283.00

8. Employee Benefits
This table shows the benefits of the employees where kitchen staff is charged to

Cost of Good Sold and manager charged to Operating Expenses.

Table 37 SSS,PHIC,PAGIBIG

Employee Monthly EE ER SSS PAG- PHIC TOTAL

Share Share and EC IBIG SSS,P
Salaries
Contrib HIC,PA
ution GIBIG
Kitchen
Staff (1)
6,000 270.00 520.00 790.00
(Charged
to COGS)
120.00 120.00 240
100.00 100.00 200
8,880
Manager
(Charged 7,200 315 605 920
to Op.
Exp.)

61
 144 144 288
100 100 200
10,188

Table 38 13th Month pay

EMPLOYEES NO. OF MONTHLY TOTAL COST
EMPLOYEES SALARY
Kitchen Staff
(Charged to 1 6,000 6,000
COGS)
Manager
(Charged to Op. 1 7,200 7,200
Exp.)
TOTAL 13,200

62
 CHAPTER V
FINANCIAL PLAN

This chapter details the financial situation and long-term monetary goals of a

propose business as well as strategies and techniques on how to achieve those

goals. This includes the capitalization requirement and its source of financing,

financial major assumptions and the financial statements and analysis.

1. Capitalization Requirement

63
Propose business is no need to borrow funds from financing institutions because

its financing requirement and initial investment will be coming from the personal

savings of the owner.

2. Total Project Cost

DAVE’S LECHON MANOK

Start-up Cost and Capitalization
For the Period Ended 20x1-20x3

A. PRE - OPERATING EXPENSES

Marketing Expenses 630
Supplies Expense 1,339
Prepaid Rent 400
Permits and Licenses 2,847 5,216
B. CAPITAL EXPENDITURES
Equipments 28,000
Office Furnitures 1,400 29,400
C. WORKING CAPITAL( One Month Production
Regular Lechon Manok 7,965

64
 Special Lechon Manok 6,171 14,136
START-UP COST 48,752
CAPITALIZATION 48,752
EXTERNAL FINANCING NEEDS -

Propose business will be needing an amount of ₱ 48,752.00 as an initial capital

for start-up.

3. Major Assumptions

For the Period Ended 20x1-20x3

Important Financial Assumptions

1. Sales in volume ( orders ) will increase according to growth rate in Laak,

Davao de Oro.

2. Price of each product will remain constant for the projected period.

3. Salaries expense will remain unchanged for the whole projection period.

4. Cost of sales will increase according to inflation rates of the province of Davao

de Oro ( 4.5% )

5. All other operating expenses will increase according to inflation rate of 4.5%.

65
6. Zero inventory maintains everyday.

7. Inventory represents raw materials equal to 1 week worth of direct materials

required.

8. Withdrawal of the owner is 30% of the income after interest and taxes.

4. Projected Financial Statements

DAVE’S LECHON MANOK

Statement of Financial Performance
For the Period Ended 20x1-20x3
Note 20x1 20x2 20x3
Sales Revenue 1 1,172,496 1,187,973 1,203,654
Less: Cost of Sales 2 766,352 775,403 784,581
Gross Profit 406,144 412,570 419,073
Less: Operating Expenses
Utilities Expense 3 13,188 13,781 14,402
SSS,PHIC,PAGIBIG 4 10,188 10,188 10,188

66
 Depreciation Expense 5 3,500 3,500 3,500
13th Month Pay 7 13,200 13,200 13,200
Marketing Expenses 8 630 630 630
Permits and Licenses 9 2,847 2,847 2,847
Professional Fee 10 6,000 6,000 6,000
Rent Expense 11 2,400 2,400 2,400
Salaries and Wages 12 86,400 86,400 86,400
Supplies Expense 13 5,355 5,596 5,848
Repairs and Maintenance 14 2,400 2,508 2,621
Business Tax 15 35,175 35,639 36 ,110
Total Expenses 181,283 182,718 184,203
Operating Income 224,861 229,852 234,870
Less: Provision for Income Tax(GIT) 16 - - -
Net-Income 224,861 229,852 234,870

DAVE’S LECHON MANOK

Statement of Financial Position
As of Year Ended 20x1-20x3
Notes 20x1 20x2 20x3
ASSETS
Current Assets
Cash 161,108 325,210 492,821
Inventory 24,427 24,749 25,076
Supplies 1,339 1,399 1,462
Prepaid Rent 400 400 400
Total Current Assets 187,274 351,759 519,759

67
 Non- Current Assets(Net)
Equipments 5 24,500 21,000 17,500
Total Non-Current Assets 24,500 21,000 17,500
TOTAL ASSETS 211,774 372,759 537,259
LIABILITIES AND OWNER’S
Current Liabilities
Accrued Utilities Expense 3 1,099 1,148 1,200
VAT Payable 14 2,931 2,970 3,009
Income Tax Payable 15 - - -
SSS,PHIC,HDMF Payable 4 1,589 1,589 1,589
Total Current Liabilities 5,619 5,707 5,798
Owner’s Equity
Dela Pena, Capital 206,155 367,051 531,461
TOTAL LIABILITIES & OWNER’S 211,774 372,759 537,259
EQUITY

DAVE’S LECHON MANOK

Cash Flow Statement
For the Period Ended 20x1-20x3
20x1 20x2 20x3
OPERATING ACTIVITIES
NET-INCOME AFTER TAX 224,861 229,852 234,870
Add/Deduct: Non-Cash Items
Depreciation- OPEX 3,500 3,500 3,500
Changes in Working Capital
(Increase)/decrease Prepaid Rent (400) - -
(Increase)/decrease Inventory (24,427) (322)
(327)

68
 (Increase)/decrease Supplies (1,339) (60)
(63)
Increase/(decrease) OPT Payable 2,931 39 39
Increase/(decrease)Income Tax Payable - - -
Increase/(decrease) Accrued Utilities
Expenses 1,099 49 52
Increase/(decrease)SSS,PHIC,PAGIBIG 1,589 - -
NET-CASH INFLOW/(OUTFLOW) 207,815 233,058 238,072

INVESTING ACTIVITIES
Equipments (28,000 ) - -
NET-CASH INFLOW/(OUTFLOW) (28,000) - -

FINANCING ACTIVITIES
Cash Investment from Owner 48,752 - -
Withdrawal (67,458) (68,956) (70,461)
NET-CASH INFLOW/(OUTFLOW) (18,706) (68,956) (70,461)
TOTAL NET CASH FLOWS 160,108 164,102 167,611
Add: Cash,Beg, Balance - 161,108 325,210
CASH, ENDING BALANCE 161,108 325,210 492,821

DAVE’S LECHON MANOK

69
Statement of Owner’s Equity
For the Period Ended 20x1-20x3
Beginning Net Income Withdrawal Ending
Balances Balances
20x1 48,752 224,861 67,458 206,155
20x2 206,155 229,852 68,956 367,051
20x3 367,051 234,870 70,461 531,461

5. Financial Ratios and Analysis

DAVE’S LECHON MANOK

Financial Ratios
For the Period Ended 20x1-20x3
20x1 20x2 20x3

Return on Net Income 224,861 19% 229,852 19% 234,870

19%
Sales Revenue 1,172,496 1,187,973 1,203,654

Return On Net Income 224,861 229,852 234,870

106% 62% 44%

70
Assets Total Assets 211,774 372,759 537,259

Return On Net Income 224,861 109% 229,852 63% 234,870 44%

Equity Owner’s Equity 206,155 367,051 531,461

Current Current Assets 161,108 325,210 56.98 494,821 84.99

28.67
Ratio Current Liabilities 5,619 5,707 5,798

Equity To Total Equity 206,155 97% 367,051 98% 531,461 99%

Asset Ratio Total Assets 211,774 372,759 537,259

PAYBACK PERIOD Operating Cash Flows

48,752
1 207,815 (159,063)
2 233,058 (392,121)
3 238,072 (630,192)
4 238,072 (868,264)
5 238,072 (1,106,336) 0.23 yrs

BREAK-EVEN POINT 20x1 20x2 20x3

Revenue 1,172,496 1,187,973 1,203,654
Variable Cost 771,707 780,999 790,429

71
Contribution Margin 400,789 406,974 413,225

Fixed Cost 168,095 168,937 169,801

Contribution Margin Ratio(CM/SR) 34% 34% 34%
Break-Even Revenue 491,756 493,132 494,602
Average Price 247 247 247
No. Of Orders to Break-even 1,994 1,999 2,005

Financial Ratios of Dave’s Lechon Manok shows that, on return on sales, 19% of

the sales revenue goes to the net income for the whole projection period which is

not bad return for the business.Return on equity and asset ratio is decreasing for

the whole projection period. Its normal because as the income increases, there is

also a big increase in equity and assets every year. Current ratio shows that the

propose business has nothing to worry about because its current liabilities are

smaller than its current assets.

6. Breakeven Point Analysis

Break-even point explains that the propose business should be able to sell 1,994

orders for year 1, 1,999 orders for year 2 and 2,005 orders of lechon manok for

year 3 so that it does not go bankrupt.

7. Return on Investment ROI

Formula:

72
 ROI = Net Income/ Capital

ROI = 224,861/48,752

ROI = 5

This means that the capital of the propose business will be returned 5 times.

8. Project Feasibility

After doing the financial analysis, the result will prove that the project is much

feasible and in a matter of 0.23 years ( 2 months and 24 days ) the capital has

been fully recovered.

ENVIRONMENTAL AND SOCIAL IMPACT ANALYSIS

The biggest impact of the propose business on the environment is that it

produces wastes in the sorroundings which is manageable through following

proper waste management disposal after production activity. When it comes to

air pollution, it does not have much effect socially and environmentally because

there is no gas emissions from the machine during production period. On the

social impact, the propose business may cause laziness to the people in the

community because they may only rely on cooked food as sold by the propose

73
business and will not be able to prepare more nutritious foods for their families

such as vegetables. Despite this, it also brings an advantage to people being

convenient, especially to those who do not have time to cook due to busy work.

Propose business will be able to contribute to the community by providing

convenient service to the people and above all, it will make it easier for people to

shop because they do not have to travel for almost 1 hour just to buy freshly

cooked food because they already have it in their place.

REFERENCES

Adesina and jato,2005

Adesina, A.A and K.K. Djato.2005.Farm Size, Relative Efficiency and Agrarian

Policy in Cote d’ Ivoire: Profit Function Analysis of Poultry Farms. Agricultural

Economics,414:93-102

74
 APPENDICES
Appendix A
Population Letter

75
 Appendix B
Population Data

76
 Appendix C
Sample Size Calculation

77
 Appendix D

Purchase Frequency Computation

78
Frequency Option
Per Survey Numeric No. of Weekly
Equivalent Respondents Orders
Everyday 1 2 2
Once A week 2 148 296
Twice a week 3 72 216
Once a month 4 8 32
Total 230 546

Ave. Daily Orders 78

(Weekly Orders)
× Total days in a year 365
Total Annual Orders 28,470
Divide Total 230
Respondents
Purchase Order Per 124
Customer

Variants No. of Preference Purchase

Respondents Rate Frequency
Base on Per
Survey Customer
Per
Preference
Regular 187 81% 100
Special 43 19% 24
Total 230 100%

PURCHASE
FREQUENCY=TOTA
L ORDER NO. OF
CUSTOMERS
Current year Under

79
 Survey
No. of Population 605 236
Current Year
No. of Population Yes 587 % yes 230 97%
No. of Population No 18 % no 6 3%

Appendix E
Survey Questionnaire Result

80
Survey Questionnaire:

1. Do you eat lechon manok?

Yes 230 No 06

2. How often do you eat lechon manok?

Everyday 02 Once a week 148 Twice a week 72 1 month

08

3. What kind of lechon manok do you usually buy?

Regular 187 Special 43

4. How many pecies of lechon manok do you usually buy?

1pc. 148 2 pcs 81 3 pcs 01 Others (Please specify)

0

5. Where do you usually by your lechon manok?

Laak 228 Monkayo 02 Tagum 0 Others (Please specify) 0

6. What if your lechon manok is filled with longganiza filled with longganiza?
What flavor would you prefer?

Chicken 230 Pork 0 Others (Please specify) 0

7. What kind of sauce would you prefer for your lechon manok?

Plain 95 Sweet and spicy 100 Hot and and spicy 35 Others(Please
specify)

8. How much are you willing to pay for your regular lechon manok?

₱200-₱230 99 ₱ 230-₱260 107 ₱260-₱290 24

9. How much are you willing to pay for your lechon manok with longganiza
filling?

₱300-₱330 120 ₱ 330-₱360 90 ₱ 360-₱390 20

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 Appendix F

Respondents Profile

Profile Category Out of 10 Percentage

responses
Age 20 below 5 2%
20-50 180 78%
50 and above 45 20%
Gender Male 167 73%
Female 63 27%
Educ. Attainment Elem. Level 57 25%

Elem. Grad 28 12%

High School 41 18%
Level
High School 53 23%
Grad
College Level 20 9%
College Grad 31 13%
Religion Catholic 114 50%
SDA 19 8%
Baptist 26 11%
One way 45 20%
Foursquare 26 11%
Ave. Monthly Income Less than 40 17%
5,000
5,000-10,000 135 59%
10,000 and 55 24%
Above

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 Appendix G

Average increase of Demand

:
Year Population % of # of Purchase Total
Per customers customer Frequenc Annual
Househol s y Demand
d
2018 509 97% 494 124 61,256
2019 528 97% 512 124 63,488 2,232 3.52%
2020 571 97% 554 124 68,696 5,208 7.58%
=11.1%
÷2
=5.55%

Appendix H

83
 Competitor Survey Questionnaire

KINATUYUANG DIREKSIYON: Palihog butangi ug tsek and wanang

nga gihatag sa tubag nga imong gipili.

Business Survey Questionnaire

/. Business Profile (Profile sa Negosyo)

Name of the Business (Pangalan sa Negosyo) Banabana Lechon

Manok

No. Years in the Business Operation (Gidaghanon sa mga Tuig nga

nag-operate and negosyo: 3 years

Date started the business (Petsa nagsugod ang megosyo) MAY 2018

Average Monthly Income (Average nga Binulan nga kita) 18,000

Question:

1. What year did you started your business?

Ans. 2018

2. How much is your starting capital for lechon manok?

Ans. 5,000

3. Who is your supplier?

Ans____________________

4. How many estimated orders have sold in the year?

2018 Ans 1,000 Annual Income 160,000

2019 Ans 1 ,200 Annual Income 216,000

2020 Ans 2,400 Annual Income 576,000

84
 Appendix I

Average Increase and Decrease of supply

Year Historical Difference % Decrease Average%

Supply Current/Previou increase/
(Diff. Prev.
s Year decrease
Year)
2018 1,000
2019 1,200 200 20%
2020 2,400 1,200 50%
35%

85
 Appendix J

Production Capacity Computation

Regular Lechon Manok

2021 2022 2023
%Increase(Estimate) 1.32% 1.32%
Monthly Purchases 220
Month of Operation 12
Annual Production 2,640 2,675 2,710

Market Share Regular Lechon Manok

Year Unsatisfied Production Market 3 months Purchases
Demand Capacity Share
2021 55,235 2,640 4.78% 660
2022 57,346 2,675 4.66% 669
2023 59,240 2,710 4.57% 678

Special Lechon Manok

2021 2022 2023
% Increase 1.32% 1.32%
(Estimate)
Monthly Puchases 154
Months of 12
Operation
Annual production 1,848 1,872 1,897

86
 Market Share Special Lechon Manok

Year Unsatisfied Production Market Share 3 months

Demand Capacity Purchases
2021 14,034 1,848 13.16% 462
2022 14,813 1,872 12.64% 468
2023 15,635 1,897 12.13% 474

87
 APPENDIX K

COMPUTATION OF DEPRECIATION OF PPE

PARTICU TOTAL ESTIMA DEPRECIATION
-LARS COST TED
USEFUL
LIFE
YEAR 1 YEAR 2 YEAR 3
Lechon 20,000.00 8 2,500.00 2,500.00 2,500.00
machine years
Freezer 8,000.00 8 years 1,000.00 1000.00 1000.00

FORMULA:
Depreciation = Cost - Residual Value ( 0 ) / Estimated Useful Life

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