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PJ Patties Shop: A Feasibility Study

Chapter I Executive Summary The business enterprise is a new venture and will be implemented in the future. It is a sole proprietorship form of business organization. Owned and managed by the proprietor himself but he is helped by her two assistants. It will be established and will start its operations at downtown of San Jose, Malilipot, Albay.

The enterprise will be a small-scale business enterprise which will provide a pleasant and convenient store for the costumers who will patronize our product. PJ Patties Shop owned by the owner himself, who build his business at San Jose, Malilipot, Albay. The business offers a unique taste of patty which will serve as an alternative instead of different basic foods such as rice, it is best supplement to lessen too much carbohydrates.

The business is entirely new, does not know or have any experience and people who manages it are all first-timers in the field of business but they assure that will achieve the goals and objectives of the business.

MISION

To excel in sales and distribution of chicken patties using a carefully devised marketing program towards local competitiveness.

To provide a lower cost and palatable tastes of patties new products. To provide a nutritious supplement for any other foods.

PJ Patties Shop

PJ Patties Shop: A Feasibility Study


VISION PJ Patties Shop is a legal venture committed to become well-known suppliers all over the region towards the stability for the economic production and provided by the proper management for a good welfare.

OBJECTIVE PJ Patties Shop is able to create a unique marketing strategy to the market and to maintain market sustainability in order to meet competitive challenge and overcome market barriers.

PJ Patties Shop

PJ Patties Shop: A Feasibility Study


Chapter II Company Overview Name, Nature and location of the business. Name of the business: PJ Patties Shop Nature of the business: Dealer (wholesaling and retailing) Location: Zone #5, Datag, San Jose, Malilipot, Albay

PJ Patties Shop is own and manage by __________________the owner and general manager of the business.

Legal Business Description: Sole Proprietorship i. Form of business organization: The proposed business is in the form of sole proprietorship. It will easily manage and operate by one individual. On the other hand, we could not easily operate our business without the help of prospective employees with high potential business establishment.

In sole proprietorship, the main owner shall be liable from all phases in the company either shortages or surplus of the capital.

ii.

Licensing and other requirements for setting up the business In putting up PJ Patties Shop there have several permits that the owner needs to

get. The owner need to comply and accomplish all the permits as requirements to make the business legal and they are the following:

PJ Patties Shop

PJ Patties Shop: A Feasibility Study


1. Barangay Clearance 2. Mayors permit 3. DTI 4. BIR

List of owner:

Jeffrey C. Paras

Management Team

Organizational Structure Below is the organizational chart which describes in a capsule form the flow of authority from the manager to her assistants:

General Manager

1st Assistant

2nd Assistant

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PJ Patties Shop: A Feasibility Study


Lists of officers and staffs: General Manager (owner) 1st Assistant 2nd Assistant-

Job Description and Specification Below are the job descriptions which describe the function of the people involved in the operation of the business: A. OWNER and GENERAL MANAGER 1. Overall in-charge of the business and engages in the management aspects of the enterprise; 2. Primarily responsible in the financial aspects of the enterprise; 3. Prepares the financial statements at the end of every 6 months from the start of operations; 4. Does the overall inventory of raw materials as well as the inventory of finished products; 5. Washes the kitchen utensils used before leaving the workplace; 6. Keeps an inventory of finished products on a daily basis; 7. Assists in the sale of finished products.

PJ Patties Shop

PJ Patties Shop: A Feasibility Study


PERSONAL REQUIREMENTS Below is the statement of the qualifications and traits in terms of skills, experience, trainings required in the effective performance of each task.

A. OWNER AND GENERAL MANAGER 1. Knowledgeable in the operation and management of a sole proprietorship enterprise; 2. Must have an excellent sales talk ability; 3. Must be confident and optimistic; 4. Must know basic accounting and bookkeeping; 5. A graduate of business related courses; 6. At least 18-35 years old.

B) FIRST ASSISTANT 1.Must be hardworking; 2. Must be willing to work under pressure; 3. Must be flexible at all times; 4. Must have knowledge in making simple reports; 5. Must know how to communicate in English and the local dialect; 6. Must be physically fit; 7. Must have pleasing personality; 8. Must have knowledge in inventory reporting; 9. Must be a graduate of any business course; 10. Can adapt to quality standard.
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PJ Patties Shop: A Feasibility Study


C.SECOND ASSISTANT 1. Must have special skills in cooking and baking; 2. Must have great sense of responsibility; 3. Must be willing to work under pressure; 4. Must have pleasing personality; 5. Must be physically fit; 6. Must be hardworking; 7. Must have skills in production process; 8. Must be knowledgeable in making inventory reports; 9. Must be knowledgeable in production and quality standards.

Compensation of the officers and staffs: Employee Description General Manager 1 Assistant 2nd Assistant

st

No. of Workers 1 1 1

Monthly Rate 5,000.00 3,000.00 3,000.00

Yearly Rate 60,000.00 36,000.00 36,000.00

Every employee will avail the benefits that the manager will offer as long as they will perform their job well. They will be having health care and fringe benefits.

PJ Patties Shop

PJ Patties Shop: A Feasibility Study


Chapter III Product

PRODUCTS DESCRIPTION The product is called Chicken Patties. It is basically a patty made of chicken as a special filling inside the crust. The standard size of each patty is 4 inches long, 3 inches wide and inch thick. It is C shaped in appearance with crust at the outside and inside is cooked curry chicken as filling. The introductory selling price is 10 per patty.

Importance of the Product

Chicken meat is one of the most efficient sources of protein for human consumption.

Packaging, labelling and branding

The crust will be kept intact to maintain its freshness and protect them from the outside environment. The proponent will use paper pouch intended for the items. And the product will be wrapped into a thin sheet of compacted paper.

PJ Patties Shop

PJ Patties Shop: A Feasibility Study


Chapter IV Market Analysis Market Definition The market for Tasty Patties includes all people of different walks of life. All people who are used to heavy snack or meal and are used to accompanying beverages, soda or cola to their meal belong to this kind of patrons.

Specific Target Market The product is best as heavy meal substitute. A piece of patty is already

equivalent to a heavy meal like lunch or dinner. The crust is a substitute for rice as a source of carbohydrates. The chicken filling is equivalent for a dish. One needs cold water or beverage to complete his/her meal.

The specific target market of this product is all those belonging to the community members are expected to be regular customers. Childrens who go to school are the first targets.

CUSTOMER PROFILE Regular customers of Tasty Patties are those who are able and willing to exchange

their money for a nutritious and delicious food. These customers likewise are seekers of good nutrition and maintain a healthy and balanced diet. They belong to all genders, and special targets are also travellers, visitors and tourists.

PJ Patties Shop

PJ Patties Shop: A Feasibility Study


Competition Currently, bakeries exist and are located almost at every corner of the community where people gather and converge. However, sales person at these establishment are just waiting for customers. Their products, after being manufactured are transferred directly to the store station and sold until supply last. In the external environment, the following are the enterprise competitors: 1. Restaurants 2. Turo-Turo stores 3. Burger hauz Demand and Supply Supply is the amount available for sale or the amount that sellers are willing to sell at a specified price, and demand, sometimes called effective demand, is the amount purchasers are willing to buy at a specified price. Factors Affecting the Market of the Product in terms of demand The demand for the product may be affected by the following: 1. Increase of habitants at San Jose; 2. Changes (increase or decrease) in customers income and purchasing power; 3. Rural and urban development; 4. Price of substitute products.

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PJ Patties Shop: A Feasibility Study


Factors Affecting the Market of the Product in terms of supply The supply of the product may be influenced by the following:

1. Development of substitute products; 2. Threat of new entrants with similar or same products; 3. Governments policies; 4. Development and innovation in technology; 5. Sources and cost of production; 6. The dynamic setting of environment.

Risk and Solution The strengths of the enterprise are the following: 1. It is a sole proprietorship, hence it is easy to manage and operate; 2. Introduction of an entirely new and unique product; 3. The business enterprise has no existing direct competitors that produces and sells the same product.

In spite of the optimism in the establishment of this enterprise, the business however, recognizes and accepts the following constraints in its success and prosperity:

1. The enterprise may run short of sufficient capital; 2. The raw materials used in the production may also suffer high inflation rate; 3. Competitors may abound and create strategies better than that of Tastee Patties; 4. The distribution channel may become obsolete in the following years of operation
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PJ Patties Shop: A Feasibility Study


5. Environmental conditions which the business may not to be able to anticipate; 6. Political and economic crisis in the country both local and national; 7. Technical aspects on the information technology, production and the like.

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PJ Patties Shop: A Feasibility Study


Chapter V Marketing Plan Sales Strategy At present, where the enterprise is located is a busy community and it is observed that it is vulnerable to many changes.

Most of the ventures that opened were bakeries, computer shops, canteen, eatery and sari-sari stores. The canteens and eateries offer cooked food which residents, and students buy good for a snacks or a heavy meal.

The enterprises will also take an opportunity on the frequent closure of sari-sari stores located on the community. Such closure will enable the enterprise to cater the specific market segment such stores.

Distribution Channel Originally, the channel of distribution for the product is through retailing. However, the enterprise sought alternative channels to ensure a greater market share. The alternative channels are:

1. Wholesaling; 2. Personal selling and distribution; 3. Order-taking and distribution.

The alternative channel of distribution the products to the market have a relative importance in the following sense:
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PJ Patties Shop: A Feasibility Study


1. It would be easier to distribute the products; 2. It would be easier to penetrate the market; 3. The products could easily be distributed to the market and different distributors and outlets.

Pricing and Pricing Policy 1pc of chicken patty is 15 dozen is 85 1 dozen is 170

Purchase price of flour (soft wheat flour) is 30 pesos per kilo; Purchase price of chicken is 120 pesos per kilo; Conversion is 30 pieces of patty per kilo of flour; Ratio of chicken to flour is 2:3;

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PJ Patties Shop: A Feasibility Study


Chapter VI Production Plan Production Process Raw materials will be prepared in accordance to standard set forth by the proponent. After preparation all ingredients will be mixed and mold into the required shape and weight. After molding, it will be put into a packaging material individually and will keep at a freezer for temporary storage. Machineries and Equipment

Description Freezer Gas Range LPG Cooking spoon Regular Kitchen Knife Chopping Knife Chopping Board Kitchen Knife Kitchen Scale Kitchen Trays TOTAL

Quantity 1 unit 1 unit 11 kgs. 1 1 1 1 1 1 3

Cost 12,000.00 3,000.00 600.00 30.00 20.00 20.00 50.00 20.00 400.00 50.00

Total 12,000.00 3,000.00 600.00 30.00 20.00 20.00 50.00 20.00 400.00 150.00 P16,290.00

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PJ Patties Shop: A Feasibility Study


Furniture and Fixtures

Description Table Monoblock Chair Displaying Cabinet Total

Quantity/Unit(s) 1 6 1

Price 1,000.00 120.00 1,000.00

Total 1,000.00 720.00 1,000.00 2,720.00

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PJ Patties Shop: A Feasibility Study


PLANT LAYOUT DOOR

GENERAL MANAGER

C. R

DISPLAYING AREA OF PATTIES

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PJ Patties Shop: A Feasibility Study


PLANT LOCATION

PJ Patties Shop

Residential

Vulcanizing Shop

To Datag

Residential

Waiting Shed

Sari-Sari Store (closed)

To Legazpi

To Tabaco

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PJ Patties Shop: A Feasibility Study


Production Schedule The production of patties will on daily basis. The shop will be open from 7:00 A.M. to 7:00 P.M. Costing and Costing Method

Machineries and Equipment Description Freezer Gas Range LPG Cooking spoon Regular Kitchen Knife Chopping Knife Chopping Board Kitchen Knife Kitchen Scale Kitchen Trays TOTAL Quantity 1 unit 1 unit 11 kgs. 1 1 1 1 1 1 3 Cost 12,000.00 3,000.00 600.00 30.00 20.00 20.00 50.00 20.00 400.00 50.00 Total 12,000.00 3,000.00 600.00 30.00 20.00 20.00 50.00 20.00 400.00 150.00 P16,290.00

Depreciation (Machineries and Equipment) = 16,290.00 5 =


PJ Patties Shop

3,258.00
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PJ Patties Shop: A Feasibility Study


Furniture and Fixtures Description Table Monoblock Chair Displaying Cabinet Total Quantity/Unit(s) 1 6 1 Price 1,000.00 120.00 1,000.00 Total 1,000.00 720.00 1,000.00 2,720.00

Depreciation (Furniture and Fixtures) = 2,720.00 5 = 544.00

Permit and licences Description Business Permit DTI Permit BIR Permit Barangay clearance Mayors Permit Total Annually 1,000.00 500.00 300.00 100.00 500.00 2,400.00

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PJ Patties Shop: A Feasibility Study


Salary Expense Position Manager First Assistant Second Assistant TOTAL Number of Employee 1 1 1 Monthly Salary 4,000.00 2,000.00 2,000.00 P8,000.00 Annual Salary 48,000.00 24,000.00 24,000.00 P 96,000.00

Advertising and Promotion Kinds of Advertisement Flyers Tarpaulin Quantity 1 box (1000pcs) 2 Cost 500.00 250.00 Annual 500.00 500.00 1,000.00

Utility Expense Description Electric Bill Water bill Monthly 800.00 200.00 P1,000.00 Annual 9,600.00 2,400.00 12,000.00

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PJ Patties Shop: A Feasibility Study


Rent Expense Description Rent (Building) TOTAL Monthly 2,000.00 Annual 24,000.00 24,000.00

Employee Benefits Expense


Staff/Officers Salary SSS Philhealth Pag-ibig Monthly annual

Manager First Assistant Second Assistant TOTAL

4,000.00 2,000.00 2,000.00

150.00 100.00 100.00 250.00

50.00 50.00 50.00 150.00

50.00 50.00 50.00 150.00

250.00 200.00 200.00 650.00

3,000.00 2,400.00 2,400.00 7,800.00

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PJ Patties Shop: A Feasibility Study


Chapter VII FINANCIAL PLAN Major Assumption 1. Production Data Purchase price of flour (soft wheat flour) is 30 pesos per kilo; Purchase price of chicken is 120 pesos per kilo; Conversion is 30 pieces of patty per kilo of flour; Ratio of chicken to flour is 2:3; Packaging cost is estimated at 1 peso per piece of the finished product; Other ingredient cost is 1000 pesos per month; Selling price is 10 pesos per piece; Target sales volume for the first year is 36,000 pieces and will increase on the following years of operation. OPERATING EXPENSES Advertising and promotion expense is 1,000 per month; Salaries expense include payment for the service of general manager, first assistant and second assistant; Utility expense (light and water) is estimated 1,500 per month; Ingredients and indirect materials is estimated 1,000 per month UNIT PRODUCTION COST Description
Chicken Patty

Unit Cost
P10.00/piece 100

Daily
1,000.00

Monthly
3,000 30,000.00

Annually
36,000 360,000.00

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PJ Patties Shop: A Feasibility Study


INITIAL WORKING CAPITAL REQUIREMENTS A. Equipment and Materials Equipment/Materials Freezer Gas Range LPG Cooking spoon Regular Kitchen Knife Chopping Knife Chopping Board Kitchen Knife Kitchen Scale Kitchen Trays Total B. Cost of Production and Operation (1 month) Flour (90 kls @ 30 per kilo) Chicken (60 kls @ 120 per kilo) Packaging Materials LPG Ingredients and Indirect Materials Total 2,700.00 7,200.00 2,700.00 1,200.00 1,000.00 13,900.00 Quantity 1 unit 1 unit 11 kgs 1 pc 1 pc 1 pc 1 pc 1 pc 1 pc 3 pc Total cost 15,000.00 3000.00 600.00 30.00 20.00 20.00 50.00 20.00 400.00 150.00 19,290.00

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PJ Patties Shop: A Feasibility Study


TOTAL PROJECTED COST

A.FIXED ASSET Machineries and Equipment Furniture and Fixtures 16,290.00 2,720.00

B.OPERATING EXPENSE Raw materials Rent Expense Salary Expense Benefits Expense Advertising and Promotion Utility Expense Permit and Licenses 13,900.00 2,000.00 8,000.00 650.00 1,000.00 1,000.00 2,400.00 P 47,960.00 C. CONTINGENCY ALLOWANCE (10%) TOTAL 4,796.00 P 52,756.00

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PJ Patties Shop: A Feasibility Study


PJ Patties Shop Projected Income Statement For the year ended, December 31, 2013

Sales (Net)

360,000.00

Less: Operating Expenses Raw Materials Advertising and Promotions Utilities Salaries Benefit Expense Rent Expense Permit & Licenses Add: Contingency 10% Depreciation - Machineries & Equip Furniture & Fixtures Net Income before Tax Less: Income Tax (12%) Net Income after Tax 4,968.24 36,433.76 166,800.00 1,000.00 12,000.00 96,000.00 7,800.00 24,000.00 2,400.00 4,796.00 3,258.00 544.00 318,598.00 41,402.00

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PJ Patties Shop: A Feasibility Study


PJ Patties Shop Projected Cash Flow Statement For the year ended, December 31, 2013 Cash Inflow Capital Sales 47,960.00 360,000.00

Total Cash Outflow Machineries and Equipment Furniture and Fixtures Raw Materials Advertising and Promotions Utilities Salaries Benefit Expense Rent Expense Permit & Licenses Contingency Total Cash Balance, End 16,290.00 2,720.00 166,800.00 1,000.00 12,000.00 96,000.00 7,800.00 24,000.00 2,400.00 4,796.00

407,960.00

333,806.00 74,154.00

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PJ Patties Shop: A Feasibility Study


PJ Patties Shop Projected Balance Sheet December 31, 2013 Assets Current Assets Cash Machineries and Equipment Furniture and Fixtures Less: Depreciation Total Assets 74,154.00 16,290.00 2,720.00 (3,802) 89,362.00

Liabilities and Owners Equity Capital Tax Payable Net Income 47,960.00 4,968.24 36,433.76

Total Liabilities and Capital

89,362.00

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PJ Patties Shop: A Feasibility Study


Exit/Payback Strategy

ROI

Net Income x 100% Capital

36,433.76 x 100% 47,960.00

.76 x 100%

76%

PAYBACK PERIOD

Capital Net Income

47,960.00 36,433.76

1.31 X 12

1 year and 4 months

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PJ Patties Shop: A Feasibility Study


Chapter VIII Conclusion The proponent concluded that the proposed business is feasible and viable as shown in the financial statements. With a capital investment of 47,960.00 and a net income of 36,433.76 it will be recouped within 1 year and 4 months at 76 % ROI.

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