You are on page 1of 107

“DIPSIDOO”

Submitted to:
Michael Del Rosario

Submitted by:
Dan Marlon Isaac
Joannie Suzaine Lualhati
Ray Christian Rosell
Ma. Mikhaela Sanchez
Romiko Vidanes

1
Table of Contents
Introduction ......................................................................................................................................... 5
Statement of Purpose ........................................................................................................................ 5
General Objective ............................................................................................................................... 6
Specific Objectives .............................................................................................................................. 6
Chapter 2 ..................................................................................................................................... 8
Industry and Competitive Analysis .............................................................................................. 8
Industry structure and performance .......................................................................................... 8
Industry Outlook................................................................................................................................. 9
Competition ....................................................................................................................................... 10
Chapter 3: ................................................................................................................................. 14
The Business and the Product Concept ................................................................................... 14
Partnership Name ........................................................................................................................... 14
Figure 1. Partnership logo ....................................................................................................................... 15
Figure 2. Business Logo ............................................................................................................................ 16
Mission and Vision Statement ..................................................................................................... 23
The Product ....................................................................................................................................... 23
Uniqueness of the product ...................................................................................................................... 24
Chapter 4: ................................................................................................................................. 25
Production/Operations Study..................................................................................................... 25
Technical Description of the Product ....................................................................................... 25
Production Process ......................................................................................................................... 29
Pre-made ingredients process ............................................................................................................... 29
Pizza Dips Process ...................................................................................................................................... 30
Spicy Cheese Dips Process ....................................................................................................................... 31
Other Process ................................................................................................................................................ 32
Time and motion study.................................................................................................................. 41
Capacity ............................................................................................................................................... 45
Business Location ............................................................................................................................ 46
Production Schedule and Labor Requirements.................................................................... 48
Production Cost ................................................................................................................................ 50
Table 11. Spicy Dips Costing ................................................................................................................... 50
Table 12. Pizza Dips Costing ................................................................................................................... 51
Table 13. Toppings costing ...................................................................................................................... 51
Table 14. Consolidated Pizza Dips Cost ............................................................................................ 52
Table 15. Snacks Costing .......................................................................................................................... 52
Table 16. Packaging Costing ................................................................................................................... 52
Table 17. Variable Factory Overhead ................................................................................................. 53
Table 18. Fixed Factory Overhead ....................................................................................................... 53
Chapter 5 .................................................................................................................................. 54
Marketing Plan ....................................................................................................................... 54
Marketing Environment ................................................................................................................ 54
Target Market ................................................................................................................................... 54
Market Study ..................................................................................................................................... 55
Objectives of the study ................................................................................................................... 55
Research design ............................................................................................................................... 56

2
Research Methodology .................................................................................................................. 56
Population and sample size ......................................................................................................... 56
Results and Discussion .................................................................................................................. 57
Market Strategy ................................................................................................................................ 73
Product ................................................................................................................................................ 73
Price...................................................................................................................................................... 74
Place ..................................................................................................................................................... 75
Promotion .......................................................................................................................................... 75
Chapter 6 .................................................................................................................................. 76
Financial Plan.......................................................................................................................... 76
Production Budget .......................................................................................................................... 76
Direct Labor Budget........................................................................................................................ 77
Direct Materials Budget ................................................................................................................ 78
Factory Overhead Budget ............................................................................................................. 78
Cost of Goods Sold............................................................................................................................ 79
Operating Expense Budget ........................................................................................................... 79
Income Statement ............................................................................................................................ 80
Projected Cash Flow........................................................................................................................ 80
Balance Sheet .................................................................................................................................... 81
Financial Ratio and Analysis........................................................................................................ 81
Payback Period............................................................................................................................................. 81
Break Even Value ........................................................................................................................................ 83
Profitability Ratios ...................................................................................................................................... 84
Chapter 7 .................................................................................................................................. 85
Management Plan ............................................................................................................................ 85
Form of ownership ..................................................................................................................................... 85
Profile of the partners ............................................................................................................................... 85
Organizational Structure .............................................................................................................. 87
Figure 31. Organizational Chart ............................................................................................................ 88
Job Description and Function ...................................................................................................... 89
General Administrative Programs ............................................................................................ 91
Chapter 8 .................................................................................................................................. 93
SOCIO-ECONOMIC STUDY .............................................................................................................. 93
Population ...................................................................................................................................................... 93
Households .................................................................................................................................................... 93
Age Group ....................................................................................................................................................... 94
Religion............................................................................................................................................................ 95
Labor force ..................................................................................................................................................... 95
Chapter 9 .................................................................................................................................. 97
RISK AND CONTROL ........................................................................................................................ 97
Risk Management ............................................................................................................................ 97
RISK IDENTIFICATION ................................................................................................................... 99
Internal Risk ...................................................................................................................................... 99
Human Risks ................................................................................................................................................. 99
Equipment and Information Technology Risks ........................................................................... 100
Financial Risk ............................................................................................................................................. 101
External Risk ................................................................................................................................... 102

3
*Competition and Market Risks ......................................................................................................... 102
Business Environment Risks ............................................................................................................... 102
Personal Conflict Risk............................................................................................................................. 103
RISK CONTROL MANAGEMENT AND IMPLEMENTATION ................................................ 104
Business work strategies ...................................................................................................................... 104
Employee Management ......................................................................................................................... 105
Accounting and Cash Control .............................................................................................................. 106
Equipment ................................................................................................................................................... 107
Competition ................................................................................................................................................ 107

4
Chapter One

Introduction

Business planning plays a significant role in starting up a business. Likewise, it is

business essential to set priorities, to establish goals, and to measure performance or in

other words, to map the future of one’s business. It helps to manage the business

effectively by committing thoughts and foreseeing the needs of the business. It’s

understanding will lead to specific courses of action, growth and financial security.

Writing out a business plan forces the proponents to analyze and review everything at

once: the value proposition, marketing assumption, operation plan, and financial plan.

Chapter one covers long term and short term goal of the business. It identifies

general and specific objective of what are the business projecting to.

Statement of Purpose

Writing a business plan allows the entrepreneur to know exactly where the

business is going, it allows setting objectives, and comparing exact result with projection.

Hence this determines whether a business has a chance of making a good profit, since it

provides an estimate start-up cost. Also, it helps business owners set their controls and

priorities, anticipate potential problems and establish benchmarks. In connection, an

objective opinion helps to recognize inconsistencies or risks in business, and gives insight

on what to do to stay competitive and win more customers.

5
General Objective

Overall, this plan aims to determine the viability, marketability of venturing into the

business of dips and sauces.

Specific Objectives

Provided are the specific objectives in product and business development in terms of

operation process, marketing strategies, management operation and Risk control.

OPERATION

a. To determine the efficient and effective system for preparing, producing and

serving the product at the shortest possible time with minimal expenses

b. To determine the minimum and maximum capacity for the production of the product.

c. To determine the possible sources of raw material for the consistent quality of

production required for the product.

d. To identify the optimal plant layout of the building, facilities and utilities.

MARKETING

a. To identify who are the direct and indirect competitor of the business.

b. To determine the psychographic profile of the target market

c. To determine the customer’s buying power and buying patterns towards their food.

d. To determine what drinks and snacks would the customers like to go with the dips.

e. To determine the customer’s willingness to buy the product.

f. To determine the acceptability of the product to the market.

g. To gather data that would allow further improvements for the product

6
MANAGEMENT

a. To develop organizational structure for official reporting relationships that govern

the workflow of the partnership

b. To provide the required job description and job specification of the people in external

and internal environment of the business.

c. To determine how many people are necessary for production to maintain the business

FINANCIAL

a. To determine and reach a healthy monthly sales by the end of the starting operation

year

b. To prepare budgets and schedule for the efficient operation of the business

c. To develop a pro-forma financial statement for the operation of the business

d. To determine the possible sources of funds and start up capitalization of the business

venture

RISK AND CONTROL

a. To determine what are the possible problems that the business might encounter

during its operation

b. To determine what are the best possible solution for the inconvenience that the firm

might encounter

c. To Identify the common risks associated with the business

d. To Identify the external and internal factors which affect risk for a small business

e. To Identify situations that may cause risk for the business

f. To Implement, monitor, and evaluate a risk management plan

7
Chapter 2
Industry and Competitive Analysis

Industry structure and performance

Dipsidoo belongs to the food industry, specifically, the dips and sauces industry.

After observing supermarkets and looking for businesses that sells dips on the internet,

the researchers have observes that the industry has a very few major players. Dips and

sauces are currently distributed either through a seasonal kiosk or by being sold in cans,

jars and containers in the supermarket. Dips are also made available through kiosks but

the researchers have not found any business that operates as a kiosk who sells dips as its

core product in the Philippine market. Dipsidoo will be started as a seasonal kiosk but

would eventually aim to be a regular kiosk depending on its success.

The key players in this industry are Doritos and Tostitos. Tostitos offers a variety

of tortilla chips and dips produced by Frito-Lay. Tostitos has been very successful and is

currently available in supermarkets nationwide. As seen in Frito-Lay’s (Parent company

of Tostitos and Doritos) website, Tostitos has been introduced in 1979 and their dips have

been available globally since 1995. Doritos produces seasoned tortilla chips and dips.

Doritos has been introduced in 1964 and their dips have been available since 1990.

Businesses that serve dips, sauces and dressings as a secondary product are

Lady’s Choice, Clara Ole and Nacho king. The company’s range of spreads and dressings

are made from the finest ingredients that bring out the best taste of food. Clara Ole is one

of the leading local and important brands due to its authentic and distinct flavor. The

company strives for excellence in quality, convenience, and reasonably priced products

8
stated philamfood.com Brands (2015). Nacho King according to nachoking.com (2015),

is a Fast food retailer of nachos in the Philippines, with kiosks that can be found in malls,

supermarkets and schools.

Industry Outlook

The growth of Philippine sauces, dressings and condiments has been driven by

innovative products as well as product diversification. The growing presence of both

local and international flavors has also been seen in sauces, dressings and condiments.

Data from the leading U.S salsa brand, Tostitos has generated over 449.4 million dollars

of sale this February 2015. As stated in PepsiCo’s annual report (2014), Frito-lay, the

parent company of Doritos and Tostitos, received an increase of 3% in net revenue and an

increase of 2% in volume from 2013 to 2014. The volume growth reflects mid-single-

digit growth in trademark Doritos, double-digit growth in variety packs, Sabra joint

venture products and low-single-digit growth in dips. Based on the given information, the

industry is currently growing at a slow pace. As of today in the Philippines, only three

brands produce dips that are available in the supermarket. The three being Tostitos,

Doritos and old fashioned cheese. Though these three have been available in the market

for years, flavors available in the Philippines are still mostly limited to salsas and a

variety of cheesy dips. This can be used as an advantage for Dipsidoo. Dipsidoo will

offer a wider variety of dips that are served fresh while giving the customers an option on

what they would like to dip. These prestige are currently not provided by dips in the

supermarket.

9
Competition

Tostitos offers the following products; in the dips category, Tostitos Salsa,

Tostitos Roasted Red Pepper Salsa, Tostitos Garlic Salsa, Tostitos Spinach Dip and

Tostitos Salsa Con Queso. Its variety of dips has been very successful through the years.

in the line of chips they offer the following tortilla chips; Rolls tortilla chips, Extra thin

tortilla chips, Restaurant style tortilla chips, multigrain tortilla chips, hint of lime grilled

red pepper and tomato salsa tortilla chips, bite size round tortilla chips, multigrain rounds

tortilla chips, gold tortilla chips, scoops tortilla chips, multigrain scoops tortilla chips and

oven baked scoops tortilla chips. These chips innovation has put them on the top of the

industry making them one of our major competitors in chips and dips industry.

The next competitor is Nacho King, they serve nacho and chips just like

Dipsidoo. they offer variants of nacho’s but only vary in size and toppings they offer the

following product; Jumbo loaded, Jumbo w/ toppings, Biggie Beefy Nachos w/ salsa and

packed flavored nachos that is ready to take out (Bbq, Cheese, Sour and Cream). Their

prices range from 80 to 150 plus 15 pesos for additional toppings and they have stall in

malls like Sm, Glorrieta and fisher mall.

Lady’s choice is one of the leading pioneer in spread and dips in the Philippines.

They are well trusted brands by mom’s all over the country, They over variants of Spread

like Mayonnaise, Sandwhich spread chicken,Ham spread, Mayo Lite and Bacon spread,

and tuna spread. The prices ranges from php28 to php168 from sachet to 80 ml, 220 ml

and 440ml and these spread can also found in most leading supermarket in the country.

10
Table 1.

Competition

Tostitos Nacho King Lady’s Choice


(Indirect)

Product/ Dips Nachos Spread/Dips


Product
Line  Tostitos Salsa  Jumbo  Mayonnaise
 Tostitos roasted Loaded  Sadwich Spread
red pepper salsa  Jumbo w/  Chicken Spread
 Tostitos Garlic toppings  Ham spread
Salsa  Biggie  Mayo Lite
 Tostitos Loaded  Bacon Spread
Spinach Dip  Biggie Beefy  Tuna Spread
 Tostitos Salsa Nachos w/
Con Queso Salsa
 Packed
Chips Nachos (Bbq,
Cheese, Sour
 Rolls! tortilla cream)
chips
 Extra thin
tortilla chips
 Extra Thick
Tortilla chips
 Restaurant style
tortilla chips
 Multigrain
tortilla chips
 Hint of Lime
Tortilla chips
 Low Sodium
round tortilla
chips
 Organic Blue
Corn tortilla
chips
 Organic Yellow
Corn chips

11
 Artisan Recipe
:Roasted Garlic
& Black Bean
tortilla chips

 Artisan
Recipes: Grilled
Red Pepper &
Tomato Salsa
tortilla chips
 Bite Size
rounds tortilla
chips
 Multigrain
Round tortilla
chips
 Gold Tortilla
chips
 Scoops! tortilla
chips
 Multigrain
Scoops! tortilla
chips
 Oven Baked
Scoops! tortilla
chips

Pricing Php 100-180 Php 80-150(+15 Php 28- 165


pesos per toppings, from sachet to 80ml to
Cheese, Beef, Salsa, 220ml, 440ml
Jalapeno,
Mushroom, Chili
Beef.

Location/ 25 Branches nation


Number of wide Available in most Available in most
Branches supermarkets supermarkets nationwide
SM Sta. Rosa nationwide.
SM City Dasmariñas
Sm Center Muntinlupa
SM Center Molino
Sm Southmall
SM City Bacoor
SM Angono
SM City Rosario
SM Mall of Asia

12
Greenbelt 1
Robinsons
Forum
Baranka
SM Megamall Star
City
SM Masinag
Sm City Sta. Mesa
SM Manila
SM city San Lazaro
Fisher Mall
SM City North Edsa
SM Center Valenzuela
SM City Fairview

Advertising Online marketing and Tostitos is known Lady’s Choice


and advertising through globally they advertising and
Promotion social media such as promote and promotion is through tv
facebook, twitter, advertise their commercial (nationwide)
pinterest, google ads, product through Tv social media and events
food blogs and through commercials and for mother’s.
their website. online advertising
such as youtube,
google ads, facebook
and through their
website.

Financial The financial condition Tostitos is under of Lady’s Choice is under of


Condition of nacho king is well Frito lay company. Unilever company.
budgeted. they provide Frito lay is well Lady’s Choice is known
Lease negotiation, cost known for its snacks for its sandwich spreads
analysis, marketing and and dips. It is known and mayonnaise. It is a
accounting to ensure its globally and it trusted brand for so many
financial stability. already reached a years that it reached
billion sales in 1979. billion sales since it was
Throughout the years established
frito lay is
continuing its vision
to serve high-quality
snacks.

13
Chapter 3:

The Business and the Product Concept

The business started when five entrepreneurial management students decided to

be partners in a business venture. The partners have a common interest in food dips and

sauces, which served as an inspiration to be in the food industry.

Partnership Name

The partnership name that the proponents came up is LaunchBox. This represents

where great products, ideas and innovation begins, in creating more efficient work

process to have a better productivity and performance. The first business under

LaunchBox is Dipsidoo. The proponent’s professor first suggested its name while they

were presenting business concepts, this turned out to be a random idea. Then, the

proponents decided to go with the name Dipsidoo because according to a reference it

portrays fun, playful and enjoyable applicable to the environment of the business.

14
Figure 1. Partnership logo

15
Figure 2. Business Logo

16
Figure 3. Spicy Chicken Dip

17
Figure 4. Spicy Beef Dip

18
Figure 5. Hawaiian Pizza Dip

19
Figure 6. Pure Beef Pizza Dip

20
Figure 7. Pepperoni Pizza Dip

21
Figure 8. Bacon Pizza Dip

22
Mission and Vision Statement

Launchbox aims to give life to ideas that would promote development in different

industries and improvement of the customer's lifestyle. It is Launchbox's mission to

create products that will improve consumer’s standards of living because of the

convenience and benefits that the products deliver. The partnership hopes for the

products to achieve a constant demand in the market in order for the partnership to

sustain a longer life.

The Product

Dipsidoo offers four pizza dips, two spicy dips and one beef dip. There are four variance

of pizza dips such as: Hawaiian, Pure beef, Pepperoni and Bacon. Base dip was made

with Mozzarella, Creamcheese, Cheddar and other special ingredients and flavors are

added on top to appear the variance of pizza they choose. The two spicy dips are Spicy

chicken dip and Spicy beef dip, it was mixed with special cheese sauce. The two core

ingredients, which are chicken and beef are cooked separately to stew and sauté before

putting together with its sauce.

Each is served with toasted tortilla and breadsticks.

23
Uniqueness of the product

Dipsidoo offers a variety of products that is not currently provided in the market. The

product gives the consumer an opportunity to taste a variety of dips, not typically

available at the super market at a cheaper price. Dips are also served conveniently with

The snack of the customer's choice and dips are served fresh and no preservatives added.

Dipsidoo shall be one of the only food cart that would utilize dips as its core.

24
Chapter 4:

Production/Operations Study

Technical Description of the Product

The dips would be served in a 2.5” carton cup with 3” in diameter. Alongside the

dip, would be the snacks for dipping of their choice. The snacks would be packed in a

1.5”x5.5”x7.5” open carton packaging with the dip inside.

The proponents currently has seven flavours. Four of the flavors being the pizza

dip which would have a total weight of 90 grams without the toppings. It is composed of

50 grams cheese base, 20 grams tomato sauce and 20 grams of mozzarella on top. The

pizza dip would have varying weight on the toppings which is based on an equal pricing

for each flavors. 10 grams of pepperoni yielding a total of 100 grams for the pepperoni

flavor. 6 grams of bacon yielding a total of 96 grams for the bacon flavor. 10 grams of

pineapple and 10 grams of ham yielding a total of 110 grams for the Hawaiian flavor.10

grams of bell pepper and 10 grams of beef yielding a total of 110 grams for the beef

flavor.

Two among the seven flavors are the variety of spicy cheese dips, spicy chicken

and spicy beef. Both flavors would have a total weight of 80 grams. And lastly the

barbecue beef dip which would have a total weight of 80 grams.

25
Figure 9. Front view of spicy cheese dips

26
Figure 10. Front view of Pizza dips

27
Figure 11. Top view of spicy cheese dips

28
Production Process

Pre-made ingredients process

Process A: Preparation of toppings and pizza sauce & preheating of oven

First, Prepare 300 grams of pepperoni, 180 grams of bacon, 150g of ham.Second,

preheat the oven to 400 degrees Fahrenheit then, finely chop the bacon, pepperoni, bell

pepper, and ham. Contain the 300 grams of pineapple, 300 grams of bell pepper, and 600

grams of pizza sauce. Then put the bacon, ham and pepperoni in a plate.

Process B: Frying of bacon, pepperoni and ham.

Prepare a pan or pot and pre-heat it in the stove for 30 seconds. Add a teaspoon of

oil and begin cooking the bacon bits. After taking out the bacon bits, the pepperoni is

cooked next. When the pepperoni is finally cooked the pieces of ham is then fried. After

frying, the stove is turned off and each toppings is transferred to their container.

Process C: Preparation of beef toppings

Prepare and chop a whole onion and 4 cloves of garlic. Then, Preheat the pan in

medium heat for 30 seconds then add a teaspoon of oil in the pan. Add onions then garlic

and saute for 1-2 minutes. Beef is then added and constantly stirred and chopped with the

spoon or spatula for 6-8 minutes. Pan is then turned off and the ground beef is transferred

in a container while leaving excess oil in the pan.

Process D: Preparation of Chicken bits

29
Prepare 612 grams of chopped chicken breast and place it in a pot. 5 cups of

salted water is then added in the pot. Stove is then set to medium-high heat and chicken is

braised for 15-20 minutes. After braising, chicken is strained and shredded then

transferred in a container.

Pizza Dips Process

Process E: Preparation of dairy products

Prepare 330 grams of cheddar, 600 grams of mozzarella, 330 grams of eden, 390

grams of cream cheese and 1096 grams of milk and put all the ingredients in a pot.

Process F: Melting of cheese

Pot filled with dairy products are now placed in the stove with a temperature of

150 degrees Celsius for 5-8 minutes then mixed and crushed until the mixture is

Completely melted.

Process G: Transfer from pot to packaging

After turning off the stove, the cheese base in the pot is then transferred to its cup

packaging. Cups are placed in a weighing scale and poured with the cheese base until it

reaches a weight of 50 grams.

Process H: Adding of sauce and toppings

While the pizza dip is still on the weighing scale, it is then topped with 20 grams

of pizza sauce on top, thus yielding the dip a total weight of 70 grams. Then, it is topped

with 20 grams of mozzarella cubes and the customer’s topping of choice.

H1= topped with 6 grams of bacon.

30
H2=topped with 10 grams of pepperoni.

H3=Topped with 10 grams of pineapple chunks and 5 grams of ham.

H4= Topped with 10 grams of beef and 10 grams of bell pepper

Process I: Sealing of packaging

Dips are then sealed with a 3 inches diameter plastic cover and stored.

Spicy Cheese Dips Process

Process J: Preparation of spicy cheese ingredients

Prepare 612 grams of cheddar, 432 grams of Eden, 432 grams of cream cheese,

and 288 grams of garlic ranch, 1213.2 grams of milk and 10.8 grams of cayenne pepper

and put it all in one pot.

Process K: Melting of spicy cheese base

Transfer the pot to the stove and set the temperature to medium for 5-8 minutes.

Mix and crush everything in the pot until everything is melted and mixed.

Process L: Adding of Chicken

Finally add 612 grams of chicken and mix it well with the dip. Then the stove is turned

off.

Process M: Adding of Beef

Finally add 450 grams of beef and mix it well with the dip.Then, the stove is turned off.

Process N: Packing of spicy cheese

A cup is placed in a weighing scale and filled the spicy cheese in the pot until it reaches

80 grams.

31
Other Process

Process V: Preparing of snacks for dipping

Snacks are taken out from the cooler and prepared. If loaf bread or tortilla was

ordered it would be toasted for 2 minutes. Serving size: nachos-42 grams, tortilla-1 piece,

and loaf bread – 2 slices. This process is only done if the snacks are ordered.

Process W: Microwaving of dips

When customer orders, dips are microwaved for 1 minute if it is ordered.

Process X: Adding of toppings

Pizza dip is opened and added with 6 grams of bacon, or 10 grams of pepperoni,

or 10 grams of ham, or 10 grams of beef if it is ordered.

Process Y: Taking of orders

Customers are asked for their orders and given an option to choose what snack

they would like to go with their dip.

Process Z: Serving

Customers are served with their orders.

Table 2. Production Process

Process Process Name Precedent

A Preparation of toppings and pizza sauce -

B Frying of toppings A

C Preparation of beef toppings -

32
D Preparation of chicken bits -

E Preparation of dairy products -

F Melting of cheese E

G Transfer from pot to packaging F

H Adding of sauce and toppings of customer’s choice B/C,G

I Sealing of packaging H/N/M

J Preparation of spicy cheese ingredients -

K Melting of spicy cheese base J

L Adding of chicken D,K

M Adding of beef C,K

N Packing of spicy cheese L/M

V Preparing of snacks Y

W Microwaving of dips X

X Adding of toppings -

Y Taking of orders -

Z Serving -

Figure 12. Process Chart of Pizza Dips

33
Figure 13. Process chart of Spicy Cheese dips

34
Figure 14. Serving Process Chart

35
Table 3. Tools Machineries and Equipment

36
Equipments Brand Price

Panini toaster Krups Php 5,400

Microwave Midea Php 5,995

Induction cooker Philips Php 3,995

Freezer Condura Php 12,495

Utensils Metro Php 699.75

Chopping Board Neoflam Php 399

Pot (Ceramic) Stoneware Php 1,399

Whisk Europro Php 249.75/2pcs

37
Table 4. Raw Materials and Supplies

Ingredient Supplier Cost

Ground Beef Waltermart, Trece 240/kg

Trece Public Market 240/kg

Mahogany Market 220/kg

Onion Waltermart,Tagaytay 99/kg

Waltermart,Trece 60/kg

Trece Public Market 60/kg

Garlic Waltermart,Tagaytay 139/kg

Trece Public Market 90/kg

Puregold, Tagaytay 35.64/.293kg

Flour Waltermart, Tagaytay 57/kg

Trece Public Market 10.5/250g

Puregold,Tagaytay 22.49/250g

Oil Waltermart Tagaytay 173.95/200ml

Trece Public Market 70/1.5L

Silang Public Market 86/L

Mozarella PGP Marketing 320/kg

Waltermart, Tagaytay 145/150g

SNR 399.95/kg

Cream Cheese PGPMarketing 340/kg

38
Waltermart,Tagaytay 145/150g

SNR 349.95/kg

Eden Cheese District,Imus 235/950g

Waltermart, Trece 118/440g

Waltermart, Tagaytay 118/400g

Milk Waltermart, Tagaytay 71.50/L

SNR 77.50/L

Puregold, Tagaytay 62.50/L

Pizza Sauce PGPMarketing 80/kg

Quick and easy del monte Waltermart, Dasma 18.75/100g

Bacon Waltermart, Tagaytay 47.11/100g

SNR 389.95/kg

Waltermart, Trece 299/500g

Pepperoni Waltermart, Tagaytay 36.92/100g

Waltermart, Dasma 74.75/225g

Pineapple Chunks Waltermart, Tagaytay 52.25/560g

Waltermart, Trece 22.50/200g

Waltermart, Tagaytay 48.18/196g


Bellpepper

Trece Public Market 150/kg

Waltermart, Trece 300/kg

39
Water Aqua Khane, Tanza 25/5G

Aqua Dela Vita 35/5G

Cayenne Pepper Waltermart, Trece 49.50/26g

Waltermart, Tagaytay 49.50/26g

Cheddar(Quickmelt) SNR 252.97/506g

Cheddar PGP Marketing 330/kg

Waltermart, Tagaytay 205/250g

Ranch PGP Marketing 200/kg

Salt Waltermart, Trece 19/140g

Silang Public Market 20/140g

Packaging Dasma Packaging 5.35/set

Herb Tortilla 6” Village Gourmet Php 101.00/1pack/12pcs

Nachos SNR Php 130/442g

Loaf Bread SNR Php 53/pack

40
Time and motion study

The time and motion study is done by estimating the number of output and how

long it takes to product a batch. The output and time are estimated by timing three trials

for each task. The amount of working time per day was estimated to be 8 hours during the

study. The purpose of the time and motion study is to estimate how many orders can the

business take and fully understand the worker’s capacity. The proprietors also used the

time and motion study as an opportunity to improve working time or increase the number

of batch that can be produced in a single production. It is also a great way to find the

most efficient and effective way of producing the products.

Dipsidoo plans to utilize the assembly line in the production of the products. It

was considered the better option rather than the job shop because the creation of dips are

only composed of simple repeated tasks that any member can do. It is also preferable

because of its nature to utilize each and every worker in the completion of a task. The

proponents have found that they can produce an average of 347 units per day (Computed

by adding overall product total task time divided by the number of products).

41
Table 5. Time and Motion Study

Trial 1 Trial 2 Trial 3 Average


(Seconds) (Seconds) (Seconds) (Minutes)

Process A 5.30 3.37 3.28 3.98

Process B 21.70 20.75 19.12 20.52

Process C 12.42 11.70 11.22 11.78

Process D 26.63 24.57 25.35 25.52

Process E 3.07 2.87 2.42 2.78

Process F 6.23 5.42 5.67 5.77

Process G 10.83 8.08 8.67 9.19

Process H 30.08 23.87 22.92 25.62

Process I 1.12 1.07 1.25 1.14

Process J 3.87 4.05 3.42 3.78

Process K 5.40 5.02 3.42 4.61

Process L 0.75 0.53 0.58 0.62

Process M 0.75 0.57 0.50 0.61

Process N 12.17 5.70 10.50 9.46

42
Table 6. Time and Motion Study and Plant Capacity for Pizza Dips

Pizza Dip Trial 1 Trial 2 Trial 3 Average


(Seconds) (Seconds) (Seconds) (Minutes)

Process A 318 202 197 3.98333

Process B 1302 1245 1147 20.5222

Process C 745 702 673 11.7778

Process E 184 172 145 2.78333

Process F 374 325 340 5.77222

Process G 650 485 520 9.19444

Process H 1805 1432 1375 25.6222

Process I 67 64 75 1.14444

Production capacity = 5.940594 batch/day or 178 units Total Task Time = 80.8
per day minutes

43
Table 7. Time and Motion Study and Plant Capacity for Spicy Chicken Dips

Spicy Chicken Trial 1 Trial 2 Trial 3 Average


(Seconds) (Seconds) (Seconds) (Minutes)

Process D 1598 1474 1521 25.5167

Process J 232 243 205 3.77778

Process K 324 301 205 4.61111

Process L 45 32 35 0.62222

Process N 730 342 630 9.45556

Process I 67 64 75 1.14444

Production capacity=10.63646 batches/day or 318 Total Task Time = 45.1278


units per day minutes

Table 8.
Time and Motion Study and Plant Capacity for Spicy Beef Dips

Spicy Beef Trial 1 Trial 2 Trial 3 Average


(Seconds) (Seconds) (Seconds) (Minutes)

Process C 745 702 673 11.7778

Process J 232 243 205 3.77778

Process K 324 301 205 4.61111

Process M 45 34 30 0.60556

Process N 730 342 630 9.45556

Process I 67 64 75 1.14444

Production capacity=15.30016 batches/day or 450 Total Task Time = 31.3722


units/day minutes

44
Capacity

The proponents can produce a total of 178 units of Pizza dips a day or 318 units

of spicy chicken dips and 450 units of spicy beef dips. Although some processes does not

necessarily needs to be repeated upon the preparation of the next batch. Also, the

proponents can also exceed the serving amounts of 30 units per batch up to 50 units per

batch depending on the demands for the product. Given this flexible capacity, the

proponents would have no problem with catering to the demands of the customer. The

proponents would only need to prepare a next batch if the supply for the first batch

already reached its minimum inventory amount and if there are still any market for the

day. These conservative step is done to minimize leftovers and to have an efficient

inventory system.

45
Business Location

Our first location will be on De La Salle University Dasmarinas. This location

would be ideal for us to test our newly developed product since the market there is also a

student like us. We can ask the students to give us feedback about our product. This will

help us to improve our dips.

Second location would be at different bazaars, this will help us to gain experience

on how to manage and run a business outside the school. The partnership is planning to

join bazaars at world trade center, Robinsons Las Piñas, Robinsons General Trias , Evia

and other Christmas Bazaars by joining different bazaars we would be learning hands on

experience.

Dipsidoo’s third location will be on malls, by putting a store in a mall we could

determine how competitive our product is. Currently, the proponents are eyeing to get an

agreement with any mall that would have a good market for the product.

46
Figure 15. Plant/ Business Layout

47
Table 9. Building Facilities and Utilities

Equipments Brand Price

Griller Toaster Kyowa Php, 750

Slice Bread Toaster Kyowa Php, 650

Microwave Hanabishi Php 3,000

Induction cooker Scarlett Php 1,000

Utensils/Kitchenware ----- Php 3,000

Stall ----- Php 10,000

Cooler Coleman Php 3,500

Total Cost 21,900

Production Schedule and Labor Requirements

The proponents have decided to work for 8 hours a day for 6 days having a total

of 192 Hours per month. A minimum of one worker shall be operating the kitchen and

one worker operating the cashier. Worker A shall be responsible for marketing the

product if there are no customers and help worker B during the peak hours of the

business. A total of 5 task have been divided for the workers, preparation of ingredients,

cooking, packing, and serving. Also the 3 workers should be interchangeable and capable

of doing the assigned tasks of other workers in case of emergencies or cases when one of

them is not available.

48
Table 10.
Labor Requirements

Proponents Assigned

Task/Process Worker A Worker B Worker C

Preparation X X

Cooking X

Packing X X

Marketing/Promoting X

Serving X

Taking of orders X

49
Production Cost

Table 11. Spicy Dips Costing

(Assuming 30
units is
Spicy Cheese produced per
Dips batch)
Cost per Cost per Req.
order Weight gram g/unit Cost per unit Cost per batch
Chicken 160 1000 0.16 20.4 3.264 97.92
Cheddar 165 500 0.33 20.4 6.732 201.96
Eden 118 440 0.27 14.4 3.861818182 115.8545
Creamcheese 680 2000 0.34 14.4 4.896 146.88
Cyenne 49.5 26 1.90 0.36 0.685384615 20.56154
Garlic ranch 200 1000 0.20 9.6 1.92 57.6
Milk 72 1016 0.07 40.44 2.865826772 85.9748
Beef 240 1000 0.24 15 3.6 108
Chicken 24.23 726.751
Beef 24.56 736.831

50
Table 12. Pizza Dips Costing

PIZZA DIP
Cheese Base Cost per order Weight Cost per gram Req. g/unit Cost per unit Cost per batch
Cheddar 165 500 0.33 11 3.56 106.821
Mozarella 320 1000 0.32 20 6.4 192
Eden 118 440 0.268181818 11 2.89 86.81045
Creamcheese 680 2000 0.34 13 4.42 132.6
Milk 72 1016 0.070866142 37 2.59 77.64094
Cheese base total 91.10 19.86 595.8724
Tomato Sauce 80 1000 0.08 18 1.44 43.2
Dip base total 21.30 639.072

Table 13. Toppings costing

Cost per Weig Cost per Req. Cost per Cost per
Toppings order ht gram g/unit unit batch
Bacon 90 150 0.60 6 3.6 108
Pepperoni 36.92 100 0.3692 10 3.69 110.76
Pineapple
chunks 22 98 0.2245 10 2.24 67.34694
Bellpepper 150 1000 0.1500 10 1.5 45
Ham 67.5 225 0.3000 5 1.5 45
Beef 240 1000 0.2400 10 2.4 72

51
Table 14. Consolidated Pizza Dips Cost

Flavors Components Cost per unit Cost per batch


Pepperoni Dip base total + Pepperoni 24.9944 749.8323994
Bacon Dip base total + Bacon 24.90241331 747.0723994
Hawaiian Dip base total + Ham & Pineapple 25.04731127 751.4193382
Pure beef Dip base total + Beef & Bellpepper 25.20241331 756.0723994

Table 15. Snacks Costing


Amount Cost per Amount per Cost per Total
Snacks per order order serving serving Packaging Cost
Toast Bread
(Slices) 17 52.95 2 6.23 2.7 8.93
Nachos(Grams) 420 130 42 13 2.7 15.70
Tortilla (Piece) 12 101 1 8.42 2.7 11.12

Table 16. Packaging Costing

Packaging Per piece Cost Per batch

Cup 1.4 42

Cover 1.25 37.5

Nacho 5 2.7 81

Packaging total 5.35 160.5

52
Table 17. Variable Factory Overhead
Amount per Cost per Amount used per Cost per Cost Per
order pack serving serving batch
Tissue 1600 150 5 0.47 14.06
Plastic
250 150 0.33 0.20 5.94
Gloves

Table 18. Fixed Factory Overhead


Fixed Overhead Cost Usage
Electricity 200 1 Week
Ice 300 1 Week
Rent 250 1 Week
Transportation 500 Monthly
Mask 25 Weekly

53
Chapter 5

Marketing Plan

This chapter will establish and integrate all its sales effort and marketing to project

consistent image of the partnership that everyone in the organization should both

understand and support.

Marketing Environment

Since Dipsidoo is relatively new to the market and presenting a new concept of

dips as the core product for their snacks, it would be difficult to earn the market’s

acceptability of the product and gain market shares against well-known brands like

Nacho King and cheaper alternatives sold through mobile stalls. The product’s edge

against this two threats would be its market positioning of being a high-quality deluxe

snacks with a slightly lower pricing as compared to popular brands like Nacho King.

Target Market

The product would be segmented as a high-quality pleasure food. The proponents are

currently aiming for students who love spending their free time eating snacks and are

from the socio economic classes’ b and c. The proponents primarily targeted this segment

because the stall would be mostly located within the campus of DLSU-D. Referring to

Figure 17. Psychographics, the top 5 traits that most of the DLSU-D students would have

are the following; music lover, home person, sporty and family oriented. Although if the

54
business successfully transcends its location in malls, target market may shift to its

secondary target market which is financially stable people with the cravings of prestige

dishes aged 16~40 who loves to eat pizza and snacks.

Market Study

According to Businesscasestudies.co the purpose of market study is to gather data on

customers and potential customers. It explained the detailed description of the research

design used on how the research was made, the data gathering procedure and the

statistical technique.

Objectives of the study

1. To determine the psychographic profile of the target market

2. To determine the customer’s buying power and buying patterns towards their

food.

3. To determine what drinks and snacks would the customers like to go with the

dips.

4. To determine the customer’s willingness to buy the product.

5. To determine the acceptability of the product to the market.

6. To gather data that would allow further improvements for the product

55
Research design

The partners used a descriptive type of research by identifying the market potential of the

whole DLSU-D market by determining a good amount of respondents that can represent

each of the market in order to classify the acceptability and profitability of the product

and focus on further improvements to develope a more competitive product.

Research Methodology

The partners used descriptive research method to identify the market potential of the

whole DLSU-D population by utilizing data collection and analysis techniques that yields

report concerning the measurements of variation and correlation of the preferences of the

respondents.

The survey questionnaire contained data such as: Daily allowance, psychographics, pizza

preferences, eating habits, spending habits, willingness to purchase the product,

evaluation of the dips, and price preferences etc.

Population and sample size

The researchers used the number of enrollees for the school year 2015-2016 2nd semester

of DLSU-D. The population based from the accounting office of DLSU-D is 13,217. Out

of the 13,217 students, 296 were chosen as the sample size thus having a margin of error

of 5.75% and a 94.25% confidence interval.

56
In order to gather data from the market effectively, the researchers opted to use self-

administered questionnaires gathering a mix of quantitative and qualitative data. The

method that the researchers utilized are stratified random sampling, and convenience non

probability sampling. To ensure the diversification of students, the researchers first opted

to survey classes at random times from neutral grounds thus avoiding getting respondents

from the same colleges. The researchers assumed that DLSU-D’s MTH Court and

Ugnayang La Salle would be a good neutral ground for the colleges because of the

student’s P.E class which is a part of every course’s curriculum. After gathering

respondents from the two locations, the researchers then randomly pick out available

professors and ask permission to survey their next class.

Results and Discussion

There are two hundred ninety six people in De La Salle University- Dasmarinas was

randomly selected to take part of the survey this represent the whole population of

DLSU-D

57
Figure 16. Allowance per day

5%
15%

0-100PHP
22%
101 -200PHP
201-300PHP
301-400PHP

58%

For the first survey question, “allowance per day”. Out of 296 respondents, 15% or 45

respondents answered PHP0-PHP100, 56% or 166 respondents answered PHP101-

PHP200, 21% or 63 respondents answered PHP201-PHP300, 5% or 14 respondents

answered PHP301-PHP400, and 2% or 7 respondents answered PHP400 and above.

58
Figure 17. Psychograpcics

Music Love

Home Person

Family Oriented

Outgoing

Sporty

0% 10% 20% 30% 40% 50% 60% 70%

As shown on the bar graph above; music lover, home person, outgoing, family oriented

and sporty are the top five traits answered by the respondents. To put this on percentage;

45% are sporty, 46% are outgoing, 45% are family oriented, 48% are home person and

62% of the population are music lover. These comprises psychographics of the whole

population of DLSU-D.

59
Question 1: Do you eat pizza?
Figure 18.

2%
0%

YES NO

98%

For the 3rd survey question, “Do you eat pizza?. As to the respondents eating

preferences, 98% or 288 respondents answered that they are eating pizzas and on the

other hand, 2% or 5 respondents said that they does not eat pizza.

60
Question 1. 1. How often do you eat pizza?
Figure 19.

32%
Once a week
Twice a week
50%
Thrice a week
Others

6%

12%

Question 1.1 (For those who answered “Yes”), in this graph you can see the behavior

patterns of the total respondents towards eating pizza. In relation, 50% or majority of the

respondents eat pizzas once a week, 12% of the respondents eat pizzas twice a week,

17% of the respondents eat pizzas thrice a week, and 32% of the respondents answered

others.

61
Question 1.2 What is your favorite Pizza flavor?
Figure 20.

1%

17% 18%
Pepperoni
Margherita
6% Hawaiian
Beef
21% Cheese
Bacon
24% Others

13%

For the 5th survey question, “What is you favorite pizza flavor”. The most preferred

pizza flavor is Hawaiian which covers 51% of the population, next to the respondents

flavor preference is Pepperoni pizza flavor which is 37% followed by Cheese pizza flavor

that is 45% , Bacon pizza flavor which is 35%, Beef pizza flavor which is 27%,

Margherita pizza flavor which is 13%, and “other” pizza flavors have the least pizza

flavor preference which is down to 1% of the whole population of DLSU-D

Question 2: How often do you eat snacks in a day

62
Figure 21.

12:01am to 6:00am

6:01pm to 12:00mn MORETHAN TRICE


THRICE
TWICE

12:01pm to 6:00pm ONCE


N/A

6:01 am to 12:nn

0 50 100 150 200

For the 6th survey question, “how often do you eat snacks in a day?’ Out of 296
respondents who eat snacks every 6am-12pm, 149 of the respondents eats once, 60 of the
respondents eats twice, 8 of the respondents eats thrice, 8 of the respondents eats more
than thrice, and 66 doesn’t eat snacks from 6am-12pm. The respondents who eat snacks
from 12:00pm-6:00pm, 132 of the respondents eats once, 96 of the respondents eats
twice, 26 of the respondents eats thrice, 13 of the respondents eats more than thrice, and
21 of the respondents doesn’t eat snacks from 12:00pm-6:00pm. The respondents who eat
snacks from 6:00pm-12:00am, 145 of the respondents eats once, 57 of the respondents
eats twice, 15 of the respondents eats thrice, 13 of the respondents eats more than thrice,
and 59 of the respondents doesn’t eat snacks from 6:00pm-12:00am. The respondents
who eats from 12:00am-6:00am, 82 of the respondents eats once, 17 of the respondents
eats twice, 10 of the respondents eats thrice, 6 of the respondents eats more than thrice,
and 171 of the respondents doesn’t eat snacks from 12:00am-6:00am.

63
Question 2.1 - How much do you spend for your snack?
Figure 22.

10%

9%

40% Php 0 - 50
Php 51 - 100
Php 101 - 149
Php 150 and above

41%

For the 7th survey question, “How much do you spend for your snacks?”. Out of 296

respondents, 40% or 118 respondents spend PHP0-PHP50 for their snacks, 41% or 120

respondents spend PHP51-PHP100 for their snacks, 9% or 25 of the respondents spend

PHP101-PHP149 for their snacks, and 10% or 30 of the respondents spend PHP150 and

above for their snacks.

64
Question 3 Have you encountered any product that is similar with our pizza dips?
Figure 23.

3%

YES
NO

97%

According to the results, 32% of the respondents answered that they have already

encountered products similar with pizza dips, and 68% answered that they haven’t

encountered products similar with our pizza dips.

65
Question 3.1 “where did you encounter the similar product?”
Figure 24.

Mall

100% of the respondents that claimed that they found a similar product answered that

they were able to try the similar product at the mall. The responded didn’t specified the

exact stall or restaurant where they encounter the similar product.

66
Question 4: Would you buy our product

Figure 25.

4%

YES
NO

96%

For the question “Would you buy our products?” 268 of the 296 which is 90% of the

total population of DLSU-D answered “Yes” while the remaining 28 which is 9% of the

population answered “No”, due to the reason of affordability.

67
Question 4.1: How much are you willing to pay for our Pizza Dips?

Figure 26.

3% 3%

16%

0-25
26-50
51-75
76-100

78%

For the 12th question “how much are you willing to pay for our Spicy Cheese Dips” Out

of 296 student respondents 169 answered that they are willing to buy the product if the

price range is 0 to 25 while 99 answered 26 to 50 pesos and 20 responded answered 51 to

75 pesos and the remaining 4 students answered 76 to 100 pesos and the another 4

students is willing to buy the dip at the price of 100 and up.

68
Question 5: What snack would you like to go with our dips?

Figure 27.

6%
15%

Breadstick
Tortilla chips
Nachos
27%
Others
52%

For the 13th question “what snacks would you like to go with our dips?” 67 students
answered that they would prefer bread sticks and 121 students for tortilla chips, while
majority of the respondents( 236) answered nachos and 25 respondents said they would
prefer other.

As shown in the results above, Nachos is the preferred snack that most respondents have
choosen, which covers the preference of 79% of the entire population of DLSU-D and
67 students which is 24% of the population answered that they would choose bread sticks
while 121 students have chose tortilla chips which is 41% of the DLSU-D population,
and 25 respondents said they would prefer others.

69
Question 5.1: What drink would you like to go with our dips

Figure 28.

Others 5

Coffee 14

Tea 22

Series 1
Lemonade 167

Soft drinks 75

Iced tea 169

0 50 100 150 200

As shown in the results 169 of the student respondents answered iced tea and 167 would

choose lemonade and 75 students answered softdrinks while the minority would rather go

with tea (22 respondents), Coffee (14 respondents) and the remaining 5 said others.

Question 6: Evaluation of the product (PIZZA DIPS AND SPICY PIZZA DIPS)

70
Figure 29.

PIZZA DIPS

Pricing

Texture
N/A
Packaging
Excellent
Very Good
Convenience
Good

Appearance Fair
Poor
Smell

Taste

0 50 100 150

According to our 295 respondents taste , 2 answered poor while 12 s answered fair, 97 in
good, 108 in very good and 77 at excellent and in smell 18 answered 18 in fair, 104 in
good, 117 in very good and 55 in excellent plus 2 more respondents in N/A. We also
asked them about the appearance of the product and 28 of the students answered that it is
far, 109 in good, 100 in very good, 58 in excellent, but when it comes to convenience we
received a very good feedback from the respondents 113 answered that it was very
convenient for them to eat the pizza dip while 97 students said it was good, 58 in
excellent, 18 in pair and only 1 answered that it was poorly convenient. Packaging is one
of the big challenge for us since it is hard for us to get a quality and cheap packaging we
just used a paper cap and 96 respondents answered good, 97 in very good, 58 in
excellent, 25 in fair, 11 respondents answered N/A and 3 in poor. 104 of the respondents
says that the pizza dip texture is very good while 98 respondents says that it is good and
74 answered excellent and only

71
Figure 30.

SPICY PIZZA DIPS

Pricing

Texture

N/A
Packaging
Excellent
Convenience Very Good
Good
Appearance Fair
Poor
Smell

Taste

0 20 40 60 80 100 120

According to the respondents taste, 3 respondents answered poor, 18 in fair, 97 in good,


99 in very good and 71 in excellent while 6 respondents answered N/A and we also asked
them to rate the smell of the spicy chicken, 25 respondents answered in fair while 99
people answered in good and very good, 64 in excellent and 7 in N/A. Based on the
appearance of the product, 28 answered in fair, 106 in good, 90 in very good, 63 in
excellent, 6 in N/A, while 1 respondents said that the appearance of the product is poor
but when it comes to convenience we receive a good feedback from the respondents. 101
answered in good, 106 in very good and 59 in excellent while 8 respondents answered in
N/A. Our packaging is currently temporary but 106 respondents answered that the
packaging is very good, 100 in good, 62 in excellent, 29 in fair, 2 in poor and 16 in N/A
and when it comes to the spicy chicken texture 98 respondents answered that it was good,
87 in very good, 79 in excellent 22 in fair and 8 in N/A. The pricing is the same as the
pizza dip, a bit high than normal and it cost 75 to 120 pesos.

72
Market Strategy

This section intend to establish the fundamental goal of increasing sales and achieving a
sustainable competitive advantage of the partnership and to satisfy the need of the
customers under its target market.

Product

The partnership aims to position the product as deluxe dips for the socioeconomic class

b and c. The proprietors had created two variety of dips that come up with six different

flavors with all cheese base. To market the 98% population of DLSU-D who are pizza

enthusiast, the proprietors retail six flavors of pizza dips naming; Hawaiian Pizza dip,

Pure Beef pizza dip, Pepperoni Pizza dip and Bacon pizza dip. To cater the remaining 2%

of the population who does not eat pizza, the partnership also sell Spicy dips naming;

Spicy pure beef and spicy chicken dips. In line with this, the product will be compatible

with a variety of snack such as nachos, tortilla and toast bread. According to the results,

79% of the population of DLSU-D prefer nachos and 60% of the population also choose

tortilla chip as a snack accompany with the preferred dip.

Considering the different taste and preferences of the target market as resulted by

the analysis of the survey, 90% of the population of DLSU-D are willing to buy our

product in regard with the satisfaction of the taste, smell, appearance, convenience and

the texture of the product. One of the major characteristic of the product is that, it

73
is serve with high quality and served with sizeable portions that makes a reasonable price

to the target market.

Price

The proprietors intend to offer the product at an accessible price for upper and middle

classes. The price of the product was at premium / skimming prices and opted to sell the

dips at the price Php 60.00 and the snacks such as Nachos, Tortilla and Toast shall be

sold at the price of Php 25,20 and 15 respectively. The approaches used to determine the

selling price of the product are cost-based pricing and competition-based pricing using

these pricing strategy, the partnership would be able to support and ensure the pricing

competency and the product’s market value. Considering the market positioning of being

a highly-quality deluxe snacks it has slightly lower price as compared to popular brand

like Nacho King.

As shown in the result of the survey, only 26% of the population in DLSU-D

would buy our product in the price range of Php50.00 to Php 75.00. Thus, the price may

still be subject to change depending on many factors such as; packaging, ingredients,

servings and labor. Etc.

74
Place

The partnership’s location is typically a prime consideration in customer’s store choice,

the proprietors opt to promote the exposure of the business and the product itself by

joining school bazaars and emplacement among shopping centers like Robinsons Imus,

Robinsons General Trias and Robinsons Las Pinas.

As shown in the result of the survey, 68% of the total population of DLSU-D haven’t

encountered any or similar product before in the market. To cater those, the partnership

will be accessible to the target market by actively participating bazaar inside and

outside the school premises.

Promotion

The proprietors will utilize direct marketing through this, it allows proprietors to directly

communicate with the target market.

The company will be accessing online advertising by using Facebook adverts, Twitter

Ads and Instagram short videos and photos. We’ll be also handing out printed ads such

as flyers and posters that will be put on public places to make the business and the

product itself familiar to the public. Also to acquire more brand recognition, we’ll be

plugging the product in newspapers and magazines corner with the consideration of the

target market and accessibility of the product to promote social awareness.

75
Chapter 6

Financial Plan

Production Budget

The proponents have created a production budget based on the average number of units

sold on their market test during the Lasallian festival held on April 16-19 located at the

swafo parking of DLSU-D. The daily units sold are as follows; Spicy Beef Dip – 14

units, Spicy Chicken Dip – 11 units, Hawaiian Pizza Dip – 7 units, Pepperoni Pizza Dip –

6 units, Pure Beef Pizza Dip – 10 units, Bacon Pizza Dip – 11 units, Nachos – 48 units,

Toast – 26 units and finally Tortilla with 37 units a day. The tortilla was not available

during the lasallian festival so the proponents have estimated it to be in the middle of the

nachos and toast, thus the 37 units.

The proponents are scheduled to have a 6 day bazaar at school from the months of

august, September, November, December and January. While a 1 month bazaar for the

months of October and February. An assumption that a 6 day bazaar would be held

somewhere was made for the months of March, April and May.

To easily monitor the sales of the proponent’s core product and its byproducts, the

proponents categorized the Spicy Beef Dip, Spicy Chicken Dip, Hawaiian Pizza Dip,

76
Pepperoni Pizza Dip, Pure Beef Pizza Dip and Bacon Pizza Dip as Dips and Nachos,

Toast and Tortilla are categorized as Snacks.

Overall, for the months of August, September, November, December, January, March,

April and May the company is estimated to sell a total of 342 units of dips and 659 units

of snacks per month. As for the months of October a total of 1,767 units of dips and

3,406 units of snacks per month, while for the month of February a total of 1,596 units of

dips and 3,076 units of snacks are estimated to be sold.

Direct Labor Budget

The proponent expects to have at least 3 for its operation to be stable. Each worker shall

be paid with a labor rate of 250 a day. For the month of August, September, November,

December, January, March, Apri and May, the workers shall cost a total of 4,500 per

month. While for the months of October a total of 23,250 shall be paid and 21,000 for the

month of February. A total of 80,250 pesos is budgeted for the whole year of operation.

77
Direct Materials Budget

The proponents have created a budget for the following ingredients and materials:

Chicken, Cheddar, Eden, Creamcheese, Cyenne Pepper, Garlic Ranch, Milk, Beef,

Mozarella, Bacon, Pepperoni, Pineapple Chunks, Bellpepper, Ham, Beef, Nachos, Toast,

Tortilla, Tissue, Plastic Gloves, Mask, Nacho 5 Packaging (Packaging for snacks) and the

Packaging for the Dips.

The proponents made different accounts of a single direct material, which uses different

amounts depending on the variant for a more accurate, estimated of expenses.

If the projected demands are met, Dipsidoo is estimated to spend a total of 16,958.22

monthly for the months with a 6-day bazaar, 87,616.47 for October and 79,138.36 for

February. For a year of operation, a total of 302,421.60 is estimated to be spent for the

direct materials.

Factory Overhead Budget

The company included the following accounts on its Factory Overhead Budget:

Electricity Expense, Depreciation, and Ice. The equipment, utensils and booth are

expected to have a zero value by the end of May. Each depreciable item’s value upon

purchase are divided by 10 months (August-May) in order to identify how much it

depreciates every month. The budget for the Ice is estimated to be 300 pesos per week

and so the months of October and February a total of 1,500 is estimated to be spent.

78
A total of 2,100 Factory Overhead is estimated to be spent for the months with a 6-day

bazaar and 3,100 for the months with a one-month bazaar. Overall, an annual total

amount of 23,000

Electricy was assumed to be 200 pesos per month while for the months of October and

February, electricity expense is zero because it is already inclusive of the bazaar fee paid

at Robinsons.

Cost of Goods Sold

The proponents have consolidated the Direct Materials Budget, Direct Labor Budget, and

Factory Overhead Budget. The proponent assumes to have zero ending inventories. A

total of 23,558.22 are expected to be spent for the months with a 6-day bazaar and

113,967.47 for the month of October and 10, 3238.36 for the month of February.

Operating Expense Budget

Bazaar fees at DLSU-D are expected to be a standard of 250 a day or 1,500 for 6 days.

For the month of October and February, the proponents are expected to pay 1693 a month

for the rental space. It is computed as 22,000 peso monthly rent divided by the number of

tenants (13).

The proponents have also given a 500 pesos budget for the transportation expense for the

purchaser of the materials and ingredients required by the operation.

A total of 2,000 operating expense is estimated for the months with a 6-day bazaar and

2,193 for the month of October and February.

79
Income Statement

Given the assumption that the average sales from the previous market test shall be the

constant number of sales per month, each month with similar number of operating days

are expected to have similar Net sales, Cost of Goods Sold, Gross Profit and Net Income

Dipsidoo is expected to have an annual net sales of 612,708.75 and 405,671.60 Cost of

Goods Sold resulting to a gross profit of 207,037.15. Less the Operating Expense of

20,386 a total net income of 186,651.15 is expected after the end of May 2017.

Projected Cash Flow

Dipsidoo shall only accept cash for the payments of the customers thus having identical

amounts of cash sales with the sales budget per month. A Cash Sales of 34,357.50 for

months with 6-days bazars and 177,513.75 for October and 160,335.00 for February. An

Initial investment of 26,000 is estimated by the proponents a 16,000 allowance for the

materials and equipment and 10,000 allowance for the first batch of ingredients. Any

proceeding purchase shall then be paid through the company’s cash on hand. The

proponents have assumed that every fixed asset purchased by the company shall last for

the remainder of the year’s operation.

By the End of May the Proponents have estimated to have a total cash balance of

212,651.15

80
Balance Sheet

The only current asset of the company for the period ended August 2016-May2017 shall

be its Cash on Hand based on the budgeted cash flow and have a fixed asset of Booth,

Equpment and Utensils (Inclusive of Microwave, Kitchenware and Toaster).

By the end of the year the initial investment of 5,200 for each of the 5 partners is

expected to grow up to 40,770.37 per member. A total Parnet’s Equity of 212,651.15

pesos.

Financial Ratio and Analysis


Payback Period

Payback period = Initial Investment/Annual Cash Flow

Payback period = 26,000/212,651.15

Payback Period = 0.12 years or 1.46 months. Approximately 2 months of operation

81
Table 19. Weighted average contribution margin computation

Weighted Weighted Weighted


Average Average average
Total Selling Average Selling Variable contribution
Dips units Weighted Average Price Cost price Cost margin
Spicy Beef
Dip 1001.25 0.08 60.00 16.94 4.85 1.37 3.48

Spicy
Chicken Dip 1001.25 0.06 60.00 16.94 3.78 1.07 2.71
Hawaiian
Pizza Dip 1001.25 0.04 60.00 16.94 2.34 0.66 1.68
Pepperoni
Pizza Dip 1001.25 0.03 60.00 16.94 1.98 0.56 1.42
Pure Beef
Pizza Dip 1001.25 0.06 60.00 16.94 3.51 0.99 2.52
Bacon Pizza
Dip 1001.25 0.07 60.00 16.94 4.04 1.14 2.90

Snacks
Nachos 1001.25 0.28 25.00 16.94 7.12 4.82 2.30
Toast 1001.25 0.15 15.00 16.94 2.31 2.61 -0.30
Tortilla 1001.25 0.22 20.00 16.94 4.39 3.72 0.67
Weighted Average Weighted Average
selling price 34.31 Contribution Margin 17.38

82
Break Even Value

Given that the company’s only variable cost is its direct materials, the direct materials for

august was totaled and divided by the total units of every product. After dividing the

weighted average by computing the unit’s sales of the product with the total unit’s sales

of all the products, the weighted average selling price was then achieved by multiplying

the selling price with the weighted average. While the Weighted average variable cost

was computed by multiplying the average cost with the weighted average. Then, the

weighted average selling price was subtracted by the weighted average variable cost thus

computing the average contribution margin. By totaling the average contribution margin

the contribution margin was then computed.

Note: The assumption of using the average cost of a whole month’s direct materials was

preferred because some variable costs that are also applicable to other products.

Breakeven Point = Fixed assets/weighted average selling price – weighted average

variable expenses

Breakeven Point = 16,000/17.38

Breakeven Point = 921 units.

Breakeven Point = 921 units * Weighted Average Selling price (34.31)

Breakeven Point = 31,599.51

83
Profitability Ratios

Gross Profit Margin = (Revenue – COGS) / Revenue


Gross Profit Margin = (612,708.75 – 405,671.60) / 612, 708.75
Gross Profit Margin = 0.34

Net Profit Margin = Net Income / Net Sales


Net Profit Margin = 186,651.15/ 612,708.75
Net Profit Margin = 0.3046

ROI = (Gain From Investment – Cost of Investment)/ Cost of Investment


ROI = (212,651.15 – 26,000)/26,000
ROI = 7.18 or 718%

84
Chapter 7
Management Plan

Form of ownership

Dipsidoo Company is a General partnership. The partnership was established by the

Entrepreneurial students of De La Salle University – Dasmariñas, owned by Joannie

Suzaine T. Lualhati, Ray Christian P. Rosell, Ma. Mikhaela S. Sanchez, Dan Marlon

Isaac and Romiko Vidanes. All parties share the legal and financial liability of the

partnership equally and personally responsible for the debts the partnership that might

occur. Profits are shared equally, in principle, but the specifics of profit sharing will

almost certainly be laid out in a partnership agreement.

Profile of the partners

The company was led by Joannie Suzaine T. Lualhati - the president of Dipsidoo

Company. She was born on December 7, 1996 - 19 years old and studied her secondary

education at Potters Place school in El Nido Palawan. Currently studying Bachelor of

Science of Entrepreneurship at De La Salle University - Dasmariñas. With her good

communication skills and influencing skills, she can be able to contribute to the

company’s success.

The Company’s Public Relation manager is Ma. Mikhaela Sanchez. She was

born on October 14, 1996 - 19 years old and studied her secondary education OB

85
Montessori (Operational Brotherhood) in Las Piñas. She is currently studying Bachelor

Science major in Entrepreneurship at De La Salle University - Dasmariñas. Her skills in

communicating with different types of people with the means of public relation and

technology will help the public awareness of the company’s product.

The Company’s Finance manager is Ray Christian Rosell. He was born on

December 22, 1996 -19 years old. Studied his secondary education at Notre Dame of

Trece Martires City. He is currently taking Bachelor of Science in Entrepreneurship at De

La Salle University-Dasmariñas. With his good skill in regards to numerical and

financials of a company, he can be able to contribute to the good financial performance of

the company.

The Company Operation’s manager is Romiko Vidanes. He was born on June 19,

1991 - 23 years old. He studied his secondary education at National University, he is

currently studying at De La Salle University-Dasmariñas taking Bachelor of Science

major in Entrepreneurship. His skills in managing the operations and in production will

help the company for the better development and extensive production of the products.

The Marketing and Advertising manager is Dan Marlon Isaac. He was born on

July 26, 1995 - 21 years old and lives in Bacoor Cavite. He studied his secondary

education at Casa De San Miguel and he is currently studying at De La Salle University-

Dasmariñas taking Bachelor of Science major in Entrepreneurship. With his creativity,

editing and good communication skill to any type of customer to the public. He can be

able to contribute to the company’s success

86
Organizational Structure

An Organizational Structure is the framework which shows how the top level

management is organized, It's the operating manual that tells members how the

organization was put together and how it works. More specifically, the structure describes

how decisions are made.

An organizational structure serves as basis on how a company will be managed. It is also

a clear reflection of the connections of each individuals that will serve as leaders and

foundation of the company.

87
Figure 31. Organizational Chart

88
Job Description and Function

Each member of the company should know their responsibilities in order for the

company to run effectively and efficiently.

President - The role of the president serves as a good leader in internal and external

environment of the business and bears significant responsibility, accountability, and

authority within the organization. The president frequently represents the organization in

civic, casual and professional responsibilities. However; the president is responsible for

decision making and solving problem that the company might encounter.

Finance Manager - The Vice President for Finance will be responsible for all the

day to day transactional accounting procedure of the business. It primarily in charge in

costing, budgeting, keeping and maintain the financial record and analyzing the current

financial performance of the company. The Vice president for finance will also be

responsible for the development of the company’s financial management strategies and

contribute to the development of the organization’s strategic goals

Marketing and Advertising Manager - The Vice President for Marketing has

overall responsibility for growing the business revenue, increasing market share and

contribute to the company’s growth and profitability. It also plan campaigns and develop

communications material to promote products and services to customers and prospects.

Through this, it should speed up the business growth and the product will be more

efficient and accessible in the market.

89
Operations Manager - The Vice President for Operation is in charge of production

and operational procedure and processing that progress and support the objective of the

company. The Vice President for Operation is responsible for production plans and

coordinates the development and manufacture of all products made by the company.

Creative Public Relations Manager- The Vice President of Public Relation is

responsible responsible for coordinating an active public relation and generating the

positive awareness of the public through social media and to the general public. Thus,

incharge and responsible for active and continuous participation with and within a

community to maintain a good relationship between company and community. The Vice

President for Public Relation involve in dealing and communicating with the news media

when seeking publicity and with regard to societal (public) policies, action and legislation

to maintain a good image and credibility of the company.

90
General Administrative Programs

General Administrative Programs are partners’ set of rules and restrictions within the

company that will take place consecrate of inattentive and poor performance of a partner

that restrain the efficiency of itself’s performance in the business.

 -The company will only allow four absences in every meeting, unless the

member has a valid reason for being absent. First absent will be given a warning.

Second absent will be given a penalty of 100 pesos. Third absent will be given a

last warning and penalty of 500 pesos. Fourth absence will result to eviction to the

company's business.

 Failure to appear during duties with invalid reason will have penalties. First

absent will result to a penalty of 200 pesos. Second absent will result to a penalty

of 400 pesos. Third absence will result to a penalty of 600 pesos. Fourth absence

will result to a penalty of P1000 and five absent will result to eviction to the

company's business.

 The company will also not consider late attendance during significant meetings,

this will result to penalties as well. Late reasons with acceptable reasons are

tolerated, for example: unexpected events that are beyond your control like,

accidents, unexpected heavy rain condition and etc. Hence, reasons that cause the

partner to be late with obviously unacceptable reasons will result to 50 pesos

payment on its first late, the second will be 100 pesos and the third will be 150.

91
Fourth late will result to warning and the fifth will be reported at the department

chair and possibly be evicted on the partnership.

 Failure to observe proper behavior and hygiene during duties and meetings are

not tolerated, being a player in the food industry its is important that the food

handler and staff working inside the kiosk/ establisment are observe polite and

with decent image. First attempt to negligence will be given a penalty of 250

pesos, The second will be 350 pesos and conjugated with the warning. The third

failure will be reported at the department and might be evicted at the partnership.

92
Chapter 8

SOCIO-ECONOMIC STUDY

The company’s primary target market includes people 10 to 70. This is furthered

down to social class B and C that wants to experience deluxe products that will suit their

taste.

Population

Cavite is part of Region IV-A otherwise known as the CALABARZON area. It

has a total land area of 142,706 hectares representing 2.7 percent of the region’s total

land area and 0.4 percent of the total land area of the country. It is ranked 69th in terms of

land area among 81 provinces in the Philippines. The population of Cavite has increased

tremendously over the last 14 years, breaching over 4 million,

Households

The 2010 Census of Population resulted to an average of 3.71 household size.

This can be interpreted that a household has an average 4 members. The household

sizes are generally high in the rural municipalities. This trend is generally being

observed in the entire country. Families in the urban areas tend to have lesser

number of children, thus, smaller household size. High household size in the rural

areas is driven by strong family ties and extended households. The City of

Dasmariñas has the most number of households and the household size is 3.79.

Meanwhile, the fewest number of household is at Gen. Aguinaldo while its

93
household size is 4.02. In total, there are 932,467 projected number of households

in the province for 2012

Age Group

The young population of the province is at 31.259% while the old population

or the elderly is at 3.517%. Meanwhile, the workforce of the province is at 65.224%.

The richness of Cavite’s industrial sector and economy can be attributed to its

workforce that comprises the majority of its population (Figure 2.3). The senior

citizens ticked at 5.784%. In the national trend, a portion of the population that

belongs to age 15 to 19 (9.625%) and 60 to 64 (1.89%) are considered to be not in

the workforce, though they may opt to work. Those that are aged 15 to 19 are

supposed to be attending schools while some of those in the age bracket 60 to 64

are already retired. The most number of population belongs to age 5 to 9 and the

least number belongs to age bracket 80 and over. The dependency rate of the

province is at 53.32%. This dependency rate translates to 53 dependents for every

100 working population in the province. Among these 53 dependents, 48 are young

dependents and the remaining 5 are old dependents.

94
Religion

Based on the 2000 Census of Population, the province is dominated by the

longest running religion in the country, Catholicism. The start of Catholicism in

Cavite can be dated back in the early Spaniards occupation. Currently, the

prevalence of this religion is exhibited with the presence of century old churches in

various towns of the province. Estimating its membership in the province for the

year 2012, Catholics in Cavite total to 87.20% of the population. The next leading

religion in terms of affiliation is Iglesia ni Cristo that accounts to 3.45%. Other major

religions are Aglipayan, Islam, Protestants Baptists, Born Again Christians and

Jehova’s Witnesses. The province is also home to many Catholic based events like

Fiesta. The population is actively engaged in their religious affiliation and their

involvement has reached that level of getting a seat at different councils of the

government as religious representative.

Labor force

During the 2010 Census of Population and Housing, it was found out that the

provincial workforce is at 71.3279% which is estimated at 2,401,506 individuals in

2012. The latest labor statistics for CALABARZON is updated up to year 2010. In the

year 2010, there are almost five million population included in the labor force.

These values have been in increasing pattern since year 2006. In the contrary, the

labor force participation rate did not show any significant change for the past five

years. This reflects that the proportion of working age population in CALABARZON

is almost stable at 60.00 to 65.00%. This poses lesser threat of having very young or

95
very old population which tends to lessen the workforce, as in the case of other

nations. The CALABARZON employment rate is also stable at around 90.00%.

Despite being high, this is not a good value considering that it is way lower than the

national employment rate of 92.70% in 2010. Employment rate is also higher

among females as compared to male. On the other hand, more males than females

are not satisfied with their current work and tend to look for better or additional

employment

96
Chapter 9

RISK AND CONTROL

Objectives:

a. Identify the common risks associated with the business

b.  Identify the external and internal factors which affect risk for a small business

c.  Identify situations that may cause risk for the business

d.  Implement, monitor, and evaluate a risk management plan

. e. To determine what are the possible problems that the business might encounter

during its operation

f. To determine what are the best possible solution for the inconvenience that the

firm

Risk Management

Risk management applies to many aspects of a business. Almost business is subject to

internal risks (weaknesses) and external risks (threats). Generally, you can control

internal risks once you identify them. However, external risks may be out of your control.

Not all risks come from negative sources. Risks may come from positive sources, or

opportunities. Expansion and growth are opportunities, but they also bring additional risk.

Hence, the ultimate goal is to minimize the effects of risks on your business.

97
External
Rsik
Internal
Risk
Dipsidoo

98
RISK IDENTIFICATION

One of the most important investments you can make in your business is creating a

business plan, especially when identifying risks. Creating a business plan will help you

assess risk areas, those areas impacting the partner’s ability to continue business and to

grow. The continuation of your business, in the event of any risk, should be addressed in

the plan. Determining that could halt, slow, or affect the profit of your business.. A

business plan isn’t something to create and set aside, simply to be used later to obtain

financing. Once completed, the business plan will become your guide, just like a map.

The major risk that identify by the proponents are Internal and External risk. Internal

risk are determined inside the company that are beyond the control of the business’ laws

and rules. Likewise; it includes’ human risk, equipment and information technology

risk. Under external risk are competitions and market risk, business environment and

personal risk.

Internal Risk
Human Risks
The human component of your business is a source of risk. Think about these possible

human risks to your business:

99
 Illness and death. A business owner or employee may be ill for a day or be unable

to work for months. The death of a person involved in a business poses a risk to

continued operations.

 Theft and fraud. Most businesses want to have an honest working environment,

yet theft by employees and employee fraud are major risks businesses face.

Timecard fraud is a risk. Diverting funds to fictitious accounts are accounting

risks.

 Low employee moral. Unhappy employees can cost money through negligence or

through willful acts. For example, an employee who forgets to reorder inventory

is a risk to sales because back orders lead to cancellations.

 Staff turnover or lack of staff. If the business leader is responsible for the

business, or if not sufficient knowledge is spread, and if only one person is

responsible for administration and that person disappears.

Equipment and Information Technology Risks

Older equipment may run slower or require more maintenance than new

equipment. New equipment may require adjustments to work with older equipment.

Worn parts may cause damage or cause company vehicles to break down. Downtime

from physical damage or outdated systems may slow business profits. Most businesses

rely on a computer system to process credit cards. These systems are risks to continued

100
business when they are not working, especially if no backup plan exists. Lack of

administrative controls may lead to downtime, in addition to fraud and theft.

Other Internal Risks Another source of risk might be the physical assets of the

business. Phone lines and other utilities are risks to a business. The appearance of a

building such as its walls, windows, and doors may require maintenance to continue

drawing customers. Injuries and damages may be caused by your business or your

business may receive damage. For example, a storm may cause damage to a business or a

business may cause damage by selling a faulty product. Either way, injuries and damages

come with a cost. Cash flow is the lifeline of a business. . In addition to this, it will also

take into consideration is the “conflict project goals,’ does the project agree with the

political structures and goals the organization?

When unexpected costs affect the ability of a business to meet monthly expenses or

when credit lines are lost, a business may fail. A plan to maintain cash flow is crucial

Financial Risk
According to businessdictionary.com, Financial risk is the probability of loss inherent in

financing methods which may impair the ability to provide adequate return.

 One of the major risk that prononents that proponents should take into

consideration is the “cash-flow management.” This can create a big impact to the

business. Therefore; cash inflows and outflows should be recorded at all times.

 For start up business specifically on small entering enterprises, initial investment

and funding sources are considered risk because it may cause to low returns if

business are subject to bankrupcy.

101
 Corruption may be the most common risk to take into consideration. Corruption

is understood as the abuse of power by acts that generate illegal profit either by

employees or employer which seriously affect legitamacy, confidence and trust

among partners and prevents the achievement of goal of the project.

External Risk
*Competition and Market Risks

Competition can be tough and market changes can make life for your business tougher if

you are prepared to consider the following risk.

 Market changes will cause businesses to change. Competitors advertise sales,

wholesale costs go up and down, and oil and gasoline prices affect the costs and

those of your vendor.

 Employees may leave and go to our competitor’s shop, this is also one of the big

factor that the proponents must consider

 Rent increases may be caused by increased demand for space. For example, may

be able to lease space more cheaply in a building/area under construction, but

when the lease is up for renewal, an increased demand for space in the vicinity

may result in your rent increasing.

Business Environment Risks

Business environment risk was defined as a risk which can have a material environmental

or environmentally-driven impact on the business associated with the current or planned

use of a parcel of commercial real estate

102
Your community may change as the needs, age groups, spending habits, and incomes of

the population change.

 Frequent extreme weather - We may have increased property costs, more

damage to property and resources, and disruption of power and water. Possibly,

if this happens contact to supplier and personell are uneasy during this time.

 decreased demand - there may be less demand for your goods and services if

they are not environmentally friendly, or competitors with energy-efficient

products may target your customers. It may also be difficult to attract and retain

staff if your business is not sustainable.

 increased costs – The proponents may experience higher costs for energy, water

and other resources. Water restrictions may also affect the business.

Personal Conflict Risk

Personal conflicts are external risks for both business owners and employees.

Families and homes do not cease to exist at the start of a work day because, children

become ill, medical emergencies, or worse, may happen and repairs and maintenance will

be required at home.

For a partner/ owner, involvement in the community creates visibility. However, the

visibility comes with a cost, mainly time. Employees are involved in outside activities as

well. We don’t usually think of outside activities as a risk, but consider how you would

handle this situation.

Even complacency is a risk. Complacency comes from being comfortable. The

business may be successful and has been for a while and may be comfortable with the

103
hours you are working, but this might cause to miss opportunities for growth because

unwanted expendtion of extra effort. Now, multiply the effect of complacency because

complacency also happens to employees.

RISK CONTROL MANAGEMENT AND IMPLEMENTATION

Business work strategies

 Set work hours. Provide the employees with a tentative work schedule and keep

them updated in advance of changes. Use a planner to map out your anticipated

monthly, weekly, and daily work.

 Plan work with a balance. Avoid filling every minute. Allow extra time for

unexpected events. Make sure you balance work with time off.

 Set realistic goals. Setting goals requires time to meet them. Make goals realistic

for your business to avoid overextending yourself, burning out, and putting added

stress on employees and your family.

 Train support staff or an assistant. A written business plan should include how to

deal with the possibility of your disability or death. Train your support staff or

assistant to handle short-term needs. Can a family member or someone else run

the business in your place? Have you named someone to liquidate the business?

Disability insurance may provide for your care and that of the business. Life

insurance can also be purchased in amounts large enough to cover the liabilities of

the business.

104
 Develop a support system. Support systems are vital to businesses and families.

Do you have friends or services that can help your family when you can’t be

available due to work? Think about activities your family does on a weekly basis.

You may need someone to help with these activities, as well with those that are

unexpected. For example, waiting for a plumber or heating repair technician can

take an entire day. Plan your support systems.

Employee Management

Employees are important to the success of your business. Review these tips for managing

your employees:

 Use pre-employment screening. Many business credit reporting agencies and human

resource service providers will help you with pre-employment screening and background

checks. Pre-employment screening is important for legal and insurance purposes. For

example, you need to know if an employee is driving your car but their license is revoked

or they are required to have a device to check for blood alcohol level.

 Provide job descriptions and lists of duties. Communicate job expectations and any

job expectation changes to your employees. While it is important to separate duties, cross

training your staff helps to ease costs in the event someone leaves or the business is short

staffed.

-Provide performance evaluations. Employees should expect evaluations to enhance

their performance. Provide feedback and allow them to comment about their jobs.

105
 Be involved. A business cannot run on its own. Owners who are not present often

find their business runs into problems. Let people know you are present. Get to know

everyone by walking around your business. Talk with customers.

 Audit payroll. Audits should be conducted on payroll systems. Check project

timecards against job sheets for appropriate time submission. Compare timecards to

payroll ledgers and payroll ledgers to the payroll account.

 Reward safe performance. Injuries and damages can happen. Monthly

departmental rewards for avoiding accidents may be less costly than premiums and

damages resulting from carelessness. Safety procedure incentives may raise employee

involvement in the process

. Training programs.

Accounting and Cash Control

Potential for fraud or theft can exist without a separation of duties. The employee who

accepts cash or payments, processes the work, deposits funds, and reconciles the related

account may be tempted to commit theft. Consider setting up an audit trail with one

person accepting and processing payments, another preparing the bank deposit, and

perhaps another for reconciling statements.

Cash payments and arriving bills should be logged or verified by two people. Each

person should count the cash in the presence of the other. This procedure sets up

accountability and provides a record of the activity.

106
Equipment

Equipment that needs to be repaired may interrupt the business operations, but

insurance or service plans may minimize its costs. For example, if the business is

dependent on a induction cooker, a service plan may be a good way to control the risk of

the induction breaking down. Parts for the induction can be expensive and take time to

replace. To be prepared, induction vendors will plan for parts and service based on the

original design they have sold to you. Higher usage may mean more maintenance.

Competition

Identify your competitors. Locate other businesses in the same segment. Gather

information regarding their products and future from information available in the public

domain. Study the areas of their research and how much they have invested. Evaluate

whether these competitors pose a threat to your market position.

Focus on customers. Develop feedback mechanisms to keep track of customer

expectations. Before you decide on a new product to develop, check if it’s going to

satisfy consumers’ needs. View your product through the eyes of the person who’s going

to buy it. Determine what you need to include in order to make sure people prefer your

product over your competitor’s. Maintain balance between technological development

and customer comfort.

107