0

CHAPTER 1

Introduction

I. BACKGROUND OF THE STUDY

In many parts of the world, candles provide the main source of light, other

than daylight. They have a number of advantages in that they are relatively

cheap, self-contained and portable and can thus be used when or where other

kinds of lighting are unavailable.

Today candles have an extensive range of uses. Some individuals use

them as decorations to decorate their environment. They also create an

environment of beauty and romantic endeavors. That is the purpose why side

crafted candles are well-known in the market these days because candle fans

can now select their own design according to the overall look that they want.

Many romantics create candles as their motivation for composing poetry as the

impact of their wonderful and strange playful mind.

Candlestick lights also recommend a sensation of relaxed environment

and comfort. They are even used in aromatherapy because some candles are

exclusively fragrant to provide off wonderful fragrance. This will also help

eliminate distressing smells. Some candles have pest resilient qualities.

 1

Moreover, unique events are really created unique by candles. Wedding desserts

are not finish without miracle candles that keep on losing no issue how many

periods you strike it. In marriages, a candle represents oneness. There are still

important amounts of events being enriched by candles like birthdays, baptism,

weddings and a lot more. They can even be an awesome existing to the ones

you really like.

Candlestick lights are very important to the whole humankind. There are a

lot of advantages that we can get from candles. Aside from lighting our

environment, it is also a well-known method for prayer and relaxation. Each

spiritual team has its own icon for using candles during praise. This has been a

typical exercise way returning from the beginning periods up to the existing.

Therefore, it is also important for us to look returning how candles came to be.

Little information is available when it comes to the record of creating candles.

WHY BUSINESS ABOUT CANDLES ?

Candles are a very popular home décor and gift item, and many

independent candle businesses start up each year. Whether you are a candle

artisan or wholesale distributor, selling candles can be enjoyable and quite

profitable year-round, especially during holiday and major gift-giving seasons.

 2

Before opening a candle business, there are many things you should consider

to ensure your venture is a success. It is a thriving, high-demand market ,

people love quality handmade products and supporting locally owned

businesses here in the Philippines . And uniquely branded candles are some

of the most popular and in-demand home decor items on the market that you

can use in any occasions .

It is easy to start: You don’t need a lot of equipment or space to hit the

ground running—just basic supplies, tools, and a workspace—and learning

the process is quick and easy. Easy to price and sell , you don’t need much of

financial requirement while starting up with a candle business what might cost

you fifty pesos to make you can sell for around a hundred peso , also you can

market your candles through gift stores, craft malls, and farmers markets;

online through outlets or on your own website.

Candle is an important material and is sometimes used in our community.

In our modern times, it is used mainly for its aesthetic purposes and scent. This

study will be conducted in order to know the capabilities of the candle with the

used of old candles , crayon waxes and water to learn the difference of it from

the commercially product candles. By doing this, we could refrain from throwing

old candles , crayon waxes and water after being used, and make use of it as an
 3

material in making candles. The researchers wanted to develop a cheaper and

recycled candle that can be easily made at home with materials that are eco-

friendly, recycled and can be commonly seen. It is easy to make a candle and is

a good hobby. By doing this, we can save money and save mother earth.

Candles are also essential especially during power failures and emergencies.

Research Problem

This study aims to provide or produce a long-lasting candle that is cheaper

than the commercial candles, eco-friendly, and more convenient to use. This

also seeks to determine its effects to the environment, particularly to the house

where it will be used, and especially its possible effects to the people.

Specifically, this experiment seeks to answer the following questions:

1. How can up-cycling old candles help the people around the municipality

of Bayambang?

2. How can provide a reasonable price to costumers by gaining their loyalty

while achieving sufficient profit to finance the business ?

3. How to establish a competitive edge through marketing strategies and to

its innovation ?
 4

Objectives

The study was guided by the following objectives :

1. To ensure quality candles that is affordable to everyone , provide customers

with high satisfaction level .

2. To offer additional job opportunities to the municipality of Bayambang.

3. To make marketing profitable in the field of candle production.

Significance of the Study

The findings of the study will be valuable and significance to environment,

economy, household and future researcher .

 HOUSEHOLD

- this study will help the citizen saving money, for they don't need to spend

money buying expensive candles. Instead they could do it on their self.

 ECONOMY

- this study will help our economy research will be patented and exported to

other countries . It can also be a source of livelihood to other people. And it

will help to the people to be thrifty not spending a too much money/ a lot of

money to buy expensive candle.

 5

 ENVIRONMENT

- This study will help in the conservation of water forms. And you don't need

to spend money to buy expensive candles because we can afford to buy or

use up-cycling candle that it will save money.

 FUTURE RESEARCHERS

- this may serve as basis for future research that they will conduct.

 TO THE RESEARCHERS

- This will help the researchers in determining on how the old candles ,

crayon waxes and water can form another and innovated products .

Scope and Delimitation of the Study

This study aims to produce a candle made from leftover of paraffin wax

from old candles and crayon wax. It will focus on the data and observations

made and produce by the researchers such as the amount of materials added

and mixed to the other different materials and its effects to the area and

surroundings. The primary sources of materials are the leftover paraffin wax from

old candles and crayon wax .

The limitation of this study is only to produce a candle made from recycled

materials, a candle that is environmentally friendly, economic, and high quality .

 6

Definition of Terms

1. Paraffin wax: A wax-like substance obtained form petroleum, use

especially for making candles.

2. Beeswax: A yellowish wax made by bees for building honeycombs, also

used for making wood polish and candles.

3. Laboratory: A room or building in which scientific experiments are carried

out.

4. Experiment: Is to work with instruments and apparatus in a practical

investigation, on the behavior and nature of substances.

5. Wick: Length of thread in the center of a candle, the top end of which is lit

and burns as the wax melts.

 7

CHAPTER 2

ORGANIZATION AND MANAGEMENT STUDY

This chapter provides information about the management of the project

,name of the business ,mission, goals and objectives of the business, business

organization ,organizational structure, job title, description, qualification , status

and also the table of the project .

Management of the project

The proposed business will be successful through the function of

management by planning , organizing , staffing , controlling as organization and

directing the resources to achieve its specific goals and objectives. Attain the

organization goals in an effective and efficient manner . the type of organization

of business chooses sole proprietorship according to (Mutya 2009 ). L.S the

easiest firm of organization and allows full control in the management .

The manager or the owner will be responsible in the business operatives

as a whole one to motivate the employees to work as a team in providing

satisfaction to all costumer . The organization structure of business is composed

of four (4) employees who will be headed by the manager .All the staff of the

proposed business are very much friendly with proper uniform .In this kind of
 8

business cleanliness and safety of the costumer are being offered including

proper attitude of the employees will be strictly observed .

Business name

In putting up a firm either it is a small a large firm , name of the business is

very important because in this part you can easily locate to business . In arriving

at the decision in relation to the location of the plant, the proponents considered

several factors that may affect the course of selection including the strategic

location for the business, accessibility or availability of raw materials, proximity to

the target retailers, and availability of those moderately priced utilities such as

power, water, telephone service and rental cost .

The proponents used the name of the company which is Candelier from

the idea of our experiences . Candlier means that the candle we are offering is

simple yet aesthetic just like in life whenever we go through obstacles and never

giving up on it and every candle has its own story where you can customize your

own candle while telling your own precious story and make it come to life . The

proponents believe that through this name, the firm could be easily remembered

by the customers.
 9

The firm’s name is to be registered and will be used in all its business and

legal terms. The location where the business is to be established is also one of

the most important aspects to be considered in the formation of the firm. In this

study, the proposed business will be situated at Tamaro-Tambac Road

Bayambang , Pangasinan with an area of 85 sq. meters. With the size of the said

location, it is enough to accommodate the business equipment, machineries and

tools.

Figure 1 . shows the logo of the proposed business

Tagline : “ Every CANDLIER has its own story “

 10

BUSINESS ORGANIZATION

A business organization is a group or unit of people working together with

a common objective of profit maximization . However , profit maximization is not

the only objective . It also satisfies human safety , needs and wants by producing

good and services .

The proposed business used is partnership business organization wherein

only not only one person manages the business .The business used this type of

organization for the reason that the business is to be established a small and

easy to manage .

MISSION

 To become a dominant player in the chosen field . Evolve and upgrade

knowledge, products, and services and creating high-quality candles .

 Serving our customers, who enjoy giving unique gifts, in a friendly, caring

and efficient manner.

 11

VISION

 The company envisions of becoming one of the largest distributions with

high quality product of candle in the country. Providing genuine value to

the gift buyer and gift recipient . Caring employees that treat our

customers as valued friends.

GOALS AND OBJECTIVES

1. To ensure quality candles that is affordable to everyone , provide customers

with high satisfaction level

2. To offer additional job opportunities to the municipality of Bayambang.

3. To make marketing profitable in the field of candle production .

 12

ORGANIZATIONAL STRUCTURE

Organizational structure is establishing a clear form of operations that

employees could understand their responsibilities and tasks in alignment with

accomplishing company goals . Hierarchy organization has been chosen as an

organizational structure for the business . The manager serves to coordinate

the activities of the various units and resolve problems that involves in the

business operation .

MANAGER

CASHIER

CREW RETAILERS
DELIVERY
MAN

Fig . 2 shows the organizational structure of the proposed business .

 13

JOB TITLE , DESCRIPTION AND QUALIFICATION

The following are the job titles , description and qualification of the

manpower of the proposed business to help the owner in the success of the

business .

Job Title: Manager

Job Description

The manager is an employee who is responsible for planning, directing

and overseeing the operations and fiscal health of a business unit, division,

department, or an operating unit within an organization. The manager is

responsible for overseeing and leading the work of a group of people in many

instances.

Leading people is usually part of the description of what a manager does.

But, he or she is also responsible for leadership over a segment of work, a sub-

section of the organization's results, or a functional area within an organization

with or without reporting staff. If a manager has no reporting staff members, the

human resources segments of this job description may be eliminated or

narrowed.
 14

Qualifications :

 Graduate of any business related course

 Must have experience in managing a business

 Must have a good communication skills

Job Title: Cashier

Job Description:

Main duties include collecting payment and giving appropriate change.

Responsible for counting the contents of cash register drawer at the end of each

shift, maintaining receipts, records and withdrawals. May be responsible for

checking materials and supplies and reporting when stock is low.

Qualifications:

•High school graduate

• Ability to handle transactions quickly and accurately

•Previous experience in a retail store or as a cashier

•Positive, helpful attitude toward customers

 15

Job Title : Delivery Boy

Job Description :

Deliver the product to the costumers

Qualifications:

 With driving ability and license

 At Least 1 year experience as a driver

 Job Title: Retail / Retailer

Job Description:

A business or person that sells good to the consumer , as opposed to a

wholesaler or supplier, who normally sell their good to another business. The

retailer can shift their focus from costumer service and sales through to stock

logistics , leadership , marketing and effective merchandising .

Qualifications:

 Business Focus

 Communication and Interpersonal Skills

 Effective influencing and negotiation skills

 Ability to work under pressure and to tight deadlines

 16

SALARIES AND WAGES

CATEGORY SALARY NUMBER OF NUMBER OF DAILY WEEKLY

WORKING WORKING RATE RATE
HOURS DAYS

MANAGER 13 , 200 8 6 550 3300

CASHIER 9 , 120 8 6 380 2280

DELIVERY 6 , 720 8 6 280 1680

BOY

Legal Requirement

In any type of business , it is mandatory to legally operate and meet all the

demands of the law – locally and national , hence , the business will be using

economic resources and inputs legally allowed by the law in order to provide

goods or services in exchange for profits .

In order to legally operate in a certain area , the proponent will register in

the Department of Trade and Industry (DTI) after complying with all the

requirements appurtenant there to as well as those required by local authorities

such as BIR , business permit , mayor’s permit , barangay permit , sanitary

permit , Bureau of Fire clearance .

 17

Policies and Regulation

The proponents should now the business policies and regulations

conducted within the organizational structures and outlining the responsibilities of

both employees and employers . This is to be done in order to protect the welfare

of the employees .

Business Policy improves the efficiency and effectiveness of the operation

of the business . It should be the basis of what may or may not be done under

specific circumstances . Business Policy facilitates order and discipline among

the workers so that they may be effective and efficient in operation of the

business . And , to assist workers to become more receptive to their task to

handle business problems .

Employee Benefits and Bonus

An employee is entitled to receive benefits where in one of the most

important component of running a successful business is keeping employees

happy and providing them with enough incentive to minimize their productivity

and to improve his conditions as a prize for his exerted efforts in his/her works .

Giving the employee benefits is required by law (Philippines Labor Code of

1976). Therefore , the employees shall receive the following benefits .

 18

JOB BENEFITS

PhilHealth

The Philippine Health Insurance Corporation (PhilHealth) was created in

1995 to implement universal health coverage in the Philippines. It is a tax-

exempt, government-owned and controlled corporation (GOCC) of the

Philippines, and is attached to the Department of Health. Its stated goal is to

ensure a sustainable national health insurance program for all. PhilHealth is

administered by the Philippine Health Insurance Corporation, and provides

employees with a practical means of paying for adequate medical care in the

Philippines.

SSS

The SSS was created to provide private employees and their families

protection against disability, sickness, old age, and death. The Government

Service Insurance System (GSIS) is the equivalent system for Philippine

government employees.

13th Month Pay

The thirteenth salary is paid to employees according to different terms of

law or contract of employment. Mostly, it is equivalent to one full monthly salary

 19

and paid in December (the 12th month) around Christmas and is traditionally

called a Christmas bonus .The 13th month pay shall be in the amount not less

than 1/12 of the total basic salary earned by the employee within the Calendar

day.

Example: Let say an employee basic salary is Php15,000 per month and

had worked for 10 months, the 13th month computation is:

(Php15,000 X 10 months) / 12= Php12,500.00

PROJECTED TIME TABLE

The business project has a time table , this is the part which discuss the

projections period of the business from planning and site development up to

start –up normal operation of the business .

Activity # 1 : Acquisition of Capital

Period of Work ( 2 weeks)

The acquisition of capital is important in the preparation of expenses. In

this activity , the partner itself hold all the expenses needed before and after

the pre-operating period through selling real estate property and fund on his
 20

account . The weeks duration for the acquisition of the capital is enough to

find and prepare the documents in generating the funds .

Activity # 2 : Planning for Location and Site Development

Period of Work ( 4 weeks)

This activity is important because the management will look into plans ,

different techniques and strategies in anticipating the needs and wants of the

people . It assess if there is a demand for the product to be offered and to

ensure the business to be establish is feasible enough and to know if it has

the opportunity to grow and for selecting location it s part of the activity

focuses in finding and selecting the accessible location for the business .

Activity # 3 : Registration for Legal Requirements

Period of Work ( 2 weeks)

The activity referred to the process of completing all the business legal

requirements . This includes registrations to BIR , DTI , application for

Mayor’s permit and other fees needed by the business to comply .

Activity # 4 : Renovation of the Area

Period of Work (8 weeks)

 21

It is the process of construction of the place of the said business along

Tamaro – Tambac Road in Bayambang . Careful preparation of the building is

ensured for security reasons . It would take 8 weeks .

Activity # 5 : Canvassing and procurement of equipment , furniture and

raw materials needed for the business

Period of Work ( 2 weeks)

Equipment , furniture and raw materials were canvassed and procured .

This activity was completed in four (4) weeks time since it includes identifying

potential supplies that may support the business with the needed materials

during the operation of the business .

Activity # 6 : Hiring and orientation of manager , cashier & deliver boy ,

and arrangement and Supervision for Management

Period of Work ( 2 weeks)

The screening for qualified applicants is important because it ensures a

quality workforce for the business operation. This involves interview and

examination as well as the orientation of the qualified applicants in their

respective positions.
 22

Activity # 7 : Arrangement and Supervision for Marketing

Period of Work ( 2 weeks)

Preparation of the marketing aspect is predominantly concerned in this

activity . It tackles the marketing strategy , marketing budgets , test marketing

and others that will create awareness on the business .

Activity # 8 : Dry Run Operation

Period of Work ( 2 weeks)

Since the business is new in the market , the proponents made a dry run

operation to test if the operation can be manageable . This also will serve as

the training ground of the workers in the actual setting .

Activity # 9 : Formal start of the operation of the business

The business will formally start after finishing the said activities above.
 23

Scheduling Diagram

Figure 3 . shows the scheduling diagram of the proposed business

24
 25

CHAPTER 3

MARKETING BACKGROUND

Marketing candle business determines the opportunity of entering a

venture with company including handicraft and the proposed business has

newest product to offer. it well use wax , container . and other form of materials

to make a good , nice and perfect candles for our customers. During the

opening period will offer a one by one and one free candles for its introduction

so that the customer will be aware as to what the product is offering in the

public and also to get the attention of the people to buy and try the newest

candle product.

Marketing consist of four main elements this include the right product, to

be sold at the right place, and using the suitable promotional techniques. This

elements properly enables the organization to meet the it’s marketing

objectives and satisfy the requirements of customers. Marketing the candle

begins with the designs, originality, needs, wants, and expectations of the

customer to develop customers loyalty that is to have a good product of

candles and also the setting goals and objectives to meet or exceed those

needs and there are many factors to success of marketing, you have most
 26

control over the 4 of marketing which is product, price, place, and promotion.

For those small businesses these 4 elements serve as the foundation of

their marketing strategy.

MARKETING SEGMENTATION

The market segmentation is mentioned as being one of the key elements of

modern marketing , as mentioned, the process of dividing the market into several

groups or segments based on factors such as demographic, psychological and

behavioral factors. By doing this the marketers will have a better understanding

of their target audience and thereby make their marketing more effective.

DEMOGRAPHIC SEGMENTATION

The demographic segmentation divides customers into segments based

on demographic values such as age, gender, state of living , religion and

nationality.

AGE 13 years old above

GENDER Female Male

NATIONALITY Filipino

Table 2. shows the different segments on demographic values .

 27

PSYCHOGRAPHIC SEGMENTATION

In terms of lifestyle and interest , there is a requisition for the candle

offered by purposed business. Since customers think Eco- friendly and generally

concerned as well as personal and family health.

BEHAVIORAL SEGMENTATION

Behavioral segmentation is based on the customer's attitude towards, use of,

or response to a product.
 28

MARKETING PROGRAM

In every business, it is very important to have a plan for its success. The

success of every business does only depend in strategy or kill in handling it. That

is why the proponents came up with the study to apply their knowledge and skills

they learned. Under the marketing program of the said business, it emphasizes

the marketing objective, marketing strategy, and target market.

A marketing programs outlines the specific actions you intended to carry lot to

interest potential customers and clients in your product and/or service and

persuade to buy the product and/or service your offer .

The marketing program implemented your marketing strategy, whilst the

marketing strategy provided the goals for your marketing plan. It tells you where

you want to go from here. The marketing program was the specific road map.

MARKETING TARGET

Target Market is identified where the consumers have the highest user of up-

cycling candles. Usually target marketing is base on whom our product is meant

for and what is unique about the other product.

 29

And also the proposed business would be the business establishments in the

municipality of Bayambang and in the nearby towns by providing a unique,

quality and personalize design of up-cycling candles.

 Our Target Market

Almost everybody – from young teens to adults – love candles and have

purchased it at one time or the other. However, according to studies, a large

percentage of those that purchase these candles are women. This is why most of

our strategies revolve around the female folks, especially in Tulsa and in all

locations we are looking to get our products to.

Due to the above statistic from a reliable source in addition to our market

research, we have been able to draft the right strategies for our target market.

We would be engaging in a retail and wholesale distribution to the following

groups of people and organizations;

 Households ; Churches ; Spa beauty salons ; Religious houses ; Students

; Business people
 30

KEY PLAYERS AND COMPETITORS

This is critical part of a business activity because on here the proponents

need to analyse competitor to think of some techniques and strategies in order to

gain more customers. It is an assessment of the strengths and weakness of

current and potential competitors. Directly or indirectly, competitor analysis is a

driver of a firm’s strategy and impacts on how the business act or react in the

competition.

The main competitor of the proposal business in Bayambang is the candle

production . The advantage of the business in the competitor is, the proposal

business give some innovation to the said products. Like having different size

and in price which is cheaper and affordable.

Identifying the key players and competitors was very essential to the

study. It helps identify its major components with their contribution in the market.

The key players were the owner itself, the employees and consumers. These key

players provide the idea to enhance the business in terms of its production and

service. They also influenced other groups in their experiences using the

products and services they encountered. Proposal business must take good care
 31

of these key players by providing their needs to the best quality in order to

maintain its existence.

Likewise the proposed business must watch the activities of competitors

because they have special in the market. Continous innovations should be

introduced if the owner wants that such business will propose .

IDENTIFIED COMPETITORS

NAME OF BUSINESS LOCATION/ADDRESS

YANKEE CANDLE Bical sur
ARLO JACOB CANDLE Nalsian Sur / Norte
COPENHAGEN CANDLE Poblacion sur
CAYDEN CANDLE Tococ East
AZIZ CANDLE Tamaro
OUTPOOR CANDLE Tamaro
BABY DUCK CANDLE Tamaro

Table 3 .Shows the identified key competitors of the proposed business

Shows the identified key competitors of the proposed business it can be seen

that there are only two areas namely Poblacion , Tambac being covered directly

by the eight (8) identified key competitors. There is a big chance for the proposed

business to complete in the market since its location can assimilate the other

rural areas of Bayambang as well as the other urban areas along the Basista -

Bayambang roads.
 32

MARKETING MIX

The feasibility study of up-cycling old candles starts with a very little

investment beside all those factors , we will offer different designs to attract

costumers or add some essence in the material which give a pleasant smell

when it burns in your room even in an special occasion and celebrations .

As the set of marketing tools that other firms uses to pursue its marketing

objectives in the target and refers to four broad levels of marketing decision

namely product , price , promotion and place .

It is important to make product differentiation , service differentiation ,

personnel differentiation and image differentiation in the market form competitors

in order to create reputation of the company and get competitive advantage from

its competitors .

These differentiation provides various beneficial elements to the product as

well as the business provides difference in high valued benefited buyers ,

difference could be presented in a distinct way .

 33

Pricing Strategy

The team’s price –sensitive in the market is strong because we have a lot of

competitors which selling the similar product . Furthermore , at the end of the

market , if there are still some products we have not sold , we would use bundle

pricing . Bundle pricing is selling two or more products bundled together into a

single product .

The pricing for candles are very affordable for everyone. However, the pricing

usually varies depending on factors such as varieties, shapes and packaging.

However, whilst these factors might affect pricing to an extent, it will not result in

steep pricing for the candles. In choosing the right pricing for our candles, we

would ensure that we rate our proposed pricing against what our competitors are

offering, and then adjust accordingly.

Also, while we would ensure that our prices are fair, we would not offer prices

that are below our operational cost.

Product Strategy

Our business is intended to provide attractive handmade candles that are at

the same time sold at reasonable prices . We provide wide range of products
 34

along with distinctive features with excellent qualities , variety scents and

unique designs . The main strength of the business is varied range of

innovative products that provide competitive advantage over its competitors .

Promotional Strategy

Promotion can be defined as a method to build and maintain relationships

by communicating with one or more audiences through informing and

persuasion.

I. Social Media

Our organization plan is to use social media to raise our brand

awareness and to promote our products . A Facebook page will be set up

in order to communicate with our costumers more conveniently .

Facebook became a necessary part of every university students’ daily life ,

many students have benefits of exchange information for make friends ,

education goals and other activities through Facebook.

Therefore , Facebook is vital tool for us to promote our products to

our costumers . Moreover , we would accept pre-order in Facebook , so

costumers can have their preferred and unique candles . It is important to

satisfied costumers’ wants and needs .

 35

II. Direct Sale

In additional , during the market day , we would have a member

walk around the hall with our products . When people are in direct sale , it

would have more possibilities for the costumers to buy the product , also it

would be easily notice our business and would come and buy .

Figure 4 . shows a sample flyer for the advertisement of the proposed business .
 36

Figure 5 . shows a sample brochure for the advertisement of the proposed

business .
 37

Figure 6 . shows a sample product for the advertisement of the proposed

business .
 38

Placement Strategies

FEATURES COMMENTS

The proposed business can be seen

that there are only two areas namely
Poblacion and Tambac because there
Location is a big chance for the proposed
business to compete in the maket since
its location can assimilate the other
rural areas of Bayambang as well as
the other urban areas along the
Basista- Bayambang roads.

Our neighbors might be a food shop or

Potential neighbors even a flower shop these two potential
neighbors might attract the costumers .
In that case we can introduce our
product to them .

Our business organization will stick

Posts some banners on the tables and posts
for the business name . At the same
time to attract costumers’ attention.

Sound Our business will incorporate different

types of music to our stall to catch
costumers’ attention .

Table 4 . shows the features of the proposed business

 39

PEST ANALYSIS

A PEST analysis examines the Political, Economic, Social and Technological

environments that affect markets and businesses. It is recognized by decision

makers that, in the longer term, the survival and success of a business are

dependent upon adopting objectives and strategies appropriate to the external

environment within which their business operates..

PEST Analysis is useful for four main reasons:

 It helps you to spot business or personal opportunities, and it gives you

advanced warning of significant threats.

 It reveals the direction of change within your business environment. This

helps you shape what you're doing, so that you work with change, rather than

 against it.

 It helps you avoid starting projects that are likely to fail, for reasons beyond

your control.

 It can help you break free of unconscious assumptions when you enter a new

country, region, or market; because it helps you develop an objective view of

this new environment.

 40

POLITICAL ENVIRONMENT

Government regulations and legal issues affect a company's ability to be

profitable and successful, and this factor looks at how that can happen. Issues

that must be considered include tax guidelines, copyright and property law

enforcement, political stability, trade regulations, social and environmental policy,

employment laws and safety regulations.

One of the major objectives of government is to provide a stable economic

and legal framework within which businesses can operate and grow and

individuals thrive. Competition needs to be fair; the rule of law and clear property

rights must apply. Businesses that venture into countries that are politically

unstable are taking considerable risks.

1. Prices - can be impacted by a rise in VAT or Excise Duties. Businesses will try

to pass such increases onto their customers if they can, but this will depend

upon the degree of competition they face in the marketplace.

SOCIO – ECONOMIC ENVIRONMENT

This factor examines the outside economic issues that can play a role in a

company's success. Items to consider include economic growth, exchange,

 41

inflation and interest rates, economic stability, anticipated shifts in commodity

and resource costs, unemployment policies, credit availability and unemployment

policies. This factor analyzes the demographic and cultural aspects of the

company's market. These factors help businesses examine consumer needs and

determine what pushes them to make purchases. Among the items that should

be examined are demographics, population growth rates, age distribution,

attitudes towards work and job market trends.

1 Effect of inflation - The government regards achievement of the target

level of inflation as being good for the economy. This is because low

inflation encourages investment by business and spending by consumers.

It also has the effect of increasing our competitiveness with overseas

producers, so in theory limiting imports and increasing exports.

2 Cultural changes within a population can also have a major impact on

business behavior and the products they produce. social change also

includes fashion changes. Consumers are now happy to pay 100 pesos

for a coffee – as long as it has the right brand on the takeaway cup.

Changes in consumers’ attitudes toward the environment have changed

demand patterns across a range of industries.

 42

 There is a growing movement in the setting up of social enterprises, where

businesses are primarily focused on a social objective as opposed to profit.

This is driven by, and a reaction to, big businesses traditionally having given

little thought to their social impact. As a result, some large businesses today

go as far as producing a social audit alongside their traditional accounts in

order to improve public relations. The social audit measures the

environmental and social impact of the business's activities and sets out

strategies for reducing any negative impacts.

TECHNOLOGICAL ENVIRONMENT

Technology issues affect how an organization delivers its product or service

to the marketplace. Government spending on technological research, the life

cycle of current technology, the role of the internet and how any changes to it

may play out, and the impact of potential information technology changes.

Consumers and technological change consumers can benefit in a number

of ways from the new technology introduced by businesses:

• Internet provides easy price comparison and much more information through

review sites , more choice , lower prices , improved quality , convenience through

home shopping and pre-arranged delivery times.

 43

But also there can be problems

• Online shopping and banking can lead to fraud (wrongful or criminal deception

intended to result in financial or personal gain. ; a person or thing intended to

deceive others, typically by unjustifiably claiming or being credited with

accomplishments or qualities.)

• Rapid technological change leads to pressure to buy the latest products,

potentially leading to depreciation .

 44

PEST ANALYSIS

ENVIRONMENT TRENDS / ISSUES IMPLICATION OF OUR

PRODUCT
3 Strict copyright of 4 The ingredients of
the product’ s the product should
Political design , style be allowed by the
within the law and Philippine
legislations. government
5 Green ingredient 7 Eco-friendly
of the product ingredient is very
important
6 Custom gift using nowadays
organizations
trends 8 Most consumers
are concerned
about their health
Socio – Economic and purity of the
air
9 The average 10 Need to estimate
income of the the suitable price
Filipinos is 250 for the product due
pesos. Currently , to low income
the Philippine 11 Flexible price will
peso is dropping make the low and
which impact the high income willing
business to purchase the
product
12 Social media for 13 Ordering the
advertising product through
Technological Increasing the use online , like
of smart gadget Facebook, our
own website or
even Instagram
Table 5 . shows the macro environment of the business
 45

CHAPTER 4

TECHNICAL STUDY

In this chapter , the basic operation flows of the business will be discussed

. The proposed business will focus on how to meet the quality of our product in

able to satisfy the target market’s needs and wants . under the technical study all

the conversion process , technical elements of the processing unit , product and

services , plant size , schedule products and services , plant location , plant

layout structure , raw materials and waste disposal management .

Conversion Process

The concept of conversion process is necessary to give importance to the

role of each module of the process because it helps a lot in the quality of the

product and for maintaining the right product description . Shown below is the

functional diagram .

INPUT

In the proposed business lie inputs will be the capital , raw materials , and

labor’s manpower as the inputs in the proposed business . The three

 46

components served as a the starting process of giving quality services . The first

component of the proposed business is capital , which support the overall

operation of the business . The second component is raw materials which the

supplies needed for the operation of services . The third component are the

manpower who will manage the entire operation of the business

PROCESS

In this stage , it is a part to be accomplished in creating a quality product

between the input and the output . To attain the products quality , procedure

must be done properly in order to create more competitive products for the

costumer to satisfy their needs . The process of up-cycling candles includes

the process unit will be the up-cycling of old candles turning it into a new and

unique one , in such way of carving , giving different variety of colors and

different kinds of aroma .

OUTPUT

Finally , the output considered quality finished products which are produce

at the end of the input and the processing unit , the quality finish products , more

attractive and affordable and the consumers entice to buy .

 47

Fig. 7 shows the diagram of conversion process

Technical Elements of Processing Unit

This section will complete the essential requirement of the business , it

includes the detailed list of equipment and machineries that the business needed

in the actual operation of the business .

It also includes the plant size and production schedule , plant location ,

plant layout , and the discussion of the proper waste disposal of he business.

That will consider .Lastly , it would present the structure and utilities that will be

needed in the actual operation .

 48

SUPPLY

RAW MATERIALS RESOURCES PRICE/S

Paraffin Wax Old / used candles -

Crayon Wax Old / used crayons -

Water Tap Water -

Container 167 HyperMarket P 20

Coloring Dyes Csi Bayambang P 10

Decorative Items 167 HyperMarket P 20

Candle Wick Csi Bayambang P 10

Scotch tape Pandayan bookshop P10

Plastic transparent sheet Csi Bayambang P 30

Marbles Csi Bayambang P 20

Small rocks Csi Bayambang P 20

Fragrances Jin-San P 30

Candle labels Jin-San P 15

Sticky glue Pandayan bookshop P 15

Table 6. shows the supplies needed in the business

 49

EQUIPMENTS AND MACHINERIES

In order to meet the satisfaction of the costumer , the proponents identify

the following machineries and equipment including the furniture required in the

operation of the business

FURNITURES AND FIXTURES

CATEGORY QUANTITY UNIT PRICE COST

Office Table 2 2,750.00 5,500.00
Office Chair 2 1,240.00 4,480.00
Shelves 4 2,304.00 9,216.00
Table 2 349.75 699.50
Chair 6 157.47 944.82

Table 7. Shows the furniture to be use in the proposed business .

EQUIPMENTS AND MACHINERIES

CATEGORY QUANTITY UNIT PRICE COST

Equipment
Fire Extinguisher 2 2 , 990 .00 5 , 980 .00
Cellphone 1 2, 499.00 2, 499.00
Computer 1 36 , 499.00 36 , 499.00
Fluorescent Bulb 2 282.50 565.00
First Aid Kit 1 530.00 530.00
Air Conditioner 1 12 , 649 .00 12 , 649 .00
Printer 1 3 , 900 . 00 3 , 900 , 00
CCTV Camera 2 10,500.00 21,000.00
 50

CATEGORY QUANTITY UNIT PRICE COST

Machinery
Exhaust Fan 1 5,400.00 5,400.00
Generator 1 21,300.00 21,300.00
Wax Heater 2 875.00 1,750.00
Heating Pot 4 299.00 1,196.00
Stirring Rod 2 80.00 160.00
Rack Cooler 2 8,200.00 16,400.00
Motorcycle 1 50,000 50,000

Table 8. shows the different equipment and machineries

OFFICE SUPPLIES

CATEGORY QUANTITY UNIT PRICE COST

Coupon Bond (SHORT) Ream 2 ₱114.06 ₱228.12
Coupon Bond (LONG) Ream 2 142.00 284.00
Scissor 3 32.00 96.00
Stapler 3 85.00 255.00
Pencil (BOX) 1 192.00 192.00
Record Book 4 150.00 600.00
Columnar Book 4 50.00 200.00
Liquid Eraser 4 20.00 80.00
Scotch Tape 3 20.00 60.00
Stapler Wires 5 4.00 20.00
Tools 1 500.00 500.00

Table 9. shows the different office supplies

CLEANING SUPPLIES

CATEGORY QUANTITY UNIT PRICE COST

Trash Bag (1PACK) 1 ₱428.00 ₱428.00
Trash Bin 1 200.00 200.00
Mop 2 699.00 1,398.00
Dust Pan 2 550.00 1,100.00
Broom 2 49.81 99.62

Table 10. shows the different cleaning supplies

 51

Plant Location

The location is a vital factor in the success of business. A prime location is

a great competitive advantage. Location is crucial to all types of business

venture. Accessibility and conduciveness must be looked into. The proposed

business is located along the provincial road of Bayambang - Basista road at

zone VII, Poblacion Bayambang Pangasinan is the road where passengers and

passers by pass busily the whole day.

Plant Layout

This section deals with the arrangement of work areas and equipment .

The proponents discussed the relevant allocation of the adequate spaces at

appropriate places for work equipment for working men , materials and other

supporting activities of the proposed business as it starts the normal operation .

The basic theme behind the arrangement of work areas is to provide the service

effectively and to provide a safe and a good physical environment for the

costumers .

The floor plan presented as shown in figure 11 has a dimension of 8

meters in length and 7 meters in width . The floor plan is arranged from costumer
 52

service area , also includes a stock room and a comfort room to the operation to

become effective and efficient .

Perspective View

The facades presented in figure 12 has dimensions of 4.20 meters in

height and 11.0 meters in width .

Waste Disposal Methods

The business will be environmental friendly . The trust of the business of

the cooperation in the Solid Waste Management Program (SWMP) of the

Municipality of Bayambang as we already know that the pollution affect the

community are more hazardous to our health .

Therefore , the segregation of the wastes are divided into two sections

namely , RECYCLABLE and NON- RECYCLABLE . Boxes , straws , plastics ,

paper , bottles and other recyclable materials and non recyclables will be

segregated .
 53

MANUFACTURING COST

Utilities

In this case of the study there will be a lot of utilities because we need to

comply on our objectives especially the quality of our product , making candles

are not a hard job but it is all about patience , time management and creativity .

We also have an electrical and water installation , Wi-Fi connection and

telephone services .

Electricity

This utility will be use in the whole process and operation of the business ,

especially when making candles to provide our costumers good quality candles

as they are expecting it to be . Lack of electricity causes not only inconvenience

but also the smooth operation of the business . The supply of the electricity

comes from Central Pangasinan Electric Cooperative Inc . (CENPELCO) . In

case of brownout , the business will have a generator which will serve as means

of electricity .

Wi-Fi

This will be use for our online advertisement and online shopping for our

costumers to take less time and hassle free in buying our product .
 54

Water

There must be the availability of water supply for cleaning purposes ,

water outlets are installed in the building although the proposed business does

not need much supply of water . Water is supplied by Bayambang Water District

(BayWaD) .

Telephone

This is for our costumers and resellers that he / she want to order our

product by using phones .

 55

Figure 8 . shows the floor plan of the enterprise

 56

Figure 9 . shows the perspective view of the enterprise

 57

Figure 8 . shows the location map of the enterprise

 58

CHAPTER 5

FINANCIAL ASSUMPTIONS

This chapter discusses the assessment of the financial aspect , stability

and profitability of the business units on its first five (5) years of operation . This

part of the study shows the analysis on the approximate start-up capital the

business needed in order to start its operation. The three key determinants for

this analysis are the sources of capital, the operation expenses and pre-

operating expenses. Furthermore, this chapter provides a detailed description of

the formal records of the financial activities of the enterprise.

Financial analysis such as computation of the projected revenue, yearly

income statement, cash flow statement, balance sheet account, the graphical

presentation of the factors related to the enterprise, salary category,

maintenance category, inventory, estimated accounts receivable, allowance for

bad debts and computation of gross sales as well as the payback analysis and

ROI (Return of Investment) analysis were utilized in order to create an overview

of the financial condition and performance of the business in both short-term and

long-term which will then determine the feasibility of the study.

 59

Financial Analysis

Income Statement

The Income Statement presents the financial results of a business for a

stated period of time. It is essential in generating financial statement since it

quantifies the amount of revenue generated and expenses incurred by an

organization as well as any resulting net profit or loss.

Cash Flow

Cash Flow displays the net amount of cash and cash equivalents being

transferred into and out of the business. More specifically, it determines the

ability to generate positive cash flow which then shows the company’s ability to

create a value for shareholders.

Balance Sheet

A Balance Sheet reports a company’s assets , liabilities and shareholders’

equity at a specific point in time as well as provides a basis for computing rates

of return and evaluating its capital structure .

Major Assumptions

• The business will operate 8 hours in every production from

Monday to Saturday.
 60

• The total capital needed for the business is Php 500,000.00

• The income statement, cash flow and balance sheet shall be

presented in standard format.

• The estimated sales shall have 5% increase is expected for the

2nd and to 3rd year operation. Furthermore, the 6% increase is expected
for the 5th year operation.

• The estimated net purchased shall have 5% increase for the 2 nd to

4th year operation. Furthermore, the 6% increase is expected for the 5 th
year operation.

• The estimated net purchased shall have 5% increase for the 2 nd

and to 3rd year operation. Furthermore, the 6% increase is expected for
the 5th year operation.

• Rent expense will be Php 15,000.00 per month as per agreement

for 5 years.

• The depreciation will be computed using the horizontal line

method.

• The estimated salvage value will be 20% of fixed asset total value.

• Employee labor costs shall remain constant.

• Tax paid is based on the bracket percentage of income tax.

Sources of Capital

The starting capital of the business is Five Hundred Thousand

pesos that will come from the partners of the business.
 61

Initial Capital Requirement of Business

Partners Percentage of Sharing Invested Amount

Khim Ambrie Ballesteros 12.5% P 62,500

Aries Soriano 12.5% 62,500

Josa Mae Ibay 12.5% 62,500
Ralph Lorenz Soriano 12.5% 62,500

Jayvee Soriano 12.5% 62,500

Rolando Lasquite 12.5% 62,500
Katrina Anne Ferrer 12.5% 62,500
Camila Solis 12.5% 62,500
Total 100% P 500,000
Table 11 . shows the Initial Capital Requirement of Business

PRE-OPERATING EXPENSES

The pre-operating expense is a vital part of the financial study. This

portion provides the need of some important materials before the business
operates. The pre-operating expenses composed of general expenses, and
the cost of equipment. These are the expenses to get the total of pre-
operating expenses.
 62

Fixed Asset

Category Quantity Unit Price Cost

Equipment
Fire Extinguisher 2 2 , 990 .00 5 , 980 .00
Cellphone 1 2, 499.00 2, 499.00
Computer 1 36 , 499.00 36 , 499.00
Fluorescent Bulb 2 282.50 565.00
First Aid Kit 1 530.00 530.00
Air Conditioner 1 12 , 649 .00 12 , 649 .00
Printer 1 3 , 900 . 00 3 , 900 , 00
CCTV Camera 2 10,500.00 21,000.00
Sub. Total ₱83 , 622 .00
Improvement of the 200,000.00 ₱200,000.00
Building
Furniture and Fixtures
Office Table 2 2,750.00 5,500.00
Office Chair 2 1,240.00 4,480.00
Shelves 4 2,304.00 9,216.00
Table 2 349.75 699.50
Chair 6 157.47 944.82
Sub. Total ₱20 ,840.32
Machinery
Exhaust Fan 1 5,400.00 5,400.00
Generator 1 21,300.00 21,300.00
Wax Heater 2 875.00 1,750.00
Heating Pot 4 299.00 1,196.00
Stirring Rod 2 80.00 160.00
Rack Cooler 2 8,200.00 16,400.00
Motorcycle 1 50,000 50,000
Sub. Total ₱96,206.00
Total Cost of Fixed Asset ₱ 400 , 668. 32

Other Expense

Category QTY Unit Price Cost

Trash Bag (1PACK) 1 ₱428.00 ₱428.00
Trash Bin 1 200.00 200.00
Mop 2 699.00 1,398.00
Dust Pan 2 550.00 1,100.00
Broom 2 49.81 99.62
 63

Rags 4 25.00 100.00

Total ₱3,425.62

Office Supply Expenses

Category QTY Unit Price Cost

Coupon Bond (SHORT) Ream 1 ₱114.06 ₱114.06
Coupon Bond (LONG) Ream 1 142.00 142.00
Scissor 3 112.44 337.32
Stapler 3 87.00 261.00
Pencil (SET) 1 148.00 148.00
Record Book 1 250.00 250.00
Columnar Book 1 50.00 50.00
Liquid Eraser 1 25.00 25.00
Scotch Tape 1 30.00 30.00
Stapler Wires 3 24.00 72.00
Tools 1 500.00 500.00
Official Receipt . 12 50 600
TOTAL ₱1,857.92
Depreciation of Fixed Asset

Unit Price Salvage Depreciation Cost

Value Expense
Fire Extinguisher 2 , 990 .00 120.00 216.00 1,080.00
Cellphone 2, 499.00 50.00 90.00 450.00
Computer 36 , 499.00 1,500.00 2,700.00 13,500.00
Printer 3 , 900 , 00 500.00 900.00 4,500.00
Air Conditioner 12 , 649 .00 900.00 1,620.00 8,100.00
Table 349.75 220.00 396.00 1,980.00
Chair 157.47 15.74 28.35 141.73
Office Chair 1,240.00 124.00 223.02 1,116.00
Office Table 106.00 10.06 19.08 95.05
Exhaust Fan 5,400.00 540.00 975.00 4,860.00
Generator 21,300.00 2,130.00 3,834.00 19,170.00
Wax Heater 875.00 87.5 157.5 787.5
Heating Pot 299.00 29.9 53.82 269.1
Stirring Rod 80.00 8.00 14.4 72.00
Rack cooler 8,200.00 820.00 1,476.00 7,380.00
Motorcycle 50,000.00 5,000.00 9,000.00 45,000
 64

Summary of Pre-Operating expense

Category Cost
Fixed Asset 290,518.00
General Expense 12,620.00
Office Supplies 1,857.92