wraps business plan final

WRAPS

A Business Plan: WrapsPresented to theFaculty of the Department of Business AdministrationSchool of Business EconomicsUniversity of San CarlosCebu City, Philippines

In Partial FulfillmentOf the Requirements of the CourseBUSINESS PLAN (Entrep 39E)2nd Semester, AY 2012 - 2013

By:CUEVAS, EARL JUSTICE G.ESPAOL, RAFAEL DAVE G.GENOSA, JOHN DAVID M.GO, JED EARL C.LIM, LAMBERT LAMTHAI B.TAN, JOHN DAVIDSON A.TIU, ELIJAH ROSS O.VALENZUELA, IRVIN EDU O.

February 2013Endorsement Sheet for ORAL DEFENSE

This Business Plan entitled WRAPS submitted by MEATBAGS AND A VEGGIE in partial fulfilment of the course BUSINESS PLAN (E39e) has been examined and approved for ORAL DEFENSE.

1

__________________________________________Dr. Corazon G. Anzano, PhDMarketing Aspect

__________________________________________Dr. Alicia Villar, DBAHuman Resource Aspect

__________________________________________Demetrio S. Anticuando, MBAOperations Aspect

__________________________________________Priscilla Nicholas, CPAFinance Aspect

ACKNOWLEDGEMENT

To God,To our advisers,To the chefs and their students,To our parents,To our loved ones.,To our respondents,

EXECUTIVE SUMMARYThis document is a business plan to be submitted to the Entrep 39 Food superiors. Wraps is a business that eight male student entrepreneurs plan to venture into. The business idea is simply to provide a quick grab-able healthy meal. The main product is the Grilled Chicken Wrap, which is simply a combination of pan-grilled marinated chicken, vegetables, mangoes, secret home-made sauce and sprinkled with cheese, all wrapped up in a 9 inches tortilla bread. A cost-based pricing strategy is used in determining a P60 selling price per wrap. With a cost of P30, the team desires to have 100% mark-up. This entire concept will be sold initially at the ground floor of Kolks Nook at the University of San Carlos, downtown campus. The idea will be promoted and marketed through the use of social networking sites and marketing collaterals such as posters, fliers, loyalty cards and advertisement spaces in the universitys organizations.The target market of the business venture is the tight-scheduled passersby and the health conscious segment of the USC market and thus the reason why the initial stall will be opened up at the route between the main buildings and the aw building. The business will be running five days a week with its very own management team as its own employees. The rent of the initial start-up location will be P3,000 per month for 10 months a year. The team has decided to close down during the months of April and May because there will be a great decrease of foot traffic during summer. These will be maintained until the business stabilizes and the management decides to hire employees outside the entrepreneurial team.For the projecting of the demand, the team based it on the quantitative data of the competition survey and student survey and the qualitative data of the chef survey. Trend projection and guessing was used based on the survey results to forecast sales. Maximum production per day is 100 wraps. However, it is projected that sales will be an average of 50 wraps daily; and as such, the team will produce at an average of 55 wraps daily which is 10% more than the projected daily sales.

TABLE OF CONTENTS

1.OVERVIEW OF THE BUSINESS VENTURE101.1. Vision111.2. Mission111.3. Goals121.4. Objectives132. INDUSTRY ANALYSIS142.1. Industry Profile142.1.1. Classification142.1.2. Size152.1.3. Competition152.1.4. Key Success Factors152.2. External Factor Analysis162.3. Competitor's Analysis192.3.1. Existing Competitors192.3.2. Potential Competitors203.MARKETING PLAN213.1. Marketing Strategies and Programs213.1.1. Market Segmentation Strategies213.1.2. Target Market213.1.3. Positioning Strategies223.2. Marketing Mix Decisions223.2.1. Product223.2.2. Pricing Program223.2.3. Distribution Channel233.2.4. Advertising and Promotions233.3. Sales Forecasts254.OPERATIONS MANAGEMENT PLAN264.1. Overview of Proposed Supply Chain Management264.2. Production Forecast / Schedule / Budget264.2.1. Sales Projection264.2.2. Production Forecast284.2.3. Production Capacity 294.3. Supply Network304.3.1. Bill of Materials304.3.2. Raw Materials and Suppliers Requirement304.3.3. Transportation Requirement314.3.4. Location Strategy314.4. Internal Supply Chain324.4.1. Process Flow 324.4.2. Layout Design334.4.3. Machineries and Equipment Requirement344.4.4. Manpower and Skills Requirement344.4.5. Inventory Management344.4.5.1. Raw Materials354.4.5.2. Work in Process384.4.5.3. Pipeline Inventory384.4.5.4. Finished Goods384.4.6. Waste Management384.5 Distribution System394.5.1. Transportation / Delivery Requirements394.6. Project Management395.ORGANIZATION AND MANAGEMENT PLAN405.1. Type of Ownership405.2. Organizational Structure415.3. Functions and Responsibilities435.4. Compensation455.5. Organizational Policies465.6. Legal Requirements476.FINANCIAL PLAN546.1. Financial Objectives and Targets546.1.1. Total Project Costs546.1.2. Capital Structure / Sources of Financing556.1.3. Investment Returns and Risks556.1.4. Profitability Levels556.1.5. Cash Flows556.1.6. Survival Expectations556.1.7. Sustainability Expectations556.2. Statement of Assumptions556.2.1. Income Statement556.2.1.1. Pricing and Costing Method Used556.2.1.2. Volume Trends556.2.1.3. Production Costs / Service Costs566.2.1.4. Operating Costs566.2.1.5. Financing Costs566.2.1.6. Tax Assumption566.2.2. Balance Sheet566.2.2.1. Accounts Receivable and Cash Collection Policies566.2.2.2. Inventories576.2.2.3. Prepaid Expenses576.2.2.4. Other Current Assets576.2.2.5. Accounts Payable and Purchases Payments586.2.2.6. Accrued Expenses586.2.2.7. Other Current Liabilities586.2.2.8. Borrowings and Payments586.2.2.9. Capitalization586.2.2.10. Dividends / Drawings586.3. Total Project Cost586.3.1. Components586.3.2. Sources of Funds596.4. Projected Financial Statements596.5. Projected Income Statement596.6. Projected Cash Flow Statements606.7. Projected Balance Sheet606.8. Set of Schedules and Charts606.9. Financial Evaluation616.9.1. Vertical Analysis616.9.1.1. Financial Ratio Analysis616.9.1.2. Liquidity Ratios616.9.1.3. Cash Ratio616.9.1.4. Acid-Test Ratio616.9.1.5. Current Ratio616.9.1.6. Collection Period616.9.1.7. Accounts Receivable Turnover616.9.1.8. Days Sales in Inventories616.9.1.9. Inventory Turnover616.9.1.10. Working Capital Turnover626.9.2. Earnings / Profitability Ratios626.9.2.1. Gross Profit Ratio626.9.2.2. Operating Margin Ratio626.9.2.3. Return on Sales626.9.2.4. Return on Assets / ROI626.9.2.5. Return on Equity / Capital626.9.2.6. Return on Net Working Capital626.9.2.7. Return on Fixed Assets626.9.2.8. Stability Ratios626.9.2.9. Debt-Equity Ratio626.9.2.10. Times-Interest Earned Ratio626.9.2.11. ROE vs. ROA626.9.3. Cost-Volume Profit Analysis626.9.3.1. Variable Cost Component626.9.3.2. Fixed Cost Component636.9.3.3. Breakeven Point Analysis646.9.4. Investment Returns Analysis646.9.4.1. Payback Period646.9.4.2. NPV646.9.5. Benchmark with Industry Average646.9.6. Du Pont Analysis646.9.7. Sensitivity Analysis647.CONCLUSIONS AND RECOMMENDATIONS65APPENDICES66The Management Team68Other Pertinent Documents69

CHAPTER 1OVERVIEW OF THE BUSINESS VENTURE

RationaleBefore the history of the business idea of Wraps can be explained, it is essential to keep in mind that all the members of the entrepreneurial team are second year students at the Downtown Campus. The need was found when the members, a barkada, found themselves troubled on where to have their lunch. They are bored with the food around and find themselves giving up to the unhealthy foods offered. Then came the day of business proposals, where the team had an approved proposal that most of the members could not find the will to cash in such big amounts. Thats when Jed Earl Go recalled a delicious home-made meal he had. He conversed with the team regarding the idea and no sooner had the team started the concept of commercializing such a healthy treat. Wraps was then coined because of the way the product is wrapped in tortilla bread.Wraps was the solution. As a healthy fast-food option to the busy world of today, it was the perfect business idea to solve both the need of healthy foods around and provide a business for the team to venture into. It was then decided that the first stall of Wraps will be located at the ground floor of Kolks Nook of the University of San Carlos, Downtown Campus. There, Wraps will be portrayed as a grab-able product that can be a quick meal for the busy foot traffic of our target market. The stalls will be located at vantage points where foot traffic often tread by. It will lure the pedestrians as they take their usual route of daily activities. It will be fast, but still a healthy and tasty alternative for society.Wraps will raise a No MSG and No oil banner, wherein taste and flavor are not sacrificed in doing so. It also offers classy drinks to complement the main product. Because grab-able desserts are also trending, the team is planning to add desserts to the product line. Aside from the healthy option, Wraps might offer a sweet option so as to excite the taste buds of its customers. Although it is mentioned here, the desserts product line will not yet be presented in the document.

Brand Logo

Tagline: And Thats A Wrap!

1.1. VisionOur vision is a world where no man, woman, or child shall ever be under such pressures of life that he or she cannot grab a quick meal which will be of no cost to ones health.1.2. MissionOur mission is to provide a rendition of healthier choices of on-the-go snack food to the busy populace of an ever-faster evolving world.

1.3. GoalsDepartmentShort Term Goals3 months and lessTransitional Goals3 months to 1 yearLong Term Goals1 year and above

MarketingGrand Opening of First StallEstablish Promotional CardsRedesign Brand Image

Present Products to Critics and Food Bloggers for AdvertisementAdvertise the new products

Advertise before Grand OpeningAdvertise the upcoming products

Establish social network pagesDetermining the Next Location

Market Brand

Set Monthly Promotional Activities

OperationsAddition of ProductsAddition to the Product LinesPerfect the Recipe

Establish Workplace and StallRedesign the stall and social network pagesResearch and Development of Products

Redesign workplace and improve efficiency

Human ResourceBegin Hiring EmployeesImprove employee and customer relationship

Improve employee and management relationship

FinanceEvaluation of the First LocationExpansion to another location

1.4. ObjectivesOur tripartite objective is to satisfy the need for healthy fast food to all, to establish our brand and name as a premier source of healthy fast food, and to be able to conveniently serve the busy people in their tight schedule in the modern world of today.1. Supply to the busy world of students a healthy option to provide them the chance to nourish their bodies better.2. Provide meals on the go, conveniently at the route where busy students and faculty pass by.3. Allow the students to relate themselves with Wraps and make it a part of their Carolinian experience.4. Create a healthy mindset to students when they meet the brand, Wraps.

CHAPTER 2INDUSTRY ANALYSIS

2.1. Industry ProfileWRAPS belongs to the food industry. The Food Industry is the biggest of its kind. Filipinos enjoy eating and tasting different kinds of delicacies may it be western, middle-eastern, Asian and/or Croatian. Food is the most essential factor youll ever need in order to live, to fuel your bodies to do your daily tasks. Without food, a man can live, but a man cant do his normal physical activities without it. Food is the most basic need to humans. Having a food-related business was our choice because everybody eats! Not one man in his right mind would go on a day without eating or taking in something. Because this industry is a very competitive industry, this will require intense marketing research and continuous studies to be able to keep up with the innovations in the fast-revolving world. Underneath the food industry come a lot of smaller groups of different kinds of food classifications. Specifically Wraps belongs to the fast-food classification simply because it is in a stall and it isnt a brick and mortar restaurant. Wraps will cater to specified events around Cebu City depending upon agreement of the team and the opposing company. 2.1.1. ClassificationWraps belongs to the fast-food classification. It will establish a stall at the ground floor of Kolks Nooks in USC Downtown Campus and there Wraps will cater to students, faculty and staff. The brand is labelled as fast-food because people go to it to have a quick meal. Customers simply say what they want then the employee begins the process of making the specific order. The employees do this in a matter of 90 seconds more or less. Fast-foods are very trendy in a country like the Philippines. People go for the convenience, and do not really want the hassle of sitting down, ordering their food, waiting for their food to come, and finally paying high prices for ordinary food. Filipinos dont like that idea especially those who dont have the luxury of time. One doesnt simply see office workers who are in a morning rush going to a restaurant and taking their time eating breakfast. In this world today, one always sees professionals passing a drive-through at the big fast-food chains such as Jollibee and McDonalds. In like manner, because the entrepreneurial team is inside a university campus, the team targets those students or staff who dont have much time and want to grab a quick and HEALTHY meal between their busy schedules. 2.1.2. SizeWraps will initially venture in the University of San Carlos Main Campus. Of course, no entrepreneur would want to stay in a single location when potential money-making locations elsewhere are just easy to go to. In a few years time, when the time is right, the team would venture out to other possible places within Metro Cebu. The reason for this is that the team does not want its product to succeed only inside a University campus, but also to all the other communities wherever there are health-conscious and tight scheduled people. Wraps will be there to cater for them conveniently and healthily. Entrepreneurs do not settle for mediocrity, they do not end where they left off but they venture to other places outside their training ground and into foreign lands. The team would look for a place where there is great opportunity. The team believes that the population of health-conscious people are escalating by the hundreds, yearly. The team thinks that healthy food will be the trend in the near future. 2.1.3. CompetitionThe direct competitors will be the fast food stations and restaurants that also sell products similar to products such as Wraps and Flushes. The indirect competitors are those who sell fast food that can substitute the products that Wraps offers. The potential competitors are the restaurants and eateries outside campus that offer substitute products and are near enough to steal the target market.2.1.4. Key Success FactorsThe key success factors of Wraps are: first, the healthfulness of the Wraps no oil and no MSG; second, the convenience of being a fast food stall will capture the tight-scheduled passersby; last, the tastiness of the Wraps will allow customers to come back for more.2.2. External Factor AnalysisPorters Analysis

Porters Analysis of the Fast Food Industry in USC - Main

Wraps is under the fast food industry because its goal is to serve quick meals to hurrying customers. It is also under the health conscious sector of the food industry because Wraps is positioned to provide a healthy option.Wraps has four suppliers, the tortilla bread supplier, the vegetables supplier, the grocery stores and the packaging supplier. For the tortilla bread, Wraps has found a supplier who is willing to partner up and provide a constant supply of tortilla bread for a wholesale price. The vegetables supplier will either be a personal wholesaler connection of one of the management team, or from a grocery store. The grocery store will provide the cheese, the spices and the sauce ingredients. Lastly, the packaging supplier will provide in quantity the in shorter intervals of time.The direct competitors of Wraps are Leylams Shawarma, Coolers and Burp. The three direct competitors were chosen because they have similar products to Wraps. Leylams Shawarma, also the main competitor, has been chosen because it is the closest to the Grilled Chicken Wrap product. Coolers and Burp have been chosen because they offer classy beverages that are similar to the Flush that Wraps offers.The indirect competitors of Wraps are the restaurants that are dissimilar to the products of Wraps, but offer substitute products, and still are located within the campus. And the potential competitors of Wraps are the restaurants that are different from the products that Wraps offers, but still offer substitute products and are located nearby, outside the campus. This is because these may still be able to take some of the market share that Wraps is trying to collect for its market equity.The threats of substitution are the restaurants and eateries that are located outside the downtown campus. They are those who are near enough to serve to the market of the University of San Carlos. Because they are near enough to tap our target market, they become a threat of substitute. The target market of Wraps is the busy passersby and the health conscious market. Although the scope of the target is the entire Cebu, the team will initially start-up the business in Kolks Nook of the University of San Carlos, Downtown Campus. It will be located at the ground floor which is the immediate pathway for students to cross from the main buildings to the law building. This way, the passersby who are in a hurry to get to class can conveniently grab a quick meal and be on their way. As for the health conscious segment of the market, the downtown campus is a perfect place to plot a healthy option because inside and outside the campus, there are no healthy foods sold nearby.

2.3. Competitor's Analysis2.3.1. Existing Competitors (Direct and Indirect)Direct Competitors - Competitors who are in the USC Downtown campus and have similar products.Leylam Shawarma

Burp!

Burger Bites

SizeThree employeesThree employeesTwo student employees

Monthly SalesPhp 65,000Php 85,000Unavailable

Type of BusinessFast food stall offering middle-eastern snacks and rice mealsFast food stall offering burgers and friesFast food stall offering specialty burgers

LocationKolk's Nook, University of San Carlos, Main CampusKolk's Nook, University of San Carlos, Main CampusKolk's Nook, University of San Carlos, Main Campus

Target MarketStudents who need a cheap, quick mealStudents who need a cheap, quick mealStudents who need a cheap, quick meal

Indirect Competitors - competitors who are in the USC Downtown campus and sell substitute products.Steyler

Catholic Trade

USC Kafe

SizeTwo employeesThree employeesSeven employees

Monthly SalesUnavailableUnavailableUnavailable

Type of BusinessA small convenience store which offers food, beverages and school suppliesA convenience store which offers food, beverages, school supplies, and University of San Carlos productsA University cafe which offers food and beverages

LocationUniversity of San Carlos, Main CampusUniversity of San Carlos, Main CampusUniversity of San Carlos, Main campus

Target MarketPeople wanting to have a quick bitePeople wanting to have a quick bite or for a place to sit downPeople who wants to eat in a fancy restaurant inside the school with airconditioning

2.3.2. Potential Competitors - competitors who are not in the USC Downtown campus but sell nearby and sell substitute products.Siomai sa TisaFidels Chicken

Size1 Cashier, 3 workers1 Cashier, 1 Cook, 1 worker

Monthly Sales200,000-220,000 gross sales240,000-300,000 gross sales

Type of BusinessFast FoodFast Food

LocationAcross the University of San CarlosJunquera Street

Target MarketStudents, Lower-Middle ClassStudents, Lower-Middle Class

CHAPTER 3MARKETING PLAN

3.1. Marketing Strategies and Programs3.1.1. Market Segmentation StrategiesThe Psychographic Segmentation Strategy was chosen because it mainly classifies each segment according to their personality and lifestyle. The classifications below define working class as both students, professionals and businessmen who are busy and wish to have a quick meal; while non-working class is defined as the segment of the market that are pressured by time when taking their meals.1. Health conscious working class2. Not health conscious working class3. Health conscious non-working class4. Not health conscious non-working classAlso, a demographic Segmentation Strategy will be used to classify each segment according to their buying power.1. High Class2. Upper Class3. Middle Class4. Lower Class5. Low Class

3.1.2. Target Market1. Health conscious working Class because these are those who can find healthful foods in quick getaways.2. Not health conscious working class because these are those who can find delicious fast foods in their tight schedule.3. Health conscious non-working class because these are those who take our healthy option and Flush down their time.4, The Lower class who are willing to save to eat quality healthful meals.5.The Middle class who casually dine into the only healthy option around.6.The Upper class who choose to take the healthy Wraps experience.3.1.3. Positioning StrategiesThe team wants to be highly available, convenient and affordable, but most of all, the fastest food in town. Available and convenient in the sense of time and place; that Wraps is located along the route on where the busy bodies are when they need a quick meal.

3.2. Marketing Mix DecisionsThe Wraps experience is simply the combination of healthful tasty wraps to satisfy the tongue, fulfilling rice meals to fill the belly and sweet refreshing drinks to flush down the meal, all wrapped up in a handy non-mess package provided conveniently where our customers pass by.

3.2.1. Product Different kinds of Wraps: Specialty: Grilled Chicken (Healthy) Different kinds of Rice Meals: Grilled Chicken Our drinks will be called Flushes: Flushes Four Seasons Flush Iced Tea Flush Bottled Water

3.2.2. Pricing ProgramCompetitive pricing strategy will be utilized to mark our price. Because Wraps is a new entrant, it cannot depend much from the market until the market has found a connection to the brand worthy of their money. Because the team wants to keep a high regard for the product, the team has decided that a price higher than its main competitor is best. The team is quite confident that the taste and the size of the product are worth more than 10 pesos in comparison to the main competitors product. With a cost of 30 pesos per wrap, the team will price it at 60 pesos per wrap. This is mainly because the team wishes to attain at least 100% mark-up and because the team believes how the size and image of the brand is greater than that of its main competitor whose product is priced from 50-60 pesos. 3.2.3. Distribution ChannelThe initial distribution channel will be located on the ground floor of Kolks Nook in the University of San Carlos, Main Campus. The site was chosen mainly because it is the passage way of students who are going to and fro the main buildings and the law building. As they walk on by, they will be enticed by the convenience of grabbing a quick one-hand meal. It has also been chosen because the management are all students of the said campus and will be more convenient for them to keep a closer eye on their new venture and their employees performance. The ground floor was also chosen because the as the management weighed the two alternatives, the team decided that Wraps ought to be positioned as a walk-through or take out meal. Because placing it on the ground floor saved five thousand pesos every month and properly positioned the brand image, it was voted by the majority.The rental of the place will be renewed monthly, as such, the team has decided to rent only 10 months a year and avoid the months of April and May because during those two months, very few of the students will go to the university, therefore, the sales will dramatically drop. To avoid this3.2.4. Advertising and PromotionsWord of mouth truly is the best way to go. When it comes to the food industry, it is friends and acquaintances that make the advertisement. Because of this and because of the fact that the target market is a segment where the management belong, the team has decided to primarily rely on word of mouth. However, aside from this, online marketing will be done through social networks such as Facebook, Twitter and Instagram, as a way to inform. Posters will also be made to entice the foot traffic.Posters and flyers will be created as the marketing collaterals of Wraps. These will be passed on, posted and spread throughout the campus and might be in some of the Carolinian magazines. The team has connections with the TEC and the JPIA editors and may be able to negotiate for a slot in the respective publications.Marketing collaterals in the form of promotions and loyalty cards will also be done as Wraps stabilizes itself and finds its place in the society and in the mind set of the market.

3.3. Sales ForecastsMonthForecasted SalesWorking DaysUnitsUnit Selling PricePeso Sales/ Month

June, 201360pcs/day15 days900Php 60Php 54,000

July, 201350pcs/ day23 days1,1506069,000

August, 2013 70pcs/day22 days1,5406092,400

September,201350pcs/day21 days1,0506052,500

October, 201360pcs/day11 days6606039,600

November, 201350pcs/day20 days1,0006060,000

December, 201365pcs/day15 days9756058,500

January, 201460pcs/day20 days1,2006072,000

February, 201450pcs/day20 days1,0006060,000

March, 201450pcs/day21 days1,0506063,000

Sales for the month of June is optimistically estimated to be 60 units per day as it is newly introduced to the market, the team believes that people would be eager to try the product. For the following months, demand is projected seasonally and assumed to be the same everyday for the entire month. Projected demand changes every month as it is done seasonally, calculated using the activities happening during the month. Say during August, demand is expected to rise as intramurals is held during that month. After the month that demand rises, the team assumes that the demand will fall during the following month; this is due to the theory of "Marginal Satisfaction". The projected sales/ month in units is calculated using the assumed demand per day multiplied by the number of working days in each month. The Projected sales/ month in pesos is calculated using Projected sales in units multiplied by selling price/unit.

CHAPTER 4OPERATIONS MANAGEMENT PLAN

4.1. Overview of Proposed Supply Chain ManagementWraps will get its supplies and raw materials from direct suppliers in the city proper. Suppliers had been chosen carefully to ensure competitiveness of price. Purchasing will be done once a week and raw materials will stored in appropriate temperature to ensure freshness of products. A Multicab or L-300 panoramic van will be used to transport the raw materials from the supplier straight to the stall and is to be stored inside the fridge. Inventory will be regularly monitored to ensure proper upkeep of supply.4.2. Production Forecast / Schedule / Budget4.2.1. Sales ProjectionMonthForecasted SalesWorking DaysUnitsUnit Selling PricePeso Sales/ Month


July, 201350pcs/ day23 days1,1506069,000





December, 201365pcs/day15 days9756058,500




Sales for the month of June is optimistically estimated to be 60 units per day as it is newly introduced to the market, the team believes that people would be eager to try the product. For the following months, demand is projected seasonally and assumed to be the same everyday for the entire month. Projected demand changes every month as it is done seasonally, calculated using the activities happening during the month. Say during August, demand is expected to rise as intramurals is held during that month. After the month that demand rises, the team assumes that the demand will fall during the following month; this is due to the theory of "Marginal Satisfaction". The projected sales/ month in units is calculated using the assumed demand per day multiplied by the number of working days in each month. The Projected sales/ month in pesos is calculated using Projected sales in units multiplied by selling price/unit.

4.2.2. Production ForecastProductions safety margin shall be 10% of projected sales.MonthForecasted productionWorking DaysUnitsUnit Cost PricePeso Costs/ Month


July, 201355pcs/ day23 days1,2653037,950





December, 201372pcs/day15 days1,0803032,400




4.2.3. Production Capacity (aggregate plan)Since everything is prepared for during preparation phaseNumber of Wraps made at max capacityTime

11.5 minutes

6090 minutes

2606.5 hours / day

*Note: Since everything is prepared for during preparation phase, it only takes approximately 1.5 minutes to have the wrap ready for the customer to have his meal. The team believes that because of class schedules, the peak times of everyday will be at the ends of class times. Such as 9:00am-9:15am, 10:30am-10:45am, 12:00pm- 12:15pm, 1:30pm- 1:45pm, 3:00pm-3:15pm. Having a total of 75 minutes of peak hour each day divided by the approximate time to prepare each wrap, which is 1.5 minutes, we get 50 wraps/day.

4.3. Supply Network4.3.1. Bill of MaterialsBill of Materials is based on our Production Forecast. Raw Materials will be replenished on a weekly basis. Inventory stored in the fridge should be good for a little over a week of Production Forecast. Given that Production forecast states 77/day x 5 days/week =385 Wraps/ week, Bill of Materials will be 80/day x 5 days/week= 400 Wraps/ week. Below is a more detailed schedule on our Bill of Materials at the beginning of the week given that Production Forecast states 77 Wraps/ day.

LevelDescriptionUnitQuantity

1Grilled Chicken Wrappcs.400

2Tortilla Breadpcs.400

2Chickenkg.20

3Secret Spiceskg.3.5

2Cabbagekg.6.4

2Cucumberkg.5.2

2Tomatoeskg.6

2Cheesekg.2.59

2SauceL.20

2Mangokg.8

The levels represent the components involved in the products/raw material it produces. Level 2 products are components of their corresponding level 1 product; level 3 products are components of their corresponding level 2 product, etc.

4.3.2. Raw Materials and Supplies RequirementRaw Materials:Tortilla BreadChickenSecret SpicesCabbageCucumberTomatoesCheeseMangoSauce

Supplies:Plastic Gloves

4.3.3. Transportation RequirementAs much as possible, since purchasing is done just once a week, the team has decided to just rent a vehicle from one of their members. The vehicle to be used can either be a Multicab or an L-300 panoramic van. Rent of vehicle and gasoline expense will be paid at Php 280/day.4.3.4. Location StrategyExperimentation Phase - University of San Carlos, Main CampusMaturity Phase - Ayala Center Cebu / SM City Cebu

4.4. Internal Supply Chain4.4.1. Process Flow

4.4.2. Layout Design

4.4.3. Machineries and Equipment RequirementGrillerSlow cookerKitchen TongsPeelerKitchen KnifeChopping BoardsStrainerMarinating BowlFridgeWeighing scaleFlush Machine4.4.4. Manpower and Skills RequirementMust be able to cook, work under pressure, treat customers, and be accountable for their actions.4.4.5. Inventory ManagementInventory will be monitored in a daily basis, but purchases will be once a week to ensure freshness. The majority of the Raw materials will be purchased from a direct supplier in Carbon, the tortilla bread will be purchased directly from a bread manufacturer. Purchasing will be done on a Sunday and will be directly delivered to the stall and to be stored and kept fresh inside the fridge. During preparation phase of working days, only a certain amount will be taken off the inventory, only what is needed during the day, the rest is kept fresh inside the fridge. In the end of the day, inventory will be checked during closing phase.

4.4.5.1. Raw Materials

Tortilla Bread

Chicken

Secret Spices

Cabbage

Cucumber

Tomatoes

Cheese

Mango

Sauce

4.4.5.2. Work in ProcessWorking hours will be from 8:00am 4:00pm and store hours will be from 9:00 am- 3:30 pm from Monday to Friday. Every day, there will be 4 different shifts, which will mean that there will be 2 members working together each shift. The First shift is from 8:000am - 10:00am, the people assigned in this shift is to prepare everything needed during the day: the cutting of vegetables, Seasoning and grilling of the chicken, mixing of the sauce, and etc. The second shift is from 10:00am- 12:00pm, the people assigned in this shift are literally going to sell to costumers. The third shift is from 12:00pm- 2:00pm, the people assigned in this shift are literally going to continue the work of the 2nd shifts. The last shift or closing shift is from 2:00pm-4:00pm, the people assigned to this shift are to continue the work of the 3rd shift and also responsible to keep the unused ingredients.To sum it all up, for the preparation phase, first thing in the morning in clean up stage, 2nd is taking the chicken and other vegetables out of the fridge to defrost, 3rd is to season the chicken in the same time to cut the vegetables, 4th is to grille the chicken, and lastly, to store all the food in its appropriate containers. When ready by 9:00am, store then opens to serve its customers. Known as the selling phase, first, the tortilla wrap is heated on the grille then cabbage strips are placed inside, followed by the cucumber strips, followed by the tomato strips, followed by mango, followed by the chicken, followed by the sauce, followed by the cheese, and lastly it is to be wrapped up nicely in thin hygienic wrapping paper and then served to customer while hot. Serving time is approximately 1.5 minutes.4.4.5.3. Pipeline InventoryThe team finds no bottle-neck to the operations except for the shelf life of products and the employees efficiency.4.4.5.4. Finished GoodsFinished goods are considered to be the "Wraps" that are handed out to final consumers. Goods will not be considered final if not placed inside a wrap.4.4.6. Waste ManagementProper Segregation and Disposal accordingly under the rules of Kolks Nook will be observed according to the rules of the University of San Carlos.

4.5 Distribution System4.5.1. Transportation / Delivery RequirementsMulticab/ L-300 Panoramic van - payment for the gas and rent only.4.6. Project ManagementAs a company which offers food, health and sanitary precautions are requisites. Employees are to wear plastic gloves. Anti-bacterial soap will be used for the hands to make sure food wont become contaminated once there is physical contact. The stall and the utensils will be cleaned from time to time. Upon physical contact with money, employees must wash their hands. Employees are also required to be honest and maintain efficiency to ensure customer satisfaction. Employees need to greet the customers as they order and say thank you as they finish the transaction and give the drink. They must be patient with the customers and must carry a pleasing personality at all times.With regards of the raw materials, the company shall also make sure that the deliveries of the raw materials will be exact to ensure correct inventory as well as checking the expiry dates.

CHAPTER 5ORGANIZATION AND MANAGEMENT PLAN

5.1. Type of OwnershipWraps is a company of eight entrepreneurs who authorize to act as a single entity and is recognized as such in legalities and will be under the name of the General Manager of Wraps. Within the bounds of Cebu City, Philippines law, the business will be under the property of Irvin Edu Valenzuela as he was the one chosen by the entrepreneurial team to take the face of the company.Although the company will be registered as a sole proprietorship, all eight entrepreneurs have equal voice to make decisions and to channel the flow of command to the employees. Each of the entrepreneurs will also have equal rights to create the face of the company.Memorandum of AgreementThis serves as the official memorandum of agreement to whomever it may concern that Irvin Edu Valenzuela as the sole proprietor, has agreed with all the other entrepreneurial team members that although the company is under his name, the company is owned by the entire team as a whole, each having equal power and right over the business. Herewith are the signatures of each of the entrepreneurial team members.

Valenzuela, Irvin Edu Genosa, John David Espaol, Rafael Dave

Go, Jed Earl Tan, John Davidson Tiu, Elijah Ross

Lim, Lambert Lamthai Cuevas, Earl Justice

5.2. Organizational StructureOur organizational structure is similar to that of a pyramids structure. It will show who is in charge of each department and of each managerial task. It will also show the chain of command from which the individual works of each of the managerial tasks shall be submitted to as a whole. On the top of the structure is Irvin Edu Valenzuela, the General Manager of the company. Directly below him is the four identified departments, Marketing, Operations, Human Resource Management and along with the managers of each. Each of the managers from the different departments has their respective assistants who will assist them in the departments management and to act as check-up method. The Finance Manager, however, does not have any assistant since there is a lack of members in the group to fill up as his assistant.Each of the managers was designated to their respective roles accordingly to their experiences and knowledge and skill. The management team will consist of Irvin Edu Valenzuela as the General Manager, Elijah Ross Tiu as the Marketing Manager, Earl Justice Cuevas as the Assistant Marketing Manager, Jed Earl Go as Operations Manager, Rafael Dave Espaol as the Productions Supervisor, John Davidson Tan as the Human Resource Manager, John David Genosa as the Assistant HR Manager, and Lambert Lamthai Lim as the Finance Manager.

WRAPS Organizational Chart

General ManagerIrvin Edu [email protected]

MarketingDepartmentFinanceDepartmentManagement/HRDepartmentOperationsDepartment

Marketing ManagerElijah Ross [email protected] ManagerLambert [email protected] ManagerJohn Davidson [email protected] ManagerJed Earl [email protected]

Assistant Marketing ManagerEarl Justice [email protected] SupervisorRafael Dave [email protected] HR ManagerJohn David [email protected]

5.3. Functions and ResponsibilitiesI. General Manager The GM is the one responsible for overseeing all other aspects of management.1. Functions To communicate with lower managers what top management has decided upon. To bring together the ideas of top management.

2. Responsibilities To oversee administrative activities. To lead and direct employees.

II. Finance Manager The FM is the one to make sure that finances are efficiently used.1. Functions To understand and evaluate financial performance of the company. To manage the funds in such a way to ensure their optimum utilization with the available resources.

2. Responsibility To make the financial statements. To handle the companys finances.

III. Marketing Manager The MM is the one handling all marketing duties.1. Functions To conduct market research. To develop a marketing strategy. To identify new business opportunities.

2. Responsibilities To handle market surveys and research results. To seek out opportunistic events.

IV. Assistant Marketing Manager The AMM is the one to assist the MM.1. Functions To assist the marketing manager.

2. Responsibilities To help in market research.V. Human Resources Manager The HRM is the one to handle all aspects of human resources.1. Functions To handle group concerns. To play as peace keeper.

2. Responsibilities To help in improving sales packages. To oversee department functions.

VI. Assistant Human Resources Manager - The AHRM is the one to assist the HRM.1. Functions To assist the HRM.2. Responsibilities To help in improving sales packages. To oversee department functions.

VII. Operations Manager The OM is the one to manage all production processes.1. Functions To improve the efficiency of operations. To improve control of service levels and quality.

2. Responsibilities To develop processes of planning, designing and operating production systems and sub-systems.

VIII. Production Supervisor The PS is the one to oversee all production.1. Functions To oversee production first-hand. To instruct how production is to be done.

2. Responsibilities To oversee the production process. To analyze inventory levels and supply needs.

5.4. Compensation and BenefitsSalary and WagesSalaries and wages for the General Manager and his 7 employee-managers will be at Php 40 per hour.BenefitsSSS - Wraps are given SSS benefits which cover sick pay (for sick leaves used up), maternity pay, retirement pay, death and funeral. Employees pay half of the monthly contributions based on the range of salary and the other half is covered by the company as stated in the Philippine Labour Law.For Wraps, its total contribution includes the employers and employees share, summing up to P320 per month.The compensation for the employer and each employee is P1280 and its monthly salary credit is 1500. Thus, the employer and the employee would be paying 10.4% on a monthly basis. CompensationEmployer Employee

Social Security

Php 1280.00ER (7.07%) EE (3.33%)Total Contribution

Php106.00 Php50.00Php156.00

The next page shows the table or range of compensation and its corresponding contribution and the requirements for registering.* See attached table in the Appendices Section.

PHILHEALTH - Medical assistance provided by PhilHealth can help the wrap employees. 0% of the monthly contribution is paid by the employees and the other half is paid by the employer.* See attached form in the Appendices Section.

PAG-IBIG - wrap employees can avail the PAG - IBIG benefits as mandated. Both the employee and the employer will have an equal share of contribution. Pag-IBIG Fund guarantees the refund of member's total accumulated savings (TAV), which consists of the member's accumulated contributions, the employer counterpart contributions, if any, and the dividend earnings credited to the member's account upon occurrence of any of the following grounds for withdrawal:

1. Membership maturity. The member must have remitted at least 240 monthly membership contributions with the Fund. For Pag-IBIG Overseas Program (POP) members, membership with the Fund shall be at the end of five (5), ten (10), fifteen (15), or twenty (20) years depending on the option of the member upon membership registration.2. Retirement. The member shall be compulsorily retired upon reaching age 65. He may however, opt to retire upon the occurrence of any of the following: Actual retirement from the SSS, the GSIS or a separate employer provident/retirement plan, provided the member has at least reached age 45. Upon reaching age 60.3. Permanent and Total Disability or Insanity. The following disabilities shall be deemed total and permanent: Temporary total disability lasting continuously for more than 120 days; Complete loss of sight of both eyes; Loss of two limbs at or over the ankle or wrist; Permanent complete paralysis of two limbs; Brain injury resulting in incurable imbecility or insanity; and Such other cases which are adjudged to be total and permanent disability by a duly licensed physician and approved by the Board of Trustees.4. Separation from the service due to health reason5. Permanent departure from the country6. Death. In case of death, the Fund benefits shall be divided among the member's legal heirs in accordance with the New Civil Code as amended by the New Family Code.

Monthly CompensationPercentage of Monthly Compensation

Employee ShareEmployer Share

Php1,500.00 and below1%2%

Over Php1,500.00 2%2%

For WrapsMonthly CompensationContribution

EmployerPhp 1,280.00Php25.60

EmployeePhp1,280.00Php25.60

5.5. Organizational PoliciesThe organizational policies of wraps is located in the appendices section of the business plan

5.6. Legal RequirementsThese are the requirements or documents required in order to be able to operate a business. Wraps have applied for the following so as to gain operational status.A. Mayors Business PermitAll businesses must have the necessary permits to operate. For a Mayors permit, business shall pay regulatory fees based on the nature of the business and its capitalization. The following procedures must be followed

REQUIREMENTS:

Duly filled-up and notarized application form with sketch at the back of the form (must be signed by the owner if single proprietor and by the authorized representative if Corporation/Partnership/Cooperative) Photocopy of one valid ID of the signatory Personal proof of billing of owner (if single proprietor) Picture of the business location that includes the nearby establishments For Single Proprietor Certificate of registration from the Department of Trade and Industry (DTI)

Fees to be paid upon acquiring a business permit are the following

Business Taxes 0.0005 x Capital Investment Permit Fee 0.002 x Capital Investment City Health Inspection Fee Based on Capital Investment (max. Php 200.00) Zoning Fee Based on Capital Investment (max. Php 550.00) Food and Drug Fee (in case the business is food related) Based on Capital Investment (max Php 150.00) Fire Department Fee - 10% of total regulatory Fees Garbage Fee Based on the Nature and Area of the business (ordinance # 2018: Omnibus Tax Code Imposition of Garbage Fee) Community Tax Certificate Php 80.00 (2% interest per month for late cedulas for single proprietorship) Corporate Cedula Php 500.00 (Basic only)

*sample copy of Mayors business permit is found in the Appendices Section.

B. Barangay Clearance

1. Get a Cedula / Residence Certificate from the Cebu City Hall.2. Apply for a Barangay Clearance in the Barangay. This costs Php 25.00 per clearance.*sample copy is found in the Appendices Section.

C. DTI for business name registration

This is basically the first to do when starting a business. You have to register the name of the business before it officially operates.

REQUIREMENTS: Filled out application form Any valid ID Registration fees for business name registration depending on the territorial jurisdiction covered in the application:

Barangay: PHP 200.00

City/Municipality PHP 500.00

RegionalPHP 1,000.00

NationalPHP 2,000.00

Once the business concept has been approved, that is when the group will have wraps officially registered regionally. *sample copy is found in the Appendices Section.

D. Application for Taxpayerss Identification Number (BIR)

Its purpose is to monitor the legality of the business operation with regards to the laws and regulation of the state or country. There are two stages upon registration: INITIAL STAGE Application and the issuance of the Taxpayer Identification Number (TIN)

SECOND STAGE Subsequent registration of the employment, business, profession, and/or undertaking which the person, natural or juridical, intends to pursue on account of which the entity is expected to regularly file tax returns, pay taxes and fees prescribed for by the Code, as amended.

TIN or taxpayer Identification NumberPertain to the reference index number issued and assigned by the BIR to each and every person registered in its database Non transferable

In case of natural persons, stays with the taxpayer regardless of the cessation and cancellation of business registration with the BIR

Only one (1) TIN shall be assigned to the taxpayer. Multiple TIN acquisition shall be subject to penalty of P1,000 for each TIN in excess of one

Who are required to have a TIN? Every person subject to any national internal revenue tax

Withholding Agents

Any person required to make, render or file a return, statement or document where TIN is required to be indicated therein

Any person required to secure TIN by reason of EO No 98

Persons/Entities required to proceed to the second stage of primary registraion: Employees

Self-employeed individuals, professionals, Estates and Trusts, and their Branches or facilities, if any.

Corporations, Partnerships, Cooperatives, Associations, (whether taxable or non-taxabl) and their branches and facilities, if any

GAIs, GOCCs, LGUs, and their branches and facilities

Therefore, Wraps is entitled to proceed to the second stage

Components of the second stage if the primary registration Payment of registration fee

Secure Certificate of Registration (COR)

Get Ask for Receipt Notice, if applicable

Attend the Taxpayers initial briefing to be conducted by the BIR for new registrants in order to apprise the taxpayers of their rights and duties/responsibilities

Where to Register? Same RDO where one applied for TIN After which, have a COR (certificate of registration) Also, Books of Accounts must be secured by the business. Always Remember to issue receipts and invoices to avoid penalties. Failure refusal to issue receipts/invoices upon conviction of each act or omission, be punished by a fine of not less than P1000.00 but not more than P50,000.00 REUIREMENTS: BIR Form 1901 (Application Form)

BIR Form 0605 (Payment of Registration Fee)

Notarized Photocopy of the DTI Certificate of Registration of Business Name

Authenticated Photocopy of the Mayors Permit/PTR issued by LGU

Authenticated Photocopy of the Birth certificate, Marriage Contract (if applicable)

Sketch design of Business Address

Photocopy of the Leased Contract, If Applicable

The next page shows the BIR form 1901 (Application Form)

Table for Business Registration and Legal Requirement Expense ITEMS COST

Mayors Business PermitPhp 4,000.00

Barangay Clearance

Php 400.00

DTI

Php 1000

BIR

Php 550.00

Other possible expenses or allowance

Php 1050.00

Total

Php 7,000.00

*sample copy is found in the Appendices Section.

CHAPTER 6FINANCIAL PLAN

6.1. Financial Objectives and TargetsThe goal of this financial plan is to prepare the business entity WRAPS for all possible contingencies and unexpected costs. This financial plan is to prevent the naivety of entrepreneurs and investors who are ignorant to the possible risks and costs of conducting a business venture. This financial plan is meant to inform and prepare its users for future possibilities.6.1.1. Total Project CostThe total project cost will consist of the total capital expenditure to start up the business, one months rental, one months salaries and wages, and 3 months cost of sales at projected values.6.1.2. Capital Structure / Sources of FinancingA total project cost of Php 260,907 is required for the operation of the company. The total amount will be divided by each member having an equal capital share of Php 32,613.38.6.1.3. Investment Returns and RisksThe likely returns are significant profits, possibly up to a few thousand pesos per month at the best of scenarios. Risks are also significant, but not nearly as large as the returns if the project succeeds.6.1.4. Profitability LevelsCosts are expected to be low while profits are expected to be on the medium level. If projected sales volumes or higher are reached, profits are expected to be significant.6.1.5. Cash FlowsAn indirect method of cash flow representation will be used. All business transactions will be in cash and no accounts receivables or accounts payables shall be placed. All capital will be derived from the investments of the sole proprietor and his partner-managers and no liabilities shall be incurred.

6.1.6. Survival ExpectationsThe business venture is limited only by its ability to sell. It can be expected that there are very few external threats to the venture as it is within the safe vicinity of the school campus of the University of San Carlos Main and its main competitors are the amicable food stalls of Kolks Nook and fellow student enterprises.6.1.7. Sustainability ExpectationsOperations are well easily sustainable as all transactions will be in cash and final consumers will be dealt with directly. The product is nothing new on the surface but is actually something new and innovative. If the product is marketed well and the market knows well about the product, it can be expected that sustainability and even success will be within reach.6.2. Statement of Assumptions6.2.1. Income Statement6.2.1.1. Pricing and Costing Method UsedPrices are cost-based. It costs approximately Php 30.26 to make a Wrap. The team decided to price the Wrap at Php 60, a 98.28% mark-up, which is almost a 100% mark-up.6.2.1.2. Volume TrendsThe team thinks their promotional methods and the unveiling of a new student enterprise will cause sales on June to be about 60 units per day. During normal, non-special days (i.e. Intramurals, SBE Week, SYBEE Days), the team expects sales of the Wrap to stabilize to about 50-60 units per day.6.2.1.3. Production Costs / Service Costs (June 2013)Rent ExpensePhp 3,000

Utilities Expense6,900

Salaries Expense9,600

Transportation Expense1,120

Cost of Goods Sold27,234

Total Production Cost per monthPhp 47,854

6.2.1.4. Operating Costs (June 2013)Rent ExpensePhp 3,000




Supplies Expense75

Office Supplies Expense30

Total Operating Cost per monthPhp 20,725

6.2.1.5. Financing CostsNo external financing shall be engaged. All finances shall come directly from sole proprietor and partner-managers.6.2.1.6. Tax AssumptionNot applicable for first year of operations.6.2.2. Balance Sheet6.2.2.1. Accounts Receivable and Cash Collection PoliciesAll income transactions shall be immediate cash collection transactions. There will be no sales on account. All sales will be in cash.6.2.2.2. InventoriesInventories shall be replenished every week. The following table shows the minimum amount of inventory required at the beginning of the week to make 50 Wraps per day for one week.Tortilla breadPhp 3,000

Chicken breast fillet1,688

White cabbage198

Cucumber168

Tomato73

Mango300

Spices745

Wrap Packaging275

Sauce1,120

Plastic gloves25

Total InventoriesPhp 7,592

6.2.2.3. Prepaid ExpensesAll expenses shall be paid on or slightly before their due dates when payment is immediately necessary.6.2.2.4. Other Current Assets2 Grills (Php 1,890 each)Php 3,780

Slow cooker1,050

Tongs200

Spatula200

Refrigerator55,000

Flush dispenser3,000

Weighing scale580

Stall Frame12,000

Tarps & signs5,000

Tables2,000

Chairs500

Papers50

Notebooks & Ledgers50

Pens20

Total Other Current AssetsPhp 83,430

6.2.2.5. Accounts Payable and Purchases PaymentsAll payments shall be made in cash. No liabilities shall be incurred.6.2.2.6. Accrued Expenses (June 2013)Rent ExpensePhp 3,000




Total Accrued Expenses per monthPhp 20,620

6.2.2.7. Other Current LiabilitiesNo external financing or payments on account shall be made. All transactions will be done with cash from the sole proprietor and his partner-managers.6.2.2.8. Borrowings and PaymentsNo external financing shall be used. All capital will come from invested capital of the sole proprietor and his partner-managers.6.2.2.9. CapitalizationA total capitalization of Php 260,907 will be required to start up the business.6.2.2.10. Dividends / DrawingsDividends shall be paid evenly amongst the sole proprietor and his partner-managers. Drawing will be accessible to only the sole proprietor.

6.3. Total Project Cost6.3.1. ComponentsEquipment2 Grills (Php 1,890 each)Php 3,780

Slow cooker1,050

Tongs200

Spatula200

Refrigerator55,000

Flush Dispenser3,000

Weighing Scale580

Php 63,810

StallStall Frame12,000

Tarps & signs5,000

Tables2,000

Chairs500

19,500

Research & Development6,585

Surveys & Taste Tests2,030

Legal Requirements7,000

Provision for Contingencies (20%)19,785

Operating CapitalAdvanced RentalPhp 3,000

Advanced Salaries and Wages (1 month)12,800

Advanced Utilities (1 month)6,900

Cost of Goods SoldVariable Cost per UnitPhp 30.26

Projected Sales for June990 units

Projected Sales for July1,265 units

Projected Sales for August1,694 units

119,497

142,197

Total Project CostPhp 260,907

6.3.2. Sources of FundsFunds will come from the investments of the sole proprietor and his partner-managers.6.4. Projected Financial Statements6.5. Projected Income Statement (for June 2013)SalesPhp 59,400

Less: Cost of Goods Sold29,957

Gross ProfitPhp 29,443

Less: Operating Expenses

Supplies Expense100


Salaries and Wages9,600

Rent Expense3,000



Depreciation Expense1,389

Loss due to wastage and spoilage200

Less: Selling Expenses

Advertising Expense200

Less: Other Expenses

Miscellaneous Expense100

Net IncomePhp 6,804

6.6. Projected Cash Flow Statements (for June 2013)Cash, BeginningPhp 142,197

Cash provided (used) by operating activities6,804

Cash provided (used) by investing activities0

Cash provided (used) by financing activities0

Cash, EndingPhp 149,001

6.7. Projected Balance Sheet (end of June 2013)ASSETS

Current Assets

CashPhp 149,001

Office Supplies120

Inventories7,592

Non-current Assets

Equipment63,810

Less: Accumulated depreciation(1,064)

Furniture & fixtures19,500

Less: Accumulated depreciation(325)

Total AssetsPhp 238,634

LIABILITIES & OWNERS EQUITY

Valenzuela, CapitalPhp 231,830

Retained Earnings6,804

Total Liabilities & Owners EquityPhp 238,634

6.8. Set of Schedules and ChartsTimePersonsWage / hour

8:00am - 10:00amJohn David GenosaPhp 40

Elijah Ross TiuPhp 40

10:00am - 12:00pmJed Earl GoPhp 40

Rafael Dave EspaolPhp 40

12:00pm - 2:00pmJohn Davidson TanPhp 40

Earl Justice CuevasPhp 40

2:00pm - 4:00pmLambert Lamthai LimPhp 40

Irvin Edu ValenzuelaPhp 40

6.9. Financial Evaluation6.9.1. Vertical Analysis6.9.1.1. Financial Ratio Analysis6.9.1.2. Liquidity RatiosThere will be no liabilities. The enterprise will incur no liabilities. All investments and finances shall come from the sole proprietor and his partner-managers.6.9.1.3. Cash RatioThere will be no liabilities. The enterprise will incur no liabilities. All investments and finances shall come from the sole proprietor and his partner-managers.6.9.1.4. Acid-Test RatioThere will be no liabilities. The enterprise will incur no liabilities. All investments and finances shall come from the sole proprietor and his partner-managers.6.9.1.5. Current RatioThere will be no liabilities. The enterprise will incur no liabilities. All investments and finances shall come from the sole proprietor and his partner-managers.6.9.1.6. Collection PeriodThere will be no accounts receivable. All business transactions will be in cash.6.9.1.7. Accounts Receivable TurnoverThere will be no accounts receivable. All business transactions will be in cash.6.9.1.8. Days Sales in InventoriesNumber of Days in Period / Inventory Turnover = 15 / 3.95 = 3.8 days6.9.1.9. Inventory TurnoverCost of Goods Sold / Inventory = 29,957 / 7,592 = 3.956.9.1.10. Working Capital TurnoverSales / Working Capital = 59,400 / 142,197 = 0.426.9.2. Earnings / Profitability Ratios6.9.2.1. Gross Profit RatioGross Profit / Sales Revenue = 29,443 / 59,400 = 0.56.9.2.2. Operating Margin RatioNet Income / Sales Revenue = 6,804 / 59,400 = 0.116.9.2.3. Return on Sales6.9.2.4. Return on Assets / ROINet Income / Total Assets = 6,804 / 238,634 = 0.036.9.2.5. Return on Equity / CapitalNet Income / Average Owners Equity = 6,804 / 235,232 = 0.036.9.2.6. Return on Net Working CapitalNet Income / Working Capital = 6,804 / 142,197 = 0.056.9.2.7. Return on Fixed AssetsNet Income / Total Fixed Assets = 6,804 / 19,500 = 0.356.9.2.8. Stability Ratios6.9.2.9. Debt-Equity RatioTotal Liabilities / Total Owners Equity = 0 / 238,634 = 0.006.9.2.10. Times-Interest Earned RatioThere will be no interest expense as there will be no liabilities.6.9.2.11. ROE vs. ROA6.9.3. Cost-Volume Profit Analysis6.9.3.1. Variable Cost ComponentTortilla breadPhp 12

Chicken breast fillet6.75

White cabbage0.79

Cucumber0.67

Tomato0.29

Mango1.20

Spices2.98

Wrap Packaging1.10

Sauce4.48

Variable CostPhp 30.26

6.9.3.2. Fixed Cost ComponentSupplies ExpensePhp 100


Salaries and Wages9,600

Rent Expense3,000



Depreciation Expense1,389

Loss due to wastage and spoilage200

Advertising Expense200

Miscellaneous Expense100

Total Fixed CostsPhp 22,639

Total Cost per Unit (at 50 units per day and 20 working days per month)Variable CostPhp 30.26

Direct Labor (Php 12,800 / 1,000)12.80

Utilities (Php 6,900 / 1,000)6.90

Rent (Php 3,000 / 1,000)3.00

Supplies Expense (Php 100 / 1,000)0.10

Office Supplies Expense (Php 30 / 1,000)0.03

Transportation Expense (Php 1,120 / 1,000)1.12

Depreciation Expense (Php 1,389 / 1,000)1.39

Loss due to wastage and spoilage (Php 200 / 1,000)0.20

Advertising Expense (Php 200 / 1,000)0.20

Miscellaneous Expense (Php 100 / 1,000)0.10

Total Cost per WrapPhp 56.10

6.9.3.3. Breakeven Point AnalysisBEP (units) = Fixed Costs / Contribution Margin = 22,639 / 29.74 = 762 unitsBEP (pesos) = BEP (units) x Selling Price = 762 x 60 = Php 45,7206.9.4. Investment Returns Analysis6.9.4.1. Payback PeriodInitial Investment / Earnings per period = 260,907 / 6,804 = 38.35 periodsCHAPTER 7CONCLUSIONS AND RECOMMENDATIONS

The team would like to conclude that the business venture is projected to be profitable, but just as all projections are, they are merely bound by assumptions and analyses. In the end, it is the properness of execution and the other contingency factors that actually declare the final say. Also, the team would like to mention how important it is for the business to be living. It must circulate and continue its movements in order to survive. Most importantly, it needs to grow. In that sense, there is a need for the team to trust in their efforts and in what they plan. There is a need for the members to cooperate with one another so as to avoid conflicts and to continue productions and operations. The team must continue making marketing efforts as well as expansions in order to maximize profits. And when all odds are against them, the team must know when to swallow their pride and decide whether temporal shut down of operations or to sell the assets is best.

APPENDICESOrganizational Policies1. All reports are to be screened by the General Manager.2. Everyone is to report to the General Manager.3. The General Manager has the final decision, but in the absence of the General Manager, all decisions are to be handled by the HR manager with the consent of the General Manager.4. All files are to be kept and managed by the HR manager.5. If one member fails to cover his shift, and another member covers for him, the one who is absent is obliged to cover for the person who took over for him if he does not have class.6. Everyone must submit their work on time.7. Everyone must attend the meetings set by the General Manager

PenaltiesFailure to comply with any of the following policies results in the following penalties1st OffenseOral warning

2nd OffenseWritten warning

3rd OffensePayment of P50 to the group fund

4th OffensePayment of P200 to the group fund

5th OffenseExpulsion from the group

Legal Forms Social Security Services PhilHealth Pag-Ibig Mayors Permit Barangay Clearance Department of Trade and Industry Bureau of Internal RevenueSchedule of Payments in a monthDayExpense AccountAmount in Pesos

Week 1MondayTransportation Expense280

Tuesday

Wednesday

Thursday

Friday


Tuesday

WednesdayRent ExpenseUtilities Expense3,0006,900

Thursday

Friday


Tuesday

Wednesday

Thursday

Friday

Week 4MondayTransportation ExpenseSupplies ExpenseOffice Supplies Expense28010030

Tuesday

Wednesday

Thursday

FridaySalaries and Wages12,800

The Management TeamNamePositionMobile NumberEmail Address

Irvin Edu ValenzuelaGeneral [email protected]

Elijah Ross TiuMarketing [email protected]

Earl Justice CuevasAssistant Marketing [email protected]

Jed Earl GoOperations [email protected]

Rafael Dave EspaolProduction [email protected]

John Davidson TanHuman Resource [email protected]

John David GenosaAssistant Human Resource [email protected]

Lambert LimFinance [email protected]

Other Pertinent DocumentsChef Survey QuestionnaireGood day chefs, students and faculty, today we are conducting a taste test in which we direly need your ideas on our product. We are called Wraps. We are Business Administration students majoring in Entrepreneurship who are currently enrolled in Entrep 39. We have decided that only the food experts can give credential insight. Please do answer and speak your mind as you taste our product today. Thank you for your time.

1. 2. Are there any items sold in the market that is similar to what you have tasted? If so, please name them.a. _______________b. _______________c. _______________d. _______________

3. How are these products the same with the product that we offer to you today?a. b. c. d.

4. If this product was sold in the market, would you buy it? Why or why not?

5. How much would you buy this product?_______________

6. Any recommendations on how to improve the product?

7. What makes this product distinct?

8. How would you package this product?

9. If you were to create your own wrap, what would you use as for the wrap? (Ie., would you still use tortilla bread?) Why use that?

10. Do you think this is good enough to be a casual everyday meal? (Ie., a meal that is worth coming back to and not a meal that easily makes one bored.)Yes _____No _____

Comments and Suggestions (especially on the sauce):Chef Survey Qualitative AnalysisA taste test was conducted with three USC chef instructors Chef Erwin K. Yerro, Chef Ariel Valienos and Chef Bimbo, along with class of culinary students regarding the proportions of spices, the propriety of procedures, taste of and the sanitation of workplace. The purpose of the taste test with the chefs was to get their insight on the product as a whole. The team decided that surveying students about a product they do not know will give high probabilities of false data. As such the teams marketing adviser advised the team to also conduct a survey among professional chefs in order to get a response that is with credence. There were two taste tests conducted. During the first, the chefs corrected the mistakes and suggested better sauces and ways to improve the product. It was during the second taste test that the survey was conducted along with the class of culinary students. Their response was voiced collectively in four questionnaires. Because the responses were meant to be qualitative, the team decided that the student survey The first product that all the respondents thought similar with our product was Shawarma. They had different reasons ranging from similar wrapping idea, similar sauce, similar appearance and similar size. Because the chefs see the product similarly with Shawarma, the team believes that the competition will be tight. Although according to the size, Wraps is bigger than Shawarma, the respondents hardly saw the difference. Also, because Wraps is the new entrant among the two similar products, it will seem to the public that Wraps is simply copying Shawarma. The team must create a greater differentiation to take a step further.All the respondents mentioned that they are willing to buy/try the wraps if sold in the market. However, according to price, 25% were willing to buy at the price of P60, 50% were willing to buy at P50 and 25% were willing to buy at P100. When asked what improvements they would request, 25% mentioned more twist to the idea, 25% mentioned more quantity, 25% mentioned do not overpower the spices in the sauce, and 25% mention flavor. The team will truly add more twist to the idea, and try to perfect the amount of spices in the wrap to improve flavor. However, the team believes that adding more meat would simply add up to the unit cost. The team believes that the change of customers in adding more meat at a higher price is negative. The team thinks that these the target market always want more, but want a lower price even more.When asked concerning the products distinction, the respondents mentioned that the mangoes and the rice in the wrap were what differentiated the product from the rest. Because of this, the team will continue searching for better differentiations that will mark the distinction between wraps and shawarma.When asked concerning the package, ideas included aluminum foil, carton and plastic. Plastic seems to be most cheap and convenient, however, it is not environmentally friendly. Aluminum foil is sturdy and clean, but quite expensive. Carton is cheap and friendly to the environment; however, it is not as convenient as the others. Among the three, the team will weigh decisions until further notice.When asked on what bread they would use if they were to create their own wrap, 25% mentioned pita bread, 25% mentioned tortilla bread, 25% mentioned both pita and tortilla bread, and 25% mentioned crepes. Pita had been a thought to the entrepreneurial team at first, but the team knew that pita is not as good as tortilla, although the shelf life of the pita bread is better. Crepe on the other hand is a whole other story. The team wishes to serve a meal, and not a dessert, so the team will disregard the suggestion.When asked whether the product does not easily bore the consumers, 50% said yes and 50% said no. This means that it is the kind of meal that easily bores consumers. Although they believe it is quite fine, they think that if it were eaten casually, one would simply get bored with it. To address this analysis, the team will follow up with different side sauces, fancy drinks and perhaps side dishes such as fries.Finally, the comments and suggestions that the respondents placed included how surprising the mango was and how there had been too much cumin powder. Both will be taken into consideration especially on the ripeness of the fruit and on the proportion of the said powder in the sauce.

Student Survey Questionnaire

Good day! We are entrepreneurial students who would like to ask your for a bit of time to answer this survey. We intend to introduce a new product, the Wrap, to your community. Wraps is a healthful fast-food similar to a burrito or shawarma. We would like to hear your opinion so as to serve you better. Please note that all the items here are private, will be kept confidential, and will in no way be used against you.1. Status (please check all that apply):___ Student___ Faculty___ StaffMonthly allowance/income:___ below P1,500___ P1,500 - P2,500___ P2,501 - P4,000___ P4,001 - P8,000 ___ P8,001 - P12,000 ___ P12,001 - P15,000 ___ P15,001 - P30,000 ___ P30,001 - P50,000 ___ above P50,0002. How much do you usually spend for meals and snacks?SnacksMeals___ below P10 ___ below P10___ P10 - P25 ___ P10 - P25___ P26 - P40 ___ P26 - P40___ P41 - P60 ___ P41 - P60___ P61 - P80 ___ P61 - P80___ P81 - P100 ___ P81 - P100___ above P100 ___ above P100

3. Do you go to Kolks Nook for a snack at least once a week?___ Yes___ No4. Do you go to Kolks Nook for a meal at least once a week?___ Yes___ No5. Do you always have rice in your meals?___ Yes___ No6. Do you often lack time to take your lunch?___ Yes___ No7. Is your health a big factor or consideration when selecting the food for your meals?___ Yes___ No8. Which stall/s do you usually buy from at Kolks Nook? (please check all that apply):___ Leylam Shawarma___ Panlasang Pinoy___ Master Siomai___ Burp!___ Lola Inda9. What would you like to have in our Wrap? (please check all that apply):___ Chicken___ Beef___Pork___ Fish___ No meat, only veggies!

Thank you for your time!

Student Survey AnalysisRESPONDENTS OF THE STUDY400 students of the University of San Carlos - Main Campus who happened to be in the convenience of the researchers are the respondents of the study. The student population of the University of San Carlos Main Campus numbers about 6,498. Slovens formula, n = N / (Pe^2), defines that with a total population of 6,498, the sample size must number 377 respondents. The researchers decided to survey a sample size of 400.DATA PROCESSING AND ANALYSISThe researchers first gathered the percentages of the student population who may buy the product Wraps. They multiplied the percent values by the total population size of 6,498. Finally, they quantified the final results and concluded accordingly.CONCLUSIONSThe research team concludes that the burrito-like product, Wraps, is a viable selling product for fast food outlets.The following are the findings of the study based on the data gathered. 1. A significant majority of 66% of respondents claim that their meals usually cost above the selling price of Wraps, Php 60. 2. More than half of respondents eat their snacks at Kolks Nook at least once a week.3. Approximately 65% of respondents eat their meals at Kolks Nook at least once a week.4. A vast majority, 85% of respondents, always have rice in their meals.5. Health is a big factor to 94% of respondents when selecting their food.6.

RECOMMENDATIONSThe Wrap may need to lower prices or market its higher value in order to compete more effectively with their main competitor, Leylam Shawarma. It is also recommended that it be offered in a variety of meats and vegetables, as respondents seem to desire a variety of ingredients to be available inside the Wrap.The survey also shows that an increasing percentage of the student population desire to eat healthy. The Wrap should maintain its reputation of being a healthy option in the world of unhealthy fast food.Lastly, an estimate of the demand for the Wrap has been established by multiplying the percentages of the answers of respondents that would make them potential customers, and multiplying that portion by the student population of the University of San Carlos -Main Campus.Using the percentages of the results, the researchers have concluded that a demand of 54 Wraps a day is plausible. This is derived from multiplying the percentages of answers favourable to the purchase of Wraps in Tables 2,4,5,7,9, and 10.Table 2 shows that 61% of respondents usually spend more than Php 60, the price of one Wrap, for a meal.Table 4 shows that 65% of respondents who go to Kolks Nook for a meal at least once a week.Table 5 shows that 15% of respondents do not require rice in their meals.Table 7 shows that 94% of respondents consider their own health before purchasing their food, which may propel them to purchase a Wrap instead of a Shawarma.Table 9 shows that Leylams Shawarma is popular with about 42% of respondents.Lastly, Table 10 shows that 72% of respondents would enjoy chicken in a Wrap.Multiplying the entire USC-Main population of 6,498 with 61%, 65%, 15%, 94%, 42%, 72%, then dividing it by 5 as there are 5 school days in one week (based on Table 4), and lastly multiplying it 2.5, which is the almost the median of 5 days (based on Table 4, almost the median because Friday sees a decreased student population), then the estimated demand for a Wrap worth Php 60 each is 55 units a day.TABLES AND GRAPHS*Note: In the tables shown below, the choices in the survey questionnaire are in the left-most column, with the number of respondents who checked that choice in the 2nd column, and the percentage of the 400 respondents who checked that particular choice in the 3rd column with their respective graphical charts underneath them.Table 1 - Monthly AllowanceBelow Php 1,5003810%

Php 1,500 - Php 2,5005714%

Php 2,501 - Php 4,0005313%

Php 4,001 - Php 8,00010927%

Php 8,001 - Php 12,0009323%

Php 12,001 - Php 15,000277%

Php 15,001 - Php 30,000133%

Php 30,001 - Php 50,00051%

Above Php 50,00051%

Table 2 - Usual Cost of SnacksBelow Php 104712%

Php 10 - Php 255113%

Php 26 - Php 408822%

Php 41 - Php 605113%

Php 61 - Php 80359%

Php 81 - Php 10010125%

Above Php 100277%

Table 3 Usual Cost of MealsBelow Php 10277%

Php 10 - Php 25318%

Php 26 - Php 40318%

Php 41 - Php 606416%

Php 61 - Php 8010927%

Php 81 - Php 1009323%

Above Php 1004511%

Table 4 Eat snacks at Kolks Nook at least once a weekYes21153%

No18947%

Table 5 Eat meals at Kolks Nook at least once a weekYes25965%

No14135%

Table 6 Do you always have rice in your meals?Yes33985%

No6115%

Table 7 Do you always lack time to eat lunch?Yes4511%

No35589%

Table 8 Is your health a big factor when selecting food?Yes37694%

No246%

Table 9 Which stalls do you usually buy from at Kolks Nook?Leylam Shawarma16842%

Panlasang Pinoy18446%

Master Siomai15739%

Burp!21654%

Lola Inda10727%

Table 10 What would you like to have in our Wrap?Chicken28872%

Pork29674%

Beef25965%

Fish21153%

No meat, only veggies!6115%

STUDENT PROFILE

Name: Earl Justice Garcia CuevasCourse & Year: BS-Entrepreneurship 2ID No.: 11102372Date of Birth: December 12, 1994Age: 17Gender: MaleStatus: SingleAddress: #06 Maya St., Sto. Nio Village, Banilad, Cebu CityNationality: FilipinoReligion: ChristianContact No.: 09228371977E-mail Address: [email protected]

PARENTS:Fathers Name: Virgilio G. CuevasContact No.: N/A (deceased)Mothers Name: Linella G. CuevasContact No.: 09173216513

EDUCATIONAL ATTAINMENT:College: University of San Carlos-Main Campus

High school: Philippine Christian Gospel SchoolDate graduated: 2011

Elementary: Mandaue Christian SchoolDate graduated: 2007

Interests: Playing the guitar and basketballMotto: Trust God with all your heart and lean not on your own understanding

STUDENT PROFILE

Name: Rafael Dave G. EspaolCourse & Year: BS-Entrepreneurship 2ID No.: 11102489Date of Birth: October 04, 1994Age: 17Gender: MaleStatus: SingleAddress: 62-a Kabajar Road, Guadalupe, Cebu CityNationality: FilipinoReligion: CatholicContact No.: 09334298263E-mail Address: rafael [email protected]

PARENTS:Fathers Name: Leopoldo EspaolContact No.: (032) 316-1446Mothers Name: Adelia EspaolContact No.: (032) 272-0759

EDUCATIONAL ATTAINMENT:College: University of San Carlos Main Campus

High school: Cebu Eastern CollegeDate graduated: 2011

Elementary: Cebu Eastern CollegeDate graduated: 2007

Interests: CarsMotto: No money, no honey!

STUDENT PROFILE

Name: John David Macrohon GenosaCourse & Year: BS-Entrepreneurship 2ID No.: 11102377Date of Birth: January 18, 1994Age: 18Gender: MaleStatus: SingleAddress: Sea Breeze Homes, Mactan, Lapu-Lapu CityNationality: FilipinoReligion: Born AgainContact No.: 09228552469E-mail Address: [email protected]

PARENTS:Fathers Name: Nathan GenosaContact No.: N/AMothers Name: Sandra Genosa Contact No.: 0917844957/ 09237350336



Elementary: Philippine Christian Gospel SchoolDate graduated: 2007

Interests: Music and sportsMotto: Never say never

STUDENT PROFILE

Name: Jed Earl Chua GoCourse & Year: BS-Entrepreneurship 2ID No.: 11102373Date of Birth: December 06, 1994Age: 17Gender: MaleStatus: SingleAddress: #52 Paseo Annabelle Maria Luisa Park, Banilad, Cebu CityNationality: FilipinoReligion: ChristianContact No.: 09227953150 / 09173641402E-mail Address: [email protected]

PARENTS:Fathers Name: Johnny Uy GoContact No.: 09173230500/316-3186Mothers Name: Elena Chua GoContact No.: (032) 515-1133



Elementary: St. Benedict Childhood Education CenterDate graduated: 2007

Interests: Earning money myselfMotto: Many people choose to ask why?, I choose to ask why not?

STUDENT PROFILE

Name: Irvin Edu Ong ValenzuelaCourse & Year: BS-Entrepreneurship 2ID No.: 11104276Date of Birth: November 01, 1990Age: 21Gender: Male Status: SingleAddress: #2 Macaraya Street San Agustin Village, TugasPardo, Cebu CityNationality: FilipinoReligion: ChristianContact No.: 09325387507E-mail Address: [email protected]

PARENTS:Fathers Name: Christon Ching ValenzuelaContact No.: 516-8089 / 520-1476Mothers Name: Jenneth Ong ValenzuelaContact No.: 516-8089 / 520-1476


High school: Cebu Eastern CollegeDate graduated: 2011

Elementary: Cebu Eastern CollegeDate graduated: 2005

Interests: LearningMotto: Nothing is Impossible

STUDENT PROFILE

Name: Elijah Ross Ong TiuCourse & Year: BS-Entrepreneurship 2ID No.: 11102636Date of Birth: November 16, 1994Age: 17Gender: MaleStatus: SingleAddress: 682 V. Rama Avenue, Cebu CityNationality: FilipinoReligion: ChristianContact No.: 09336587497E-mail Address: [email protected]

PARENTS:Fathers Name: Alan Yu TiuContact No.: 09228884151Mothers Name: Rosita Sing Ong TiuContact No.: 09228884152


High school: Bethany Christian SchoolDate graduated: 2011

Elementary: Bethany Christian SchoolDate graduated: 2007

Interests: Photography, literature, music, and friendsMotto: All things work together for good to those who love God and work according to His purpose

STUDENT PROFILE

Name: Lambert Lamthai Binamira Lim Jr.Course & Year: BS-Entrepreneurship 2ID No.: 11102367Date of Birth: September 11, 1993Age: 19Gender: MaleStatus: SingleAddress: 8 Crimson Ct. South Hills, Tisa, Cebu CityNationality: FilipinoReligion: AgnosticContact No.: 09228207165E-mail Address: [email protected]

PARENTS:Fathers Name: Lam Thai LimContact No.: 09173207165Mothers Name: Rhodora Binamira LimContact No.: N/A



Elementary: Cebu Cherish SchoolDate graduated: 2007

Interests: Swimming, wall climbing, badminton, ping pong, tennis, soccer, and martial artsMotto: Strive to be Happy

STUDENT PROFILE

Name: John Davidson Ang TanCourse & Year: BS-Entrepreneurship 2ID No.: 11102366Date of Birth: June 18, 1994Age: 17Gender: MaleStatus: Single

Address: #10 Pinnata St. North Town Homes, Cabancalan, Mandaue CityNationality: FilipinoReligion: ProtestantContact No.: 09062220174E-mail Address: [email protected]

PARENTS:Fathers Name: David Johnson TanContact No.: 09173200110Mothers Name: Jennifer Mae TanContact No.: 09173216221



Elementary: Philippine Christian Gospel SchoolDate graduated: 2007

Interests: Playing the guitarMotto: God will provide