Mariano Marcos State University College of Business Economics and Accountancy Batac City, Ilocos Norte
(In partial fulfillment of the requirement of the course in ProEl123, nd 2 semester, S.Y. 2009-2010)
AQUACEAN PURE DRINKING WATER
(A BUSINESS PLAN)
Prepared by: Hazel Anne Abut Sheryl Agullana Gerald Domingo Mary Ann Lista Ma Sheryl D. Marzan Mae Ann L. Salviejo
Submitted to: Dr. Leah Ballesteros
March 2010
Purified Drinking Water
The water refilling station
Brgy. 19 San Lorenzo
that is centered in providing
San Nicolas, Ilocos
safe and clean water for
Norte
consumption at
low«
Phone: 771-3214 CP No.:09191234567
low«
E-mail: www.aquacean.com
prices«
Purified Drinking Water
The water refilling station
Brgy. 19 San Lorenzo
that is centered in providing
San Nicolas, Ilocos
safe and clean water for
Norte
consumption at
low«
Phone: 771-3214 CP No.:09191234567
low«
E-mail: www.aquacean.com
prices«
INTRODUCTION Health
is the major priority of every person because it is hard and expensive to be brought
to the hospital once you get sick. Because of this, most people see to it that what they usually take in is safe and clean. Health is a priority, as the saying goes, ³Health is Wealth.´ Purified water was intended for the safety of the people and this is safe for the most sensitive stomach. This type of water is good enough to prevent intake contamination to anyone who has weak fighting cells. In relation to this, most customers are possessing safety assurance in every product they purchase, especially to the products which indeed to be take in such as water. Water is necessary for the very survival of human beings, as it to ensure the smooth functioning of body systems. In fact, 2/3 of our body weight is water. Drinking plenty of water helps fight against flu and ailments, regulates your body temperature and raises your metabolism.
BUSINESS OPPORTUNITES
The Municipality of San
Nicolas
as its name denotes is a town where cooperation and
unity is a way of life. It is considered a rapidly growing center of trade, finance, health, researches and education. It is also known as the home of eminent men and women who have significant contribution in the development and welfare of our country and fellowmen. This section discusses the business opportunities of food delicacies and crafts, and service business. 1.
FOOD DELICACIES AND CR AFTS Opportunities:
2.
y
Pottery
y
Meat Processing
y
Street Food Selling
y
Furniture Making
y
Dress Making/Sewing
y
Food Chains/Eatery
y
Homemade
Foods
SERVICE BUSINESS Opportunities: y
Water Refilling Station
y
Hardware
y
Computer Shops/Internet Café
y
Cell Phone Repair
y
Photo Studio And Framing
y
Spa And Beauty Salon
y
Grocery Stores
y
Laundry Shop
y
V ideoke
y
Merchandise
y
Shopping Centers
y
RTW
y
Jewelry
y
Auto Repair Shop
y
Pawnshops
y
Auto Parts Shop
Bars
Shops
Store
Table
1. Screening of Business Idea Screening
Business opportunities
Water Refilling Station
Marketability
Profitability
Desirability
Demand
Possibility
Total
Rank
(30%)
(35%)
(10%)
(20%)
(5%)
100%
90
95
75
85
65
88%
1
85
92
72
80
70
84.40%
2
70
80
60
60
80
72%
3
Food chain/eatery
Pottery
The criteria for screening businesses are the following: Marketability
It is the acceptability of the business to the market. Profitability
It is how the business will measure its profit. Desirability
It is the willingness of the owner to establish the business. Demand
It is the level of desire or need that exists for a particular business. Possibility
It is the potential for successful future development.
PART II EXECUTIVE
SUMMARY
A.
Name of the firm: AGUACEAN Purified Water Refilling Station
B.
Location: Brgy.16, San Marcos, San Nicolas, Ilocos Norte (along the national highway)
C.
Type/Nature of business: Service/Sole Proprietorship
D.
Proponents: Mary Ann Lista Ma. Sheryl Marzan Sheryl Agullana Mae Ann Salviejo Hazel Ann Abut Gerald Domingo
E.
Brief Description of the project AQUACEAN is a business that is centered in providing safe and clean purified water for
consumption. The target markets of the business are the households, food establishments, schools and nearby towns of San Nicolas. Strategies to trigger competitors product itself is not only made purified but also contains vitamins (vitamin B and C) and minerals (calcium and sodium potassium) that are helpful in fighting bacteria. These practices are some of the processes distinct from the competitors. AQUACEAN can be also accurate in organizing their equipments and maintaining its buildings physical appearance from the day it is establishes up to its growth. And they can be efficient delivering the service on time.
F.
H ighlights
of the Plan
Marketing Aspect
This section includes the target market of the business, demand and supply, competitive position of the business such as the product selling price, competitiveness of the quality product, methods of transportation and existing rates, channels of distribution, and general trade practices, the proposed marketing program such as the product, price, and promotional activities, and the projected sales. Management Aspect
This section presents the classification of the business. It is classified as a single proprietorship. Water refilling station is a simple and can be manage by your own. The proponent is also the manager of the business. Production Aspect
This section presents the production process, including the plant layout and location. The business will be situated at the residence of the owner. It will have to provide 3 tricycle and 2 pick-up vans for the delivery service and machines such as multimedia sediment filter, ion exchange, activated carbon filter, reverse osmosis membrane, post carbon filter, ultraviolet lamp and the ozone generator. The total projected cost that maybe incurred has a total of 1,054,383 that will be the used in the operation of the business. Financial Aspect
The financial statement in the financial portion of this business plan is presented with this order. Income Statement, Projected Cash Flow, the Projected Balance Sheet, Return on
Investment. The net income of AQUACEAN in its first year operation will be 36,842. Its projected cash flow could reach as high as 1,066,496. Social Desirability This section presents the contributions of water refilling station to the economy such as provide employment, improve quality of life and provide additional taxes, and the entrepreneurial level such as income generation and self-fulfillment CHAPTER I MARKETING PLAN Target
Market
A.
Households
from San Nicolas, other nearby towns like Batac, Laoag City, Sarrat and
owners of food establishments and schools from the said towns would much benefited and qualified to avail of the service.
B.
The demand of water refilling station is highly increasing due to rapidly growing
population of the locality. It is needed that almost all households are now drinking purified water as to satisfy their thirst. Thus it implies that the demand for water, specifically purified drinking water is increasing more than to every household.
Market Segment Households
Food Business
Schools
Establishments
1. SAN NICOLAS
20,215
250 (estimated)
35
2. BATAC
47,610
300 (estimated)
72
3. LAOAG
19,976
700(estimated)
105
AT 4. SARR
4,881
50 (estimated)
29
C. SUPPLIER S/COMPETITOR S
SUPPLIERS/COMP ETITORS 1. AQUA 2000
ADDRESS Brgy. 3 San Idelfonso
STRENGHTS y
Accessibility within the town proper
WEAKNESSES y
y
2. AMIEL¶S
3. WATER 4 LIFE
Brgy. 11 Sa Fernando
Brgy. 22 San Guillermo
y
Unlimited area for delivery Dress code
y
Location
y
y
y
y
4. AQUA
Brgy. 1 San Fancisco
y
Location
y
Small processing area Lack of employee
Lazy employee
Small no. of delivery vehicles Lack of promotions
physical appearance
D. COMPETITIVE POSITION 1. Selling Price
The family size (5L) costs 25 pesos per container with free delivery in San Nico las area and 30 pesos for nearby town, then only 20 pesos for walk-in customers. Medium size (4L) costs 15 pesos. While small sizes such as 500ml cost 5 pesos and 300ml cost 3 pesos.
2. Competitiveness of the quality product y
Bacteriological quality
y
Chemical quality
y
Physical quality
y
Biological quality
3. Methods of transportation and existing rate
The business will provide at least five vehicles. Two pick-up vans for delivery service outside San Nicolas and three tricycles for delivery service along the location area. 4. Channels of distribution
Through the use of telecommunications such as Cell phones and telephones are merely used for channels of distribution. In addition, the firm may also distribute the product through having outlets in some sari-sari store.
retailer distributor distributor customer manufacturer
distributor distributor retailer
Figure 1. Channels of Distribution
5. General trade practices
Competitors are now at peak in San Nicolas for business like water refilling station. Certain practices from different water refilling station are in common, like the selling price if family size cost to 25 pesos with free delivery and if it is directly acquire in the business it only cost 20 pesos.
E.
PROPOSED MARKETING PROGR AM
1. Description of Proposed Product a. For tangible products
The product AQUACEAN purified drinking water is a product need by people as one of their basic necessities in life. The product offered in the market made safety and healthy as the process of purifying is being implemented. It goes through the process if distillation, deionization or term as dematerializing the water. The product is categorized into different sizes to cater the customer according to what they prefer. The interesting part of the product is not only made purified or distilled but it contains vitamins (Vitamin B, Vitamin C) and minerals (Calcium, Sodium, Potassium, and o ther) helpful in fighting bacteria. These practices are some o f the processes distinct from competitors.
b. Packaging
The name of the product is AQUACEAN Purified Drinking Water located at Brgy. 16 San Marcos San Nicolas, Ilocos Norte. The product consists of a quality plastic bottle which is not hazardous, and tested and approved by BFAD use material for its package. It has also label which emphasize the information about the product including its benefits, the manufacturer, product name and logo, and cover tightly with sealed plastic for protection. 2. Description of Proposed Target Market
a. Geographical location-Ilocos Norte b. Age-all ages c. Sex-both 3. Proposed Prices
Product Family Size ( 5L) Medium Size (4L) Small Size 500mL 300mL y y
Unit Pc. Pc.
Unit Selling Price 25 15
Pc. Pc.
5 3
4. Proposed promotional activities
The business will be providing flyers, stickers, keychain designed like a mini bottle. On the grand opening of the business, the first 20 customers will get free t-shirt upon purchasing of 3-5 galloon family size. Every customer will also receive a loyalty card given by the company wherein customers must purchase ten times in order to get one family size for free.
CHAPTER II GANIZATION OR
The
AND MANAGEMENT PLAN
Management of the Business:
The business is classified as a single proprietorship. It will be operated by Ms. Mary Ann Lista. Water refilling station is a simple and can be manage by your own. The proponent is also the manager of the business. The owner is responsible in taking all the risk, overall in charge in managing the business, sustains the capital requirement of the business and gives appropriate salary for the employees. The owner must be a graduate of Commerce and have attended different seminars in managing a business regarding health and safety implementation of water refilling station. The management is composed of marketing manager who is responsible in promotional activities of the business, finance manager who is in charge of bookkeeping and making financial statement, production manager who looks after the production of the products and needed materials and equipment to be used, the technical assistant who is responsible in maintaining and running the machine, the refillers who accept and refills containers of customers and the deliveryman who transport refilled containers.
Figure 2. The Management Structure of the Business
GENER AL MANAGER /OWNER
MARY ANN LISTA
MARKETING MA. SHERYL MARZAN
PRODUCTION
FINANCE SHERYL AGULLANA
MAE ANN SALVIEJO
DISTRIBUTOR1
REFILLER1
TECHNICAL ASSISTANT
San Nicolas
HAZEL ABUT
GERALD DOMINGO
DISTRIBUTOR2 Batac
DISTRIBUTOR3 Laoag
DISTRIBUTOR4 Sarrat
REFILLER2
REFILLER3
2. Management Job Description
Name Mary Ann Lista
Position Owner and the General Manager
Job
y y y
y
Sheryl Agullana
Finance Manager
y y
Ma. Sheryl Marzan
Gerald Domingo
Marketing Manager
Technical Assistant
y
y y
y
Description Responsible in taking all the risk Overall in charge in managing the business Sustains the capital requirement of the business Gives appropriate salary of the employees
In charge of bookkeeping. Makes financial statement of the business operations.
In charge in the promotional activities of the business Maintains and runs the machine responsible in looking after the operations and repot as to production In-charge in reporting the materials to be purchased for the production in the coming days.
Mae Ann Salviejo
Production Manager
y
y
y
Hazel
Abut
Others
Refiller Driver/Delivery Man
y
y
Business planner of what the outcome and prices of the product Responsible in the conceptualization, design, creation and innovation of the products to be served to customers. Look after the production of the products and needed materials and equipments to be used in the identification of the needed skills and labor, and how much will the business cost. Accepts and refills containers of customers Transport refilled containers to customer¶s home
PER SONNEL and WORK FOR CE
Personnel in this business are highly qualified based on their wide experiences in the same field of the job. They are highly equipped with good education and are nurtured by their experiences. They are all aware of their own tasks and the owner properly delegated the needed activities on the operations of the business. Perso nnel are dedicated, friendly and well trained.
Activities
A. PROJECTED TIME TABLE Wk1 Wk2 Wk3 Wk4 Wk5
Wk6
Wk7
Wk8
Wk9
Wk10
Wk11
Wk12 Wk13 Wk14
Wk15 Wk16
Planning and preparation of the financial statement and business plan Look for supplier or seller of equipments (list the price and ask for feasibility study to know how much the cost needed) Analyzing and studying the total cost (negotiating with the supplier) Choosing the right equipment Building improvement Go to the DTI for the business name and registration Applying for business permit Go to BIR for your official Receipts Buy other supplies like water containers, seals, heat gun, etc. Start doing your store¶s signage and sticker labels Installation of equipments Hiring of employees Dry-run Water Testing
CHAPTER III PRODUCTION PLAN Product Specification
The AQUACEAN is a water refilling station that conforms to the national standard for drinking water. The business primarily provides clean and safe pur ified water. Purified is a water that has virtually all of its impurities as well as minerals and electrolytes stripped through distillation (boiling the water and re-condensing the steam into clean a container), leaving all contaminants behind. Purified water is good clean water; unfortunately all the minerals and electrolytes are also all stripped out. Purified water tends to be
CHAPTER III PRODUCTION PLAN Product Specification
The AQUACEAN is a water refilling station that conforms to the national standard for drinking water. The business primarily provides clean and safe pur ified water. Purified is a water that has virtually all of its impurities as well as minerals and electrolytes stripped through distillation (boiling the water and re-condensing the steam into clean a container), leaving all contaminants behind. Purified water is good clean water; unfortunately all the minerals and electrolytes are also all stripped out. Purified water tends to be slightly acidic moving your body to a less healthy state. Based on some studies comparing mineral water purified water and it results to minerals¶ leaches out are of the unusable, ionic form and we want these to leave the body rather than be deposited and cause disease. While purified water does not leach out significant amounts of biologically available minerals because these are quickly taken up the body on an as needed basis. If they are present in excess then they are filtered through the kidneys and this is exactly what needs to happen with all things which are in excess in the circulation. Purified water cleanses the body through promoting healthy kidney function.
PRODUCTION PROCESS
The main processes in a water refilling station are dictated by raw water quality. the typical steps are filtration (several stages), softening, and disinfection.
Acquiring of raw materials from the well .
Removing sediments such as rust, sand and particles that are invisible to naked eye.
Replacing hard minerals with safe minerals .
Removing all organic chemical herbicide, pesticide, offensive odor and bad taste.
improving the taste of water .
Ensuring that the water is free from disease-causing micro-organisms.
Inhibits the growth of the product tank and prolongs the shelf life of water.
Ready for bottling
Water refilling.
PLANT LAYOUT
25 sq.m
WASTE
TOILET
DISPOSAL
STORE
MACHINE 1
MACHINE
2
ROOM
PARKING SPACE FOR THE PICK-UP VAN
(ENCLOSED WATER PURIFICATIO N ROOM)
25 sq.m
TABLE
WASHING
PARKING SPACE FOR PERSONNEL AND MANAGEMENT
AND
OFFICE
CLEANING PARKING SPACE FOR THE TRICYCLES
REFILLING AREA
PLANT LOCATION
BUS. ESTABLISHMENT
School
COCKPIT ARENA
BUS. ESTABLISHMENT
AQUACEAN BUS. ESTABLISHMENTS BUS. ESTABLISHMENT
Church
PLANT LOCATION
BUS. ESTABLISHMENT
School
COCKPIT ARENA
BUS. ESTABLISHMENT
AQUACEAN BUS. ESTABLISHMENTS BUS. ESTABLISHMENT
Church MUNICIPALITY OF SAN NICOLAS
PARK
A. Machine and
Equipments
Machine
Cost
Multi-media sediment filter
P35,000
Ion Exchanger
P25,000
Activated Carbon Filter
P25,000
Reverse Osmosis Membrane
P100,000
Description/Specification and Suppliers Removing sediments such as rust, sand and particles that are invisible to naked eye; employs a total of 5 filters. Replaces hard minerals with soft minerals. Removes all organic chemical herbicide, pesticide, offensive odor and bad taste. The heart system and the most expensive unit; Removes inorganic minerals, bacteria and viruses while retaining its
A. Machine and
Equipments
Machine
Cost
Multi-media sediment filter
P35,000
Ion Exchanger
P25,000
Activated Carbon Filter
P25,000
Reverse Osmosis Membrane
P100,000
Post-Carbon Filter Ultraviolet Lamp
P20,000 P20,000
Ozone Generator
P25,000
Description/Specification and Suppliers Removing sediments such as rust, sand and particles that are invisible to naked eye; employs a total of 5 filters. Replaces hard minerals with soft minerals. Removes all organic chemical herbicide, pesticide, offensive odor and bad taste. The heart system and the most expensive unit; Removes inorganic minerals, bacteria and viruses while retaining its oxygen content. Since the filter size is very small at less than 0.05 micrometer, the product water could have total dissolved solids (TDS) of less than 10ppm. The filtration process rejects about 50 percent of raw water volume. Improves the taste of water. Ensures that the water is free from disease-causing microorganisms. Inhibits the growth of the product tank and prolongs the shelf life of water.
B. R AW MATERIALS
aw R
Materials Bottles Gallons Paper Sealed Heat gun Total
Quantity 1,500 800 1,000 50 3
Cost per Unit
Amount 4,350 10,400 3,000 5,000 6,000 28,750
2.90 13 3 100 2,000
TOTAL
PROJECT COST
Factory Overhead Factory Overhead
January
February
Amortization of building improvements Depreciation of materials and tools Depreciation of furniture and fixture Depreciation of office equipments Total factory overhead
00 6 750 290 150
Fix Asset
Equipment Furniture Total
Book Value 845,000
5,6 50
1,740
600
March 600
April 600
750 290
750 290
750
150 1,740
150 1,740
Useful life
10 4
Depreciation (Monthly) 7,041 117 7,158
290 150 1,740
Expense
(Annual) 84,500 1,412 85,912
Salaries of Employees
Position Finance Manager Marketing Manager Production Manager Technical Manager Refillers (3) Delivery Man (5)
Monthly Salary
3,000 3,000
Annual Salary 72,000 72,000 72,000 72,000 108,000 180,000
Total
P 30,000.00
P 576,000.00
,000 6 ,000 6 ,000 6 ,000 6
C.OFFICE SUPPL IER S
Supplies Ball pen Board Marker Bulletin Board Sales Book Sales Invoice Official Receipts Journal Total
Monthly Cost 50 30 120 20 20 20 20
380.00
Annual Cost 600 360 1440 240 240 240 240 3,360.00
D. UTILITIES
Utility Electric bill Water Telephone Cell phone load Total E.
Monthly Cost 5,000 350 1,000 1,000
6,350
Annual Cost 60,000 4,200 12,000 3,600 79,800
PER MITS AND LICENSES
Pre-Operating Activities Mayor¶s Permit Zoning clearance Garbage disposal fee Fire safety clearance Fire code fee Tax Clearance Occupation Tax Governor¶s permit fee Business Registration Certificate Community Tax Certificate Brgy. Clearance Total
Cost 100 200 2,500 100 50 50 150 200 100 73 50 5,373.00
Total
of Project Cost Item
Building Improvement
100,000
Plant and equipment Equipment Furniture & fixtures Office Supplies
815,000 5,650 3,360
824,010
Pre-operating Cost Permit & Licenses Freight Expense
5,373 1,500
6,873
Working Capital Packaging Advertising Expense Salaries Telephone
28,750 1,500 30,000 1,500
61,750
Cash
Total
Project Cost
Source of fund Equity Debt
61,750
1,054,383
704,383 350,000
The proprietor will invest Php 704,383 cash to establish the business. Loans from bank will be amounting to Php 350,000 could help finance the business for further development and enhancement. The loan payable to DBP has an interest of 5%. The business will be located at the residence of the owner in order to minimize the expenses of building own establishment building. It is a good start to keep the capital liquidating.
CHAPTER IV FINANCIAL FEASIBILITY
INCOME
Gross sale Expenses Pre-operating Files and Licenses Building and Improvement Equipment Freight Expense Furniture and fixture Office Supplies
STATEMENT P ,8 1 11,770.00
5,373 100,000 815,000 1,500 5,650 3,360
P 930,883.00
62,345 2,000 360,000 7,500 17,000 240,560
P 689, 405.00
85,912 17,500
P103, 412.00
Operating Expense
Electricity/Water Maintenance and Repair Salaries Expense Advertising Expense Telephone Bill/Cell phone load Packaging materials Other Expenses
Depreciation Expense Interest Expense Income before tax Income Tax Expense (88,070*32) Net Income
88,070 28,182 59,888
BALANCE SHEET For the year 2010
ASSET Cash aw/Packaging Mat. R Office Supplies Furniture and Fixtures Equipment Total Assets
1,066,496 5,000 1,000 4,000 422,612
1 ,499,108
LIABILITIES Loan Income Tax Payable Interest Expense Payable Total Liabilities
350,000 17,337 17,500
384,837 CAPITAL
Capital beginning Add: Net Income Total Capital TOTAL
1 ,054,383 59,888
LIABILITIES AND CAPITAL
1 ,114,271
1 ,499,108
eturn R
ROI= Net Income/ =
of Investment
Capital*1 00
47,987/ 1,054,383*100
=
0.0458*100
=
4.58
Payback period
The business could reimburse its debt from the Development Bank of the Philippines on its second year of operation and the business assures for its full payment and all the liabilities will be settled. Break-even Sale
AQUACEAN could attain its break-even sale at first year of operation.
TOTAL
Cash Balance, Beg.
Add: Cash Inflows Equity Contribution Cash Sale Total
1,079,468
Cash Balance, ending
1,054,383 1,687,020 3,820,871
Cash Provided
Less: Cash Outflows
CASH FLOW
1,686,820 2,134,051
PROJECTED SALE
JAN
FEB
MAR
APR
MAY
JUN
JUL
AUG
SEPT
OCT
U
USP
QTY
AMT
QTY
AMT
QTY
AMT
QTY
AMT
QTY
AMT
QTY
AMT
QTY
Fam. size (5gal)
gal
25
50
37500
70
52500
80
60000
100
75000
90
67500
60
45000
50
37500
50
37500
50
37500
50
37500
50
Med. size (4gal)
gal
15
100
45000
130
58000
125
56250
150
67500
130
58500
120
54000
110
49500
105
47250
100
45000
100
45000
95
Small size (500mL)
Bot.
5
150
22500
155
23250
170
25500
180
27000
175
26250
165
24270
160
24000
150
22500
150
22500
150
22500
100
Small size (300mL)
Bot.
3
200
18000
230
20100
240
21600
250
22500
250
22500
240
21600
230
20700
200
18000
200
18000
200
18000
200
500
123,000
565
153,850
615
163,350
680
192,000
645
174,750
585
144,870
550
131,700
505
248,250
500
123,000
500
123,000
445
PRODUCT
Total
AMT
QTY
AMT
QTY
AMT
QTY
AMT
QTY
The month that has the highest sale is the month of March, April, and May, because these months are the summer season. On the other hand, th income is the month of August, September, October, November, December and January because these months are the rainy season. The gross sale for an
CHAPTER V SOCIAL DESIR ABILITY AND CONTRIBUTION TO THE ECONOMY
The business contributes the following to the economy: y
Provide employment
AQUACEAN will hire additional employee to do the operation of the business. This will provide job opportunities to the unemployed and allowing them also to enhance their skills and knowledge related to the job. y
Improve
Quality of life
CHAPTER V SOCIAL DESIR ABILITY AND CONTRIBUTION TO THE ECONOMY
The business contributes the following to the economy: y
Provide employment
AQUACEAN will hire additional employee to do the operation of the business. This will provide job opportunities to the unemployed and allowing them also to enhance their skills and knowledge related to the job. y
Improve
Quality of life
AQUACEAN purified drinking water caters the best quality product that satisfy their needs and to develop ways to improve quality of life. y
Provides additional taxes to the economy
AQUACEAN provides taxes to the economy to which the business will pay tax to strengthen the econo my. Entrepreneur¶s level: y
Income
generation
The main goal of having a business is to gain profit. y
Self-fulfillment
This project will develop the entrepreneur¶s intense desire to innovate, build and to meet his goals through making this project.
