PJ Patties Shop: A Feasibility Study Chapter I Executive Summary The business enterprise is a new venture and will be implemented in the future. It is a sole proprietorship form of business organization. Owned and managed by the proprietor himself but he is helped by her two assistants. It will be established and will start its operations at downtown of San Jose, Malilipot, Albay.
The enterprise will be a small-scale business enterprise which will provide a pleasant and convenient store for the costumers who will patronize our product. PJ Patties Shop owned by the owner himself, who build his business at San Jose, Malilipot, Albay. The business offers a unique taste of patty which will serve as an alternative instead of different basic foods such as rice, it is best supplement to lessen too much carbohydrates.
The business is entirely new, does not know or have any experience and people who manages it are all first-timers in the field of business but they assure that will achieve the goals and objectives of the business.
MISION
To excel in sales and distribution of chicken patties using a carefully devised marketing program towards local competitiveness.
To provide a lower cost and palatable tastes of patties new products.
To provide a nutritious supplement for any other foods.
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PJ Patties Shop: A Feasibility Study VISION PJ Patties Shop is a legal venture committed to become well-known suppliers all over the region towards the stability for the economic production and provided by the proper management for a good welfare.
OBJECTIVE PJ Patties Shop is able to create a unique marketing strategy to the market and to maintain market sustainability in order to meet competitive challenge and overcome market barriers.
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PJ Patties Shop: A Feasibility Study Chapter II Company Overview Name, Nature and location of the business. Name of the business: PJ Patties Shop Nature of the business: Dealer (wholesaling and retailing) Location: Zone #5, Datag, San Jose, Malilipot, Albay
PJ Patties Shop is own and manage by __________________the owner and general manager of the business.
Legal Business Description: Sole Proprietorship i.
Form of business organization: The proposed business is in the form of sole proprietorship. It will easily manage
and operate by one individual. On the other hand, we could not easily operate our business without the help of prospective employees with high potential business establishment.
In sole proprietorship, the main owner shall be liable from all phases in the company either shortages or surplus of the capital.
ii.
Licensing and other requirements for setting up the business In putting up PJ Patties Shop there have several permits that the owner needs to
get. The owner need to comply and accomplish all the permits as requirements to make the business legal and they are the following:
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PJ Patties Shop: A Feasibility Study 1. Barangay Clearance 2. Mayor’s permit 3. DTI 4. BIR
List of owner:
Jeffrey C. Paras
Management Team
Organizational Structure Below is the organizational chart which describes in a capsule form the flow of authority from the manager to her assistants:
General Manager
1st Assistant
PJ Patties Shop
2nd Assistant
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PJ Patties Shop: A Feasibility Study Lists of officers and staffs: General Manager (owner) – 1st Assistant 2nd Assistant-
Job Description and Specification Below are the job descriptions which describe the function of the people involved in the operation of the business: A. OWNER and GENERAL MANAGER 1. Overall in-charge of the business and engages in the management aspects of the enterprise; 2. Primarily responsible in the financial aspects of the enterprise; 3. Prepares the financial statements at the end of every 6 months from the start of operations; 4. Does the overall inventory of raw materials as well as the inventory of finished products; 5. Washes the kitchen utensils used before leaving the workplace; 6. Keeps an inventory of finished products on a daily basis; 7. Assists in the sale of finished products.
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PJ Patties Shop: A Feasibility Study PERSONAL REQUIREMENTS Below is the statement of the qualifications and traits in terms of skills, experience, trainings required in the effective performance of each task.
A. OWNER AND GENERAL MANAGER 1. Knowledgeable in the operation and management of a sole proprietorship enterprise; 2. Must have an excellent sales talk ability; 3. Must be confident and optimistic; 4. Must know basic accounting and bookkeeping; 5. A graduate of business related courses; 6. At least 18-35 years old.
B) FIRST ASSISTANT 1.Must be hardworking; 2. Must be willing to work under pressure; 3. Must be flexible at all times; 4. Must have knowledge in making simple reports; 5. Must know how to communicate in English and the local dialect; 6. Must be physically fit; 7. Must have pleasing personality; 8. Must have knowledge in inventory reporting; 9. Must be a graduate of any business course; 10. Can adapt to quality standard. PJ Patties Shop
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PJ Patties Shop: A Feasibility Study C.SECOND ASSISTANT 1. Must have special skills in cooking and baking; 2. Must have great sense of responsibility; 3. Must be willing to work under pressure; 4. Must have pleasing personality; 5. Must be physically fit; 6. Must be hardworking; 7. Must have skills in production process; 8. Must be knowledgeable in making inventory reports; 9. Must be knowledgeable in production and quality standards.
Compensation of the officers and staffs: Employee Description
No. of Workers
Monthly Rate
Yearly Rate
1
5,000.00
60,000.00
1 Assistant
1
3,000.00
36,000.00
2nd Assistant
1
3,000.00
36,000.00
General Manager st
Every employee will avail the benefits that the manager will offer as long as they will perform their job well. They will be having health care and fringe benefits.
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PJ Patties Shop: A Feasibility Study Chapter III Product
PRODUCTS DESCRIPTION The product is called “Chicken Patties”. It is basically a patty made of chicken as a special filling inside the crust. The standard size of each patty is 4 inches long, 3 inches wide and ½ inch thick. It is “C” shaped in appearance with crust at the outside and inside is cooked curry chicken as filling. The introductory selling price is ₱10 per patty.
Importance of the Product
Chicken meat is one of the most efficient sources of protein for human consumption.
Packaging, labelling and branding
The crust will be kept intact to maintain its freshness and protect them from the outside environment. The proponent will use paper pouch intended for the items. And the product will be wrapped into a thin sheet of compacted paper.
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PJ Patties Shop: A Feasibility Study Chapter IV Market Analysis Market Definition The market for Tasty Patties includes all people of different walks of life. All people who are used to heavy snack or meal and are used to accompanying beverages, soda or cola to their meal belong to this kind of patrons.
Specific Target Market The product is best as heavy meal substitute. A piece of patty is already
equivalent to a heavy meal like lunch or dinner. The crust is a substitute for rice as a source of carbohydrates. The chicken filling is equivalent for a dish. One needs cold water or beverage to complete his/her meal.
The specific target market of this product is all those belonging to the community members are expected to be regular customers. Children’s who go to school are the first targets.
CUSTOMER PROFILE Regular customers of Tasty Patties are those who are able and willing to exchange
their money for a nutritious and delicious food. These customers likewise are seekers of good nutrition and maintain a healthy and balanced diet. They belong to all genders, and special targets are also travellers, visitors and tourists.
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PJ Patties Shop: A Feasibility Study Competition Currently, bakeries exist and are located almost at every corner of the community where people gather and converge. However, sales person at these establishment are just waiting for customers. Their products, after being manufactured are transferred directly to the store station and sold until supply last. In the external environment, the following are the enterprise’ competitors: 1. Restaurants 2. Turo-Turo stores 3. Burger hauz Demand and Supply Supply is the amount available for sale or the amount that sellers are willing to sell at a specified price, and demand, sometimes called effective demand, is the amount purchasers are willing to buy at a specified price. Factors Affecting the Market of the Product in terms of demand The demand for the product may be affected by the following: 1. Increase of habitants at San Jose; 2. Changes (increase or decrease) in customer’s income and purchasing power; 3. Rural and urban development; 4. Price of substitute products.
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PJ Patties Shop: A Feasibility Study Factors Affecting the Market of the Product in terms of supply The supply of the product may be influenced by the following:
1. Development of substitute products; 2. Threat of new entrants with similar or same products; 3. Governments policies; 4. Development and innovation in technology; 5. Sources and cost of production; 6. The dynamic setting of environment.
Risk and Solution The strengths of the enterprise are the following: 1. It is a sole proprietorship, hence it is easy to manage and operate; 2. Introduction of an entirely new and unique product; 3. The business enterprise has no existing direct competitors that produces and sells the same product.
In spite of the optimism in the establishment of this enterprise, the business however, recognizes and accepts the following constraints in its success and prosperity:
1. The enterprise may run short of sufficient capital; 2. The raw materials used in the production may also suffer high inflation rate; 3. Competitors may abound and create strategies better than that of Tastee Patties; 4. The distribution channel may become obsolete in the following years of operation PJ Patties Shop
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PJ Patties Shop: A Feasibility Study 5. Environmental conditions which the business may not to be able to anticipate; 6. Political and economic crisis in the country both local and national; 7. Technical aspects on the information technology, production and the like.
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PJ Patties Shop: A Feasibility Study Chapter V Marketing Plan Sales Strategy At present, where the enterprise is located is a busy community and it is observed that it is vulnerable to many changes.
Most of the ventures that opened were bakeries, computer shops, canteen, eatery and sari-sari stores. The canteens and eateries offer cooked food which residents, and students buy good for a snacks or a heavy meal.
The enterprises will also take an opportunity on the frequent closure of sari-sari stores located on the community. Such closure will enable the enterprise to cater the specific market segment such stores.
Distribution Channel Originally, the channel of distribution for the product is through retailing. However, the enterprise sought alternative channels to ensure a greater market share. The alternative channels are:
1. Wholesaling; 2. Personal selling and distribution; 3. Order-taking and distribution.
The alternative channel of distribution the products to the market have a relative importance in the following sense: PJ Patties Shop
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PJ Patties Shop: A Feasibility Study 1. It would be easier to distribute the products; 2. It would be easier to penetrate the market; 3. The products could easily be distributed to the market and different distributors and outlets.
Pricing and Pricing Policy 1pc of chicken patty is ₱15 ½ dozen is ₱85 1 dozen is ₱170
Purchase price of flour (soft wheat flour) is 30 pesos per kilo;
Purchase price of chicken is 120 pesos per kilo;
Conversion is 30 pieces of patty per kilo of flour;
Ratio of chicken to flour is 2:3;
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PJ Patties Shop: A Feasibility Study Chapter VI Production Plan Production Process Raw materials will be prepared in accordance to standard set forth by the proponent. After preparation all ingredients will be mixed and mold into the required shape and weight. After molding, it will be put into a packaging material individually and will keep at a freezer for temporary storage. Machineries and Equipment
Description
Quantity
Cost
Total
Freezer
1 unit
12,000.00
12,000.00
Gas Range
1 unit
3,000.00
3,000.00
LPG
11 kgs.
600.00
600.00
Cooking spoon Regular Kitchen Knife
1
30.00
30.00
1
20.00
20.00
Chopping Knife Chopping Board
1 1
20.00 50.00
20.00 50.00
Kitchen Knife
1
20.00
20.00
Kitchen Scale
1
400.00
400.00
Kitchen Trays
3
50.00
150.00
TOTAL
PJ Patties Shop
P16,290.00
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PJ Patties Shop: A Feasibility Study Furniture and Fixtures
Description
Quantity/Unit(s)
Price
Total
Table
1
1,000.00
1,000.00
Monoblock Chair
6
120.00
720.00
Displaying Cabinet
1
1,000.00
1,000.00
Total
PJ Patties Shop
2,720.00
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PJ Patties Shop: A Feasibility Study PLANT LAYOUT DOOR
GENERAL MANAGER
C. R
DISPLAYING AREA OF PATTIES
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PJ Patties Shop: A Feasibility Study PLANT LOCATION
PJ Patties Shop
Vulcanizing Shop
Waiting Shed
To Legazpi
PJ Patties Shop
Residential
To Datag
Residential
Sari-Sari Store (closed)
To Tabaco
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PJ Patties Shop: A Feasibility Study Production Schedule The production of patties will on daily basis. The shop will be open from 7:00 A.M. to 7:00 P.M. Costing and Costing Method
Machineries and Equipment Description
Quantity
Cost
Total
Freezer
1 unit
12,000.00
12,000.00
Gas Range
1 unit
3,000.00
3,000.00
LPG
11 kgs.
600.00
600.00
Cooking spoon Regular Kitchen Knife
1
30.00
30.00
1
20.00
20.00
Chopping Knife Chopping Board
1 1
20.00 50.00
20.00 50.00
Kitchen Knife
1
20.00
20.00
Kitchen Scale
1
400.00
400.00
Kitchen Trays
3
50.00
150.00
TOTAL
P16,290.00
Depreciation (Machineries and Equipment) =
16,290.00 5
= PJ Patties Shop
3,258.00 19
PJ Patties Shop: A Feasibility Study Furniture and Fixtures Description
Quantity/Unit(s)
Price
Total
Table
1
1,000.00
1,000.00
Monoblock Chair
6
120.00
720.00
Displaying Cabinet
1
1,000.00
1,000.00
Total
2,720.00
Depreciation (Furniture and Fixtures) =
2,720.00 5
=
544.00
Permit and licences Description Business Permit
Annually 1,000.00
DTI Permit
500.00
BIR Permit
300.00
Barangay clearance
100.00
Mayor’s Permit
500.00
Total
PJ Patties Shop
2,400.00
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PJ Patties Shop: A Feasibility Study Salary Expense Position
Number of Employee
Monthly Salary
Annual Salary
Manager
1
4,000.00
48,000.00
First Assistant
1
2,000.00
24,000.00
Second Assistant
1
2,000.00
24,000.00
TOTAL
P8,000.00
P 96,000.00
Advertising and Promotion Kinds of Advertisement Flyers Tarpaulin
Quantity
Cost
Annual
1 box (1000pcs)
500.00
500.00
2
250.00
500.00 1,000.00
Utility Expense Description
Monthly
Annual
Electric Bill
800.00
9,600.00
Water bill
200.00
2,400.00
P1,000.00
12,000.00
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PJ Patties Shop: A Feasibility Study Rent Expense Description
Monthly
Rent (Building)
Annual 2,000.00
24,000.00
TOTAL
24,000.00
Employee Benefits Expense Staff/Officers
Salary
SSS
Philhealth
Pag-ibig
Monthly
annual
Manager
4,000.00
150.00
50.00
50.00
250.00
3,000.00
First Assistant
2,000.00
100.00
50.00
50.00
200.00
2,400.00
Second Assistant
2,000.00
100.00
50.00
50.00
200.00
2,400.00
250.00
150.00
150.00
650.00
7,800.00
TOTAL
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PJ Patties Shop: A Feasibility Study Chapter VII FINANCIAL PLAN Major Assumption 1. Production Data
Purchase price of flour (soft wheat flour) is 30 pesos per kilo;
Purchase price of chicken is 120 pesos per kilo;
Conversion is 30 pieces of patty per kilo of flour;
Ratio of chicken to flour is 2:3;
Packaging cost is estimated at 1 peso per piece of the finished product;
Other ingredient cost is 1000 pesos per month;
Selling price is 10 pesos per piece;
Target sales volume for the first year is 36,000 pieces and will increase on the following years of operation.
OPERATING EXPENSES
Advertising and promotion expense is 1,000 per month;
Salaries expense include payment for the service of general manager, first assistant and second assistant;
Utility expense (light and water) is estimated 1,500 per month;
Ingredients and indirect materials is estimated 1,000 per month UNIT PRODUCTION COST
Description
Unit Cost
Chicken Patty
P10.00/piece
PJ Patties Shop
Daily 100
1,000.00
Monthly 3,000
30,000.00
Annually 36,000
360,000.00
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PJ Patties Shop: A Feasibility Study INITIAL WORKING CAPITAL REQUIREMENTS A. Equipment and Materials Equipment/Materials
Quantity
Total cost
Freezer
1 unit
15,000.00
Gas Range
1 unit
3000.00
LPG
11 kgs
600.00
Cooking spoon
1 pc
30.00
Regular Kitchen Knife
1 pc
20.00
Chopping Knife
1 pc
20.00
Chopping Board
1 pc
50.00
Kitchen Knife
1 pc
20.00
Kitchen Scale
1 pc
400.00
Kitchen Trays
3 pc
Total B.
150.00 19,290.00
Cost of Production and Operation (1 month) Flour (90 kls @ 30 per kilo)
2,700.00
Chicken (60 kls @ 120 per kilo)
7,200.00
Packaging Materials
2,700.00
LPG
1,200.00
Ingredients and Indirect Materials
1,000.00
Total
13,900.00
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PJ Patties Shop: A Feasibility Study TOTAL PROJECTED COST
A.FIXED ASSET Machineries and Equipment Furniture and Fixtures
16,290.00 2,720.00
B.OPERATING EXPENSE Raw materials
13,900.00
Rent Expense
2,000.00
Salary Expense
8,000.00
Benefits Expense
650.00
Advertising and Promotion
1,000.00
Utility Expense
1,000.00
Permit and Licenses
2,400.00 P 47,960.00
C. CONTINGENCY ALLOWANCE (10%) TOTAL
PJ Patties Shop
4,796.00 P 52,756.00
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PJ Patties Shop: A Feasibility Study PJ Patties Shop Projected Income Statement For the year ended, December 31, 2013
Sales (Net)
360,000.00
Less: Operating Expenses Raw Materials
166,800.00
Advertising and Promotions
Add:
1,000.00
Utilities
12,000.00
Salaries
96,000.00
Benefit Expense
7,800.00
Rent Expense
24,000.00
Permit & Licenses
2,400.00
Contingency 10%
4,796.00
Depreciation - Machineries & Equip
3,258.00
Furniture & Fixtures
544.00
Net Income before Tax Less: Income Tax (12%) Net Income after Tax
PJ Patties Shop
318,598.00 41,402.00
4,968.24 ₱36,433.76
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PJ Patties Shop: A Feasibility Study PJ Patties Shop Projected Cash Flow Statement For the year ended, December 31, 2013 Cash Inflow Capital
47,960.00
Sales
360,000.00
₱407,960.00
Total Cash Outflow Machineries and Equipment Furniture and Fixtures Raw Materials
16,290.00 2,720.00 166,800.00
Advertising and Promotions
1,000.00
Utilities
12,000.00
Salaries
96,000.00
Benefit Expense Rent Expense
7,800.00 24,000.00
Permit & Licenses
2,400.00
Contingency
4,796.00 Total
Cash Balance, End
PJ Patties Shop
₱333,806.00 ₱74,154.00
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PJ Patties Shop: A Feasibility Study PJ Patties Shop Projected Balance Sheet December 31, 2013 Assets Current Assets Cash
74,154.00
Machineries and Equipment
16,290.00
Furniture and Fixtures Less: Depreciation
2,720.00 (3,802) ₱89,362.00
Total Assets
Liabilities and Owner’s Equity Capital
47,960.00
Tax Payable
4,968.24
Net Income
36,433.76
Total Liabilities and Capital
PJ Patties Shop
₱89,362.00
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PJ Patties Shop: A Feasibility Study Exit/Payback Strategy
ROI
=
Net Income x 100% Capital
=
36,433.76 x 100% 47,960.00
=
.76 x 100%
=
76%
PAYBACK PERIOD
=
Capital Net Income
=
47,960.00 36,433.76
PJ Patties Shop
=
1.31 X 12
=
1 year and 4 months
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PJ Patties Shop: A Feasibility Study Chapter VIII Conclusion The proponent concluded that the proposed business is feasible and viable as shown in the financial statements. With a capital investment of 47,960.00 and a net income of 36,433.76 it will be recouped within 1 year and 4 months at 76 % ROI.
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