Documente Academic
Documente Profesional
Documente Cultură
Submitted to:
Michael Del Rosario
Submitted by:
Dan Marlon Isaac
Joannie Suzaine Lualhati
Ray Christian Rosell
Ma. Mikhaela Sanchez
Romiko Vidanes
1
Table of Contents
Introduction ......................................................................................................................................... 5
Statement of Purpose ........................................................................................................................ 5
General Objective ............................................................................................................................... 6
Specific Objectives .............................................................................................................................. 6
Chapter 2 ..................................................................................................................................... 8
Industry and Competitive Analysis .............................................................................................. 8
Industry structure and performance .......................................................................................... 8
Industry Outlook................................................................................................................................. 9
Competition ....................................................................................................................................... 10
Chapter 3: ................................................................................................................................. 14
The Business and the Product Concept ................................................................................... 14
Partnership Name ........................................................................................................................... 14
Figure 1. Partnership logo ....................................................................................................................... 15
Figure 2. Business Logo ............................................................................................................................ 16
Mission and Vision Statement ..................................................................................................... 23
The Product ....................................................................................................................................... 23
Uniqueness of the product ...................................................................................................................... 24
Chapter 4: ................................................................................................................................. 25
Production/Operations Study..................................................................................................... 25
Technical Description of the Product ....................................................................................... 25
Production Process ......................................................................................................................... 29
Pre-made ingredients process ............................................................................................................... 29
Pizza Dips Process ...................................................................................................................................... 30
Spicy Cheese Dips Process ....................................................................................................................... 31
Other Process ................................................................................................................................................ 32
Time and motion study.................................................................................................................. 41
Capacity ............................................................................................................................................... 45
Business Location ............................................................................................................................ 46
Production Schedule and Labor Requirements.................................................................... 48
Production Cost ................................................................................................................................ 50
Table 11. Spicy Dips Costing ................................................................................................................... 50
Table 12. Pizza Dips Costing ................................................................................................................... 51
Table 13. Toppings costing ...................................................................................................................... 51
Table 14. Consolidated Pizza Dips Cost ............................................................................................ 52
Table 15. Snacks Costing .......................................................................................................................... 52
Table 16. Packaging Costing ................................................................................................................... 52
Table 17. Variable Factory Overhead ................................................................................................. 53
Table 18. Fixed Factory Overhead ....................................................................................................... 53
Chapter 5 .................................................................................................................................. 54
Marketing Plan ....................................................................................................................... 54
Marketing Environment ................................................................................................................ 54
Target Market ................................................................................................................................... 54
Market Study ..................................................................................................................................... 55
Objectives of the study ................................................................................................................... 55
Research design ............................................................................................................................... 56
2
Research Methodology .................................................................................................................. 56
Population and sample size ......................................................................................................... 56
Results and Discussion .................................................................................................................. 57
Market Strategy ................................................................................................................................ 73
Product ................................................................................................................................................ 73
Price...................................................................................................................................................... 74
Place ..................................................................................................................................................... 75
Promotion .......................................................................................................................................... 75
Chapter 6 .................................................................................................................................. 76
Financial Plan.......................................................................................................................... 76
Production Budget .......................................................................................................................... 76
Direct Labor Budget........................................................................................................................ 77
Direct Materials Budget ................................................................................................................ 78
Factory Overhead Budget ............................................................................................................. 78
Cost of Goods Sold............................................................................................................................ 79
Operating Expense Budget ........................................................................................................... 79
Income Statement ............................................................................................................................ 80
Projected Cash Flow........................................................................................................................ 80
Balance Sheet .................................................................................................................................... 81
Financial Ratio and Analysis........................................................................................................ 81
Payback Period............................................................................................................................................. 81
Break Even Value ........................................................................................................................................ 83
Profitability Ratios ...................................................................................................................................... 84
Chapter 7 .................................................................................................................................. 85
Management Plan ............................................................................................................................ 85
Form of ownership ..................................................................................................................................... 85
Profile of the partners ............................................................................................................................... 85
Organizational Structure .............................................................................................................. 87
Figure 31. Organizational Chart ............................................................................................................ 88
Job Description and Function ...................................................................................................... 89
General Administrative Programs ............................................................................................ 91
Chapter 8 .................................................................................................................................. 93
SOCIO-ECONOMIC STUDY .............................................................................................................. 93
Population ...................................................................................................................................................... 93
Households .................................................................................................................................................... 93
Age Group ....................................................................................................................................................... 94
Religion............................................................................................................................................................ 95
Labor force ..................................................................................................................................................... 95
Chapter 9 .................................................................................................................................. 97
RISK AND CONTROL ........................................................................................................................ 97
Risk Management ............................................................................................................................ 97
RISK IDENTIFICATION ................................................................................................................... 99
Internal Risk ...................................................................................................................................... 99
Human Risks ................................................................................................................................................. 99
Equipment and Information Technology Risks ........................................................................... 100
Financial Risk ............................................................................................................................................. 101
External Risk ................................................................................................................................... 102
3
*Competition and Market Risks ......................................................................................................... 102
Business Environment Risks ............................................................................................................... 102
Personal Conflict Risk............................................................................................................................. 103
RISK CONTROL MANAGEMENT AND IMPLEMENTATION ................................................ 104
Business work strategies ...................................................................................................................... 104
Employee Management ......................................................................................................................... 105
Accounting and Cash Control .............................................................................................................. 106
Equipment ................................................................................................................................................... 107
Competition ................................................................................................................................................ 107
4
Chapter One
Introduction
other words, to map the future of one’s business. It helps to manage the business
effectively by committing thoughts and foreseeing the needs of the business. It’s
understanding will lead to specific courses of action, growth and financial security.
Writing out a business plan forces the proponents to analyze and review everything at
once: the value proposition, marketing assumption, operation plan, and financial plan.
Chapter one covers long term and short term goal of the business. It identifies
general and specific objective of what are the business projecting to.
Statement of Purpose
Writing a business plan allows the entrepreneur to know exactly where the
business is going, it allows setting objectives, and comparing exact result with projection.
Hence this determines whether a business has a chance of making a good profit, since it
provides an estimate start-up cost. Also, it helps business owners set their controls and
objective opinion helps to recognize inconsistencies or risks in business, and gives insight
5
General Objective
Overall, this plan aims to determine the viability, marketability of venturing into the
Specific Objectives
Provided are the specific objectives in product and business development in terms of
OPERATION
a. To determine the efficient and effective system for preparing, producing and
serving the product at the shortest possible time with minimal expenses
b. To determine the minimum and maximum capacity for the production of the product.
c. To determine the possible sources of raw material for the consistent quality of
d. To identify the optimal plant layout of the building, facilities and utilities.
MARKETING
a. To identify who are the direct and indirect competitor of the business.
c. To determine the customer’s buying power and buying patterns towards their food.
d. To determine what drinks and snacks would the customers like to go with the dips.
g. To gather data that would allow further improvements for the product
6
MANAGEMENT
b. To provide the required job description and job specification of the people in external
c. To determine how many people are necessary for production to maintain the business
FINANCIAL
a. To determine and reach a healthy monthly sales by the end of the starting operation
year
b. To prepare budgets and schedule for the efficient operation of the business
d. To determine the possible sources of funds and start up capitalization of the business
venture
a. To determine what are the possible problems that the business might encounter
b. To determine what are the best possible solution for the inconvenience that the firm
might encounter
d. To Identify the external and internal factors which affect risk for a small business
7
Chapter 2
Industry and Competitive Analysis
Dipsidoo belongs to the food industry, specifically, the dips and sauces industry.
After observing supermarkets and looking for businesses that sells dips on the internet,
the researchers have observes that the industry has a very few major players. Dips and
sauces are currently distributed either through a seasonal kiosk or by being sold in cans,
jars and containers in the supermarket. Dips are also made available through kiosks but
the researchers have not found any business that operates as a kiosk who sells dips as its
core product in the Philippine market. Dipsidoo will be started as a seasonal kiosk but
The key players in this industry are Doritos and Tostitos. Tostitos offers a variety
of tortilla chips and dips produced by Frito-Lay. Tostitos has been very successful and is
of Tostitos and Doritos) website, Tostitos has been introduced in 1979 and their dips have
been available globally since 1995. Doritos produces seasoned tortilla chips and dips.
Doritos has been introduced in 1964 and their dips have been available since 1990.
Businesses that serve dips, sauces and dressings as a secondary product are
Lady’s Choice, Clara Ole and Nacho king. The company’s range of spreads and dressings
are made from the finest ingredients that bring out the best taste of food. Clara Ole is one
of the leading local and important brands due to its authentic and distinct flavor. The
company strives for excellence in quality, convenience, and reasonably priced products
8
stated philamfood.com Brands (2015). Nacho King according to nachoking.com (2015),
is a Fast food retailer of nachos in the Philippines, with kiosks that can be found in malls,
Industry Outlook
The growth of Philippine sauces, dressings and condiments has been driven by
local and international flavors has also been seen in sauces, dressings and condiments.
Data from the leading U.S salsa brand, Tostitos has generated over 449.4 million dollars
of sale this February 2015. As stated in PepsiCo’s annual report (2014), Frito-lay, the
parent company of Doritos and Tostitos, received an increase of 3% in net revenue and an
increase of 2% in volume from 2013 to 2014. The volume growth reflects mid-single-
digit growth in trademark Doritos, double-digit growth in variety packs, Sabra joint
venture products and low-single-digit growth in dips. Based on the given information, the
industry is currently growing at a slow pace. As of today in the Philippines, only three
brands produce dips that are available in the supermarket. The three being Tostitos,
Doritos and old fashioned cheese. Though these three have been available in the market
for years, flavors available in the Philippines are still mostly limited to salsas and a
variety of cheesy dips. This can be used as an advantage for Dipsidoo. Dipsidoo will
offer a wider variety of dips that are served fresh while giving the customers an option on
what they would like to dip. These prestige are currently not provided by dips in the
supermarket.
9
Competition
Tostitos offers the following products; in the dips category, Tostitos Salsa,
Tostitos Roasted Red Pepper Salsa, Tostitos Garlic Salsa, Tostitos Spinach Dip and
Tostitos Salsa Con Queso. Its variety of dips has been very successful through the years.
in the line of chips they offer the following tortilla chips; Rolls tortilla chips, Extra thin
tortilla chips, Restaurant style tortilla chips, multigrain tortilla chips, hint of lime grilled
red pepper and tomato salsa tortilla chips, bite size round tortilla chips, multigrain rounds
tortilla chips, gold tortilla chips, scoops tortilla chips, multigrain scoops tortilla chips and
oven baked scoops tortilla chips. These chips innovation has put them on the top of the
industry making them one of our major competitors in chips and dips industry.
The next competitor is Nacho King, they serve nacho and chips just like
Dipsidoo. they offer variants of nacho’s but only vary in size and toppings they offer the
following product; Jumbo loaded, Jumbo w/ toppings, Biggie Beefy Nachos w/ salsa and
packed flavored nachos that is ready to take out (Bbq, Cheese, Sour and Cream). Their
prices range from 80 to 150 plus 15 pesos for additional toppings and they have stall in
Lady’s choice is one of the leading pioneer in spread and dips in the Philippines.
They are well trusted brands by mom’s all over the country, They over variants of Spread
like Mayonnaise, Sandwhich spread chicken,Ham spread, Mayo Lite and Bacon spread,
and tuna spread. The prices ranges from php28 to php168 from sachet to 80 ml, 220 ml
and 440ml and these spread can also found in most leading supermarket in the country.
10
Table 1.
Competition
11
Artisan Recipe
:Roasted Garlic
& Black Bean
tortilla chips
Artisan
Recipes: Grilled
Red Pepper &
Tomato Salsa
tortilla chips
Bite Size
rounds tortilla
chips
Multigrain
Round tortilla
chips
Gold Tortilla
chips
Scoops! tortilla
chips
Multigrain
Scoops! tortilla
chips
Oven Baked
Scoops! tortilla
chips
12
Greenbelt 1
Robinsons
Forum
Baranka
SM Megamall Star
City
SM Masinag
Sm City Sta. Mesa
SM Manila
SM city San Lazaro
Fisher Mall
SM City North Edsa
SM Center Valenzuela
SM City Fairview
13
Chapter 3:
be partners in a business venture. The partners have a common interest in food dips and
Partnership Name
The partnership name that the proponents came up is LaunchBox. This represents
where great products, ideas and innovation begins, in creating more efficient work
process to have a better productivity and performance. The first business under
LaunchBox is Dipsidoo. The proponent’s professor first suggested its name while they
were presenting business concepts, this turned out to be a random idea. Then, the
portrays fun, playful and enjoyable applicable to the environment of the business.
14
Figure 1. Partnership logo
15
Figure 2. Business Logo
16
Figure 3. Spicy Chicken Dip
17
Figure 4. Spicy Beef Dip
18
Figure 5. Hawaiian Pizza Dip
19
Figure 6. Pure Beef Pizza Dip
20
Figure 7. Pepperoni Pizza Dip
21
Figure 8. Bacon Pizza Dip
22
Mission and Vision Statement
Launchbox aims to give life to ideas that would promote development in different
create products that will improve consumer’s standards of living because of the
convenience and benefits that the products deliver. The partnership hopes for the
products to achieve a constant demand in the market in order for the partnership to
The Product
Dipsidoo offers four pizza dips, two spicy dips and one beef dip. There are four variance
of pizza dips such as: Hawaiian, Pure beef, Pepperoni and Bacon. Base dip was made
with Mozzarella, Creamcheese, Cheddar and other special ingredients and flavors are
added on top to appear the variance of pizza they choose. The two spicy dips are Spicy
chicken dip and Spicy beef dip, it was mixed with special cheese sauce. The two core
ingredients, which are chicken and beef are cooked separately to stew and sauté before
23
Uniqueness of the product
Dipsidoo offers a variety of products that is not currently provided in the market. The
product gives the consumer an opportunity to taste a variety of dips, not typically
available at the super market at a cheaper price. Dips are also served conveniently with
The snack of the customer's choice and dips are served fresh and no preservatives added.
Dipsidoo shall be one of the only food cart that would utilize dips as its core.
24
Chapter 4:
Production/Operations Study
The dips would be served in a 2.5” carton cup with 3” in diameter. Alongside the
dip, would be the snacks for dipping of their choice. The snacks would be packed in a
The proponents currently has seven flavours. Four of the flavors being the pizza
dip which would have a total weight of 90 grams without the toppings. It is composed of
50 grams cheese base, 20 grams tomato sauce and 20 grams of mozzarella on top. The
pizza dip would have varying weight on the toppings which is based on an equal pricing
for each flavors. 10 grams of pepperoni yielding a total of 100 grams for the pepperoni
flavor. 6 grams of bacon yielding a total of 96 grams for the bacon flavor. 10 grams of
pineapple and 10 grams of ham yielding a total of 110 grams for the Hawaiian flavor.10
grams of bell pepper and 10 grams of beef yielding a total of 110 grams for the beef
flavor.
Two among the seven flavors are the variety of spicy cheese dips, spicy chicken
and spicy beef. Both flavors would have a total weight of 80 grams. And lastly the
25
Figure 9. Front view of spicy cheese dips
26
Figure 10. Front view of Pizza dips
27
Figure 11. Top view of spicy cheese dips
28
Production Process
First, Prepare 300 grams of pepperoni, 180 grams of bacon, 150g of ham.Second,
preheat the oven to 400 degrees Fahrenheit then, finely chop the bacon, pepperoni, bell
pepper, and ham. Contain the 300 grams of pineapple, 300 grams of bell pepper, and 600
grams of pizza sauce. Then put the bacon, ham and pepperoni in a plate.
Prepare a pan or pot and pre-heat it in the stove for 30 seconds. Add a teaspoon of
oil and begin cooking the bacon bits. After taking out the bacon bits, the pepperoni is
cooked next. When the pepperoni is finally cooked the pieces of ham is then fried. After
frying, the stove is turned off and each toppings is transferred to their container.
Prepare and chop a whole onion and 4 cloves of garlic. Then, Preheat the pan in
medium heat for 30 seconds then add a teaspoon of oil in the pan. Add onions then garlic
and saute for 1-2 minutes. Beef is then added and constantly stirred and chopped with the
spoon or spatula for 6-8 minutes. Pan is then turned off and the ground beef is transferred
29
Prepare 612 grams of chopped chicken breast and place it in a pot. 5 cups of
salted water is then added in the pot. Stove is then set to medium-high heat and chicken is
braised for 15-20 minutes. After braising, chicken is strained and shredded then
transferred in a container.
Prepare 330 grams of cheddar, 600 grams of mozzarella, 330 grams of eden, 390
grams of cream cheese and 1096 grams of milk and put all the ingredients in a pot.
Pot filled with dairy products are now placed in the stove with a temperature of
150 degrees Celsius for 5-8 minutes then mixed and crushed until the mixture is
Completely melted.
After turning off the stove, the cheese base in the pot is then transferred to its cup
packaging. Cups are placed in a weighing scale and poured with the cheese base until it
While the pizza dip is still on the weighing scale, it is then topped with 20 grams
of pizza sauce on top, thus yielding the dip a total weight of 70 grams. Then, it is topped
30
H2=topped with 10 grams of pepperoni.
Dips are then sealed with a 3 inches diameter plastic cover and stored.
Prepare 612 grams of cheddar, 432 grams of Eden, 432 grams of cream cheese,
and 288 grams of garlic ranch, 1213.2 grams of milk and 10.8 grams of cayenne pepper
Transfer the pot to the stove and set the temperature to medium for 5-8 minutes.
Mix and crush everything in the pot until everything is melted and mixed.
Finally add 612 grams of chicken and mix it well with the dip. Then the stove is turned
off.
Finally add 450 grams of beef and mix it well with the dip.Then, the stove is turned off.
A cup is placed in a weighing scale and filled the spicy cheese in the pot until it reaches
80 grams.
31
Other Process
Snacks are taken out from the cooler and prepared. If loaf bread or tortilla was
ordered it would be toasted for 2 minutes. Serving size: nachos-42 grams, tortilla-1 piece,
and loaf bread – 2 slices. This process is only done if the snacks are ordered.
Pizza dip is opened and added with 6 grams of bacon, or 10 grams of pepperoni,
Customers are asked for their orders and given an option to choose what snack
Process Z: Serving
B Frying of toppings A
32
D Preparation of chicken bits -
F Melting of cheese E
V Preparing of snacks Y
W Microwaving of dips X
X Adding of toppings -
Y Taking of orders -
Z Serving -
33
Figure 13. Process chart of Spicy Cheese dips
34
Figure 14. Serving Process Chart
35
Table 3. Tools Machineries and Equipment
36
Equipments Brand Price
37
Table 4. Raw Materials and Supplies
Waltermart,Trece 60/kg
Puregold,Tagaytay 22.49/250g
SNR 399.95/kg
38
Waltermart,Tagaytay 145/150g
SNR 349.95/kg
SNR 77.50/L
SNR 389.95/kg
39
Water Aqua Khane, Tanza 25/5G
40
Time and motion study
The time and motion study is done by estimating the number of output and how
long it takes to product a batch. The output and time are estimated by timing three trials
for each task. The amount of working time per day was estimated to be 8 hours during the
study. The purpose of the time and motion study is to estimate how many orders can the
business take and fully understand the worker’s capacity. The proprietors also used the
time and motion study as an opportunity to improve working time or increase the number
of batch that can be produced in a single production. It is also a great way to find the
Dipsidoo plans to utilize the assembly line in the production of the products. It
was considered the better option rather than the job shop because the creation of dips are
only composed of simple repeated tasks that any member can do. It is also preferable
because of its nature to utilize each and every worker in the completion of a task. The
proponents have found that they can produce an average of 347 units per day (Computed
by adding overall product total task time divided by the number of products).
41
Table 5. Time and Motion Study
42
Table 6. Time and Motion Study and Plant Capacity for Pizza Dips
Process I 67 64 75 1.14444
Production capacity = 5.940594 batch/day or 178 units Total Task Time = 80.8
per day minutes
43
Table 7. Time and Motion Study and Plant Capacity for Spicy Chicken Dips
Process L 45 32 35 0.62222
Process I 67 64 75 1.14444
Table 8.
Time and Motion Study and Plant Capacity for Spicy Beef Dips
Process M 45 34 30 0.60556
Process I 67 64 75 1.14444
44
Capacity
The proponents can produce a total of 178 units of Pizza dips a day or 318 units
of spicy chicken dips and 450 units of spicy beef dips. Although some processes does not
necessarily needs to be repeated upon the preparation of the next batch. Also, the
proponents can also exceed the serving amounts of 30 units per batch up to 50 units per
batch depending on the demands for the product. Given this flexible capacity, the
proponents would have no problem with catering to the demands of the customer. The
proponents would only need to prepare a next batch if the supply for the first batch
already reached its minimum inventory amount and if there are still any market for the
day. These conservative step is done to minimize leftovers and to have an efficient
inventory system.
45
Business Location
would be ideal for us to test our newly developed product since the market there is also a
student like us. We can ask the students to give us feedback about our product. This will
Second location would be at different bazaars, this will help us to gain experience
on how to manage and run a business outside the school. The partnership is planning to
join bazaars at world trade center, Robinsons Las Piñas, Robinsons General Trias , Evia
and other Christmas Bazaars by joining different bazaars we would be learning hands on
experience.
determine how competitive our product is. Currently, the proponents are eyeing to get an
agreement with any mall that would have a good market for the product.
46
Figure 15. Plant/ Business Layout
47
Table 9. Building Facilities and Utilities
The proponents have decided to work for 8 hours a day for 6 days having a total
of 192 Hours per month. A minimum of one worker shall be operating the kitchen and
one worker operating the cashier. Worker A shall be responsible for marketing the
product if there are no customers and help worker B during the peak hours of the
business. A total of 5 task have been divided for the workers, preparation of ingredients,
cooking, packing, and serving. Also the 3 workers should be interchangeable and capable
of doing the assigned tasks of other workers in case of emergencies or cases when one of
48
Table 10.
Labor Requirements
Proponents Assigned
Preparation X X
Cooking X
Packing X X
Marketing/Promoting X
Serving X
Taking of orders X
49
Production Cost
(Assuming 30
units is
Spicy Cheese produced per
Dips batch)
Cost per Cost per Req.
order Weight gram g/unit Cost per unit Cost per batch
Chicken 160 1000 0.16 20.4 3.264 97.92
Cheddar 165 500 0.33 20.4 6.732 201.96
Eden 118 440 0.27 14.4 3.861818182 115.8545
Creamcheese 680 2000 0.34 14.4 4.896 146.88
Cyenne 49.5 26 1.90 0.36 0.685384615 20.56154
Garlic ranch 200 1000 0.20 9.6 1.92 57.6
Milk 72 1016 0.07 40.44 2.865826772 85.9748
Beef 240 1000 0.24 15 3.6 108
Chicken 24.23 726.751
Beef 24.56 736.831
50
Table 12. Pizza Dips Costing
PIZZA DIP
Cheese Base Cost per order Weight Cost per gram Req. g/unit Cost per unit Cost per batch
Cheddar 165 500 0.33 11 3.56 106.821
Mozarella 320 1000 0.32 20 6.4 192
Eden 118 440 0.268181818 11 2.89 86.81045
Creamcheese 680 2000 0.34 13 4.42 132.6
Milk 72 1016 0.070866142 37 2.59 77.64094
Cheese base total 91.10 19.86 595.8724
Tomato Sauce 80 1000 0.08 18 1.44 43.2
Dip base total 21.30 639.072
Cost per Weig Cost per Req. Cost per Cost per
Toppings order ht gram g/unit unit batch
Bacon 90 150 0.60 6 3.6 108
Pepperoni 36.92 100 0.3692 10 3.69 110.76
Pineapple
chunks 22 98 0.2245 10 2.24 67.34694
Bellpepper 150 1000 0.1500 10 1.5 45
Ham 67.5 225 0.3000 5 1.5 45
Beef 240 1000 0.2400 10 2.4 72
51
Table 14. Consolidated Pizza Dips Cost
Cup 1.4 42
Nacho 5 2.7 81
52
Table 17. Variable Factory Overhead
Amount per Cost per Amount used per Cost per Cost Per
order pack serving serving batch
Tissue 1600 150 5 0.47 14.06
Plastic
250 150 0.33 0.20 5.94
Gloves
53
Chapter 5
Marketing Plan
This chapter will establish and integrate all its sales effort and marketing to project
consistent image of the partnership that everyone in the organization should both
Marketing Environment
Since Dipsidoo is relatively new to the market and presenting a new concept of
dips as the core product for their snacks, it would be difficult to earn the market’s
acceptability of the product and gain market shares against well-known brands like
Nacho King and cheaper alternatives sold through mobile stalls. The product’s edge
against this two threats would be its market positioning of being a high-quality deluxe
snacks with a slightly lower pricing as compared to popular brands like Nacho King.
Target Market
The product would be segmented as a high-quality pleasure food. The proponents are
currently aiming for students who love spending their free time eating snacks and are
from the socio economic classes’ b and c. The proponents primarily targeted this segment
because the stall would be mostly located within the campus of DLSU-D. Referring to
Figure 17. Psychographics, the top 5 traits that most of the DLSU-D students would have
are the following; music lover, home person, sporty and family oriented. Although if the
54
business successfully transcends its location in malls, target market may shift to its
secondary target market which is financially stable people with the cravings of prestige
Market Study
customers and potential customers. It explained the detailed description of the research
design used on how the research was made, the data gathering procedure and the
statistical technique.
2. To determine the customer’s buying power and buying patterns towards their
food.
3. To determine what drinks and snacks would the customers like to go with the
dips.
6. To gather data that would allow further improvements for the product
55
Research design
The partners used a descriptive type of research by identifying the market potential of the
whole DLSU-D market by determining a good amount of respondents that can represent
each of the market in order to classify the acceptability and profitability of the product
Research Methodology
The partners used descriptive research method to identify the market potential of the
whole DLSU-D population by utilizing data collection and analysis techniques that yields
report concerning the measurements of variation and correlation of the preferences of the
respondents.
The survey questionnaire contained data such as: Daily allowance, psychographics, pizza
The researchers used the number of enrollees for the school year 2015-2016 2nd semester
of DLSU-D. The population based from the accounting office of DLSU-D is 13,217. Out
of the 13,217 students, 296 were chosen as the sample size thus having a margin of error
56
In order to gather data from the market effectively, the researchers opted to use self-
method that the researchers utilized are stratified random sampling, and convenience non
probability sampling. To ensure the diversification of students, the researchers first opted
to survey classes at random times from neutral grounds thus avoiding getting respondents
from the same colleges. The researchers assumed that DLSU-D’s MTH Court and
Ugnayang La Salle would be a good neutral ground for the colleges because of the
student’s P.E class which is a part of every course’s curriculum. After gathering
respondents from the two locations, the researchers then randomly pick out available
There are two hundred ninety six people in De La Salle University- Dasmarinas was
randomly selected to take part of the survey this represent the whole population of
DLSU-D
57
Figure 16. Allowance per day
5%
15%
0-100PHP
22%
101 -200PHP
201-300PHP
301-400PHP
58%
For the first survey question, “allowance per day”. Out of 296 respondents, 15% or 45
58
Figure 17. Psychograpcics
Music Love
Home Person
Family Oriented
Outgoing
Sporty
As shown on the bar graph above; music lover, home person, outgoing, family oriented
and sporty are the top five traits answered by the respondents. To put this on percentage;
45% are sporty, 46% are outgoing, 45% are family oriented, 48% are home person and
62% of the population are music lover. These comprises psychographics of the whole
population of DLSU-D.
59
Question 1: Do you eat pizza?
Figure 18.
2%
0%
YES NO
98%
For the 3rd survey question, “Do you eat pizza?. As to the respondents eating
preferences, 98% or 288 respondents answered that they are eating pizzas and on the
other hand, 2% or 5 respondents said that they does not eat pizza.
60
Question 1. 1. How often do you eat pizza?
Figure 19.
32%
Once a week
Twice a week
50%
Thrice a week
Others
6%
12%
Question 1.1 (For those who answered “Yes”), in this graph you can see the behavior
patterns of the total respondents towards eating pizza. In relation, 50% or majority of the
respondents eat pizzas once a week, 12% of the respondents eat pizzas twice a week,
17% of the respondents eat pizzas thrice a week, and 32% of the respondents answered
others.
61
Question 1.2 What is your favorite Pizza flavor?
Figure 20.
1%
17% 18%
Pepperoni
Margherita
6% Hawaiian
Beef
21% Cheese
Bacon
24% Others
13%
For the 5th survey question, “What is you favorite pizza flavor”. The most preferred
pizza flavor is Hawaiian which covers 51% of the population, next to the respondents
flavor preference is Pepperoni pizza flavor which is 37% followed by Cheese pizza flavor
that is 45% , Bacon pizza flavor which is 35%, Beef pizza flavor which is 27%,
Margherita pizza flavor which is 13%, and “other” pizza flavors have the least pizza
62
Figure 21.
12:01am to 6:00am
6:01 am to 12:nn
For the 6th survey question, “how often do you eat snacks in a day?’ Out of 296
respondents who eat snacks every 6am-12pm, 149 of the respondents eats once, 60 of the
respondents eats twice, 8 of the respondents eats thrice, 8 of the respondents eats more
than thrice, and 66 doesn’t eat snacks from 6am-12pm. The respondents who eat snacks
from 12:00pm-6:00pm, 132 of the respondents eats once, 96 of the respondents eats
twice, 26 of the respondents eats thrice, 13 of the respondents eats more than thrice, and
21 of the respondents doesn’t eat snacks from 12:00pm-6:00pm. The respondents who eat
snacks from 6:00pm-12:00am, 145 of the respondents eats once, 57 of the respondents
eats twice, 15 of the respondents eats thrice, 13 of the respondents eats more than thrice,
and 59 of the respondents doesn’t eat snacks from 6:00pm-12:00am. The respondents
who eats from 12:00am-6:00am, 82 of the respondents eats once, 17 of the respondents
eats twice, 10 of the respondents eats thrice, 6 of the respondents eats more than thrice,
and 171 of the respondents doesn’t eat snacks from 12:00am-6:00am.
63
Question 2.1 - How much do you spend for your snack?
Figure 22.
10%
9%
40% Php 0 - 50
Php 51 - 100
Php 101 - 149
Php 150 and above
41%
For the 7th survey question, “How much do you spend for your snacks?”. Out of 296
respondents, 40% or 118 respondents spend PHP0-PHP50 for their snacks, 41% or 120
PHP101-PHP149 for their snacks, and 10% or 30 of the respondents spend PHP150 and
64
Question 3 Have you encountered any product that is similar with our pizza dips?
Figure 23.
3%
YES
NO
97%
According to the results, 32% of the respondents answered that they have already
encountered products similar with pizza dips, and 68% answered that they haven’t
65
Question 3.1 “where did you encounter the similar product?”
Figure 24.
Mall
100% of the respondents that claimed that they found a similar product answered that
they were able to try the similar product at the mall. The responded didn’t specified the
66
Question 4: Would you buy our product
Figure 25.
4%
YES
NO
96%
For the question “Would you buy our products?” 268 of the 296 which is 90% of the
total population of DLSU-D answered “Yes” while the remaining 28 which is 9% of the
67
Question 4.1: How much are you willing to pay for our Pizza Dips?
Figure 26.
3% 3%
16%
0-25
26-50
51-75
76-100
78%
For the 12th question “how much are you willing to pay for our Spicy Cheese Dips” Out
of 296 student respondents 169 answered that they are willing to buy the product if the
75 pesos and the remaining 4 students answered 76 to 100 pesos and the another 4
students is willing to buy the dip at the price of 100 and up.
68
Question 5: What snack would you like to go with our dips?
Figure 27.
6%
15%
Breadstick
Tortilla chips
Nachos
27%
Others
52%
For the 13th question “what snacks would you like to go with our dips?” 67 students
answered that they would prefer bread sticks and 121 students for tortilla chips, while
majority of the respondents( 236) answered nachos and 25 respondents said they would
prefer other.
As shown in the results above, Nachos is the preferred snack that most respondents have
choosen, which covers the preference of 79% of the entire population of DLSU-D and
67 students which is 24% of the population answered that they would choose bread sticks
while 121 students have chose tortilla chips which is 41% of the DLSU-D population,
and 25 respondents said they would prefer others.
69
Question 5.1: What drink would you like to go with our dips
Figure 28.
Others 5
Coffee 14
Tea 22
Series 1
Lemonade 167
Soft drinks 75
As shown in the results 169 of the student respondents answered iced tea and 167 would
choose lemonade and 75 students answered softdrinks while the minority would rather go
with tea (22 respondents), Coffee (14 respondents) and the remaining 5 said others.
Question 6: Evaluation of the product (PIZZA DIPS AND SPICY PIZZA DIPS)
70
Figure 29.
PIZZA DIPS
Pricing
Texture
N/A
Packaging
Excellent
Very Good
Convenience
Good
Appearance Fair
Poor
Smell
Taste
0 50 100 150
According to our 295 respondents taste , 2 answered poor while 12 s answered fair, 97 in
good, 108 in very good and 77 at excellent and in smell 18 answered 18 in fair, 104 in
good, 117 in very good and 55 in excellent plus 2 more respondents in N/A. We also
asked them about the appearance of the product and 28 of the students answered that it is
far, 109 in good, 100 in very good, 58 in excellent, but when it comes to convenience we
received a very good feedback from the respondents 113 answered that it was very
convenient for them to eat the pizza dip while 97 students said it was good, 58 in
excellent, 18 in pair and only 1 answered that it was poorly convenient. Packaging is one
of the big challenge for us since it is hard for us to get a quality and cheap packaging we
just used a paper cap and 96 respondents answered good, 97 in very good, 58 in
excellent, 25 in fair, 11 respondents answered N/A and 3 in poor. 104 of the respondents
says that the pizza dip texture is very good while 98 respondents says that it is good and
74 answered excellent and only
71
Figure 30.
Pricing
Texture
N/A
Packaging
Excellent
Convenience Very Good
Good
Appearance Fair
Poor
Smell
Taste
0 20 40 60 80 100 120
72
Market Strategy
This section intend to establish the fundamental goal of increasing sales and achieving a
sustainable competitive advantage of the partnership and to satisfy the need of the
customers under its target market.
Product
The partnership aims to position the product as deluxe dips for the socioeconomic class
b and c. The proprietors had created two variety of dips that come up with six different
flavors with all cheese base. To market the 98% population of DLSU-D who are pizza
enthusiast, the proprietors retail six flavors of pizza dips naming; Hawaiian Pizza dip,
Pure Beef pizza dip, Pepperoni Pizza dip and Bacon pizza dip. To cater the remaining 2%
of the population who does not eat pizza, the partnership also sell Spicy dips naming;
Spicy pure beef and spicy chicken dips. In line with this, the product will be compatible
with a variety of snack such as nachos, tortilla and toast bread. According to the results,
79% of the population of DLSU-D prefer nachos and 60% of the population also choose
Considering the different taste and preferences of the target market as resulted by
the analysis of the survey, 90% of the population of DLSU-D are willing to buy our
product in regard with the satisfaction of the taste, smell, appearance, convenience and
the texture of the product. One of the major characteristic of the product is that, it
73
is serve with high quality and served with sizeable portions that makes a reasonable price
Price
The proprietors intend to offer the product at an accessible price for upper and middle
classes. The price of the product was at premium / skimming prices and opted to sell the
dips at the price Php 60.00 and the snacks such as Nachos, Tortilla and Toast shall be
sold at the price of Php 25,20 and 15 respectively. The approaches used to determine the
selling price of the product are cost-based pricing and competition-based pricing using
these pricing strategy, the partnership would be able to support and ensure the pricing
competency and the product’s market value. Considering the market positioning of being
a highly-quality deluxe snacks it has slightly lower price as compared to popular brand
As shown in the result of the survey, only 26% of the population in DLSU-D
would buy our product in the price range of Php50.00 to Php 75.00. Thus, the price may
still be subject to change depending on many factors such as; packaging, ingredients,
74
Place
the proprietors opt to promote the exposure of the business and the product itself by
joining school bazaars and emplacement among shopping centers like Robinsons Imus,
As shown in the result of the survey, 68% of the total population of DLSU-D haven’t
encountered any or similar product before in the market. To cater those, the partnership
will be accessible to the target market by actively participating bazaar inside and
Promotion
The proprietors will utilize direct marketing through this, it allows proprietors to directly
The company will be accessing online advertising by using Facebook adverts, Twitter
Ads and Instagram short videos and photos. We’ll be also handing out printed ads such
as flyers and posters that will be put on public places to make the business and the
product itself familiar to the public. Also to acquire more brand recognition, we’ll be
plugging the product in newspapers and magazines corner with the consideration of the
75
Chapter 6
Financial Plan
Production Budget
The proponents have created a production budget based on the average number of units
sold on their market test during the Lasallian festival held on April 16-19 located at the
swafo parking of DLSU-D. The daily units sold are as follows; Spicy Beef Dip – 14
units, Spicy Chicken Dip – 11 units, Hawaiian Pizza Dip – 7 units, Pepperoni Pizza Dip –
6 units, Pure Beef Pizza Dip – 10 units, Bacon Pizza Dip – 11 units, Nachos – 48 units,
Toast – 26 units and finally Tortilla with 37 units a day. The tortilla was not available
during the lasallian festival so the proponents have estimated it to be in the middle of the
The proponents are scheduled to have a 6 day bazaar at school from the months of
august, September, November, December and January. While a 1 month bazaar for the
months of October and February. An assumption that a 6 day bazaar would be held
somewhere was made for the months of March, April and May.
To easily monitor the sales of the proponent’s core product and its byproducts, the
proponents categorized the Spicy Beef Dip, Spicy Chicken Dip, Hawaiian Pizza Dip,
76
Pepperoni Pizza Dip, Pure Beef Pizza Dip and Bacon Pizza Dip as Dips and Nachos,
Overall, for the months of August, September, November, December, January, March,
April and May the company is estimated to sell a total of 342 units of dips and 659 units
of snacks per month. As for the months of October a total of 1,767 units of dips and
3,406 units of snacks per month, while for the month of February a total of 1,596 units of
The proponent expects to have at least 3 for its operation to be stable. Each worker shall
be paid with a labor rate of 250 a day. For the month of August, September, November,
December, January, March, Apri and May, the workers shall cost a total of 4,500 per
month. While for the months of October a total of 23,250 shall be paid and 21,000 for the
month of February. A total of 80,250 pesos is budgeted for the whole year of operation.
77
Direct Materials Budget
The proponents have created a budget for the following ingredients and materials:
Chicken, Cheddar, Eden, Creamcheese, Cyenne Pepper, Garlic Ranch, Milk, Beef,
Mozarella, Bacon, Pepperoni, Pineapple Chunks, Bellpepper, Ham, Beef, Nachos, Toast,
Tortilla, Tissue, Plastic Gloves, Mask, Nacho 5 Packaging (Packaging for snacks) and the
The proponents made different accounts of a single direct material, which uses different
If the projected demands are met, Dipsidoo is estimated to spend a total of 16,958.22
monthly for the months with a 6-day bazaar, 87,616.47 for October and 79,138.36 for
February. For a year of operation, a total of 302,421.60 is estimated to be spent for the
direct materials.
The company included the following accounts on its Factory Overhead Budget:
Electricity Expense, Depreciation, and Ice. The equipment, utensils and booth are
expected to have a zero value by the end of May. Each depreciable item’s value upon
depreciates every month. The budget for the Ice is estimated to be 300 pesos per week
and so the months of October and February a total of 1,500 is estimated to be spent.
78
A total of 2,100 Factory Overhead is estimated to be spent for the months with a 6-day
bazaar and 3,100 for the months with a one-month bazaar. Overall, an annual total
amount of 23,000
Electricy was assumed to be 200 pesos per month while for the months of October and
February, electricity expense is zero because it is already inclusive of the bazaar fee paid
at Robinsons.
The proponents have consolidated the Direct Materials Budget, Direct Labor Budget, and
Factory Overhead Budget. The proponent assumes to have zero ending inventories. A
total of 23,558.22 are expected to be spent for the months with a 6-day bazaar and
113,967.47 for the month of October and 10, 3238.36 for the month of February.
Bazaar fees at DLSU-D are expected to be a standard of 250 a day or 1,500 for 6 days.
For the month of October and February, the proponents are expected to pay 1693 a month
for the rental space. It is computed as 22,000 peso monthly rent divided by the number of
tenants (13).
The proponents have also given a 500 pesos budget for the transportation expense for the
A total of 2,000 operating expense is estimated for the months with a 6-day bazaar and
79
Income Statement
Given the assumption that the average sales from the previous market test shall be the
constant number of sales per month, each month with similar number of operating days
are expected to have similar Net sales, Cost of Goods Sold, Gross Profit and Net Income
Dipsidoo is expected to have an annual net sales of 612,708.75 and 405,671.60 Cost of
Goods Sold resulting to a gross profit of 207,037.15. Less the Operating Expense of
20,386 a total net income of 186,651.15 is expected after the end of May 2017.
Dipsidoo shall only accept cash for the payments of the customers thus having identical
amounts of cash sales with the sales budget per month. A Cash Sales of 34,357.50 for
months with 6-days bazars and 177,513.75 for October and 160,335.00 for February. An
Initial investment of 26,000 is estimated by the proponents a 16,000 allowance for the
materials and equipment and 10,000 allowance for the first batch of ingredients. Any
proceeding purchase shall then be paid through the company’s cash on hand. The
proponents have assumed that every fixed asset purchased by the company shall last for
By the End of May the Proponents have estimated to have a total cash balance of
212,651.15
80
Balance Sheet
The only current asset of the company for the period ended August 2016-May2017 shall
be its Cash on Hand based on the budgeted cash flow and have a fixed asset of Booth,
By the end of the year the initial investment of 5,200 for each of the 5 partners is
pesos.
81
Table 19. Weighted average contribution margin computation
Spicy
Chicken Dip 1001.25 0.06 60.00 16.94 3.78 1.07 2.71
Hawaiian
Pizza Dip 1001.25 0.04 60.00 16.94 2.34 0.66 1.68
Pepperoni
Pizza Dip 1001.25 0.03 60.00 16.94 1.98 0.56 1.42
Pure Beef
Pizza Dip 1001.25 0.06 60.00 16.94 3.51 0.99 2.52
Bacon Pizza
Dip 1001.25 0.07 60.00 16.94 4.04 1.14 2.90
Snacks
Nachos 1001.25 0.28 25.00 16.94 7.12 4.82 2.30
Toast 1001.25 0.15 15.00 16.94 2.31 2.61 -0.30
Tortilla 1001.25 0.22 20.00 16.94 4.39 3.72 0.67
Weighted Average Weighted Average
selling price 34.31 Contribution Margin 17.38
82
Break Even Value
Given that the company’s only variable cost is its direct materials, the direct materials for
august was totaled and divided by the total units of every product. After dividing the
weighted average by computing the unit’s sales of the product with the total unit’s sales
of all the products, the weighted average selling price was then achieved by multiplying
the selling price with the weighted average. While the Weighted average variable cost
was computed by multiplying the average cost with the weighted average. Then, the
weighted average selling price was subtracted by the weighted average variable cost thus
computing the average contribution margin. By totaling the average contribution margin
Note: The assumption of using the average cost of a whole month’s direct materials was
preferred because some variable costs that are also applicable to other products.
variable expenses
83
Profitability Ratios
84
Chapter 7
Management Plan
Form of ownership
Suzaine T. Lualhati, Ray Christian P. Rosell, Ma. Mikhaela S. Sanchez, Dan Marlon
Isaac and Romiko Vidanes. All parties share the legal and financial liability of the
partnership equally and personally responsible for the debts the partnership that might
occur. Profits are shared equally, in principle, but the specifics of profit sharing will
The company was led by Joannie Suzaine T. Lualhati - the president of Dipsidoo
Company. She was born on December 7, 1996 - 19 years old and studied her secondary
communication skills and influencing skills, she can be able to contribute to the
company’s success.
The Company’s Public Relation manager is Ma. Mikhaela Sanchez. She was
born on October 14, 1996 - 19 years old and studied her secondary education OB
85
Montessori (Operational Brotherhood) in Las Piñas. She is currently studying Bachelor
communicating with different types of people with the means of public relation and
December 22, 1996 -19 years old. Studied his secondary education at Notre Dame of
the company.
The Company Operation’s manager is Romiko Vidanes. He was born on June 19,
major in Entrepreneurship. His skills in managing the operations and in production will
help the company for the better development and extensive production of the products.
The Marketing and Advertising manager is Dan Marlon Isaac. He was born on
July 26, 1995 - 21 years old and lives in Bacoor Cavite. He studied his secondary
editing and good communication skill to any type of customer to the public. He can be
86
Organizational Structure
An Organizational Structure is the framework which shows how the top level
management is organized, It's the operating manual that tells members how the
organization was put together and how it works. More specifically, the structure describes
a clear reflection of the connections of each individuals that will serve as leaders and
87
Figure 31. Organizational Chart
88
Job Description and Function
Each member of the company should know their responsibilities in order for the
President - The role of the president serves as a good leader in internal and external
authority within the organization. The president frequently represents the organization in
civic, casual and professional responsibilities. However; the president is responsible for
decision making and solving problem that the company might encounter.
Finance Manager - The Vice President for Finance will be responsible for all the
costing, budgeting, keeping and maintain the financial record and analyzing the current
financial performance of the company. The Vice president for finance will also be
responsible for the development of the company’s financial management strategies and
Marketing and Advertising Manager - The Vice President for Marketing has
overall responsibility for growing the business revenue, increasing market share and
contribute to the company’s growth and profitability. It also plan campaigns and develop
Through this, it should speed up the business growth and the product will be more
89
Operations Manager - The Vice President for Operation is in charge of production
and operational procedure and processing that progress and support the objective of the
company. The Vice President for Operation is responsible for production plans and
coordinates the development and manufacture of all products made by the company.
responsible responsible for coordinating an active public relation and generating the
positive awareness of the public through social media and to the general public. Thus,
incharge and responsible for active and continuous participation with and within a
community to maintain a good relationship between company and community. The Vice
President for Public Relation involve in dealing and communicating with the news media
when seeking publicity and with regard to societal (public) policies, action and legislation
90
General Administrative Programs
General Administrative Programs are partners’ set of rules and restrictions within the
company that will take place consecrate of inattentive and poor performance of a partner
-The company will only allow four absences in every meeting, unless the
member has a valid reason for being absent. First absent will be given a warning.
Second absent will be given a penalty of 100 pesos. Third absent will be given a
last warning and penalty of 500 pesos. Fourth absence will result to eviction to the
company's business.
Failure to appear during duties with invalid reason will have penalties. First
absent will result to a penalty of 200 pesos. Second absent will result to a penalty
of 400 pesos. Third absence will result to a penalty of 600 pesos. Fourth absence
will result to a penalty of P1000 and five absent will result to eviction to the
company's business.
The company will also not consider late attendance during significant meetings,
this will result to penalties as well. Late reasons with acceptable reasons are
tolerated, for example: unexpected events that are beyond your control like,
accidents, unexpected heavy rain condition and etc. Hence, reasons that cause the
payment on its first late, the second will be 100 pesos and the third will be 150.
91
Fourth late will result to warning and the fifth will be reported at the department
Failure to observe proper behavior and hygiene during duties and meetings are
not tolerated, being a player in the food industry its is important that the food
handler and staff working inside the kiosk/ establisment are observe polite and
with decent image. First attempt to negligence will be given a penalty of 250
pesos, The second will be 350 pesos and conjugated with the warning. The third
failure will be reported at the department and might be evicted at the partnership.
92
Chapter 8
SOCIO-ECONOMIC STUDY
The company’s primary target market includes people 10 to 70. This is furthered
down to social class B and C that wants to experience deluxe products that will suit their
taste.
Population
has a total land area of 142,706 hectares representing 2.7 percent of the region’s total
land area and 0.4 percent of the total land area of the country. It is ranked 69th in terms of
land area among 81 provinces in the Philippines. The population of Cavite has increased
Households
This can be interpreted that a household has an average 4 members. The household
sizes are generally high in the rural municipalities. This trend is generally being
observed in the entire country. Families in the urban areas tend to have lesser
number of children, thus, smaller household size. High household size in the rural
areas is driven by strong family ties and extended households. The City of
Dasmariñas has the most number of households and the household size is 3.79.
93
household size is 4.02. In total, there are 932,467 projected number of households
Age Group
The young population of the province is at 31.259% while the old population
The richness of Cavite’s industrial sector and economy can be attributed to its
workforce that comprises the majority of its population (Figure 2.3). The senior
citizens ticked at 5.784%. In the national trend, a portion of the population that
the workforce, though they may opt to work. Those that are aged 15 to 19 are
are already retired. The most number of population belongs to age 5 to 9 and the
least number belongs to age bracket 80 and over. The dependency rate of the
100 working population in the province. Among these 53 dependents, 48 are young
94
Religion
Cavite can be dated back in the early Spaniards occupation. Currently, the
prevalence of this religion is exhibited with the presence of century old churches in
various towns of the province. Estimating its membership in the province for the
year 2012, Catholics in Cavite total to 87.20% of the population. The next leading
religion in terms of affiliation is Iglesia ni Cristo that accounts to 3.45%. Other major
religions are Aglipayan, Islam, Protestants Baptists, Born Again Christians and
Jehova’s Witnesses. The province is also home to many Catholic based events like
Fiesta. The population is actively engaged in their religious affiliation and their
involvement has reached that level of getting a seat at different councils of the
Labor force
During the 2010 Census of Population and Housing, it was found out that the
2012. The latest labor statistics for CALABARZON is updated up to year 2010. In the
year 2010, there are almost five million population included in the labor force.
These values have been in increasing pattern since year 2006. In the contrary, the
labor force participation rate did not show any significant change for the past five
years. This reflects that the proportion of working age population in CALABARZON
is almost stable at 60.00 to 65.00%. This poses lesser threat of having very young or
95
very old population which tends to lessen the workforce, as in the case of other
Despite being high, this is not a good value considering that it is way lower than the
among females as compared to male. On the other hand, more males than females
are not satisfied with their current work and tend to look for better or additional
employment
96
Chapter 9
Objectives:
b. Identify the external and internal factors which affect risk for a small business
. e. To determine what are the possible problems that the business might encounter
f. To determine what are the best possible solution for the inconvenience that the
firm
Risk Management
internal risks (weaknesses) and external risks (threats). Generally, you can control
internal risks once you identify them. However, external risks may be out of your control.
Not all risks come from negative sources. Risks may come from positive sources, or
opportunities. Expansion and growth are opportunities, but they also bring additional risk.
Hence, the ultimate goal is to minimize the effects of risks on your business.
97
External
Rsik
Internal
Risk
Dipsidoo
98
RISK IDENTIFICATION
One of the most important investments you can make in your business is creating a
business plan, especially when identifying risks. Creating a business plan will help you
assess risk areas, those areas impacting the partner’s ability to continue business and to
grow. The continuation of your business, in the event of any risk, should be addressed in
the plan. Determining that could halt, slow, or affect the profit of your business.. A
business plan isn’t something to create and set aside, simply to be used later to obtain
financing. Once completed, the business plan will become your guide, just like a map.
The major risk that identify by the proponents are Internal and External risk. Internal
risk are determined inside the company that are beyond the control of the business’ laws
and rules. Likewise; it includes’ human risk, equipment and information technology
risk. Under external risk are competitions and market risk, business environment and
personal risk.
Internal Risk
Human Risks
The human component of your business is a source of risk. Think about these possible
99
Illness and death. A business owner or employee may be ill for a day or be unable
to work for months. The death of a person involved in a business poses a risk to
continued operations.
Theft and fraud. Most businesses want to have an honest working environment,
yet theft by employees and employee fraud are major risks businesses face.
risks.
Low employee moral. Unhappy employees can cost money through negligence or
through willful acts. For example, an employee who forgets to reorder inventory
Staff turnover or lack of staff. If the business leader is responsible for the
Older equipment may run slower or require more maintenance than new
equipment. New equipment may require adjustments to work with older equipment.
Worn parts may cause damage or cause company vehicles to break down. Downtime
from physical damage or outdated systems may slow business profits. Most businesses
rely on a computer system to process credit cards. These systems are risks to continued
100
business when they are not working, especially if no backup plan exists. Lack of
Other Internal Risks Another source of risk might be the physical assets of the
business. Phone lines and other utilities are risks to a business. The appearance of a
building such as its walls, windows, and doors may require maintenance to continue
drawing customers. Injuries and damages may be caused by your business or your
business may receive damage. For example, a storm may cause damage to a business or a
business may cause damage by selling a faulty product. Either way, injuries and damages
come with a cost. Cash flow is the lifeline of a business. . In addition to this, it will also
take into consideration is the “conflict project goals,’ does the project agree with the
When unexpected costs affect the ability of a business to meet monthly expenses or
when credit lines are lost, a business may fail. A plan to maintain cash flow is crucial
Financial Risk
According to businessdictionary.com, Financial risk is the probability of loss inherent in
financing methods which may impair the ability to provide adequate return.
One of the major risk that prononents that proponents should take into
consideration is the “cash-flow management.” This can create a big impact to the
business. Therefore; cash inflows and outflows should be recorded at all times.
and funding sources are considered risk because it may cause to low returns if
101
Corruption may be the most common risk to take into consideration. Corruption
is understood as the abuse of power by acts that generate illegal profit either by
External Risk
*Competition and Market Risks
Competition can be tough and market changes can make life for your business tougher if
wholesale costs go up and down, and oil and gasoline prices affect the costs and
Employees may leave and go to our competitor’s shop, this is also one of the big
Rent increases may be caused by increased demand for space. For example, may
when the lease is up for renewal, an increased demand for space in the vicinity
Business environment risk was defined as a risk which can have a material environmental
102
Your community may change as the needs, age groups, spending habits, and incomes of
damage to property and resources, and disruption of power and water. Possibly,
if this happens contact to supplier and personell are uneasy during this time.
decreased demand - there may be less demand for your goods and services if
products may target your customers. It may also be difficult to attract and retain
increased costs – The proponents may experience higher costs for energy, water
and other resources. Water restrictions may also affect the business.
Personal conflicts are external risks for both business owners and employees.
Families and homes do not cease to exist at the start of a work day because, children
become ill, medical emergencies, or worse, may happen and repairs and maintenance will
be required at home.
For a partner/ owner, involvement in the community creates visibility. However, the
visibility comes with a cost, mainly time. Employees are involved in outside activities as
well. We don’t usually think of outside activities as a risk, but consider how you would
business may be successful and has been for a while and may be comfortable with the
103
hours you are working, but this might cause to miss opportunities for growth because
unwanted expendtion of extra effort. Now, multiply the effect of complacency because
Set work hours. Provide the employees with a tentative work schedule and keep
them updated in advance of changes. Use a planner to map out your anticipated
Plan work with a balance. Avoid filling every minute. Allow extra time for
unexpected events. Make sure you balance work with time off.
Set realistic goals. Setting goals requires time to meet them. Make goals realistic
for your business to avoid overextending yourself, burning out, and putting added
Train support staff or an assistant. A written business plan should include how to
deal with the possibility of your disability or death. Train your support staff or
assistant to handle short-term needs. Can a family member or someone else run
the business in your place? Have you named someone to liquidate the business?
Disability insurance may provide for your care and that of the business. Life
insurance can also be purchased in amounts large enough to cover the liabilities of
the business.
104
Develop a support system. Support systems are vital to businesses and families.
Do you have friends or services that can help your family when you can’t be
available due to work? Think about activities your family does on a weekly basis.
You may need someone to help with these activities, as well with those that are
unexpected. For example, waiting for a plumber or heating repair technician can
Employee Management
Employees are important to the success of your business. Review these tips for managing
your employees:
Use pre-employment screening. Many business credit reporting agencies and human
resource service providers will help you with pre-employment screening and background
checks. Pre-employment screening is important for legal and insurance purposes. For
example, you need to know if an employee is driving your car but their license is revoked
or they are required to have a device to check for blood alcohol level.
Provide job descriptions and lists of duties. Communicate job expectations and any
job expectation changes to your employees. While it is important to separate duties, cross
training your staff helps to ease costs in the event someone leaves or the business is short
staffed.
their performance. Provide feedback and allow them to comment about their jobs.
105
Be involved. A business cannot run on its own. Owners who are not present often
find their business runs into problems. Let people know you are present. Get to know
timecards against job sheets for appropriate time submission. Compare timecards to
departmental rewards for avoiding accidents may be less costly than premiums and
damages resulting from carelessness. Safety procedure incentives may raise employee
. Training programs.
Potential for fraud or theft can exist without a separation of duties. The employee who
accepts cash or payments, processes the work, deposits funds, and reconciles the related
account may be tempted to commit theft. Consider setting up an audit trail with one
person accepting and processing payments, another preparing the bank deposit, and
Cash payments and arriving bills should be logged or verified by two people. Each
person should count the cash in the presence of the other. This procedure sets up
106
Equipment
Equipment that needs to be repaired may interrupt the business operations, but
insurance or service plans may minimize its costs. For example, if the business is
dependent on a induction cooker, a service plan may be a good way to control the risk of
the induction breaking down. Parts for the induction can be expensive and take time to
replace. To be prepared, induction vendors will plan for parts and service based on the
original design they have sold to you. Higher usage may mean more maintenance.
Competition
Identify your competitors. Locate other businesses in the same segment. Gather
information regarding their products and future from information available in the public
domain. Study the areas of their research and how much they have invested. Evaluate
expectations. Before you decide on a new product to develop, check if it’s going to
satisfy consumers’ needs. View your product through the eyes of the person who’s going
to buy it. Determine what you need to include in order to make sure people prefer your
107