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Submitted to:
Mecor M. Riego
BSM III (Negros Group 1)
EXECUTIVE SUMMARY
Churros Company is a food business which aims to provide affordable, fun, and healthy
snacks to Doa Hortencia Salas Benedicto National High School (DHSBNHS)
management, employees, professors, and students. This enterprise offers churros and
carrot peanut butter balls to the school community at Guerra St., La Carlota City, Negros
Occidental.
The entrepreneurs involved in the creation of this partnership are Mecor Riego, Glen
Obelidon, Marie Occea, Rizalyn Tingson and Charmaine Trocino. The partners are 4
educators of school and one is a registered midwife. This is the first time they have
embarked in a business undertaking.
As the project will require the consumption of various raw ingredients available in the
local market, it will contribute to the local economy by helping local businessmen, such
as peanut butter vendors and grocery store owners. Because Churros Company has
healthy offerings such as carrot peanut butter balls, banana churros and mango churros,
it will contribute in the long-run to the national economy by nourishing students, who
are the future labor force of the country. The taxes to be paid by the entity will also help
drive the national economy.
MARKETING PLAN
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GOALS
To maintain positive balance in our lives so that the business rounds us out and reflects our values.
To offer our community wholesome foods that are satisfying, great tasting, and worth every cent.
To have our employee/s and customers feel appreciated, supported and satisfied, every time they come
in.
To introduce new products in the local market
Location
Churros Co. will operate its first stand inside the DSHBNHS campus in La Carlota City, a 3rd class city
in Negros Occidental, Philippines. Most of the production process shall take place in the individual
partners homes for the first three years of operations. On Year 3 onwards, initial preparation of raw
materials shall also occur in the stand.
Market Area
The Churros Company production and sales area shall be in a stand located adjacent to the Master
Siomai cubicle but inside the Students Lounge near the DHSBNHS canteen.
Main Customers
The main customers of Churros Co. stand shall be the students, college students, faculty, staff, and
other employees of DHSBNHS and La Carlota City College who are present during regular school
days.
Market Share
Due to time and labor limitations, it is estimated that Churros Company will serve carrot peanut butter
balls and churros at a rate of 180 servings, each, per day.
Selling Price
Churros Co. plans to sell three 3-inch pieces of churros (any flavor) in a small paper container, along
with a chocolate dip in a small plastic container, at an affordable price of P10.00. For the same price a
customer can buy three pieces of any type of carrot peanut butter ball in a wax paper container.
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Sales Revenue
Year 1
Year 2
626,400.00
Year 3
689,040.00
861,300.00
Year 4
Year 5
1,722,600.00
1,894,860.00
Promotional Measures
Churros Co. will host a grand opening and product launch with free samples on June 6, 2016. Upbeat
music shall accompany the event. Flyers shall be distributed and balloons shall be set up around the
stand.
The Churros Co. stand shall bear a sign with the Churros Co. logo and shall be decorated in a way that
reflects the Churros Co. mission and vision. The point-of-sale display will be done in a creative manner
to appear visually appealing to potential customers
Marketing Strategy
To guide the organization and to leave a distinct impression upon its customers, the Churros Co. shall
have mission and vision statements, which will be displayed prominently on its stand. Our mission is
to bring customers delight with every taste and bite. Our vision is to be a sought-after pastry snack
provider in La Carlota City. Aside from these, Churros Co. shall have the unique selling proposition of
Deliciously Fun!
Churros Co. will position itself as a leader in the sweet snacks market by offering unique products that
will satisfy customers cravings and budget. This product differentiation strategy is expected to capture
the attention of the academic community.
Our marketing strategy will include word-of-mouth referrals and social media campaigns. A Facebook
page shall be set up, showcasing Churros Co. products.
Marketing Budget
Churros Co. will mostly rely on the goodwill it will generate through its innovative and high-quality
food offerings. As such, we expect our customers to share good reviews about us orally or through
social media. Thus the marketing budget is simply broken down into cash needed for the grand opening
and product launch, as follows:
DESCRIPTION
Balloons
Flyers
Free Samples
Tarpaulin
Transportation
Total
QUANTITY
COST
100 pieces
200.00/pack of 100s
100 pieces
1.00
180 servings of carrot 5.73/ serving
peanut butter balls
180 servings of
churros;
60 original
60 banana
60 mango
2 2x3 ft. piece
TOTAL
200.00
100.00
1,031.40
7.82/serving
1,407.60
60.00/piece
120.00
100.00
2,959.00
OPERATING REQUIREMENTS
Production Process
The business will operate in a stand at the DHSBNHS school canteen. Before the daily operation
begins, ingredients needed and products prepared shall be placed in the stall, segregated and stored in
proper containers.
The Churros Co. stand shall be open for 8 hours from 9:00am to 5:00pm.
Preparation and Storage
Churros dough and carrot peanut butter balls shall be prepared the night before. To avoid spoilage,
these products must be stored in a cool place. As it would be impractical to buy a refrigerator solely for
this purpose, the products will be stored in the refrigerators of each partner, from Year 1 to Year 3. But
on Year 3 to 5, raw materials shall also be processed fresh on the day the products will be sold, by the
additional laborer.
Cooking
The churros dough will be cooked upon customers orders. It will be served in a specially designed
paper container, with the Churros Company logo, along with the chocolate syrup in a separate plastic
container. Peanut butter balls will be readily available upon order and served in a
The specially-designed churros containers shall be made annually before the start of the years
operations. The number of containers produced per year shall correspond to the forecasted number of
servings to be produced annually. Wax paper cup.
Fixed Capital
The business fixed capital shall include items which are used for more than one period and are
expected to benefit future periods. The entitys fixed capital shall include the following
Fixed Capital
Large frying pan
Butane gas stove
Pastry Tip
Measuring cup
Description
Used for deep frying churros upon customers
order
Powered by butane gas refill
Portable gas stove used for cooking
Stainless steel mold for forming churros
Brand: Pyrex
Glassware used to accurately measure
ingredients
Sources of Equipment
The business aims to produce quality products through the use of equipment with good quality
standards. To ensure such quality, the entity shall purchase equipment at the preferred and available
suppliers.
List of sources of equipment
EQUIPMENT
Frying pan
Butane gas stove
Pastry tip
Measuring cup
Planned Capacity
SUPPLIER
Seasons Trading, Bacolod City
Total Gas Station, La Carlota City
Chef and Bakers Bacolod City
Chef and Bakers Bacolod
The business will operate at full capacity. All the partners will industrially contribute in the preparation
and production of the products, except for the 4th year onward, where the laborers will take over
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production. The researchers estimate the capacity of each partner to produce 108 pieces or 36 servings
of carrot peanut butter balls and 36 servings of churros dough.
Future Capacity
The partners shall hire additional laborers upon the future expansion of the business. Future capacity
will increase by 105 pcs of carrot peanut butter balls and 165 pcs of churros for each additional unit of
labor.
Terms and Conditions of Purchase of Equipment
The acquisition of the entitys equipment shall be on a cash basis. Thus, all equipment shall be
immediately paid upon purchase.
Raw Materials
The necessary raw materials for the business are as follows:
PRODUCT
Carrot Peanut Butter Ball
RAW MATERIALS
Peanut Butter
Margarine
Carrot
Colored Sprinkles
Choco Sprinkles
SUPPLIERS
La Carlota Public
Market/Rosario Mesaya
La Carlota Public Market
La Carlota Public Market
Chef and Bakers
Chef and Bakers
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Confectioners Sugar
Wax Paper Cups
Brown Sugar
Salt
Butter
White Flour
Eggs
Vanilla extract
Ground Cinnamon
Confectioners Sugar
Mango
Banana
Paper Container
Chocolate Syrup
Small Plastic cups
Churros
Chocolate Dipping
Cost of Labor
The business will hire one (1) personnel who will be in-charge in the stand daily. Work schedule will start
from 9:00 5:00 pm. The partners will industrially contribute in the production of their products. The entity
shall acquire additional labor only on the third year, as well as on the fourth year.
Churros Co. shall register its employees with the SSS, PhilHealth and Pag-Ibig when they are employed.
For each unit of labor that will be acquired the entity shall incur salary expense of P286.00 per day, the
minimum wage for Region VI. The proponents estimate a business need of one additional labor on the third
year, and another additional labor on the fourth year. The cost of labor on these periods shall be P50, 050.00
per year per laborer, since the entity will not be incurring labor expenses during the 2 months of shutdown:
April and May.
Labor Productivity
Each night before every workday, each partner is expected to make 36 servings of carrot peanut butter balls
and enough churros dough to make 36 servings. However, each additional unit of external labor is expected
to produce an output of 180 servings of carrot peanut butter balls and 180 servings of churros each day,
since the laborer has the whole day to process the raw materials.
Rent Expense
The business shall operate and produce products in a stand at Doa Hortencia Salas Benedicto National
High School canteen. The school charges P5, 000.00 as rent expense for stand vendors. Rent expense is
paid one month in advance. In addition, a P15, 000.00 rent deposit shall be paid at the beginning of the first
month. Churros Co. plans to continue operations indefinitely, thus this deposit shall be considered as noncurrent asset.
Its rent expense shall be considered part of the factory overhead expense for the reason that the stand is
used for the production and operation of the business.
Production Cost
During the first year of operation, the Grand Opening of the Churros Co. stand requires free samples of 180
servings each for carrot peanut butter balls and churros. The costs of these amounts will be expensed
instead of added to inventory.
The entity shall maintain a desired ending inventory equal to the safety stock of one week operation of the
next years sales. Budgeted production shall equal the annual forecasted sales. The sales of each flavour and
variation are derived by multiplying the annual sales by the sales mix ratio.
It is assumed that prices will remain constant and stable for the first five years of operations.
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Form of Business
Churros Company shall operate as a partnership between Mecor Riego, Marie Occea, Charmaine Trocino,
Rizalyn Tingson and Glen Obelidon. All partners will contribute capital and industry to the partnership.
3.2. Organizational Structure
The partnership shall be organized as follows:
The partners have decided that Ms. Riego shall be the General Manager. Ms. Trocino shall be the operations
manager, Ms. Tingson shall be the assistant operations manager, Mr. Obelidon shall be the financial
manager, and Ms. Occea shall be the marketing manager on the first year.
FINANCIAL MANAGER
The following are the duties and responsibilities of each member of the organization
OPERATIONS MANAGER
Assists the operations manager in the management of the main business activity,
Prepares inventory lists.
MARKETING MANAGER
Pre-operating Expenses
The following table shows the pre-operating expenses of Churros Company:
ACTIVITY
Research and development
Training
Organization Cost
Setup of Stand
Total
AMOUNT
581.22
361.20
14,605.00
17, 676.02
33,381.02
Quantity
37.50 g
16.68 g
351.99 g
2 kg
6 pcs
18 ml
4.71 g
187.50 g
1 bottle
5 pcs
1 pc
2 pcs
1 cup
3 medium-sized
1 box
6 pieces
kg
Price
40.00 per kg
18 per kg
10.00 per 100 g
42.00 per kg
6.00 per pc
260.00 per 450 ml
560.00 per kg
130.00 per kg
92.95 per bottle
1.00 per pc
20.00 per pc
5.00 per pc
35.00 per cup
10.00 per pc
35.95 per 1000 pcs
6.25 per 90pcs
128.00 per kg
76.00
Total
1.50
0.30
35.19
84.00
36.00
10.41
2.64
24.36
92.95
5.00
20.00
10.00
52.50
30.00
35.95
0.42
64.00
581.22
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Particulars
Quantity
Brown sugar
12.50 g
Salt
5.56 g
Margarine
72.33 g
White flour
656.25 g
Eggs
2 pcs
Confectioners sugar
62.50 g
Bond paper
10 pcs
Mango
pc
Banana
1 pcs
Peanut butter
cup
Carrot
1 medium-sized
Transportation
TOTAL
Training Cost Breakdown
Price
40.00 per kg
18 per kg
10.00 per 100 g
42.00 per kg
6.00 per pc
130.00 per kg
1.00 per pc
10.00 per pc
5.00 per pc
35.00 per cup
10.00 per pc
270.00
Total
0.50
0.10
7.23
15.75
12.00
8.12
10.00
5.00
5.00
17.50
10.00
P 361.20
Administrative Expenses
The budget for annual administrative expenses are as follows:
ITEM
Bond Paper
Special Books
Envelopes
Ballpens
Stapler
Stapler Wires
Total
QUANTITY
1 ream
4 pcs
5 pcs
12 pcs
1 pc
1 box
AMOUNT
300.00
150.00
40.00
60.00
85.00
50.00
685.00
Estimated Cost
40.00
500.00
250.00
500.00
3,500.00
300.00
8,100.00
115.00
1,000.00
14,605.00
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FINANCIAL PLAN
Project Cost
The cost of the investment is as follows:
Particulars
Rent Expense
Rent Deposit
Fixed Assets
Raw Materials
Factory Supplies
Variable Factory Overhead
Transportation In
Miscellaneous Expense
Permits and License
Transportation Expenses
Administrative Expenses
Business Tax
Pre-Operating Expenses
Initial Cash
TOTAL COST
Amount
5,000.00
15,000.00
3,620.00
35,462.34
473.50
4,280.58
270.00
70.00
1,200.00
150.00
685.00
1,836.00
33,381.02
1,571.56
103, 500.00
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Operations
Finance
People
Disaster such as fire breakdown. Have a standby fire extinguisher. Check always the kerosene
(gasul) if its properly close before closing the stand. There is also a first aid in the cabinet.
Theft and fraud. Everyday sales is being check by the financial manager and monthly financial
statement will be reported. The operational manager and marketing manager together with the
personnel will conduct a twice a month inventory of stocks.
Illness. In case the worker is sick or if there is any situation that hinders him/her to report, we
will hire a person who can be in-charge in the operation. That person will be paid on a daily
basis.
Financial Crisis. Cut operational and variable cost. The financial manager should monitor the
cash flow of the business.
Failure in Marketing Strategy.
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