1

Chapter I
BACKGROUND OF THE STUDY

Introduction

NutriHerb Organic Foods Company establish a product named “Ala eh Dried

Langka” which is located in Barangay 7, Tanauan City Batangas. It is equally owned and
managed by its five partners. NutriHerb expects to catch the interest of a regular loyal
customer base with its broad variety of jackfruit products. The company plans to build a
strong market position in the town, due to the partners' industry experience and the demand
for our product. NutriHerb Organic Foods Compny aims to offer high quality dried
jackfruit products at a competitive price to meet the demand of the middle- to higher-
income local market area residents and tourists’ partners.

Drying is a method of food preservation that works by removing water from the
food, which inhibits the growth of bacteria and has been practiced worldwide since ancient
times to preserve food. Water is usually removed by evaporation since bacteria, yeast and
molds needs water in the food in order to grow, and drying effectively prevents them from
surviving in the food.

Fruits and vegetables, jackfruit inclusive, are regarded as highly perishable food
due to their high moisture content (Simal et al., 1994). Accordingly, they exhibit relatively
high metabolic activity compared with other plant-derived foods such as seeds.
Consequently after harvest excess jackfruit moisture content must be reduced to a level
acceptable for marketing, storage, and processing. Dried jackfruit is fruit from which the
majority of the original water content has been removed either naturally, through sun
drying, or through the use of specialized dryers or dehydrators.

Jackfruit is a sweet, delicious and exotic fruit that is packed with many nutrients
and benefits. Jackfruit is known as the jack of all fruits. It is a rich source of vitamin,
minerals, phytonutrients, carbohydrate, electrolytes, fiber, fat and protein. This fruit also
contains calorie but no cholesterol or saturated fats. Consume jackfruit for the best taste,
nutrition and its many health benefits.
 2

Brief Background of the Study

We made this product, the “Ala eh! Dried Langka” because we have not seen it in

the market. We know and we are confident that our product will be well known in the

market or consumers as it is not new to the market and tastes good and because it has

many benefits that you can get from our product like it can maintains blood sugar

because it has potassium that maintain the sodium level in the body, relief asthma and

many more. Even the process is not easy to do, but we push it, because as we said we

know and we are confident that many buyers buy it especially for those who traveling to

Batangas because our product are available to all tourist spot and markets here in

Batangas. And also dried jackfruit is possible to all ages. And by the resources we use, all

the ingredients to produce that product are accessible to market which is easy for us to

find. Based on our study our dried jackfruit is profitable and affordable to the consumers

and also not expensive to produce dried jackfruit because it has low cost of raw materials.

Objective of the Study

1. Determining an acceptable product market by assessing the supply and demand of

such product.
2. To determine the marketing plan and strategy for the successful operation by using
promotion.

3. To determine the managerial viability of the study by defining the most appropriate
organizational structure.

4. To test the project profitability and capital adequacy by assessing the financial
performance of the business.

5. To determine how the project will promote economic problem.

 3

Definition of Terms

In order to accomplish the suitable comprehension and perception of the requisites

that will be used in study and completely understand the terms, the following terms are

describe and define.

 Jackfruit large tropical Asian tree (Artocarpusheterophyllus) related to the

breadfruit that yields a fine-grained yellow wood and immense fruits which

contain an edible pulp and nutritious seeds.

(Merriam-Webster).

 A food dehydrator. A food dehydrator uses a heat source and air flow to reduce

the water content of foods. The water content of food is usually very high, typically

80% to 95% for various fruits and vegetables and 50% to 75% for various meats.

Removing moisture from food restrains various bacteria from growing and spoiling

food. Further, removing moisture from food dramatically reduces the weight of the

food. Thus, food dehydrators are used to preserve and extend the shelf life of

various foods. (Samuel Saraiva, 2011).

 A wax paper. A wax paper that has been impregnated with wax to make it

waterproof or greaseproof, used especially in cooking and the wrapping of food

stuffs is paper that has been made moisture-proof through the application

of wax. Gustave Le Gray introduced the use of waxed paper for photographic

negatives in 1851. Wax paper is commonly used in cooking for its non-stick

properties, and wrapping food for storage, such as cookies, as it keeps water out or

in. It is also used in arts and crafts.

 4

Scope and Limitations

This business plan is proponents conducted a study to determine if the proposed

product might be profitable. Several factors were considered; the market, technology,

management, finance and socio-economic aspects of the study.

This business plan will focus on creating, selling and build customer relationship

to the potentials customers of such product (Ala eh! Dried Langka) to Tanauan City as it

is generated through the use of different retailers.

In marketing, it covers the target market, competitor, different method used

SWOT analysis and effective strategies. It helps business can identify consumers’ needs

so that business can successfully develop and market products. It also provides research

related to promotion and marketing decisions based on, supporters through the

observation and of all kinds of customers. The proponents used promotional tools like

online advertising, personal selling and some promotions.

 5

Chapter II
MARKET STUDY

Market research is an important factor that must be considered in setting up a

company. It is considered as the basis for the entire feasibility study as follow-up depends

largely on the range of data and information collected through quantitative research and

other means of collecting such data.

This chapter includes the identification of needs, which is an important factor in

determining the effective penetration of the target market. Discusses how unmet needs

and how the product supply meets the needs of consumers. Also discussed the company's

strengths and weaknesses, industry opportunities and threats, the company marketing

products and marketing strategies and strategies, and examined the impact of the

company's business feasibility of several factors.

Objectives of the Study

The general objective of the study is to determine the market feasibility of Ala eh!

Dried Langka in the market. Specially, it attempts to discuss the following objectives:

1. To identify the consumers response of such products.

2. Know the consumers’ need and expectation.

3. To establish the desired market share after analyzing the market demand.

4. Know the nature and extent of competition and also the strength and weaknesses of

the competitors.

5. Identify and solve the marketing problems of the company.

 6

Demand

Demand in economics is how many goods and services are bought at various prices

during a certain period of time. Demand is the consumer's need or desire to own the product

or experience the service. Demand is the quantity of a good or service that consumers and

businesses are willing and able to buy at a given price in a given time period. (Jim Riley,

2009)

Demand is the underlying force that drives everything in the economy.

Fortunately for economics, people are never satisfied.

A great demand for Ala eh! Dried Langka will lead to the conclusion that this

kind of product can strive to gain income, to give jobs, to contribute to our economy, and

survive its competition.

SWOT Analysis

In establishing a business, the industry should be careful scrutinized. For this study,

the strengths and opportunities must be identified so that the proponents will be able to

take advantage. Analyzing the weaknesses and threats should also be considered, so that

the business can develop their weak areas. Strengths, weaknesses, opportunities and threats

analysis is very important as basis in determining the competitive advantage of the business

among the others.

 7

Strength

Strengths are capital, knowledge, skill, or other advantage that a firm has or can

acquire over its competitors in meeting the needs and the customers (BD, 2017). It used

to determine what your business does best, if you know your business strengths you can

place emphasis on them when the time comes to implement you marketing program

(Aaron Marquis). Strengths of NutriHerb Organic Foods Corporation are as follows:

 They obtain a good functional machines to operate with.

 They obtain no preservative added to the products.

 Our product is a healthy dietary snack.

 Our fruits are fresh form the farm, and process within 8 hours.

 Our product is new to the product line in Batangas.

Innovative Product.

This will make the customer become curious because it is new to market and the

tendency is to have an urge to buy and experience how to use the product. It is a

development and market introduction of a new, redesigned or substantially improved

products. You can now have a sustainable product which can be helpful in your daily

activities especially when you are in your college campuses and be useful to your subject

commitments.
 8

Weaknesses

Knowing your business’ weaknesses is critical to SWOT Analysis. Anything that

your business struggles with or lacks is considered a weakness. For instance, limited

production capacity is weakness: You know that you cannot mass-market a new product

because you cannot meet a large demand should it materialize. If you know your business’

weaknesses, you can avoid centering a marketing and advertising strategy on those

weaknesses (Aaron Maquis).Weaknesses of NutriHerb Organic Foods Corporation as

follows:

 Limited suppliers

 It takes an hour to produce the product.

Opportunities

Entrepreneurs have to take advantage of the opportunity to be successful in the

world of business. The opportunities are emerging scenarios whereby your business can

grow and succeed with a new or existing product. An opportunity might be an underserved

market, a newly emerging technology or anything that can add to your business (Aaron

Maquis). The following are some opportunities of NutriHerb Organic Foods Company:

 Inclusive in the trending organic food

 New to the market

 Accessible to the target market

Threats
 9

A negative situation causes a specific impact in the decision and requires making
adjustments. One of the threats for the business is the entrance of other dried food that has
different satisfaction by the consumer. Threats of NutriHerb Organic Foods Company as
follows:
 A new advertising campaign launched by competitors
 A competitor opening new shop in a nearby location
 A down turn in economy and less spending budget of people
Marketing Strategies and Program

Marketing is the one factor considered by the business in promoting its product into

the market. It involves choosing and implementing the best strategies to attain the

company's long-term objectives and gain competitive advantage.

The marketing strategies is a business' overall game plan for reaching people and

turning them into customers of the product or service that the business provides. Strategies

should be made in a more efficient and creative way to get a positive product acceptance

of the target market. The marketing program is composed of product, price, brand, name

and packaging. It also includes the place or channel of distribution and promotion and

advertising.

All these factors should be given enough emphasis to ensure the marketability of

the Ala eh! Dried Langka in the market.

In marketing strategies, we first introduced our products which is Ala eh! Dried

Langka to the market to gain customers to get their loyalty and make them satisfied. We

give free taste to the potential customers just to let them know what our products can offer.

All the health benefits of our dried langka will be included in our packaging just to let them

know what the hidden health benefits of our product.

 10

In marketing promotion, we distribute our products to the retailers who sells organic
foods and give them sample for free taste to their potential customers. Also our brand name
can attract customers especially in Batangas because of its dialect “Ala Eh!” Ala Eh dialect
is well known in Batangas because Batangueños usually use it. And also the location of
our business is near to the target market so that our customers will easily found our location.

Product

In a marketing, a product is anything that can be offered to a market that might

satisfy a want or need. In retailing, products are called merchandise. In manufacturing,
products are bought as raw materials and sold as finished goods. A service is another
common product type. (Bennett, Coleman)

The Ala eh Dried Langka is a dietary snacks which is combination of jackfruit,

honey and other ingredients. It is rich in vitamins and has so many health benefits that
good for all ages. And instead of eating the unhealthy snacks, we promote healthy but
delicious kind of snack. And the reason why we establish this product is because we
notice that no dried langka in Batangas, so we decided to create a business like this just
also to create employment.

Product Size/ Quantity/ Category

Dried Langka belongs to dietary snacks category. Jackfruit are considered as one
of the well-known fruits in the Philippines which is rich in vitamins. This product was
useful not only for snacks, but can do mix in some desserts like Halo-halo, Ice Cream, etc.
The size of our packaging is 340cm length and 270cm width with the net weight of
100 grams per container.
 11

Brand Name

Brand name is one of the brand elements which helps the customers to identify and

differentiate one product from another. It should be chosen very carefully as it captures the

key theme of a product in an efficient and economical manner. (MSGPP, 2017)

The researchers came up with the “Ala Eh! Dried Langka” as brand name which

describes the Batangas delicacy because the word “Ala eh” represents the personality of

Batanguenos, since our product is made in Batangas. The proposed product will be

introduced with the Company’s name NutriHerb Dried Langka from the business name

NutriHerb Organic Foods Corporations.

Packaging

Packaging is the technology of enclosing or protecting products for distribution,

storage, sell, and use. Packaging also refers to the process of designing, evaluating, and

producing packages. Packaging can be described as a coordinated system of preparing

goods for transport, warehousing, logistics, sale, and end use. Packaging contains, protects,

preserves, transports, informs, and sells Soroka (2002).

Figure 2.2
Shows the packaging of the product
 12

Pricing
The cost of each product is based on major components such as raw materials, the
direct cost and overhead expense. The proponents sell it by piece.
Table 2.1
Pricing

Particulars Price/piece
Direct Materials 0
Direct Labors 0
Factory Over Head 0
Total 0
Mark-Up (20%) 0
Selling price to Retailer 0
VAT 12% 0
Suggested Retail Price to Consumer Php 120.00

Comparative Selling Price

The item-by-item comparison of two or more comparable alternatives, processes,

products, qualifications, sets of data, systems, or the like. In accounting, for example,
changes in a financial statement's items over several accounting periods may be presented
together to detect the emerging trends in the company's operations and results.(BD 2017).
Comparative selling price shows the file of product that can be a good competitor to the
proposed product. It is a listing of different price quotes on where the proponents can
compare and base the product’s price.

Table 1.1
Comparative Selling Price

Product Name Price

Ala eh Dried Langka (100g) P 120.00

FreshcoDried Mangoes (100g) P 140.00

 13

Place of Distribution
The item-by-item comparison of two or more comparable alternatives, processes,
products, qualifications, sets of data, systems, or the like. In accounting, for example, changes
in a financial statement's items over several accounting periods may be presented together to
detect the emerging trends in the company's operations and results. (Philip Kotler)
The manufacturing site and store of Ala eh Dried Langka will be situated in
PoblacionBarangay 7 Tanauan City Batangas. The proponents will use three-level channel
of distribution wherein the products will be passed from the company to the retailers to
consumer.
The rent of the place is P 10,000.00 monthly. The place is good enough to
accommodate all the equipment, furniture and workers necessary for the production.
Figure 2.3
Channel of Distribution

Manufacturer

Wholesaler

Retailer

Consumer

Figure 2.3 shows the distribution channel of the firm which starts from the

manufacturer sells to retailers then consumers. The mode of transportation used for
 14

delivery was a multicar/cab that commonly used in the City of Tanauan. The retailers will

be the vendors in Tanauan public market which is located in Barangay 7, Tanauan City

Batangas.

Promotion

Promotions refer to the entire set of activities, which communicate the product,

brand or service to the user. The idea is to make people aware, attract and induce to buy

the product, in preference over others. (Bennett, Coleman)

Table 2.3
Promotion Mix Strategies
What Who When Where How Budget
Online
networking
site,Lazada,
Online 5 days before the By instantly posting
Proponents Oshopping, P999
Advertising operation it online
Facebook,twi
tter,Instagra
m

Tanauan
Personal 3 days before the
Proponents Public Giving free taste P580
Selling operation
Market

TOTAL P 1,579

Chapter III
TECHNICAL STUDY
 15

The technical aspect helps to determine the capacity of the project. The technical

study will provide information in service activity and the raw materials to be used in

providing activity in this product as well as their resources. It also determines the utilities

and equipment to be acquired in showing the location and layout of the project. It is

primarily involves different production activities and schedules, overall procedures,

systems and structures of the firm. It relatively determines the description of the product –

its qualities, materials with which it is made, and other compositions, and the services

offered by the business. It presents the ways by which the final product is produced. It

shows proficient means of properly allocating resources to reach a particular level of output

during the specified period of time.

Description of the Product

The proposed product of the proponents is named Ala eh! Dried Langka is

categorized as a type of dietary snacks which is nutritious and healthy. It is a dried jackfruit

with a twist of honey and sugar to make it flavorable and delicious. The texture of the

product is chewy and when you bite it, you will be taste the sweetness and flavorable

texture of jackfruit. It was dried through the process of food dehydrator by drying it for 30

minutes. The packaging is the different type of flexible pouches for retail which is 100

grams and it is the minimum servings per pack. This kind of propose product is for the

people who are very conscious to their health but they are prone to the sweet snacks like

our product. The price of the product is Php 120.00 for 100 grams.
 16

Uses of Product

The proponents came up with this product “Ala eh! Dried Langka” that has many

uses. Jackfruit is considered as healthiest fruit in the Philippines because it is rich in

vitamins and also it can cure some diseases, since it is processed through drying the shelf

life of jackfruit increases and it is no preservative added. And also Filipino love sweets that

is why this product may be used as a dessert. Second, this product also served as a gift for

selected occasions.

Manufacturing Process

In the production of certain product, the manufacturing process is important. Proper

placement and time management for each process helped in minimizing the cost of

producing this product. The firm used the manual process production and the sources of

Process were made based on the work experience of the worker in making a single product.

Figure 3.1 shows the manufacturing process of Ala Eh! Dried Langka.

1. Preparation

Prepare all the ingredients and equipment needed in the production. Also the

worker must prepare. 15 minutes.

 17

2. Mix the honey, sugar and jackfruit

Put the pan, boil the sugar as it melt and blanch the honey then soak it, same

at the jackfruit. 15 minutes.

3. Lay in trays for 30 minutes.

4. Dry the jackfruit

Dry in cabinet dryer at 60 °C for 90 minutes.

 18

5. Remove and coat the dry jackfruit

Remove the dry jackfruit from the tray and coat it in powdered sugar for 30

minutes.

6. Packaging and Storing the product

Package and place the finished product at the storage area for 75 minutes.

7. Cleaning

After transferring all the finish product to the storage area, the workers should

ensure that the materials and facility used during the process are properly cleaned and ready

for the next production day. 45 minutes

 19

Process Flow Chart

Mix the honey, sugar

Preparation and jackfruit
Lay in trays
7:00 – 7:15 7:15 – 7:30 7:30 – 8:00

Packing Remove and coat Dry the

the dry jackfruit jackfruit
10:00 – 11:15
9:30 – 10:00 8:00 – 9:30

Lunch 2nd Batch Cleaning

11:15 – 12:15 12:15 – 3:15 3:15 – 4:00

Table 3.1
Time and Motion Study
Time Task Assignment Duration Ending Time
7:00 Preparation 15 mins 7:15
7:15 Mix the honey, sugar and jackfruit 15 mins 7:30
7:30 Lay in Trays 30 mins 8:00
8:00 Drying the jackfruit 90 mins 9:30
9:30 Remove and Coat the jackfruit 30 mins 10:00
10:00 Packing 75 mins 11:15
11:15 Lunch 60 mins 12:15
nd
12:15 2 batch 180 mins 3:15
3:15 Cleaning 45 mins 4:00
 20

Production Schedule

Production or feasibility normal capacity is defined as the volume or number of

units that can be produced during a given period or the output expectation from the

production of a plant (De Guzman, 2000). It also summarizes the units to be produced for

2017-2021. It is necessary to an organization to synchronize its operations and become

more efficient. A good production schedule helps a firm to lower cost, reduce inventory

and improve customer services over all applicable time horizons.

NutriHerb Organic Foods Company have an overall production of 60 packs of dried

langka a day. The company plans to have a 12% increase in its annual production for the

next consecutive years. In 2017, the annual production will be 14,400 packs.

Table 3.2
Production Schedule
Year Daily Weekly Monthly Annually
2017 60 350 1,400 16,800
2018 65 375 1,500 18,000
2019 70 400 1,600 19,200
2020 80 450 1,800 21,600
2021 90 500 2,000 24,000

Table 3.2 shows the preparation of NutriHerb Organic Foods Company in weekly,

monthly and annual production of dried langka for the years 2017 to 2021. The firm is

planning to increase the production annually by 12%.

 21

Plant Location

Location is a critical factor in establishing a business in able for it to be profitable.

It is always emphasized that a strategic location leads to most business progress in terms
of profitability and the scope for future expansion. Many factors should be considered to
arrive at a realistic plant location. The researchers chose this location for its accessibility
to workers and walk-in customers and even to the suppliers of raw materials. The
availability and price of suitable raw materials will often determine the plant location. The
transport of materials and products from the plant will be an overriding consideration in
selecting a location. The proposed plant must fit in with and be acceptable to the local
community. Initial cost and local taxes may be the deciding factors in selecting a business
location. The availability of electric power, water and other utilities are of great
significance in choosing the location of the business.

NutriHerb Organic Foods Company is located along the highway of Mabini Avenue
in Barangay 7, Tanauan City Batangas. The said location will be near from Jollibee and in
front of 167 hypermart. Its location is in commercial area. (See Figure 3.2)

We’re Here!

SOUTH
Vulcanizing NutriHerb Organic
KING TSM
Shop Foods Corp. SUPERMARKET

Mabini Avenue Mabini Avenue Mabini Avenue Mabini Avenue

167
Tanauan
Public Market

Figure 3.2
Plant Location
 22

Plant Size and Layout

Plant layout is the most effective physical arrangement, either existing or in plans

of industrial facilities i.e arrangement of machines, processing equipment and service

departments to achieve greatest co-ordination and efficiency of 4M’s (Men, Materials,

Machines and Methods) in a plant.

Shown in figure 3.3 is the plant size and layout. It composed of display area where

customers can view the product and make orders, office for customer’s transaction and

other inquiries, a kitchen which serves as a place for production and comfort room for

customers and workers as well. The firm will just rent the place for P 10,000.00 per month.

Figure 3.3
Plant Layout
 23

Factory Tools, Machines & Equipment

Listed below are factory tools, machinery and equipment which are vital in the

process of producing Ala eh! Dried Langka. It makes the flow of the work easier and faster

which result to higher production.

Table 3.3
Factory Tools, Machines & Equipment

Description Quantity Unit Cost Total Cost

Food Dehydrator 2 P 12,000 P 24,000.00
Stove 1 3,000.00 3,000.00
Aluminum tray 5 150.00 750.00
Pan 2 207.00 414.00
Bowl 5 50 250
Ladle 3 45 135
TOTAL Php28,549.00
Source: 167 Hypermart, Home Appliances, Tanauan City

Table 3.3 show the tools that will be needed to produce the Ala eh! Dried Langka

at most convenience and speed of production. All the tools are paid in cash and acquired

in Century Home Appliances, Tanauan City.

Factory Supplies

Factory supplies will be used to manufacture the proposed product of the firm.

This will help the workers to work efficiently and accordingly to the purposes of the

supplies.

Table 3.4
Factory Supplies
Particulars Quantity Unit Cost Total Cost
Gloves 25 boxes Php150.00/box Php3,750.00
Uniform/Apron 20 sets 100/set 2,000.00
Mask 25 packs 55.00/pack 1,375.00
Wax Paper 5 rolls 80.00/roll 400.00
Total Php7,525.00
Source: 167 Hypermart, Home Appliances
 24

Table 3.4 shows the factory supplies needed in the operation of producing quality

products considering the supplies as used according to its purposes.

Furniture and Fixtures

These refer to the movable furniture and fixture used in the business and for

production. It will be also used to accommodate clients and visitors.

Table 3.5
Factory Furniture and Fixtures
Particulars Unit of Measurement Cost per Unit Total Cost
Storage Cabinet 2 units Php900.00 Php1,800.00
Working Table 2 units 400.00 800.00
Working Chair 2 units 500.00 1000.00
Ceiling Fan 1 unit 699.00 699.00
Total Php4,299.00

Table 3.6
Office Furniture & Fixtures
Particulars Quantity Unit Cost Total Cost
Ceiling Fan 1 Php699.00 Php699.00
Working Chair 2 500.00 1000.00
Shelves 1 700.00 700.00
Working table 1 400.00 400.00
Total Php2,799.00
Source: Ligaya Furniture

Table 3.5 and 3.6 shows the furniture and fixtures which will be purchased at

Ligaya Furniture, Tanauan City, Batangas. This will provide convenience to workers

because they will be comfortably accommodated by the firm’s setup.

 25

Maintenance Supplies

Maintenance supplies would be needed for the cleanliness of the office and the

factory. This is necessary to maintain the cleanliness and sanitation of the faculty and the

production as well.

Table 3.7
Maintenance Supplies
Particulars Quantity Unit Cost Total Cost
Broom 2 P 150.00 P 300.00
Dustpan 2 90. 00 180. 00
Rugs 5 20. 00 100. 00
Trash Can 3 84. 00 760. 00
Soap 2 20. 00 30. 00
Soap Case 2 21. 00 42. 00
Garbage Bag 3 60. 00 180. 00
Pail 2 30. 00 60. 00
Fire Extinguisher 1 2, 600. 00 2, 600. 00
Sponge 5 10. 00 50. 00
Floor Map 2 60. 00 120. 00
Dipper 2 15. 00 30. 00
Total P 4, 556.00
Source: Century, Home Appliances, Tanauan City

Table 3.7 shows the cost of the supplies needed. This also shows the

supplies needed in order to sustain the cleanliness of the firm.

Office Equipment and Supplies

In order to be on efficient business and to serve the clients at its best, the company

must be able to acquire the necessary office supplies which will be used for better filing

and recording of transactions of the business and office equipment for them to have an

efficient business transaction with their clients and suppliers as well as foster a good

camaraderie with their other business operators. Office supplies are used for better filing

and recording of transactions of the business.

 26

Table 3.8
Office Supplies
Description Quantity Unit Cost Total
Ball pen 1 box P 70.00 P 70.00
Bond Paper 1 ream 209.00 209.00
Business Receipt 20 booklets 15.00 300.00
Calculator 2 pieces 130.00 260.00
Envelope 15 pieces 3.00 75.00
Folder 10 pieces 5.00 50.00
Pencil 15 pieces 6.00 90.00
Journal 2 pieces 30.00 60.00
Record Book 2 pieces 45.00 90.00
Scissors 2 pieces 18.00 36.00
Sharpener 1 piece 5.00 5.00
Stapler 1 piece 40.00 40.00
Staple Wire 3 boxes 7.00 21.00
Fastener 10 pieces 1.00 10.00
Puncher 1 piece 55.00 55.00
Tape 15 pieces 5.00 75.00
Tape Dispenser 1 piece 35.00 35.00
Total Php.1,976.00
Source: Formosa atbp. Store, Tanauan City
* BIR made receipts.

Table 3.8 Office supplies are purchased in Formosa except for business receipts

which came from BIR that are paid in cash to be used in the business.

Table 3.9
Office Equipment
Particulars Quantity Unit Cost Total Cost
Computer Set 1 Php.14,000.00 Php.14,000.00
Total Php.14,000.00
Source: ABENSON, Walter Mart,Tanauan City

Table 3.9 shows the equipment which are purchased in cash and acquired in

ABENSON, Walter Mart.

 27

Direct Materials

It refers to the items that forms part of the finished product and which can be measured

and directly charges to the product (Mejorada, 2006).

Table 3.10
Direct Materials (Annually)
Items Quantity Per kilo Total Cost
Jackfruit 1,440 kg P 160.00 230,400
Honey 489.6 kg P 210.00 102,816
Sugar 30 kg P 120.00 3,600
Total P 336,816

Indirect Materials

These are the materials needed for the completion of the product, the consumption

of which regard to the product is either so small or its allocation would be too complex so

that for convenience, it is treated as an indirect production cost (Mejorada, 2006). The table

below shows the cost of indirect materials that would be used in the production.

Table 3.11
Indirect Materials (Annually)
Items Quantity Unit Cost Total Cost
Plastic (Packaging) 14, 400 pcs P 4.00 P 57,600
Box (Packaging) 1,440 pcs 9.00 12,960
Total P 70,560

Lease and Leasehold Improvement

The proponents will provide P 10,000.00 for the expenses of rental place in terms

of one month deposit, one month advance. Furthermore, the area was once used. So, there

are alterations or modification on the leased property made by the lease with the consent

of the lessor. The proponents provide Php 10,000.00 for the expenses in transforming the

rental place to suit for the production area. Modification is needed for the division of room
 28

for production area, administrative office, storage area and comfort room. This leasehold

improvement will be depreciated in five years.

Table 3.12
Leasehold Improvement
Items Quantity Unit Cost Total Cost
Paint 4 liters P 250.00 P 660.00
Paint roll 2 pieces 55.00 110.00
Paint Brush 2 pieces 35.00 70.00
Thinner 1 liter 200.00 200.00
Lumber (2x2) 10 pieces 130.00 1,300.00
Plywood 5 pieces 450.00 2,250.00
4 inch nail 1 kilo 90.00 90.00
5 inch nail 1 and ½ kilo 76.00 114.00
2 inch nail 2 kilo 80.00 160.00
Lighting 9 pieces 50.00 450.00
Total Material P 5,404.00
Labor Cost (2 days) 2 workers 700.00 P 1,400.00
Total Leasehold
P 6,800.00
Improvement

Table 3.12 shows the items needed in order to furnish the area to operate

conveniently and provide a good working space for the employees.

Utilities

Different expenses incurred when the firm is in the operation. The firm’s utilities

include the water and electricity. These are vital in the business operation.

Table 3.13
Cost of Utilities Consumption
Utilities Monthly Consumption Annual Consumption
Water Bill P 800.00 P 9,600.00
Electricity Bill P 1,800.00 P 21,600.00
Telephone Bill P 999.00 P 11,988.00
Total P 43,188.00

Water

The Water District in Brgy. Darasa of Tanauan City will provide the water supply

in the manufacturing firm. Its monthly consumption will be Php 800.00.

 29

Electricity

Electricity is necessary for the ventilation and lighting of the whole building and

for the machineries to work. It will be provided by BATELEC II, the existing electricity

supplier in Tanauan City. Our monthly consumption for electricity will be Php. 1,800.00 a

month.

Telecommunication

PLDT Company will provide the telecommunication of the enterprise. Telephone

and Internet expense will be Php. 999.00 a month.

Delivery Expense

It is the expense that incurred by the firm for its operation.

Table 3.14
Delivery Expense
Expense Monthly Consumption Annual Consumption
Multicab/car P 1,300.00 P 15,600.00
*Delivery Box 160.00 1,920.00
Total P 17,520.00
*Delivery box is used weekly with the amount of P40, each box contains 60 packs
of Ala eh Dried Langka.

Table 3.14 shows that the firm is leasing a transportation for their delivery. The

said rental is used only weekly by the seller who distributes the product.

Waste Disposal

Proper waste disposal is one thing that the business must consider. To be an

economical and environmental friendly, proper disposal is needed although the business

has a minimal waste. The firm needs to segregate waste divided into biodegradable and

non-biodegradable. All wastes to the firm including in the office will be disposed in the

garbage bag then collected by the City Garbage Truck of Tanauan every Monday,

Wednesday and Friday of the month at 8 o’clock in the morning.

 30

Direct Labor and Requirement

Man power plays a very important role in the business entity. People are the key

factors behind the success. The entire manpower must have the necessary skills and

interest for work. For the proposed business, two workers will be hired to provide for the

required direct labor. They will be working 8 hours a day, five days a week. Good

working conditions and fair compensation will be given to the workers to motivate them

to work effectively and efficiently.

The proponents are in charge for assigning the salaries of employee based on the

nature of job, and the degree obtained. The partners will serve as the managers and will

do the office works. The table shows the salaries of employees in monthly and annually

tally.

Table 3.15
Salary of the Employee
Job Description Quantity Daily Weekly Monthly Annually
Worker 1 1 Php320 Php1,600 Php6,400 Php76,800
Worker 2 1 320 1,600 6,400 76,800
Worker 3 1 320 1,600 6,400 76,800
Total 3 Php230,400
 31

Chapter IV
MANAGEMENT STUDY

According to koontz (1984), Management is an art of getting things done through

and with the people in formally organized groups.it is an art of creating an environment

in which people can perform and individuals and can cooperate toward attainment of

group goals. A leader has certain inherent qualities and traits which assist him in playing

a directing role and commanding influence which others. Leadership is an integral part of

management and plays a vital role in managerial operations ,while management is an

integral component of technical as well as social processes ,The practice of management

is as old human civilization .However, the study of management in a systematic and

scientific way as a distinct body of knowledge is only of recent origin .Management in

some form of another is an integral part of living and is essential wherever human efforts

are to be undertaken to achieve desired objectives ,the basic ingredients of management

are always at play, whether we manage our lives or our business.

Forms of Business Organization

The business named “NutriHerb Organic Foods Company” which is derived from

the word Nutritious and Herbal, Nutritious because our product has a health benefits and

rich in vitamins while Herbal because our product are well known that can cure some

diseases so we formed this company name inspired by our product. . It is in the form of

partnership. A type of business organization in which two or more individual’s pool money,

skills, and other resources, and share profit and loss in accordance with terms of the

partnership agreement. In absence of such agreement, a partnership is assumed to exit

where the participants in an enterprise agree to share the associated risks and rewards

proportionately.(BD,2013)
 32

Proponents

The proponents are consist of five members named, Carmina Trinidad, she is the

general partner of the company while Sheela Mae Taberdo, is responsible for the whole

operation of the company and Renzo Andrei Haplos, is responsible for the sales and

promotion of the company and Camille Simbahan, are assigned in analytical business

problems and lastly Marielle Baldonado is responsible for managing the stocks and shares

of each partner.

Capitalization

The start-up capital of the business will be coming from the share investments of

the partners. It will be of great help to the new existing company to have an adequate

amount of capital fund for its pre-operating and operating expenditures. The partners will

be contributing P 45,484.2 each to be able to raise an initial capital of P 227,421.00. This

amount was taken after considering the total projected cost.

Table 4.1
Partners Contribution
Partners Amount
Trinidad, Carmina Php 50,000.00
Taberdo, Sheela Mae 50,000.00
Haplos, Renzo Andrei 50,000.00
Baldonado, Marielle 50,000.00
Simbahan, Camille 50,000.00
Total Php250,000.00

Organizational Structure

The typically hierarchical arrangement of lines of authority, communications,

rights and duties of an organization. Organizational structure determines how the roles,
power and responsibilities are assigned, controlled, and coordinated, and how
information flows between the different levels of management.
A structure depends on the organization's objectives and strategy. In a centralized
 33

structure, the top layer of management has most of the decision making power and has
tight control over departments and divisions. In a decentralized structure, the decision
making power is distributed and the departments and divisions may have different
degrees of independence.

Figure 4.1
Organizational Structure

General Manager

Worker 1 Worker 2

Worker 3 Salesman/Driver

Figure 4.1 show the organizational chart of NutriHerb Organic Foods Company.

The line structure which is the simplest form of organization structure was adopted by the

proponents. This structure has a direct straight line responsibility between the managers

and his subordinates. The managers has a direct control once the business started, and

majority decision will come from the top management and shall be disseminated to the

lower level.

Manpower Requirements

The role of manpower in a manufacturing business is a vital component for the

effective operation of the organization. The efficient use of material resources of any

organization depends on how they are utilized and organized by manpower. Without

adequate and supportive manpower a business cannot be successful. The staff should be

well skilled and should be able to take on responsibilities with a lot of expertise
 34

The partners decided to hire two factory workers, one seller license and a part-time

bookkeeper and one driver with professional license. Additional workers will be hired

when the business grow. The workers should have the requirements needed and satisfy the

qualification in order to be hired for the business.

One of the partners would be appointed as the general manager who shall all

perform the managerial and supervisorial functions respectively. The other partners will be

bookkeeper and capitalist.

Job Specification

Also known as employee specifications, a job specification is a written statement

of educational qualifications, specific qualities, level of experience, physical, emotional,

technical and communication skills required to perform a job, responsibilities involved in

a job and other unusual sensory demands. It also includes general health, mental health,

intelligence, aptitude, memory, judgment, leadership skills, emotional ability, adaptability,

flexibility, values and ethics, manners and creativity, etc. (MSGuide, 2015)

The manpower in order to be functional, there must be a clear job specification.

This means the company must hire employees and staff that are fitted with the position

they applied for. Job specification gives the specific qualifications required for the position

(Iňigo, 2005).

General Manager

 Must be a graduate of business administration, accounting management and any

business degree course

 Atleast one year experience at work

 Self-motivated and can work in challenging environment

 35

Worker

 Must be at least 18-30 years of age

 Skilled and hardworking

Seller/Driver (Part time)

 Must be at least 18-30 years of age

 Skilled and hardworking

 Has an experience in driving

Job Description

A broad, general, and written statement of a specific job, based on the findings of

a job analysis. It generally includes duties, purpose, responsibilities, scope, and working

conditions of a job along with the job's title, and the name or designation of the person to

whom the employee reports. Job description usually forms the basis of job specification.

(BD, 2013)

General Manager

 Oversee daily operations of the business unit or organization.

 Ensure the creation and implementation of a strategy designed to grow the

business.

 Ensure the development of tactical programs to pursue targeted goals and

objectives.

 Ensure overall delivery and quality of the unit's offerings to customers.

 Engage in key or targeted customer activities.

 Oversee key hiring and talent development programs.

 36

 Evaluate and decide upon key investments in equipment, infrastructure and

talent.

 Communicate strategy and results to the unit's employees.

Workers

 Responsible for the overall production of the products

 Responsible for cleaning the equipment after he used

 Assemble goods on production lines

 Monitor the production process

 Carry out basic quality and testing checks

 Store goods and raw materials properly in our warehouse

 Use lifting equipment and forklift trucks to fulfill orders

 Pack goods to be shipped

 Maintain work areas and equipment

Salesman

 Responsible for selling the finished products to the customers inside and outside

the plant location.

 Should guide the buyers in buying the goods they want.

 Collect the outstanding bills relating to the goods sold by him. In such a case,

he has to collect the bills and remit the amount to his firm.
 37

Driver

 Taking care of only a specific vehicle for the organization.

 Transport products, materials, and staff securely to areas where they are needed

Compensation

Refers to the benefits (cash, vacation, etc.) that an employee receives in exchange

for the service they provide to their employer. Employee compensation is generally one of

the largest costs or expenses for any organization.

Compensation is the monetary payments including salary, commission and

bonuses; also, paid vacations, health and insurance benefits and a retirement plan.

(Levy/Weitz, 2007)

The salary will be given every 10th and 25th day of the month. The company will

also provide the employees’ 13th month pay and the employer contribution on SSS and

Philhealth.

Table 4.2
Compensation Schedule
Position Monthly Annually
Manager Php10,000.00 Php120,000.00
Worker 1 6,000.00 72,000.00
Worker 2 6,000.00 72,000.00
Worker 3 6,000.00 72,000.00
Salesman/Driver (part-time) 3,000.00 36,000.00
Total Php31,000.00 Php372,000.00
*The workers will have a salary of P300.00 per day and the general manager will have a

salary of P500 per day. The salesman will have a salary of P300.00 and the driver will

receive P750.00 per week.

 38

Organizational Policies

A set of policies are principles, rules, and guidelines formulated or adopted by an

organization to reach its long-term goals and typically published in a booklet or other form

that is the widely accessible. Policies and procedures are designed to influence and

determine all major decisions and actions, and all activities take place within the

boundaries set by them. Procedures are the specific methods employed to express policies

in action in day-to-day operations of the organization. Together, policies and procedures

ensure that a point of view held by the governing body of an organization is translated into

steps that result in an outcome compatible with that view.

Personnel Policies

1. The employees should report to their work on time and strictly start from seven

o’clock in the morning (7:00 am) to four o’clock in the afternoon (4:00 pm) from

Monday to Friday.

2. Sleeping while working will be penalized through salary deduction.

3. All employees are given a fifteen-minute grace period for the time that they will

come late; the said fifteen minutes should be offset. Three times 15 minute late will

be considered absent. They must observe proper work decorum.

4. The workers will have 15 minutes break in the morning and afternoon. They are

also allowed to have one hour lunch break at 11:15-12:15pm. They are only allowed

to leave the premises during breaks.

5. Wages will be paid every 10th and 25th day of the month.

6. The employees are entitled to absent for valid reason only.

 39

Production Policies

1. Workers shall wear proper working attire like gloves, hairnet, and aprons during

production process.

2. Workers shall not wear any kind of jewelries like earrings, bracelet, ring, etc.

3. Workers must practice good hygiene when handling products. This includes

washing hands before and after handling products.

4. Workers must show integrity and professionalism in the workplace.

5. Workers should treat our company’s property, wether material or inatangible, with

respect and care.

Selling Policies

1. Seller shall record, track and quickly process customer requests for service and

support

2. Seller shall create and manage service contracts. Accurately define the level of

service that will be offered to your customers.

3. Seller must set up the after sales service policy and processes in line with the

individual business needs

4. Seller shall wear proper attire like hairnet and aprons during selling process.

5. Seller shall conform to the standard of cleanliness and quality at all times.

6. Seller must deliver the goods appropriately to customers.

 40

Policies toward customers

1. Delivery will be subjected on customer inspection upon receipt. Return of defective

goods will be entertained only one day after purchase date.

2. No credit sales.

3. Products will be delivered to the customers after the purchase order is received.

4. Return without official receipt is invalid.

Policies toward supplies during working hours in the business premises

1. In order to maintain quality of the product, NutriHerb Organic Food Company will

be monitoring the quality of materials supplied which is being used in the

production to really meet the tasks and preferences of the customers.

2. The firm will be punctual in paying its debts and will constantly keep its promises

to establish a good relationship with its suppliers based on complete mutual trust

and confidence.

3. There will be two suppliers of raw materials needed in the operation but the firm is

free to acquire raw materials from other suppliers if they don’t meet the firm’s

expectation.

4. The suppliers will deliver purchase materials on the agreed date.

 41

Chapter V
FINANCIAL STUDY

Financial study is the heart of any business plan, the point in time where one vision

is quantified in terms of pesos and centavos, and units of time: days, weeks, months, and

years. (Cabrera, 2005)

Financial analysis is the process of evaluating businesses, projects, budgets and

other finance-related entities to determine their performance and suitability. ... When

looking at a specific company, a financial analyst conducts analysis by focusing on the

income statement, balance sheet and cash flow statement. Through an enterprise analysis

of its financial aspect, the business will be able to determine the viability of the proposed

project and shall be projected by taking into account the financial ratios pertaining to the

liquidity, profitability and solvency.

Total Project Cost

The total project cost is the outlay of money to acquire the needed assets that assist

in performing operations. Assets are properties owned by the enterprise.

 42

Table 5.1
Total Project Cost
Two Months

Fixed Assets Requirement

Factory Tools, Machine and Equipment Php 28,549.00
Factory Furniture and Fixtures 4,299.00
Leasehold Improvements-Site 6,800.00
Office Equipment 15,000.00
Office Furniture and Fixtures 2,799.00
Subtotal 57,447.00
Working Capital for Two Months
Direct Materials 56,136.00
Direct Labor 38,400.00
Factory Overhead
Indirect Materials 11,760.00
Rent Expense – Factory 10,000.00
Utilities Expense – Factory 2,380.00
Maintenance Expense – Factory 848.00
Supplies – Factory 1,254.17
SSS Contribution – Workers 733.20
Philhealth Contribution – Workers 400.00 27,375.37
Subtotal 121,911.37
Administrative Expenses
Rent Expense – Office 4,000.00
Utilities Expense Office 2,799.00
Driver/Seller 6,000.00
Supplies – Office 1,976.00
Maintenance Expense office 404.83
Delivery Expense 2,920.00
Total Administrative Cost 18,099.83
Pre-Operating Expenses
Rent Deposit 15,000.00
Promotional Activities 19,000.00
Legal Fees and Licenses 5,366.60 40,366.60
Total Cash Requirements 237,824.80
Cash for Contingencies 12,175.20
Total Project Costs Php250,000.00
 43

Initial Capital Requirement

The proponents agreed to set the initial capitalization of P 261,621.00, with each

partner contributing P 52,324.20. The total amount of capital set was taken after

considering the total projected cost for the first three months of operation and its working

capital.

It is important that capitalization is set to support the pre operating and operating

expenditures.

Table 5.2
Capital Contribution

Name of the Partners Capital Contribution

Trinidad, Carmina Php 50,000.00
Taberdo, Sheela Mae 50,000.00
Haplos, Renzo Andrei 50,000.00
Baldonado, Marielle 50,000.00
Simbahan, Camille 50,000.00
Total Php250,000.00
 44

Chapter VI
SOCIO ECONOMIC CONTRIBUTION

The primary purpose of the business is to obtain the profit from their economic

endeavors. Despite this, they cannot go away with the fact that they operate in social

environment. This aspects discusses in sufficient detail the responsibilities and

relationship of the business towards the society within which it operates. This part if the

study can help to identify the socio-economic allocation that business provide.

Contribution to the Philippine Economy

NutriHerb Organic Companainly contributes to the development of the community

economy. It can also help the government by paying the right taxes. These taxes will be

used to support the program especially for the community development. The company

GDP or Gross Domestic Product is Php1,728,000 given the annual production with 14,400

multiplied by the price P120.00

Employment Generation

The company not only provides good products for consumers but alao gives a

good taste, the company also provides work to other people and contributes to the earning

by making payments correctly on tax. Through the company’s work and profit the

businesses is directed to help workers be able to be a good source of income to meet the

needs of their families. The company’s revenue increase is also a rise in government

revenue because of this tax. The company’s automatically contributing to the taxation of

the economy according to the legal aspects that taxation follow the country’s constitution
 45

for the year 2017. The workers will have fringe benefits like 13th month pay every end of

the year.

Social Desirability

The NutriHerb Organic Company must follow the propoer waste to ensure that

company operates do not affect the health of others as well as the government and not just

community riot where it is located. The policy must be followed for a good government

stay. Manufacturing in the company does not work without waste but the company need to

segregate according to its biodegradability and putting them into trash containers. The

waste segregate will be properly disposed and to collected be government truck on its

scheduled day of collection.