ABSTRACT

Statement of the problem

The study entitled “Pan de Sarap: A Feasibility Study of

Establishing a Store that sells Hot Ampalaya pandesal with a

variety of filling” aimed to evaluate and test the feasibility

of the operations, marketing, management, technical and

financial aspects in Aliaga.

Specifically, it sought to answer the following questions;

1. Who are the target markets of the proposed business? What

marketing strategies and techniques should be implemented to

help ensure the success of the business?

2. What with be the production processes involve in the

operation business?

3. What organizational structure is applicable for the

business operations and the required number of personnel?

4. How much would be the needed capital? And how long would it

take to recover the investment?

5. What are the potential problems that may be encountered in

pursuing the proposed project and what would be the possible

solutions?

6. What does it bring to the economic aspects as a whole?

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Justification of the Study

The related literature and studies above helped the

researchers to gather relevant information that provides the

basis of the project.

Techniques of production of pandesal may somehow have

similarities with existing businesses. On the other hand, its

scope differs in many aspects such as marketing, technical,

management and financial. This project is located in Poblacion

West 3 Aliaga Nueva Ecija. Its purpose is to provide for people

and promote healthy living.

Research Method Used

The proposed study made used of the descriptive method.

According to Manuel and Medel (1994), descriptive method of

research is a fact finding study with adequate and truthful

interpretation of findings. It seeks to answer the question:

“What are the facts regarding existing condition?”. This method

is used because it is the most appropriate on in interpreting

the data gathered by the researchers. This provided the

researchers a more accurate way to distinguish the knowledge,

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attributes, preferences, and the buying behaviour of the

prospective buyers.

Research Locale

The research was conducted within the town of Aliaga.

Respondents

The respondents of the study were the respondents from

households of Aliaga who are employed, unemployed and students.

Instrumentation

The researchers used a self-made survey questionnaire to

obtain primary data from respondents. The questionnaire was

designed so that most of the respondents could be able to answer

question by placing a mark of the check on the appropriate

circles provided on the right position of the questionnaire.

The first part of the questionnaire is a personal data

sheet. This part seeks for the respondent’s information

regarding name, age, gender, status and computations of the

respondents.

The second part of the questionnaire deals with the

questions designed contributes to the marketing, technical,

management and financial aspects of the study.

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 Due to time constraints to produce the product, researchers

use another way of survey by asking questions regarding

competitors.

Data Gathering Techniques

The researchers used the following techniques below to

ensure the reliability and accuracy of the facts presented in

this study:

Observation

The researchers did field observation by visiting Pan de Sal

businesses in Aliaga. The research carefully observes the

setting to be able to discover the kind of market penetrates.

Survey/Questionnaire

The researchers conducted a survey and gave out questionnaires

that served as the reasonable source of data regarding

preferences and concerns of prospective customers. The questions

were related to the problems observed by the researchers when

they visited places. It helps in determining factors that affect

the buying habits of the buyers as well as the pricing of the

product. Getting information and perceptions of the consumer may

give the hint as to how to deal and offer the new product to

them.

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Interview

The researchers conducted interviews to the owners or

workers of different existing Pan de Sal business in Aliaga,

Nueva Ecija.

Library Technique

Books, magazines, dictionaries, ad other references found in

Wesleyan University Library were used as additional references

in accomplishing the study.

Internet Surfing

The researchers used the internet to gather and find updates

about the topic of the study.

Statistical Treatment of Data

The major assumptions on the other part of the study based

on facts obtained from surveys and interviews conducted with the

respondents from Aliaga specifically Poblacion West III,

Poblacion West IV, Pob.East II, Pob. East I, Sto. Rosario, San

Emiliano, Santiago, Pob.Centro. Moreover, information gathered

from the respondents on the target location was used to make

reasonable estimates of the proposed financial activities.

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Statistical Tool

Statistics is simply a tool to help the researchers interpret

data. It is the aid in organizing, summarizing, interpreting and

communicating quantitative information obtained. In addition it

is used to extrapolate data to reach tentative conclusions about

the large group from which smaller group are derived.

The Sample Size

The total target population shown in Table 1 is used to

project the total number of respondents in the survey. Using the

Slovin’s formula with a population of 3639, the researchers

arrived at a sample size of 399 respondents as shown below:

N= 4763 (number of household population)

E= 10% (margin of error)

N
n = (1+Ne²)

Sample and Sampling Technique

The following techniques are used by the researchers in

gathering data to ensure the reliability and accuracy of the

presented facts in the study.

Non-probability sampling is the sampling technique that

will be used in this study. The random type of sampling is not

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used. Rather, the sample respondents are selected for a certain

purpose. The sample’s variability is based on the soundness of

the judgment of the one who makes the choice. The purposive and

convenience sampling are the techniques used by the researchers.

Purposive Sampling. This type of sampling selects the

sample respondents based on specified criterion laid down by the

researchers. The respondents must be those who are actually

going in malls.

Convenience Sampling. The researchers picked the

respondents from the set sample size that the researchers find

convenient to interview due to their availability and

accessibility.

Financial Treatment of Data

To determine the projects viability, the researchers used the

following tools;

Payback Period. It focuses on recovering the cost of investment.

The payback period represent the amount of time it takes for a

business to recover its initial cost.

Payback Period = Initial Investment

Annual Cash Flows

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 The desirability of the project is determined by comparing

the project’s payback period against the maximum acceptable

payback period as predetermined by the management. If the

project’s payback period is shorter than what is desired, the

project may be accepted.

Return on Investment (ROI). It measures the ration of money

gain or loss (whether realized or unrealized) on an investment

relative to the amount of money invested.

Return on Investment = Net Operating Income

Average Operating Asset

Where:

 Net Operating Income is the earnings before interest and

taxes

 Operating Assets includes cash, accounts receivable,

inventory, net plan and equipment and all other asset held

for productive use in the organization.

Net Present Value (NPV). It is a method of calculating the

expected utility of the given project by discounting all the

expected future cash flows to the present lying sum

predetermined minimum desired rate of return. The net the

present value is the amount by which the present value of the

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cash inflows expected exceed the amount originally invested in

the project. It indicated whether the business proposal should

be pursued or not.

Present Value of Cash Flows xx

Less: Net Investment xx

Net Present Value xx

Accept the investment proposal if NPV is positive or zero and

reject if NPV is negative. If NPV is positive, it means that

project will earn a return greater than the discount rate also

known as hurdle rate, they should be rejected in order to earn a

higher rate in some other investment.

I. Marketing Aspect

The primary customers of the store will be composed of

households of certain barangays in Aliaga namely.

Competitors will be considered although there are no other

store that specifically offer ampalaya pandesal with fillings

within Aliaga, the business shall have a market share of 30% in

the first year and same for the next years due to the same

growth rate used for both demand and supply. The pricing is made

justifiable as possible and without compromising the product’s

quality in order to attract more customers. An average mark up

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 of 66.57% on cost for the regular meals is the employed pricing

scheme.

Different strategies will be employed by the proposed business in

order to achieve a sustainable competitive advantage in the market.

Tarpaulins, sticker ads, and social media promotions will be used to

provide information and promote the store’s products as well as its

image.

II. Technical Aspect

The proposed location of the business is infront Aliaga Market at

Poblacion West III Aliaga. The researchers have decided to lease one

unit of the building for ₱5500 per month. The store will only use the

best ingredients for the pandesals. The supplies and raw materials

will be bought on a twice a week basis. To provide for fresh supply of

high quality ingredients, the store will contract with dealers of

ampalaya and bread flour in the local market.

III. Management Aspect

The form of business organization that will be applied in

this business venture will be sole proprietorship because it is

easier, less expensive to organize and least regulated by the

government over other forms of businesses. It will be opened

from 4:00 am to 9:00 pm, from Monday to Sunday.

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 The business will be organized under the line type of

organization. The organization will be composed of manager who

is also the owner, two bakers, 2 salesmen, dishwasher and

cashier. The manager being the owner will not receive salary,

the bakers will be paid at a rate of ₱350 per day, ₱250 per day

for the cashier, ₱200 per day for dishwasher and ₱200 per day

for salesmen. Other benefits such as PhilHealth, Pag-ibig and

SSS, are available for the personnel including 13th month pay.

Salesman shall be on shifting schedule one from 4am to

12:30 and another one from 12:30pm to 9 pm.

IV. Financial Aspect

The owner will contribute to the business’ capital an amount of

PhP880,000. It shall come from the owner’s personal savings and no

part of it is loaned from financial institutions. The initial

investment will be used to purchase the equipment, tools, furniture

and fixtures, supplies, raw materials and other necessary expenses

needed for the start-up of business. It shall also cover up other pre-

operating expenses. Analysis of the projected financial statements

showed that the proposed business will have a payback period of 3.41

years. On its first year of operation, the business will have a return

on assets equal to 13.97% which will increase in the succeeding years.

At the end of year five, the project’s net present value will be

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Php346390.19. Furthermore, the projected financial statements

illustrates that the business is feasible and profitable.

V. Potential Problems and Solutions

Problems and operational issues often affects business performance

disturbs the efficacy of the business performance. They make a

business less profitable. The unexpected absences of staffs and

employees who prepare and maintain the good quality of the food and

services offered, and the unanticipated breakdown of equipment are the

primary problems that may arise during the operation of business. When

an appropriate level of management and maintenance handled it

properly, these problems can be resolved.

VI. Socio-Economic Benefits

The following are the contributions to the society by

the business upon establishment:

1. Pan de Sarap will provide job opportunities for the people of

Aliaga.

2. It will give the government additional income through taxes

and licenses.

3. Pan de Sarap will promote healthy lifestyle for Aliagueños

through conscious eating.

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4. It will increase the income of the Aliaga local market through

the purchase of ingredients.

5. It will serve as a framework for future entrepreneurs who wish

to pursue a similar line of business.

CONCLUSIONS

The following conclusions were drawn based on the findings of the

study:

1. The proposed “Pan de Sarap: A Feasibility Study of

Establishing a Store that sells Hot Ampalaya pandesal with

a variety of filling” is feasible and viable because there

is an existing demand for the product and the target market

which are the households from various barangays in Aliaga

are considered capacitated buyers.

2. The proposed location is situated along the road and near

the market and business establishments where considerable

numbers of people are going so it is technically feasible

and highly accessible.

3. The raw materials to be used are very simple and it is

available locally and domestically and the technical

operation involved is very simple.

4. Sole proprietorship is the appropriate form of organization

and the business will be managed by the owner himself.

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 5. Once this business is established, it will be one of its

kind in the area and it will help in raising people’s

awareness about healthy eating.

6. The business will add economic prosperity to the community

and it will be beneficial to the society in terms of

employment.

RECOMMENDATIONS

Based on the summary of the different aspects and conclusions,

the following recommendations are drawn:

1. The continuous innovations and improvements of the products

offered and the incorporation of the latest trends in the

bread industry.

2. The pandesal and other breads flavored with vegetables be

offered to other areas.

3. Additional employee hiring to improve the quality of service

and to meet the increasing demand.

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 TABLE OF CONTENTS

TITLE PAGE i

APPROVAL SHEET ii

ACKNOWLEDGEMENT iv

DEDICATION vi

ABSTRACT viii

TABLE OF CONTENTS xxii

CHAPTER I: INTRODUCTION

THE PROBLEM AND ITS SETTING

Introduction 1

Statement of the Problem 3

Significance of the Study 4

Scope and Delimitation 5

Definition of Terms 7

CHAPTER II: REVIEW OF RELATED LITERATURE

Local Literature 10
Foreign Study 14

Justification of the Study 19

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CHAPTER III: RESEARCH METHODOLOGY

Research Method Used 20

Research Locale 20

Respondents 20

Instrumentation 21

Data Gathering Techniques 21

Observation 21

Survey/ Questionnaire 22

Interview 22

Library Technique 22

Internet Surfing 22

Statistical Treatment of Data 22

Statistical Tool 23

The Sample Size 23

Sample and Sampling Technique 24

Financial Treatment of Data 24

CHAPTER IV: PRESENTATION, ANALYSIS AND INTERPRETATION OF DATA

Marketing Aspect 27

The Product 28

The Pricing Policy 29

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 The Place 29

The Promotional Strategies 30

Market Analysis 31

Effective Demand Forecast 33

Demand-Supply Analysis 38

Technical Aspect 43

Business Logo 44

Business Layout 44

Location 46

Products Offered 48

Production Process and Service Process 50

Machinery and Equipment 62

Furniture and Fixtures 64

Office Equipment 65

Tools and Utensils 66

Packaging 72

Advertising 73

Cleaning and Waste Disposal 74

Quality Control 74

Electricity 75

Water 75

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 Management Aspect 75

Forms of Business Organization 76

Organization Structure 77

Compensation Scheme 81

Manpower Requirements 82

Operational Policies 82

Legal Requirements 82

Financial Aspect 85

Financial Assumptions 85

Payback Period 103

Return on Assets 103

Net Present Value 103

CHAPTER V: SUMMARY, CONCLUSION AND RECCOMENDATION

Summary 104

Conclusion 108

Recommendation 109

BIBLIOGRAPHY 111

APPENDICES 112

LIST OF TABLES

Table 1-Projected Household Population per Brgy 32

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 Table 2-Projected Potential Household Demand 32

Table 3.1 33

Table 3.2 34

Table 3.3-Breakdown computation of effect demand 34

Table 4-Buying Frequency of Demand Forecast 35

Table 5-Current Supply Schedule 37

Table 6-Supply forecast 38

Table 7-Demand Gap 39

Table 9-Computation of Demand in Units 39

Table 10-Annual Projected Demand per product 41

Table 11-Annual Demand Capacity per product 42

Table 12-Demand Supply Analysis 42

Table 13-Salaries and Wages Scale 81

Table 14-Schedule of Employee’s Share 82

LIST OF FIGURES

Figure 1-Floor Plan 45

Figure 2-Front Elevation 46

Figure 3-Vicinity Map 47

Figure 4-Organizational Chart 78

Figure 5-Gantt Chart 84

LIST OF SCHEDULES

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Schedule 1-Total Project Cost 87

Schedule 2-Working Capital Needed 87

Schedule 3-Annual Gross Sales 88

Schedule 4-Raw Materials Used 88

Schedule 5-Breakdown of Raw Material per product 88

Schedule 6-Sales per product 89

Schedule 7-Cost of Sales 90

Schedule 8.1-Operating Expenses 91

Schedule 8.2-Salaries and Wages 92

Schedule 8.3-Employee’s Share 92

Schedule 8.4-Other Operating Expenses 93

Schedule 8.5-Pre-Operating Expenses 93

Schedule 9.1-Machinery Equipment 93

Schedule 9.2-Depreciation (OPEX) 94

Schedule 9.3-Furniture and Fixtures 94

Schedule 9.4-Office Equipment 95

Schedule 9.5-Others 95

Schedule 10-Income Statement 96

Schedule 11-Statement of Changes in Equity 97

Schedule 12-Statement of Cash flows 98

Schedule 13-Balance Sheet 100

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Schedule 14-Payback Period 101

Schedule 15-Return on Investment 101

Schedule 16-Net Present Value 102

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