Chapter I EXECUTIVE SUMMARY

Brief Description of the Project We aspire to become the pioneer producer of topmost quality organic coffee shakes in the city of Urdaneta. Through the concept of offering quality and economic products, we will provide our market with organic coffee shakes that is refreshing and invigorating experience for the body. Through the responsible use of natural and artificial resources, we promote the local coffee industry and contribute to the development of the countrys economy. In pursuit of maintaining a competitive edge in the industry, we aim to have a healthy relationship not only with our suppliers and consumers, but also with the members of our corporate family. This is our companys vision and mission in conducting this feasibility study. What is innovative with the product of JJsKopi Hawz is the bean used to produce the product - Kalinga Coffee Bean. This coffee bean was chosen due to its distinct taste that accompanies well with coffee shakes. Cheapness and fresh ingredients used are among the innovative characteristics of the product offered by JJs Kopi Hawz.

Brief Profile of the Entrepreneurs It has always been a dilemma of every senior student what to do after graduation. Although majority think about landing a job, the proponents, in response to the call of former President Gloria Macapagal Arroyo, and the encouragement being given by the Commission on Higher Education together with the able motivation of TESDA Director, Mr. Buboy Syjuco, would like to enter into a business venture named JJs Kopi Hawz. The business partnership will not only test the respective abilities and sort-of expertise of the proponents in the field of entrepreneurship but this project will also measure the friendship which the proponents were able to build. John Erick Thomas G. Sembrano, fondly called TJ by friends, is 21 year old guy from Urdaneta City, Pangasinan.A Bachelor of Science in Commerce, and Major in Management senior student of Lyceum Northwestern University His family, headed by his father, is manning a family-owned financing company, the Manila Teachers Savings and Loan, Assn., Inc. Joefil B. Maramba, A senior Student at Lyceum-Northwestern University with the degree Bachelor of Science in Commerce Major in Management, a close friend of TJ and who has always been his buddy, is a guy from Bonuan Boquig, Dagupan City. While TJ and Joefil are both soft-spoken and the silent type of buddies, their exposure on small ventures which they are into, TJ as operator of a petshop and Joefil as a former staff of Jollibee, the proponents are very positive that their tandem, which has been tested for quite sometime, would make the proposed business a success. With the support of the proponents respective families, TJ on finances and Joefil on labor, there is no doubt that the partnership will become a success.

Projects Contribution to Economy As buyers of Kalinga Coffee Bean, the firm is helping local farmers in the Cordilleras to continuously produce their local coffee bean, thus giving employment and livelihood to farmers. Through sales generated, the firm will contribute a number of taxes for the government. It also helps the government especially the Local Government of Urdaneta in minimizing unemployment by employing three (3) employees for the business. Segregation of wastes is seriously practiced; thereby the firm is complying in the governments environmental regulations. The welfare and satisfaction of customers is the topmost priority, therefore only the freshest ingredients are used to produce quality coffee shakes.

PROJECT BACKGROUND AND HISTORY Rationale Due to the love of drinking coffee shakes, non-existence of cheap iced coffee beverages and coffee shops in the City of Urdaneta, and the dream of having an enterprise, JJs Kopi Hawz is conceptualized. Given a limited capital, the challenge was to think of an enterprise that still could offer coffee products without the costs of too much capital. Thus, JJs Kopi Hawz,

instead of a dine-in coffee shop, is transformed into a food cart business that will cater to the needs of coffee drinkers without the hassle of waiting much time in getting their orders. After many discussion, JJs Kopi Hawz is transformed into an on-the-go coffee cart. Based on an interview with young professionals, there is no store that offers cheap coffee shakes in the City of Urdaneta, thus, making it an open market to penetrate. With an increasing number of young professionals every year, business catering to their needs will definitely be lucrative. The firm will engage in constant product research and continuous development to better serve its stakeholders.

Proposed Name of the Business The proponents decided to name the business JJs KOPI HAWZ. JJ was taken from the first letter of the proponents name John Erick and Joefil. Kopi, on the other hand reflects a Filipino way of pronouncing coffee and the word hawz is the modern and the new trend of writing house. It is the contention of the proponents that this name will attract not only the professionals but also young adults as it shows touch and character of young entrepreneurs.

Type of Business Organization Since the proponents will be working together, they came up with an agreement that the proposed business will be operated as partnership. John Erick and Joefil, who will act as co-owners will also jointly man the operations for which profits, losses and obligations arising from the operations will be shared at 60% and 40% respectively.

Location The business will strategically be located inside Magic Mall Urdaneta located at Alexander Street, Urdaneta City, along the national highway going to Dagupan City and Western Pangasinan. The location is chosen due to its proximity with commercial banks, schools and universities and colleges and other commercial establishments where our target resides.

MGX Convenience Store

MAGIC MALL

Alexander Street
N

National Highway

To Dagupan City
FICO BANK

OLD CITY HALL

Figure 1 Location Map of Magic Mall Urdaneta 5

Chapter II MARKETING PLAN

Description of the Product The product to be offered are coffee shakes. The coffee bean to be used for the product is the Kalinga Coffee Bean imported from the Cordillera Mountains. The whip cream on top of the shake is freshly made from a whipping machine. It will be served in three different non-poisonous plastic container cup petite (16 oz), medium (24 oz) and large (36 oz) with the name and logo of the company printed in the container. The product is made to answer the thirst of refreshing beverage that is both beneficial to the body and the soul. The product will satisfy caffeine craving of its customers. Coffee, being the main ingredient of its products, has anti-oxidant component which helps the body get rid of harmful toxins.

Comparison of the Products with its Competitors What set the product from other iced coffee beverages is the price, coffee ingredient, quality, location, quick time ordering and service. The main advantage of the product is the price. Starbucks Frappuccinos, though not the principal competitor of JJs Kopi Hawz, are being sold from P120.00 (petite) to P150.00 (Grande size) of iced coffee beverages and Iced Coffee Blends. JJs Kopi Hawz will offer iced coffee beverages from P25.00 to P45.00, or 60 percent cheaper.

Table 1 Comparison of the Products with Competitors

JJs Kopi Hawz Sizes Petite Regular Large Coffee Ingredients Quality Location Quick Time Ordering Service P 25 35 45 Kalinga Coffee Beans Organic and healthy Accessible/convenient 2-4 minutes faster

Competitor A P 35 45 55 Instant Coffee healthy Accessible 4-6 minutes fast

Competitor B P 35 40 50

Competitor C P 30 40 50

Commercial Commercial Instant Coffee Instant Coffee healthy healthy Accessible 10 minutes Quite slow Accessible 4-6 minutes fast

The coffee bean that will be used for the product is the Kalinga Coffee Bean which is bought from the Cordillera Regions. Quality product is one of our main priorities. Tools and equipments to be used for every order of coffee shake are cleaned. Cleanliness of the store will always be maintained. The enterprise will be located in a mall where there is high traffic of people Magic Mall Urdaneta. Due to its location, prospected target customers can locate the establishment easier for it is in a well known establishment.

Location The business will strategically be located inside Magic Mall Urdaneta located at Alexander Street, Urdaneta City, along the national highway going to Dagupan City and Western Pangasinan. The location is chosen due to its proximity with commercial banks, schools and universities and colleges and other commercial establishments where our target resides.

Market Area JJs Kopi Hawz competitors do not satisfy the entire target market so the firm has a share in the market, specifically those of the market who wants fresh, organic, and quality coffee shakes.

Main Customers The proposed coffee shop will cater to entire adult, both young and old

mallgoers specifically the professionals who are enticed drinking coffee. Since JJs Kopi Hawz offers coffee shake, the proponents believe that even young adults would patronize the product.

Total Demand-Supply Analysis Total demand-supply of the product was based on the interview conducted by proponents among the existing coffee shops around the area. Research revealed the

three main competitors surrounding the proposed location recorded following average sales with an aggregate of 10% increase per year.

Table 2 Average Sales of Competitors (In Volume)

Competitor A SIZES Daily Petite Regular Large 40 45 50 Yearly 14,400 16,200 18,000

Competitor B Daily 50 60 60 Yearly 18,000 21,600 21,600

Competitor C Daily 30 35 30 Yearly 10,800 12,600 10,800

Total Daily 120 140 140 Yearly 43,200 50,400 50,400

Table 1 shows the total sales of three competitors on a daily basis. The column for yearly sales was arrived at by multiplying the daily sales by 360 days. These figures are assumed to be the total supply.

Demand-Supply Analysis On the basis of Table 1 which reflects the current supply, the researchers are assuming to capture roughly 25% of the existing market, presented on the subsequent tables, representing the projected sales for the first three years of operations.

Selling Price This product will be priced using the Cost plus Mark-Up Strategy

Table 3 JJs Kopi Hawz Product Size and its Price

Product Size Petite Regular Large

Price P25 35 45

Table 3 shows the proposed selling prices of the products.

Sales Forecast Table 3.1 JJs Kopi Hawz Projected Sales for Year 2012 ( In Pesos) Quantity Daily 30 35 35 Monthly 900 1,050 1,050 Yearly 10,800 12,600 12,600 Selling Price 25 35 45 Projected Sales 270,000 441,000 567,000 1,278,000 10

Petite Regular Large

Total Projected Sales for Year 2012

Table 3.1 presents the projected sales for year 2012 in volume and in peso sales.

Table 3.2 JJs Kopi Hawz Projected Sales for Year 2013 (In Pesos) Quantity

Monthly Petite Regular Large Daily 35 40 40 1050 1200 1200 Yearly 12600 14400 14400

Selling Price 25 35 45

Projected Sales 315,000.00 504,000.00 648,000.00 1,467,000.00

Total Projected Sales for Year 2013

With the selling price remaining constant, the proponents are expecting at on average 15% increase on volume sales in 2012 as depicted on Table 3.2.

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Table 3.3 JJs Kopi Hawz Projected Sales for Year 2014 (In Pesos) Quantity

Petite Regular Large

Daily 40 50 45

Monthly 1,200 1,500 1,350

Yearly 14,400 18,000 16,200

Selling Price 25 35 45

Projected Sales 360,000 630,000 729,000 1,719,000

Total Projected Sales for Year 2014

It is very noticeable on Table 1.3.3 that JJs Kopi Hawz is still projecting a very high sale even if the selling price is not increasing.

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Promotional Measures and Marketing Strategy

JJs Kopi Hawz will use extensively different types of promotional materials. The enterprise will use sales promotion by means of coupons, advertising through posters/tarpaulins, flyers and personal selling. With the promotional measures mentioned, the proponents believe that the targeted market share and projected sales will be achieved or even go higher than expected. The product will have a primary package of plastic cup with cap personalized with the enterprises logo printed in it and straw packed in plastic. Secondary package will be by means of putting the product into a plastic bag before giving the product to the customer.

Marketing Budget Table 4 JJs Kopi Hawz Three Year Projected Marketing Budget (In Pesos) Year 2012 Marketing Expenses Coupons Posters/Tarpaulins Flyers Total Marketing Expenses 3,000 10,000 3,000 16,000 Year 2013 3,000 3,000 3,000 9,000 Year 2014 3,000 3,000 3,000 9,000 Total 9,000 16,000 9,000 34,000

Table 4 presents the intended amount needed for the proposed marketing budget. These amounts shall be used during the first three year of operations of the business. 13

The flyers will be distributed to the target customers in the mall before the opening of the business.

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Chapter III PRODUCTION PLAN

Product Description JJs Kopi Hawz intends to offer coffee shakes using Kalinga Coffee Bean imported from the Cordillera Mountains. It will be served in three different nonpoisonous plastic container cups petite (16 oz), medium (24 oz) and large (36 oz) with the name and logo of the company printed in the container. The whip cream on top of the shake is freshly made from a whipping machine. The product is made to answer the thirst of refreshing beverage that is both beneficial to the body and the soul. The product will satisfy every caffeine craving of its customers. Coffee, being the main ingredient of its products, has anti-oxidant component which helps the body get rid of harmful toxins.

Production Process

Ingredients 2 cups cold coffee, double strength 2 cups Low-Fat Frozen Yogurt 4 tablespoons whipped cream 1 teaspoon Hershey's Chocolate Syrup 1 marischino cherry

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Step-by-Step Production of Coffee Shake

Coffee Shakes Recipe

Add all ingredients into ice filled boston shaker, shake vigorously and pour over ice

Spray cream chocolate syrup in crisscross style on top

Figure 2

When the customer has placed and paid his/her order to the Cashier, the Customer Service Staff will Prepare all tools and equipment needed; then add all ingredients into iced filled boston shaker, shake the mixture vigorously and pour over ice. Then, cream chocolate syrup will be sprayed in crisscross style on the top. The cap will be placed and it will be served to the customer. 16

Figure 3 Finished Product of Coffee Shake

Step-by-Step Production Process of Ice Coffee Blends

Ingredients:
y y y y y y y

2 Tsp Dry instant Kalinga coffee 1 Tsp Sugar or Sugar Substitute 6-8 oz Milk - Your choice of skim, 2%, 3% or whole 6-8 Ice cubes 2 Tb Warm water 1 Tsp Vanilla - Optional 1 Tsp Chocolate Syrup - Optional

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Organizational Structure

Iced Coffee Blends

Add all ingredients into blender cup and blend

Spray cream chocolate syrup

Figure 4 When the customer has placed and paid his/her order to the cashier.the Customer Service staff will prepare all tools and equipment needed; then add all ingredients into blender cup and blend. Afterwards, the Customer Service will spray cream chocolate syrup on top of the product and place its cap and serve product to customer.

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Figure 5

19

Fixed Capital and their Costs

Table 5 Tools and Equipment and Sources (In Pesos)

Tools/Equipment Ice cream scoop Measuring spoons Measuring cups Espresso Machine Coffee maker Blender Shaker Refrigerator Cart

Sources Appliance center Appliance center Appliance center Appliance center Appliance center Appliance center Appliance center Part of contribution To build

Quantity 1

Price

Total Amount 100 100 100 20,000 1,000 1,400 200 10,000 15,000

100 1 1 1 1 2 1 1 100 100 20,000 1,000 700 200 10,000 15,000

Total amount

47,900

Table 5 is the List of JJs Kopi Hawz Tools and Equipments. JJs Kopi Haws will be using one (1) ice cream scoop, one (1) set of measuring spoons, one (1) set of measuring cups, one (1) espresso machine, one (1) coffee maker, two (2) blenders, one (1) shaker, one (1) refrigerator, and building a cart. 20

Table 5.1 Life and Annual Depreciation of Fixed Assets

Annual Life Tools/Equipment Quantity Cost Span Depreciation (In Years) Ice Cream Scoops Measuring Spoons Measuring Cups Espresso Machines Coffee Maker Blender Shaker Refrigerator Cart 1 1 1 1 1 1 1 1 1 P 100 100 100 20,000 1,000 1,400 200 10,000 15,000 2 2 2 10 5 2 2 5 5 P 50 50 50 2,000 200 700 200 2,000 3,000

Total Amount

P47,900

P8,250

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Maintenance and Repairs The tools and equipment used by the business do not require personnel to do the simple cleaning process. All will be cleaned at the end of business operation on a daily basis. The refrigerator, in order to maintain ventilation for the products and to avoid spoilage and possible formation of bacteria that will cause diseases, will be scheduled for cleaning at least once a week. This process will prevent the possible hampering of daily business operation. Should there be a need to troubleshoot the refrigerator, cart and other equipment, the supplier and/or the appliance center where these were bought can do the necessary repair. These centers are very accessible since tools and equipments are locally purchased.

Raw Materials and their Costs A summary of raw materials needed with their corresponding costs are presented on Table 5.2

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Table 5.2 List of Raw Materials Needed Raw Materials Ice Cream Coffee beans Syrups Milk Glucose Ice Chocolate chips Gelatin Sources Grocery stores Baguio City Baguio City Grocery stores Grocery stores Grocery stores Grocery stores Grocery stores Quantity Price(In Pesos) 1 gal 300 1kg 150 750ml 450 1L 90 750g 70 1 bundle 35 (In Kilos) 1 bundle 9 1 pack 30

Raw Materials Availability Raw materials enumerated on Table 3.3 can be bought at the nearest grocery stores in Urdaneta City and Baguio City. The coffee bean to be used, which is kalinga coffee bean and coffee syrups will be bought in Baguio City.

Salaries and Wages The partners of the proposed business shall see to it that its employees shall at least receive minimum wage rates and other mandatory benefits stated under Wage Order No. RB 1 13 /b of Region 1 of the Department of Labor and Employment (DOLE) (see Appendix). Table reflects the monthly basic salary for the Operations Manager, the CashierBookkeeper and Customer Service Staff. The basic salary shall increase by 2 percent annually.

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Table 5.3 Schedule of Salaries

Position

No. of Position

Year 2012

Year 2013

Year 2014

Operations Manager Cashier-Bookkeeper Customer Service Staff Total

1 1 1 3

P 9,000 7,000 6,240 P22,240

P 9,180 7,140 6,365 P22,685

P 9,364 7,283 6,492 P23,139

Personnel Availability JJs Kopi Hawz will be operating eight (8) hours a day, seven (7) days a week, 30 days a month and 360 days a year, therefore, the personnel will be available throughout the year. It is clear that most employees shall come from neighboring town or cities.

Total or Annual Production Costs Table 5.4 JJs Kopi Hawz Projected Annual Cost of Raw Materials for Year 2011 (In Pesos) Quantity Unit Cost 336 (gals) 300 192 (kilos) 150 192 (bottle) 450 1,008 (pack) 90 240 (pack) 70 2,016 (kilos) 35 480 (bundle) 9 960 ( pack) 30

Ice Cream Coffee Bean Syrups Milk Glucose Ice Chocolate Chips Gelatin Total

Total 100,800 28,800 86,400 90,720 16,800 70,560 4,320 28,800 427,200.00

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Table 5.5 JJs Kopi Haws Projected Cost of Raw Materials Year 2012 (In Pesos) Quantity Unit Price 453 300 259 150 259 450 1,358 90 324 70 2,716 35 647 9 1,294 30

Ice Cream Coffee Bean Syrups Milk Glucose Ice Chocolate Chips Gelatin Total

Total 135,900 38,850 116,550 122,220 22,680 95,060 5,823 38,820 575,903

Table 5.6 JJs Kopi Hawz Projected Cost of Raw Materials For Year 2013 (In Pesos) Quantity Unit Price 531 300 304 150 304 450 1,592 90 380 70 3,183 35 759 9 1,517 30

Ice Cream Coffee Bean Syrups Milk Glucose Ice Chocolate Chips Gelatin Total

Total 159,300 45,600 136,800 143,280 26,600 111,405 6,831 45,510 675,326

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Waste Disposal Waste materials which are produced from making the products are properly segregated to recyclable, biodegradables and non-biodegradables. The recycles are used for other purposes, the non-biodegradable are sold to junkshops and biodegradables are used for composting. The company will promote proper wastes disposal. JJs Kopi Hawz will become an environmental friendly company; intend to use recycled and non-hazardous materials in operating our business.

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Chapter IV ORGANIZATIONAL AND MANAGEMENT PLAN

Form of Business The form of business would be a partnership style of business. Partnership

brings greater financial aspects to the business, the special skills and expertise of the partners will be combined. It offers relative freedom and flexibility in terms of decisionmaking. It is easier and less expensive to organize and more personal and informal. The terms of existence depends on the time stipulated on the articles of partnership.

Organizational Structure JJs Kopi Hawz is a partnership business owned and managed by two partners John Erick Thomas G. Sembrano and Joefil B. Maramba. John Erick will contribute substantial amount of capital for the implementation of the project, 40% of which shall be lent to Joefil which will represent his contribution to the partnership. The provided capital of John Erick will cover the acquisition of the necessary business requirements. Joefil, however, in addition to the capital, will contribute his labor in the operation of the business. John Erick will be responsible for the over-all management of the proposed business, designated as the operations manager and in charge of the supervision of the business until such time the business will smoothly operate. By then, Joefil will take over the operations. Meantime, Joefil shall take care of cash collections and

27

bookkeeping and he will be assisted by a customer service staff who will act as the service crew at the same time.

Organizational Structure

JJs Kopi Hawz Partnership

John Erick Thomas G. Sembrano Operations Manager Joefil B. Maramba Cashier/Bookkeeper

Customer Service Staff

Figure 6

Figure 5 shows the organizational structure of the proposed JJs Kopi Hawz. As seen on the above figure, the proposed business is composed of the Partners, Operations Manager and Cashier-Bookkeeper and Customer Service Staff. It can be gleaned in the chart that there is only one customer service staff who will also act as the service crew. Since business have just started, hiring of more than one staff is not required to run the business smoothly.

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Business Experience and Qualification of Each Partner and Personnel The four years in college to complete the degree and the extensive learning experiences acquired through various school activities, on the job training and part-time jobs had exposed the proponents to the business world and make them qualify to start a venture of their own.

Operations Manager Qualifications:       A graduate of any four-year business course Finances the business operations Business Oriented Of legal age Computer literate Good moral character and entrepreneurial skills

Duties and Responsibilities

   

Responsible in the day to day operations of the business; Analyzes the profit and losses reports. Maintains conducive, peaceful ambience for customers. Supervises training and development program of personnel at the store level

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Handles several task in the recruitment and selection of applicants and orientation of new employees, and anything that the job will require.

Monthly Salary : P9,000

Cashier/Bookkeeper Qualifications:      Graduate of any 4-year business course Coffee lover, hardworking responsible and trust worthy Of legal age Has background on selling

Duties and Responsibilities He is responsible in the    Records daily sales of the business; Cashier Gets orders from customers and gives them correct change; Accepts delivered inventory and checks if inventory delivered is in good condition;   Oversees all facets of quality control at the cart level Monthly Salary P7,000

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CUSTOMER SERVICE STAFF Qualifications :

   

At least a graduate of High School education; Physically fit to work; Must be honest, hardworking and friendly; and With pleasing personality.

Duties and Responsibilities:  Gets the order from the Operations Manager, prepares the order of the customer and delivers the order to the customer;   Maintains the quality control of the product and in the workplace Reports to the Operations Manager and/or Cashier-Bookkeeper the day-today inventory, and anything that the job will require.  Other Each employee shall enjoy the following benefits corresponding to their salary brackets: a. A day-off from work once a week. b. Entitlement to 13th month pay c. SSS d. Philhealth e. Pag-Ibig Monthly salary: P6,240.00

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Pre-Operating Activities

Table 6 Project Implementation and Timetable

June 2011 Business Plan, Product Research Development Searching for location and Fixed Assets Application of Legal Requirements Purchase of Tools and Equipments Purchase of Supplies and Raw Materials Hiring and Screening of Employees Start of Operation x x

July 2011 x x

Au 2011

Sep 2011

Oct 2011

Nov 2011

Dec 2011

Jan 2012

x x x x x x x x x x

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Table 6 Permits & Licenses Fees Government Agencies City Of Urdaneta Application Requirements Barangay Business Clearance, 2 ID pictures, Securities and Exchange Commission Tax Application Form Permits, Taxes & Licenses Mayors Permit Amount (in pesos) 1,100

Securities and Exchange Commission Department Of Trade & Industry Bureau of Internal Revenue Bureau of Fire Protection Health Sanitary Office Total

Processing Fee

1,380

Registration Certificate, 2 x 2 picture Birth Certificate, DTI, Mayors Permit, SEC

Registration Fee

500

Registration Fee Registration Fee Sanitary Permit

500 500 1,000 4,980

Table 6 shows the details of the permits and licenses fees, as reflected in the Pre-operating expenses.

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Proposed Salary of Employees

The partners of the proposed business shall see to it that its employees shall at least receive minimum wage rates and other mandatory benefits stated under Wage Order No. RB 1 13 /b of Region 1 of the Department of Labor and Employment (DOLE) (see Appendix). Table reflects the monthly basic salary for the Operations Manager, the CashierBookkeeper and Customer Service Staff. The basic salary shall increase by 2 percent annually. Table 7 Schedule of Salaries

Position Operations Manager Cashier-Bookkeeper Customer Service Staff

2012 P 9,000.00 7,000.00 6,240.00

2013 P 9,180.00 7,140.00 6,302.40

2014 P 9,364.00 7,283.00 6,428.45

Personnel Benefits 34

As mandated by law, an employee is entitled to receive certain benefits which would serve to improve his condition, and as a reward for his exerted efforts in his work. They shall be given 13th month pay, SSS,Philhealth and Pag-Ibig benefits, free uniform and leave benefits like vacation/sick, maternity or paternity leave.

Table 8 JJs Kopi Hawz Expenses on Employee Benefits (In Pesos) 2012 SSS Operations Manager Cashier-Bookkeeper Customer Service Staff Philhealth Operations Manager Cashier-Bookkeeper Customer Service Staff Pag-ibig Operations Manager Cashier-Bookkeeper Customer Service Staff Total 7,752.00 6,060.00 5,208.00 2013 7,752.00 6,056.40 5,631.60 2014 8,172.00 6,480.00 5,628.60

1,350.00 1,050.00 900.00

1,350.00 1,050.00 900.00

1,350.00 1,050.00 900.00

1,200.00 1,200.00 1,200.00 33,224.40

1,200.00 1,200.00 1,200.00 34,071.60

1,200.00 1,200.00 1,200.00 34,918.80

Table 9

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JJs Kopi Hawz Pre-operating Expenses Pre-operating Activity Sample Production Transportation Licenses Total Cost P 2,000.00 1,220.00 4,780.00 P 8,000.00

Table 9 shows the pre-operating expenses to be incurred before the opening of the business operations. The breakdowns of some expenses are discussed clearly on Chapter III.

Chapter V 36

FINANCIAL PLAN

Project Costs The total capitalization requirement of the proposed business is P100,000 enough to provide for the business legalization, acquisition of inventories needed, advertisement

Table 10 Total Capital Requirement for JJs Kopi Hawz

PARTICULARS Cash Provision Inventories Equipment Prepaid Expenses Pre-operating Expenses TOTAL

Amount (In Pesos) 9,564.00 4,536.00 47,900.00 30,000.00 8,000.00 100,000.00

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Total allocation of capital requirement are detailed on Table 5.2

Share of Each Partner Table 11 JJs Kopi Hawz Partners Contribution John Erick Thomas Sembrano P 60,000.00 P 60,000.00 P 60,000.00 Joefil Maramba P40,000.00 P40,000.00 P40,000.00

Cash Total Contribution of Each Partner Total Capital of Partnership

Major Assumptions The proposed business financial projections are for three (3) years only, beginning 2012-2014. The 3-year period will be enough to establish its financial trend and feasibility. Major assumptions are broken down as follows: 1. Selling price will remain constant for the first three years. 2. Salaries will be increased at least 2% per year. 3. On the 2nd year, TJ will relinquish his position as the Operations Manager, Joefil taking over.

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Table 12
JJs Kopi Hawz Three Year Projected Statement of Comprehensive Income (In Pesos)

Sales Less: Cost of Goods Sold Gross Profit Less: Operating Expenses Net Income Before Taxes Less: Taxes Percentage Tax 3% Income Tax Net Income

2012 1,278,000.00 427,200.00 850,000.00 497,727.36 353,072.64 38,340.00 63,900.00 250,832.64

2013 1,467,000.00 575,903.00 891,097.00 510,824.52 380,272.48 44,010.00 73,350.00 262,912.48

2014 1,719,000.00 675,326.00 1,043,674.00 529,208.56 514,465.44 51,570.00 85,950.00 376,945.44

Table 12

shows the three-year projected statement of comprehensive income of JJs

Kopi Hawz. It can be gleaned from the table the business will substantially earn starting from the first year of operation and gradually increases yearly.

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Table 13 JJs Kopi Hawz Three Year Projected Cash Flow Statement (In Pesos) 2012 Cash Flows from Operating Activities Cash received from Sales Payment to Suppliers Payment to Employees Payment to Employees Benefits Payment for Rent Expenses Payment for Prepaid Rent Payment for Utilities Marketing Expenses Pre-operating Expenses Payments to Taxes Payments to Licenses Net Cash provided by (use in) operating activities Cash flows from Investing Activities Payments to Acquire Tools and Equipments Net cash provided by (used in) Investing activities Cash Flows from Financing Activities Cash received as Investments by Owners Net Cash provided by (used in) Financing Activities Net Cash Increase (Decrease) in Cash Cash balance at the Beginning of the period 2013 2014 1,719,000.00 675,326.00 276,898.20 34,848.20 120,000.00 75,768.60 9,000.00 137,520.00 7,000.00 382,639.00

1,278,000.00 1,467,000.00 427,200.00 575,903.00 266,880.00 271,468.80 30,455.710 34,001.00 120,000.00 120,000.00 20,000.00 48,000.00 64,661.16 16,000.00 9,000.00 8,000.00 102,240.00 117,360.00 6,000.00 239,224.30 268,606.04

(37,900.00) (37,900.00)

0.00 0.00

0.00 0.00

90,000.00 90,000.00 291,324.30

0.00 0.00 268,606.04 291,324.30

0.00 0.00 382,639.00 559,930.34

Cash Balance at the End of the Period

291,324.30

559,930.34

942,569.34

Table 13 shows that the business venture will have almost 200 percent increase in cash from start of operations and almost double the amount every year.

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Table 14 JJs Kopi Hawz Projected Statement of Changes in Equity Year 2012 (In Pesos) Joefil Capital, Beginning Add: Distribution of net Income Joefil 40% TJ 60% Capital, Ending 40,000.00 100,333.06 140,333.06 150,499.58 210,499.58 250,832.64 350,832.64 John Erick Thomas 60,000.00 Total 100,000.00

Table 15 JJs Kopi Hawz Projected Statement of Changes in Equity Year 2013 (In Pesos) Joefil Capital, Beginning Add: Distribution of net Income Joefil 40% TJ 60% Capital, Ending 140,333.06 105,164.99 245,498.05 157,747.49 368,274.07 262,912.48 613,745.12 John Erick Thomas 210,499.58 Total 350,832.64

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Table 16 JJs Kopi Hawz Projected Statement of Changes in Equity Year 2014 (In Pesos) Joefil Capital, Beginning Add: Distribution of net Income Joefil 40% TJ 60% Capital, Ending 245,498.05 150,778.18 396,276.22 226,167.26 594,414.34 376,945.44 990,690.56 John Erick Thomas 368,247.07 Total 613,745.12

Tables 14, 15 and 16 indicate that the partners respective owners equity are increasing tremendously on a yearly basis. It means that the business venture will do well for the next three years.

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Projected Statement of Financial Position

Table 17 JJs Kopi Hawz Projected Statement of Financial Position Year 2012 (In Pesos) Assets Current Assets Cash Prepaid Rent Noncurrent Assets Tools and Equipments Less: Accumulated Depreciation Total Assets Liabilities and Capital Current Liabilities Capital Joefil, Capital TJ, Capital Total Liabilities and Capital

291,324.30 20,000.00 47,900.00 5,622.96

311,324.30 42,277.04 353,601.34

2,768.70 140,333.06 210,499.58 350,832.64 353,601.34

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Table 18 JJs Kopi Hawz Projected Statement of Financial Position Year 2013 (In Pesos) Assets Current Assets Cash Prepaid Rent Noncurrent Assets Tools and Equipments Less: Accumulated Depreciation Total Assets Liabilities and Capital Current Liabilities Capital Joefil, Capital TJ, Capital Total Liabilities and Capital

559,930.34 20,000.00 47,900.00 511,245.92

579,930.34 36,654.08 616,584.42

2,839.30 245,498.05 368,247.07 613,745.12 616,584.42

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Table 19 JJs Kopi Hawz Projected Statement of Financial Position Year 2014 (In Pesos) Assets Current Assets Cash Prepaid Rent Noncurrent Assets Tools and Equipments Less: Accumulated Depreciation Total Assets Liabilities and Capital Current Liabilities Capital Joefil, Capital TJ, Capital Total Liabilities and Capital

942,569.34 20,000.00 47,900.00 16,868.88

962,569.34

31,031.12 993,600.46

2,909.90 396,276.22 594,414.34 990,960.56 993,600.46

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Ratio Analysis Table 20 JJs Kopi Hawz Profitability Rate of Return on Sales Rate of Return on Investments Liquidity Current Ratio Current Asset to Total Assets Solvency Debt/Equity Ratio Debt Ratio 0.0079 0.0078 0.0046 0.0046 0.0029 0.0029 204.25 0.88 204.25 0.94 330.79 0.97 2012 0.20 2.51 2013 0.18 2.63 2014 0.22 3.77

Based on Table 20, Profitability, Liquidity and Solvency Ratio Analysis of JJs Kopi Hawz , it can be concluded that this venture is very profitable, liquid and stable. On the computation made using Rate of Return on Sales, JJs Kopi Hawz will generate 0.2 for 2012, 0.18 for 2013 and 0.22 for 2014. This means that by 2012, every pesos sale that JJs Kopi Hawz will generate 20 centavo profit on every peso sales and on 2014, 22 centavo profit on every peso sale. Rate of Return on Investments indicates the profitability in the use of invested capital or the amount of the return per peso of investment. JJs Kopi Hawz has remarkable ROI 2.51 for 2012, 2.63 for 2013, and 3.77 for 2014. This means that in every pesos invested in JJs Kopi Hawz, it will give a return of P2.51 on 2011, P2.63 on 2013, and P3.77 on 2014. When talking about liquidity, it is defined as the capability of the firm to meet its current maturing obligations and its financial needs for current operations. Based on the

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study, JJs Kopi Hawz is very liquid as computed for its Current Ratio and Current Asset to Total Assets Ratio. The firm will have a 204.25 (2012), 204.25 (2013), and 330.79 (2014) Current Ratio. This means that for every peso of Current Liability that JJs Kopi Hawz incurred, it has P204. 25 (2012 and 2013) and P330.79 (2014) to cover its current obligations. Current Assets to Total Assets Ratio indicate the liquidity of the total assets. For every peso of JJs Kopi Hawzs Assets, 88 centavo (2012), 94 centavo (2013), and 97 centavo (2014) are Current Assets. JJs Kopi Hawz is very much stable because for every peso the firm has, very minimum part of it belongs to creditors.

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CHAPTER VI SOCIO-ECONOMIC FEASIBILITY

This section presents how entities other than the project proponents will benefit as a result of the project. These include the projects direct and indirect personnel, the government and other outside business entities.

Personnel When establishing a business, either small or big, it embodies with it the notion of creation of jobs for people who fit the qualifications to be employee/personnel. If they fit for the qualifications needed, and they got the job, it helps them their marginal wage that aid their family sustain their daily needs and wants. Within the business group or inside the workplace, employees/personnel do get some if not all of the benefits depending on the capabilities of the business to give outside the confinement of the business.

Government The business to operate has to procure/secure permits/clearances and other the likes that constitute the part it is obliged each entrepreneur, all these form part as taxes due to government support to help government increase its revenue and for the government to deliver the necessary basic services to the public.

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Other Beneficiaries Customers who are fond of drinking coffee, especially those . The suppliers will also benefit because the said business will give them an additional order, and will give them an additional income. People around the immediate area where the project/business is located will also benefit from the said product as they will experience the comfort of buying coffee of different taste and quality. Employees of nearby offices/ bureaus could also avail of the benefit of buying the same.

Environmental Impact Environmental concern is also of prime importance to consider. The proposed project will strictly follow ordinances being enforced by the Urdaneta City government especially with regards to the proper waste of disposal.

RECOMMENDATION Based on the ratio analysis that was presented, the proponents find the project feasible and therefore recommend it for implementation.

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APPENDIX A ARTICLE OF PARTNERSHIP KNOW ALL MEN BY THESE PRESENTS: That, we undersigned partners, all of legal age and residents of the Philippines, have this day voluntarily agreed to form a universal partnership of profits under the laws of the Republic of the Philippines. AND WE HEREBY CERTIFY THAT: ARTICLE I: That the name of the partnership shall be JJs PARTNERSHIP; ARTICLE II: That the principal office of the partnership shall be located at Manila Teachers Building, National Highway, Urdaneta City; ARTICLE III: That the names, citizenship and residence of the partners of the said partnership are as follows: Name Citizenship John Erick Thomas G. Filipino Sembrano Joefil B. Maramba Filipino Residence Manila Teachers National Highway Urdaneta City

Building,

Bonuan Boquig, Dagupan City

ARTICLE IV: That the term for which said partnership is to exist is between the mutual agreements of the partners from the recording of the said partnership by the Securities and Exchange Commission; ARTICLE V: That the purpose for which said partnership is formed is for realization of profit; ARTICLE VI: That the capital of the partnership shall be One Hundred Thousand Pesos (Php 100,000.00), Philippine Currency contributed in cash and assets by the partners, are as follows; Name Contribution John Erick Thomas P60,000 G. Sembrano Joefil B, Maramba P40,000

ARTICLE VII: That the profit and losses shall be divided pro-rata among the partners using ending capital of the fiscal year.

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ARTICLE VIII: That the firm shall be under the management of John Erick Thomas G. Sembrano as Operations Manager and such he shall have charge of the management of the affairs of the partnership; IN WITNESS WHEREOF, we hereunto set our hands this 15th day of March, 2011 at Urdaneta City, Philippines.

John Erick Thomas G. Sembrano Partner Signed in presence of: ______________________ ______________________

Joefil B. Maramba Partner

______________________ ______________________

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CURRICULUM VITAE

PERSONAL INFORMATION

Name: Nickname: Age: Birthday: Parents:

John Erick Thomas G. Sembrano Tjay 21 July 13,1989 Mr. Paul L. Sembrano Mrs. Connie G. Sembrano

Address:

MTMAS Building San Vicente Urdaneta City, Pangasinan

EDUCATIONAL BACKGROUND

Elementary: Mother Goose Special School System Inc. Urdaneta City, Pangasinan

High School: Mother Goose Special School System Inc. Urdaneta City, Pangasinan

College:

Bachelor of Science in Commerce Lyceum-Northwestern Unversity Tapuac District, Dagupan City

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CURRICULUM VITAE

PERSONAL INFORMATION

Name: Nickname: Age: Birthday: Parents:

Joefil B. Maramba Joef 21 October 08, 1989 Mr. Felipe E. Maramba Mrs. Josephine B. Maramba

Address:

#148 Longos St. Bonuan Boquig Dagupan City

EDUCATIONAL BACKGROUND

Elementary: Don Leon Francisco Maramba Elementary School

High School: Bonuan Boquig National High School

College:

Bachelor of Science in Commerce Lyceum-Northwestern Unversity Tapuac District, Dagupan City

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