Feasibility Study for business/accounting, Study Guides, Projects, Research of Business Accounting

Download Feasibility Study for business/accounting and more Study Guides, Projects, Research Business Accounting in PDF only on Docsity! Chapter 1 Project Summary Introduction Potato is a staple crop ranking as one of the highest in terms of nutritional value and production rate in terms of farming area over time. A medium sized potato has just 110 calories, no fat, no sodium and no cholesterol. Potatoes are rich in potassium, more than bananas can provide plus fiber, iron, vitamin C and B6 among other nutrients. Potatoes are produced mainly in the highlands because of the favorable cool and humid climates in high elevations. Locally, potato is a commercial crop of the north in Benguet and the mountains of Cordillera, and also in the south within the areas of Bukidnon. Potatoes are widely served in different forms, both processed like french fries and hash browns and unprocessed form like baked potatoes, varieties of potato salads and dishes that are complemented with potatoes. Potatoes are served in many ways and choices for both the typical fast food eater and the health conscious consumer. However, simple observation and study says that serving processed potatoes have become a cliché that you can see them served the same way everywhere in different flavorings, names and company branding. Production of POTATO PROJECT Page 1 processed potatoes have grown and served in almost every malls, corner stores, kiosks and stalls. Because of the high in demand for processed potatoes, imported supplies that came from genetically modified crops are growing thus giving a dangerous substitute to the already unhealthy processed potatoes that are being served for the consumers, who are on the other hand are already looking for healthier alternatives for their daily food and snacks. More and more food consumers nowadays are educated in terms of healthy alternatives, and study says that the new generations are willing to pay more for healthier alternatives. Because of this, providing a respective amount of healthy options for the potato lover and health conscious consumers is a good leverage in the food business, in addition to that is the unique preparation from creative ideas. Name of the Enterprise The upcoming healthy and good potato serving company will be named “Potato Project”. The aim of Potato Project is to serve deliciously and healthy potatoes where consumers can select from a respective choice of potato servings and create their own potato project from several choices of sauce and mouthwatering add-ons. The “Potato Project” name itself can easily ring a bell and tell anyone that it's all about doing your own potato project. POTATO PROJECT Page 2 Descriptive Definition of the Project Potato Project will be serving delicious and healthy potato dishes. The menu will consist mostly of unprocessed potatoes as the main dish instead of being just the side, plus herbs, spices, sauce and natural condiments with a generous amount of mouthwatering selection of toppings and add-ons. The process in a customer order will be: A) Choose your own potato preparation from a basic choice of Potato Strips (Potato Fries), Potato Mojos, Baked Potato, and Mashed Potato which are cooked with herbs and spices as secret recipe and prepared by Potato Project itself from fresh potatoes. B) Top your own choices of mouthwatering meat add-ons. Cc) Choose the sauce that will complement your potato dish. D) Additional sidings will be available as options. The main raw ingredients including potatoes and other vegetables will be trucked from Benguet Trading Post on wholesale basis located at Kilometer 5, La Trinidad, Benguet. This is to further support local farmers in the north while getting the best possible wholesale cost of raw ingredients. Because livestock’s are more sufficient in the central regions, the toppings or meat products like POTATO PROJECT Page 5 bacon, ham, ground beef, sausage and other meat toppings will be ordered from Pampanga's best processing plant located at Brgy. Dela Paz Norte, San Fernando, Pampanga. Initially Potato Project will open its first branch which will be located in the University Belt area. Once the first branch is settled and running smoothly, Potato Project will branch out to areas that include the Central Business Districts using the same proven system that worked from the first branch. At a certain point, franchising will be considered as another option for expanding the company. Project’s Short-Range Goal 1) To train employees in terms of proper food handling and preparations. 2) To train employees in introducing sauce, herbs, spices and add-ons combination that will surely complement to customers. 3) To introduce the food product around the University Belt area as a healthy main dish. 4) To increase sales as the company gain popularity with the students and locals. 5) To expand by opening new branches in nearby areas. Project’s Long-Range Goal 1) To expand the potato menu choices. 2) To build own company storage for raw ingredients. 3) To branch out to Central Business Districts across the country. POTATO PROJECT Page 6 4) To be the leading potato serving food business in the country. 5) To open for franchising. Feasibility Criteria A) Market Feasibility The market study of Potato Project is based on information gathering which includes research, survey and interviews. And because raw ingredients will be coming directly from the supply location, the cost of purchased ingredients will be much lower which will make the product price very competitive. Tarpaulins and posters will be used as advertisement media, furthermore an official website will be launched together with the help of social media including Facebook, Twitter, Tumblr, Instagram and the use of message boards and forums used in the area. B S Technical Feasibility Considering that the food products will be freshly prepared and cooked from fresh potatoes instead of processed and frozen ones, it will be a healthier treat for those who want or crave for potato dishes. A study shows that the new generations of today are also opting for healthier food and snacks and are even willing to pay more for a healthier alternative. This gives Potato Project a better leverage. Major raw ingredients which include potatoes, herbs and spices will be trucked directly from Benguet to ensure freshness and cost effectiveness. Meat products will be ordered directly from the plant in POTATO PROJECT Page 7 Projected Time Table Table 1.1 ACTIVITIES JUNE JULY AUG SEPT OCT NOV DEC JAN Conducting of il research and surve Planning an allocating of fund Securing and application of licenses, permits, etc. Canvassing of needed materials Purchasing all the necessary materials Rolling store construction Hiring, orientation and training personnel/ workers Advertising period Start of operation POTATO PROJECT Page 10 Mode of Financing The projected capital needed for Potato Project is 1,000,000. The initial capital should be able to cover all necessary expenses with a good amount of excess as emergency funds. The four partners, Abigail Ramos, Charlene Malimban, Jonas Adriel De Galicia and Renz Arabit will contribute the amount of 250,000 each, equaling a total of 1,000,000 in cash as initial capital. Capital Acquisition Table 1.2 Abigail Ramos 250,000 Charlene Malimban 250,000 Jonas Adriel De Galicia 250,000 Renz Arabit 250,000 Total 1,000,000 POTATO PROJECT Page 11 Investment Cost Table 1.3 Initial Investment (Pre-operating) Cost (PHP) Prepaid Expenses (Security Deposit) 54,550.00 Inventory 81,423.00 Deferred Tax Asset(Input Vat) 72,570.00 Leasehold Improvements 160,714.00 Furniture and Fixture 61,491.00 Machineries and Equipment 70,446.00 Storage Equipment 44,241.00 Vehicles 267,857.00 TOTAL 813,293.00 Less: Capital 1,000,000.00 CASH 186,707.00 POTATO PROJECT Page 12 TARGET MARKET Because of the growing affluent middle class and higher purchasing power, the Filipino consumers’ tastes have change toward more unique and high-end brand concepts. They are now more open to new concepts, different cultures as well as different cuisines. The changing lifestyle of the average Filipino with an increasing emphasis on convenience points to further growth potential. The Philippines, which continues to urbanize, has a large and rapidly growing young population — a big market for branded foods and modern retail channels. These factors will allow Potato Project to penetrate various markets. And also, teens and adults can enjoy our food without guilt as we make healthy, fresh foods daily. The company’s main target market is the students in University Belt. ¢ Students — as parents give more money to kids and students for allowance, students now have the capacity to choose and ultimately buy foods they like such as fast food or snacks, which may include fries, ice cream, etc. Our target customers are from University of the East (UE). DATA GATHERING PROCEDURE We used different methods and techniques in gathering necessary information to support the study: * Survey The proponents conducted survey among 100 respondents to get their opinion regarding potato dishes business. These 100 respondents were come from the present estimated total population of the University of the East ( UE) POTATO PROJECT Page 15 which are closer to the location of the company and the researchers used the Slovin's formula to get the sampling population. The survey was distributed among all the students of the people near the store. It was used to let the researchers know the respondent's perception and preference regarding the proposed business. * Slovin’s Formula The proponents used the Slovin’s Formula to determine the needed number of respondents: Formula: Where: n = number of needed respondents N = is the total number of people who qualify in the area of study e = margin of error which is 10% Solutions: n= 24,404 1 + (24,404)(0.10)* n= 99.86 n = 100 respondents POTATO PROJECT Page 16 * Sampling Techniques The group used the random sampling to gather information from the target market. Surveys and interviews are conducted to further the people’s demand regarding crepe products by using a specific number of respondents. ¢ Survey Questionnaire In this process, we find it very easy to have a reliable study specifically in accessing and gathering pertinent data about customer's taste and preferences when it comes to crepe products. Using the checklist format, the questions are made to get the personal choice/perception of the respondents and we will be able to determine the demand of the products. The group provided 100 survey questionnaires which are all in English language. POTATO PROJECT Page 17 2.4. What type of potato dishes do you usually prefer? Potato strips (potato fries) Potato mojos Baked potato Mashed Potato 2.5. Where do you usually purchase potato dishes? Potato Corner Potato Madness Potato Giant None of these 2.6. Are you willing to eat potato dishes with Toppings, Sauces and Add-ons? Willing Not willing (proceed to question 2.7) 2.6.1. If you are willing, what toppings do you prefer the most? (Choose only one) Bacon bits Ham bits Ground beef Sliced sausages If other, please specify: 2.6.2. Sauces: (Choose only one) Tomato Cream Barbeque Cheese Gravy If other, please specify: 2.6.3. Add-ons: (Choose only one) Eggs Mushrooms Bell Peppers Veggies Plain 2.7. How much do you usually spend for potato dishes? 201 and above 151 — 200 101 — 150 76 — 100 51-75 50 and below 2.8. How do you want us to reach you? POTATO PROJECT Page 20 Flyers Posters Tarpaulin Social Media ¢ Interview We interviewed relevant people in order to answer questions in addition to information gathered by survey questionnaire. The group interviewed personnel's of some establishments along Gastambide Street to get the information needed in supply analysis and competitor's analysis. We also interviewed some establishments at near the universities to determine the rental payments and the layout of the store. ® Search of Internet and Books We used the information from different secondary data references Arellano University library and browse the internet as the source of information of the researchers in order to collect information about the business, the location of the business, the total population of the target market location and other information that can help the study. Food is a basic necessity of life. Food service industry remains in high demand because of its genre. It is an industry which deals with preparing food products/items like restaurants and fast foods. Restaurants are distinct from fast foods that it offers large menus including a variety of cuisine and the customers may eat it inside the premise. While fast foods are meant for same services except that it sell quick and inexpensive take-out food. Food industry has flourished very well in the Philippines since Filipinos love to eat. Attracting a huge crowd to restaurants and fast foods require more than POTATO PROJECT Page 21 just good food. Though important, good food is only a part of the total dining experience. The proper atmosphere can make the food, service and whole dining experience seem better. For that reason a restaurant or a fast food must take care of the following to please its customers. This includes checking the cleanliness of the place and freshness of the food, guarded premises, ambiance, building design and lighting (Arboleda, 2010). * Mapping The target market of the study covered Gastambide St., Sampaloc, Manila which is at the University Belt where there are universities near. The estimated population for year 2016 is 24,404. It is computed based on the annual growth rate of 3% from the percentage annual increase in population. Figure 2.1 POTATO PROJECT Page 22 2.2. How often do you buy potato dishes? Table 2.5 Question#2.2 Statistics ANSWER FREQUENCY PERCENTAGE Once 22 26.50% Twice 49 59.04% Thrice 12 14.46% Total 83 100% Figure 2.3 Question#2.2 Graph % m Once = Twice | Thrice The graph shows the percentage of the respondents how often they're to buy potato dishes in a week. 27% or 22 out of 83 answered “once”. While 59% or 49 out of 83 answered “twice” and only 14% or 12 answered “thrice”. POTATO PROJECT Page 25 2.3. How many servings of potato dishes do you usually buy? Table 2.6 Question#2.3 Statistics ANSWER FREQUENCY PERCENTAGE One (1) serving 49 59.04% Two (2) servings 29 34.94% Three (3) servings 5 6.02% Total 83 100% Figure 2.4 Question#2.3 Graph @ One (1) serving ™ Two (2) servings ™@ Three (3) serving The graph shows the percentage of the respondents’ on how they're usually bought. The graph shows the percentage of the respondents how many servings of potato dishes that they're usually buy 59% or 49 out of 83 answered only “one serving”. While 35% or 29 out of 83 answered “two servings” and only 6% or 5 answered “three servings”. POTATO PROJECT Page 26 2.4. What type of potato dishes do you usually prefer? Table 2.7 Question#2.4 Statistics ANSWER FREQUENCY PERCENTAGE Potato strips (potato fries) 57 68.67% Potato mojos 12 14.46% Baked potato 4 4.82% Mashed potato 10 12.05% Total 83 100% Figure 2.5 Question#2.4 Graph @ Potato strips (potato fries) @ Potato Mojos ™ Baked Potato ™ Mashed Potato The graph shows the percentage of the respondents on what type of potato dishes they usually prefer. 69% or 57 out of 83 answered “Potato Strips”. 14% or 12 out 83 of answered “Potato Mojos”. 5% or 4 out of 83 answered “Baked Potato”. 12% or 10 out of 83 answered “Mashed Potato”. POTATO PROJECT Page 27 business are those who are fond of eating potato dishes with toppings, sauces, and add-ons 2.6.1. Toppings: Table 2.10 Question#2.6.1. Statistics ANSWER FREQUENCY PERCENTAGE Bacon bits 30 32.26% Ham bits 14 15.05% Ground beef 37 39.78% Sliced sausages 10 10.75% Others 2 2.15% Total 93 100% Figure 2.8 Question#2.6.1. Graph Oy ™ Bacon bits @ Ham bits ™ Ground beef ™ Sliced sausages ™ Others The graph shows the percentage of the respondents on what type of toppings for potato dishes they usually prefer. 32% or 30 out of 93 answered “Bacon Bits”. 15% or 14 out 93 of answered “Ham Bits”. 40% or 37 out of 93 POTATO PROJECT Page 30 answered “Ground Beef". 11% or 10 out of 93 answered “Sliced Sausages” 2% or 2 out of 93 answered “others”. 2.6.2. Sauces: Table 2.11 Question#2.6.2. Statistics ANSWER FREQUENCY PERCENTAGE Tomato 4 4.30% Cream 6 6.45% Barbeque 25 26.88% Cheese 41 44.09% Gravy 14 15.05% Others 3 3.23% Total 93 100% Figure 2.9 Question#2.6.2 Graph = Tomato =Cream ™ Barbequ e ™ Cheese m Gravy =| Others The graph shows the percentage of the respondents on what type of sauces for potato dishes they usually prefer. 4% or 4 out of 93 answered “Tomato”. 6% or 6 out 93 of answered “Cream”. 27% or 25 out of 93 answered POTATO PROJECT Page 31 “Barbeque”. 44% or 41 out of 93 answered “Cheese”. answered “Gravy”. And 3% or 3 out of 93 answered “others”. 15% 14 out of 93 2.6.3. Add-ons: Table 2.12 Question#2.6.3. Statistics ANSWER FREQUENCY PERCENTAGE Eggs 29 31.18% Mushrooms 25 26.88% Bell Peppers 9 9.67% Veggies 13 13.98% Plain 17 18.28% Total 100 100% Figure 2.10 Question#2.6.3. Graph % mEggs ™ Mushrooms ™ Bell Peppers m Veggies m@Plain The graph shows the percentage of the respondents on what type of add- ons for potato dishes they usually prefer. 31% or 29 out of 93 answered “Eggs”. 27% or 25 out 93 of answered “Mushrooms”. 10% or 9 out of 93 answered “Bell POTATO PROJECT Page 32 The graph shows the percentage of the respondents on how much they usually spend for potato dishes. 27% or 27 out of 100 answered “Flyers”. 3% or 3 out 100 of answered “Posters”. 32% or 32 out of 100 answered “Tarpaulin”. 38% or 38 out of 100 answered “Social Media”. DEMAND AND SUPPLY ANALYSIS Historical Analysis The target market size of the business is composed of the population of the all students in University of the East (UE) near Gastambide Street that are assumed by the partners to be potential customers of the business. Table 2.15 Historical Demand Year Number of Target Market Increase (Decrease) % 2012 21,683 - 2013 22,333 3% 2014 23,003 3% 2015 23,693 3% 2016 24,404 3% Table 2.15 shows the target population of students in University of the East which is near the Gastambide Street from year 2012 up to present year. This shows the number of the population in annual basis. There is a 3% increase yearly. POTATO PROJECT Page 35 Table 2.16 Year Total Demand Total Demand Total Demand Ae Be cre 2012 17,997 1,353,080 1,967,107 2013 18,537 1,393,672 2,026,120 2014 19,093 1,435,482 2,086,904 2015 19,666 1,478,546 2,149,511 2016 20,256 1,522,902 2,213,996 Historical Demand (Per Servings) *Number of Students who buy Potato Dishes ** Number of Students who buy Potato Dishes x Frequency of Buying *=*Number of Student who buy Potato Dishes x Frequency of Buying x Number of servings The total demand (A) is the number of students who buy potato dishes. Total Demand (B) stands for number of students who buy Potato Dishes multiply to Frequency of Buying. And Total Demand (C) stands for student who buy Potato Dishes multiply to frequency of buying multiply number of servings. Table 2.17 Statistical Straight Line Year Y x x? XY 2012 1,967,107 1 1 1,967,107 2013 2,026,120 2 4 4,052,240 2014 2,086,904 3 9 6,260,712 2015 2,149,511 4 16 8,598,044 2016 2,213,996 5 25 11,069,980 Total: 10,443,638 15 55 31,968,083 POTATO PROJECT Page 36 To get the projected demand, the researchers used the statistical straight line table and apply it to the following formula below. Where: YC = Projected Demand B = Growth of Demand every year X = No. of Years A= Quantity of Demand Formula: B=N (YXY) - YX(Y) N(X’) — (X)? B= 5 (2,984,921) — 15 (954,727) 5 (55) — (15)? B= 14,924,605 — 14,320,905 275 — 225 B= 603,700 50 A= SY-B(ZX) N A= 10,443,638 — 61,717(15 5 = 10.443.638- 925.755 5 = 9,517,883 5 A= 1,903,57 POTATO PROJECT Page 37 B=N (5XY)- 5X(Y) “NOC — 00? B= 5 (3,022,131) — 15 (969,761) 5 (55) — (15)? B= 15,110,655 — 14,546,415 275 — 225 B= 564,240 50 A= SY-B(ZX) N A= 969,761 — 11,285(15) 5 = 969,.761— 169,275 5 = 800,486 5 POTATO PROJECT Page 40 Projected Supply Year A + B * x YC 2017 160,097 + 11,285 : 6 227,807 2018 160,097 + 11,285 * 7 239,092 2019 160,097 + 11,285 * 8 250,377 2020 160,097 + 11,285 * 9 261,662 2021 160,097 + 11,285 * 10 272,947 YC=BX+A Where: YC = Demand for the year Y = Historical Demand X= Year To compute the Projected Supply for years 2017-2021, the researchers used the YC = BX + A, we multiplied the growth of supply every year which is 11,285 by the number of the following years in addition with the quantity of supply for the next following years which is 160,097. Table 2.22 Projected Demand and Supply Gap Year Projected Projected Demand Gap % Demand Supply 2017 2,273,879 227,807 2,046,072 89.98% 2018 2,335,596 239,092 2,096,504 89.76% 2019 2,397,313 250,377 2,146,936 89.56% 2020 2,459,030 261,662 2,197,368 89.36% 2021 2,520,747 272,947 2,247,800 89.17% POTATO PROJECT Page 41 The table shows the demand and supply analysis. The demand gap in year 2017 is 2,046,072. In 2018, the gap will be 2,096,504 in the following year the gap will be 2,146,936. In year 2020 there will be a shortage of 2,197,368 and lastly, in year 2021 the demand gap is 2,247,800. Table 2.23 2016 Market Share Competitors Quantity of Market Share Servings Potato Corner — 46% 99,906 4.51% Potato Giant — 36% 78,187 3.53% Potato Madness — 18% 39,094 1.77% Demand Gap 1,996,809* 90.19% Total 2,213,996 100% *Demand Gap = 2016 Demand — 2016 Supply Figure 2.13 Market Share 2016 53% 77% @ Potato Corner § Potato Giant lm@ Potato Madness lm Demand Gap POTATO PROJECT Page 42 Pricing Strategies We used cost plus strategy in order to set the price of our products. The computation would be: Purchase Cost + Operating Cost+ Mark-Up=Selling Cost Product The products of Potato Project are as follow: Potato Strips, Potato Mojos, Baked Potato, and Mashed Potato. These potatoes are with toppings, sauces, and add-ons. The products will be cooked in its traditional way in able to maintain the original taste of these foods. But, presentation will be something different. POTATO PROJECT Page 45 Chapter 3 Organization and Management Study Management is one of the important aspects in establishing a business. It is the performance of conceiving and achieving desired results by means of group effort consisting of utilizing human talents and resources. Therefore, management is considered as the force that runs an enterprise and is responsible for its success or failure. The overall implementation plan is discussed in the organization and management study. This aspect includes a study of the officers and key personnel, basic consideration in forming the organization, form of ownership, organizational chart and project schedule. The objective of the management aspect of a feasibility study is to determine the option effectiveness of the organizational setup and the qualifications of the individuals who will make up the organization. This aspect will determine the successful realization of the project study. Form of Business The owners of Project Potato decided to form a partnership because of its advantages including the ease of organization -- simply creating the articles of partnership; combined knowledge and skills -- using the strengths of each partner for better business decision-making; greater availability of financing; and very little government regulations. POTATO PROJECT Page 46 It is to be registered with the Securities and Exchange Commission (SEC) for the contract called articles of co-partnership. By the contract of partnership, two or more persons bind themselves to contribute money, property and industry with the intension of dividing the profits among themselves. Project Potato as partnership will be registered with the different government agencies as Securities and Exchange Commission (SEC), Department of Trade and Industry (DTI), Business Permit and Licensing Office of Paranaque (BPLO), Bureau of Internal Revenue (BIR) and Social Security System (SSS). The project will have its full blast after it has complied with all the necessary documents and technical requirements needed to operate and engage in this type of business. The pre-operating capital for this business will be P250,000 each partners total of P1,000,000. Pros and Cons of Partnership When several persons to pool their resources in a business venture or a partnership, they will have to carefully evaluate advantages of partnership. Advantages 1. Easily formed. A partnership may be created by an oral or written contract between two or more persons or may be implied by their actions. 2. A greater amount of capital may be raised in partnership than in sole proprietorship. 3. Relative freedom and flexibility in decision making. Decisions are made by the managing partner and changes in the enterprise may be effected POTATO PROJECT Page 47 Job Analysis 1. Store Manager Responsible for the overall supervision of all other managers and subordinates. Responsible for the administration of all the management functions: planning, organizing, controlling and directing. Handles the implementation of the policies, rules and regulations throughout the organization. Monitors the performance of his subordinates. Responsible for the overall ongoing production operations including inventory control, scheduling, documentation, equipment maintenance, calibration, shipping, and Quality Control/Food Safety Inspection. 2. Kitchen Stewards Ensures the quality of products and all the food standards are met Responsible for the cleanliness of all the kitchen tools and equipment. Ensures the maximum level of performance of the machines and equipment. Minimizes the wastage of raw materials in production Responsible for the safety of food and elimination of hazardous elements 3. Cahier Greet customers politely at all times. Performs the seven key steps in every transaction with the customers. Ensures good customer relations by giving friendly service to them. POTATO PROJECT Page 50 Handles money/sales properly. Eliminate loss of the store by accurately receiving payment and giving of change. 4. Dining/Utility Crew Assist and serve customers by choosing orders and meeting customer needs. Keeping the store tidy and clean, this includes hovering and mopping. Responsible dealing with customer complaints. Responsibility for security within the store and being the on the lookout for shoplifters. Receiving and storing the delivery of large amounts of stock. Keeping up to date with special promotions and putting up displays. 5. Driver Deliver raw materials securely and in time from the supplier to the company’s storage. Ensure that vehicle is kept perfect and clean at all times by washing both the inside and outside parts of the vehicle. Ensure timely conveyance of staff and materials to and from places instructed by supervisor or the manager. Perform periodic maintenance on vehicles such as changing batteries and motor oil at appropriate time, as well as refuelling the vehicle. POTATO PROJECT Page 51 Table 3.1 Labor Requirements Number of Daily Monthly Annual Position Employees | Salary Salary Salary Needed 1. Store Manager* 1 550 P13,200 P158,400 2. Kitchen Stewards 1 491 P 11,784 | © 141,408 3. Cashier 1 491 P 11,784 | 141,408 4. Driver** 1 500 P 5,000 P 60,000 5. Dining/Utility Crew 1 491 P 11,784 | © 141,408 Total 5 P642,224 * The Store Manager will also be in charged for the bookkeeping. “The Driver will render his service every Wednesday and Saturday from storage to store. Also, from supplier's to storage every end of the month. POTATO PROJECT Page 52 maternity, old age and death, or other such contingencies not stated but will result in loss of income or results to a financial burden. When an employee gets sick, SSS will reimburse them with their equivalent daily salary multiplied by the number of the days absent. When a female member gives birth, SSS gives the employee 2 months’ worth of salary to compensate for the time she will be off work due to childbirth. The SSS also serves as a pension plan for its members as SSS return members’ monthly contributions after they retire from work. The amount of SSS monthly contribution is determined from the actual monthly salary an employee receives. 30% of total monthly contribution is deducted from an employee's salary, while 70% is subsidized by the employer. Philippine Health Insurance (PhilHealth) - The Philippine Health Insurance Corporation is the medical insurance company of the Philippines. All employees are required to be contributors of this service (Republic Act 7875). Members are givenhealth and hospitalization subsidies should they or a dependent be hospitalized. Monthly contributors are based on actual employee monthly salaries and the amount of employee contribution is matched equally by the employer. Home Development Mutual Fund (Pag-IBIG Fund) - Employers are also required to contribute, on behalf of their employees, to the Home Development Mutual Fund (Republic Act 7835). This company provides the lowest interest housing and land acquisition loan to its members that are payable up to 30 years. This gives every Filipino worker an opportunity to own a house in easy-payment plans that can directly be deducted from their monthly wages. POTATO PROJECT Page 55 Meal and Rest Periods - According to Article 83 of the Labor Code of the Philippines, employees are entitled to one (1) hour break from meals on an eight- hour work day. Employees are also entitled to adequate rest periods in the morning and afternoon, of short duration, that will be counted as hours worked. These rest periods normally last for 15 minutes and can be used by employees as coffee or snack breaks. Overtime Pay and Holiday/Rest Day Pay — Under Article 87, an employee who renders over eight (8) hours of service per day shall give an overtime pay which is equivalent to his regular hourly wage plus at least twenty-five percent (25%) thereof. Under Article 93, if an employee is added to work on their scheduled rest day or non-working holiday, the employee shall be paid an additional compensation of at least thirty percent (30%) of his regular wage. Maternity Leave Maternity leave benefits as provided by law shall be given to every employee entitled thereto, upon complying with all the requirements of the company and upon proper verification by the Company's duly authorized representatives. Hospitalization Plan Regular employees shall be provided with hospitalization plan with a respectable Health Maintenance Organization under terms and conditions to be solely decided by the company. POTATO PROJECT Page 56 Accident Insurance Regular employees are enrolled by the Company under a reputable Insurance Organization. Any accident incurred whether work-related or not shall be compensated by this Insurance firm. This plan shall be on employer-employee participating basis. Retirement Benefits Retirement pay benefits as provided by law shall be given to all qualify employees upon their retirement from the company. Bereavement Assistance If an immediate family member of a regular employee passed away, he shall be given a financial assistance of P5000.00 upon complying with all the requirements of the company and verification by its authorized representative. Other Incentives and Awards Awards and certificates of recognition, such as Crew of the Month, Best in Attendance, Most Punctual Employee, Model Employee of the Year and the like shall be given the discretion of management. POTATO PROJECT Page 57 ¢ Absence without official leave for three (3) or more ¢ Violation of any other company policy ¢ Violation of safety and /or security rules Failure to abide by this policy may result on corrective action, up to and including termination of employment. The type of corrective action will depend upon the severity of the offense made over and above any factors presented. For Major Offense: The employee will be subject to investigation and if proven guilty of the accusation he will be terminated together with the filing of charges against the employee under the process of law. For Minor Offense: 1st violation — verbal warning 2nd violation — written warning 3rd violation — three days suspension 4th violation — five days suspension 5th violation — termination of employments b) Attendance and Punctuality ¢ Reporting for work late: 1 - 3 late (Maximum of 15 minutes of each late) = 1st violation 4-5 late (Maximum of 15 minutes of each late) = 2nd violation POTATO PROJECT Page 60 6 - 8 late (Maximum of 15 minutes of each late) = 3rd violation 8 - 10 late (Maximum of 15 minutes of each late) = 4th violation More than 10 late = 5th violation *employees are provided of 10 minutes grace period Once an employee commits a late for more than 180 minutes of late, he/she has to file a report and its sanction will be equivalent to 3rd violation. ¢ Failing to provide advance notice of 6 hours to the store manager of one’s inability to report for work ¢ Failure to provide notice to the manager of one’s inability to report for work ¢ Failure to come back to work from a break on time ¢ Going on under time without the authorization of the manager ¢ Failure to clock in and out during the shift ¢ Tampering with the time cards (Major Offense) ¢ Absence without official leave Failure to abide by this policy may result on corrective action, up to and including termination of employment. The type of corrective action will depend upon the severity of the offense made over and above any factors presented. 1st violation — verbal warning 2nd violation — written warning 3rd violation — three days suspension 4th violation — five days suspension POTATO PROJECT Page 61 5th violation — termination of employments For Major Offense: The employee will be subject to investigation and if proven guilty of the accusation he will be terminated together with the filing of charges against the employee under the process of law. c) Professional Conduct All explorers represent the Donut the Explorer brand and the expectation is that all partners behave in a professional and appropriate manner at all times while at work and during company sponsored events, failure to abide by this policy may result on corrective action, up to and including termination of employment. Some examples of failure to follow this policy include but are not limited to: ¢ Reporting for work inappropriately dressed or with unacceptable appearance (not adhering to dress code standards) ¢ Conducting personal business during work hours which include company facilities and equipment for personal purposes ¢ Selling or soliciting at company locations during work areas or distributing or posting material in work areas or company locations ¢ Selling of consumer goods or services to fellow partners during working hours ¢ Smoking in a “no smoking” or prohibited areas POTATO PROJECT Page 62 ¢ Ath violation — 3 days suspension ¢ 5th violation — dismissal Internal Controls The Potato Project will employ the following systems of internal controls which will maintain an environment that encourages incorruptibility and deter fraudulent activities by management and employees. * Management and Personnel Integrity Management integrity, or the moral character of persons of authority, sets the overall tone for the organization. Management integrity is communicated to employees through employee handbooks and procedural manuals. In addition to communicating management integrity, policy manuals will facilitate training to employees. Management's enforcement of policies will be the major indicator of our company’s commitment to a successful internal control system. * Competent Personnel The Potato Project will recruit and retain competent personnel that indicate management's intent to properly record accounting transactions. In addition, the retention of employees increases the comparability of financial records from year to year. Furthermore, an auditor's confidence in the underlying accounting records increases as he observes the reliability of our company’s personnel. This in turn will reduce an auditor's assessment of the risk of a material misstatement our company’s financial statements. POTATO PROJECT Page 65 ® Segregation of Duties Segregation of duties is critical to effective internal control because it reduces the risk of mistakes and inappropriate actions. Our company’s system of internal control will separate authoritative, accounting and custodial functions. For example, one employee opens incoming mail; a second employee prepares deposit slips for daily receipts, while a third employee deposits receipts in the bank. * Records Maintenance The Potato Project's managing partner will maintain appropriate records to ensure that proper documentation exists for each business transaction. Records management will involve storing, safeguarding and eventually destroying tangible or electronic records. Also, appropriate back-up deters an employee or management from creating phantom transactions in the underlying accounting records. *® Safeguards The Potato Project's managing partner will employ safeguards to prevent unauthorized personnel from accessing valuable company assets. Safeguards are physical, such as locks on doors, or intangible, such as computer software passwords will be employed. Safeguards are a necessary feature of our company's internal control system. This will ensure protection of inventory, cash and supplies. Other assets such blank checks, company letterheads and POTATO PROJECT Page 66 signature stamps will be handled by designated personnel and kept on a secured locker at the company’s office. Table 3.3 Pre-Operating Expenses Description Cost Business Name Reservation 40.00 SEC 2,665.00 CTC 500.00 Barangay Clearance 1,300.00 Mayor's Permit Fee 11,583.00 BIR 4,730.00 TOTAL P20,818.00 POTATO PROJECT Page 67 Product Description: * Baked Potato Strips (Php 120.00) Similar to French fries but baked in olive oil instead of deep fried in saturated fats. Plus our Baked Potato Strips are seasoned with our secret herbs & spices to give you a mouthwatering taste without the health hazard. *® Potato Mojos (Php 135.00) Your all-time favorite mojos, now served healthier and tastier than ever! It will surely satisfy your cravings for potatoes. ¢ Baked Potato (Php 140.00) This all American potato cuisine will surely indulge your appetite. Taste this special potato preparation to stop wondering what a baked potato is. Try and know why Americans love baked potatoes. ¢ Mashed Potato (Php 125.00) Not your typical fast-food mashed potatoes. Want to try mashed potatoes done the right way? Potato Project's mashed potato is your best choice not only that it's healthily prepared but embellished with our special herbs & spices. POTATO PROJECT Page 70 Procedures: ¢ Baked Potato Strips Ingredients: 2 Large Potatoes (Sliced in large strips) 3 tablespoon of Olive Oil Salt and Pepper Ys teaspoon Garlic Powder Ys teaspoon Onion Powder Ye teaspoon Dried Parsley Preparations: 1. 2. 3. Pre-heat oven to 220 degrees Celsius. Put sliced potato strips into freezer bag. Add 3 tablespoon of olive oil. Finally, put all seasonings, herbs & spices. Seal off freezer bag and shake well to make sure all potatoes are covered with all the mixes. Pour potatoes into aluminum foil. Baked for 20 minutes. POTATO PROJECT Page 71 @ Potato Mojos Ingredients: 2 Large Potatoes (Sliced in flat rounds) 3 tablespoon of Olive Oil Salt and Pepper Ys teaspoon Garlic Powder Ys teaspoon minced celery Ys teaspoon Onion Powder Ye teaspoon Dried Parsley Preparations: 1. Pre-heat oven to 220 degrees Celsius. 2. Put sliced potato mojos into freezer bag. 3. Add 3 tablespoon of olive oil. 4. Finally, put all seasonings, herbs & spices. 5. Seal off freezer bag and shake well to make sure all potatoes are covered with all the mixes. 6. Pour potatoes into aluminum foil. 7. Baked for 23 minutes. POTATO PROJECT Page 72 Production Processes Figure 4.1 POTATO PROJECT Page 75 OO OO OO O _\ U 2 5 e > 2 o a OOOO0O0O Bar Table POTATO PROJECT Page 76 The store layout features a long bar table for the casual on-the-go customers. Comfortable couches are also available for groups who are looking for comfy place for a warm conversation while eating. A corner couch is also present for a small group. The service bar and counter located on the right side features an eye-catching culinary design that showcases the menu and all menu choices. The bathroom is in the upper left corner of the store layout and the kitchen where the meats and potatoes are stocked is in the upper right corner of the layout. POTATO PROJECT Page 77 3. Meat Toppings Selected Meat Toppings will be garnished to customer's choice of dish. 4. Sauce and Condiments The food server will ask the customer for the customer's choice of sauce or condiments and might also suggest for the best possible combination. 5. Add-on Toppings - Optional Customer will choose add-on toppings for his/her dish.Several add- ons are displayed as customer's choice for the potato dish. 6. Payment As a final step customer will pay accordingly for his/her order and opt for dine-in or take-out procedure. POTATO PROJECT Page 80 Procurement Process Figure 4.4 Raw ingredients are already predefined for Potato Project Meat ingredients are Vegetable, herbs and ordered directly from spices are purchased suppliers in and trucked from Pampanga’s Best Benguet Payment is made upon purchase Raw ingredients will be trucked and delivered to storage facility Raw ingredients will be inspected prior to actual storage POTATO PROJECT Page 81 The procurement process is very straight forward as the raw ingredients and suppliers are already predefined for the reason that the menus for the store are already defined. All ingredients and suppliers are local. It is possible to have several suppliers from specific area of purchase once demand rises. Figure 4.5 Major raw ingredients which include potatoes, herbs and spices will be trucked directly from suppliers in Trading Post, Kilometer 5, Benguet to ensure freshness and cost effectiveness thenit will be inspected at the storage facility prior to storage room. Also, meat products will be ordered directly from the plant in Pampanga’s Best in Pampanga to ensure the best quality in meat products. Condiments and sauces will be ordered directly from producers. All these raw materials will be ordered from their respective suppliers/ producers then will be trucked to the storage facility and will be delivered to the Potato Project Restaurant itself. POTATO PROJECT Page 82 * Commercial Microwave Oven ¢ Commercial Convection Oven POTATO PROJECT Page 85 POTATO PROJECT Page 86 ¢ Point Of Sale (Cash Register) ¢ Deep Frying Basket A ia A» ¢ Extra Large Chopping Board POTATO PROJECT Page 87 ¢ Cutlery Set Machineries and Equipments Costing Page 90 POTATO PROJECT Table 4.5 Unit Price TOTAL Equipments QTY (PHP) (PHP) Knife Set 1set 3,500.00 3,500.00 Kitchen Set 1set 4,000.00 4,000.00 Industrial Cooktop 1pc 6,000.00 6,000.00 Commercial Microwave Oven 1pc 8,000.00 8,000.00 Commercial Convection Oven 1pc 6,500.00 6,500.00 Commercial Refrigerator 1pc 18,000.00 18,000.00 Point Of Sale 1pc 13,000.00 13,000.00 Deep Frying Basket 2 pcs. 1,600.00 3,200.00 Extra Large Chopping Board 1pc 2,000.00 2,000.00 Weighing Scale 1pc 800.00 800.00 Sink 1pc 3,000.00 3,000.00 Dinner Plate set 30 sets 120.00 3,600.00 Cutlery Set 6 sets Janitorial and Sanitation 1set Equipments TOTAL Storage Equipments POTATO PROJECT Page 91 * Frozen Meat Rack ¢ Vegetable, Herb and Spice Rack Se] POTATO PROJECT ® Modular Tables POTATO PROJECT Page 95 ¢ Bar Tables Furniture and Fixtures Costing Table 4.7 Unit Price Item Total Furniture and Fixture (PHP) QTY (PHP) Round Bar Chairs 1,005.00 14 pcs.| 14,070.00 Long continuous couch 3,500.00 2 pes. 7,000.00 Corner Couch 3,000.00 1 pe. 3,000.00 Modular Tables 1,800.00 6pcs.| 10,800.00 Bar Tables 2,000.00 2 pes. 4,000.00 Custom-made counter/service bar 30,000.00 1] 30,000.00 TOTAL 68,870.00 Store Supplies Costing POTATO PROJECT Page 96 Table 4.8 Unit Price Item Total Store Supplies (PHP) QTY (PHP) Aluminum Foil 55.00 100 pcs 5,500.00 Paper Towel 40.00 100 roll 4,000.00 Freezer Bag 30.00 100 pack 3,000.00 Paper Bag 1.50 | 1,000pcs. 1,500.00 Dishwashing Liquid 120.00 5 gallons 600.00 TOTAL 14,600.00 Raw Ingredients Costing Table 4.9 QTY | Unit Price (PHP) | TOTAL (PHP) Raw Ingredients Potatoes 283 Kilos 29.00 8,195.31 Bacon 28 Kilos 130.00 3,673.76 Ham 28 Kilos 180.00 5,086.74 Beef 28 Kilos 200.00 5,651.94 Sausage 28 Kilos 220.00 6,217.13 Mushrooms 283 cans 65.00 18,368.79 POTATO PROJECT Page 97