A Business Plan Executive Summary

A Business Plan ? Table of Contents I. Executive Summary………………………………………………………………………1 II. Company Description……………………………………………………………………. 3 III. Description of the Venture……………………………………………………………….. 5 IV. Environmental and Industry Analysis a. Analysis of Political, Economic, Social, Technological, Environmental, and Legal Environment………………………………………………………………………6 b. Analysis of Competition…………………………………………………………10 c. Market Segmentation……………………………………………………………. 10 d. Industry and Market Forecasts…………………………………………………… 12 V. Production/Operations Plan a. Description of the Company’s Operations………………………………………. 14 b.

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Flow of Orders for Goods and or Services………………………………………14 VI. Marketing Plan a. Product…………………………………………………………………………… 16 b. Price……………………………………………………………………………… 18 c. Place……………………………………………………………………………… 19 d. Promotions………………………………………………………………………. 20 VII. Management Team………………………………………………………………………. 21 VIII. Financial Plan a. Assumptions………………………………………………………………….. …. 23 b. Pro-forma Income Statements……………………………………………………24 Appendix…………………………………………………………………………………………33 References………………………………………………………………………………………. ? Executive Summary The group, through their serendipity walk, discovered the huge popularity of chicken products among Filipinos.

This prompted them to create a product that would cater to such demand. As a result, the group will put up a business offering chicken lollipops with different flavors that will be complemented by various sauces. It will be established upon a general partnership with equal ownership among the partners. The business will be named Chicpops, a shortened term for chicken lollipops. It will initially adopt one food cart to be situated in Metropoint Mall. And as such, the business’s target market will range from the upper lower class up to the middles class. The market is interested in affordable products that give them value.

Chicpops will ensure that each customer will receive the value he deserves for his money. Standardization will be incorporated to guarantee that each product is served with the same great quality. In addition, the company will impose an order of processes that will maintain the product’s excellence. Specifically, the products offered by the business are chicken lollipops with flavors of cheese, barbecue, and chili. They will be served with dips that consist of catsup, sweet and sour, catsup-mayo, and garlic-mayo. Each product will have their corresponding markup on cost that will cover operating expenses.

Product promotions will include print ads, free tasting, and flyers. The business will have four divisions – namely marketing, finance, operations, and HR – which will be headed by a General Manager. Furthermore, food cart personnel will be hired to operate the food cart of the business. Last but not the least; the group projects the business to be quite profitable in a period of five years. Company Description The nature of the business will be a product business. It will produce chicken lollipops with three flavours, cheese, chilli, and barbecue.

The idea is to have it in a snack box-like packaging along with three different sauces depending on the customer’s choice. Customers may choose to have catsup, garlic-mayo, or catsup with mayo. The business will be a partnership type of business. In this type of business, general partner will personally be accountable for the liabilities incurred by the partnership. All partners will be capitalist partners and will share the same responsibilities and rights to use the partnership properties of the business. The business was chosen to be a partnership since its founders deem it to be more convenient and ideal.

Also, they believe that at a partnership business, their personal interests will be more taken into consideration. The partners are all students of legal age from Asia Pacific College and are all taking-up Bachelor of Science in Accountancy. All partners will contribute capital for the business. The capital that will be contributed by the partners will be coming from their savings and from the money that they will personally borrow from their parents. The idea of the business originated from the group’s serendipity walk where they have observed the enthusiasm of people to chicken.

Most of the restaurants and stalls that offer chicken as their product have long lines of customers. Also, the group had recognized the natural love of Filipinos for chicken as it appears in almost every Filipino celebrations. As its start-up plan, the founders have intended to put-up a stall that would provide, as said, chicken lollipops in different flavours and with different sauces. The business will begin with a capital of Php. 500, 000. The primary objectives of the business for its first year are to penetrate the market and to increase consumers’ knowledge and awareness about the product through promotions.

It will be located at Metropoint Mall. NameNationalityPercentage Contribution Bautista, NadjlaFilipino20% Gemora, DianneFilipino20% Ramos, RyanFilipino20% Taban, AlvinFilipino20% Tan. JhensenFilipino20% -All partners are general partners Description of the Venture Food cart business is one of the fastest growing businesses in the Philippines today. This type of business requires a small capital and less fixed assets yet generates income well. For this reason, the company engaged in a food cart business offering chicken lollipops as their main product. It will carry the brand name CHICPOPS which is a shortened term for chicken ollipops. From the ordinary fried chicken dish, Chicpops offers chicken lollipops marinated in different flavors, deep fried and matched with a variety of dips. It will be initially distributed in Metropoint Mall. The company plans to make the product available in malls around the Metro within a period of four years after its first year of operations. The company’s target market consists of the upper lower class and the middle class that will range from the kids to the working class. ? Environmental and Industry Analysis Analysis Political Analysis The Philippines is known to be a member of different trade organizations.

It has been long part of World Trade Organization, Association of Southeast Asian Nation (ASEAN) Free Trade Area, and APEC. The Philippines’ membership in the said organizations had increased its potential in trading and business. It has opened up more opportunities as tariffs on imports and quantity restrictions have been lowered for both imports and exports of products. A partnership business in the Philippines is governed by the Securities and Exchange Commission, where policies have to be complied with and procedures have to be undertaken to get a permit to operate.

Partnership businesses in the country are taxed like a corporation. Income is charged with 30% tax remitted to the Bureau of Internal Revenues. The employment is guided by the Labour Code of the Philippines. The Philippines’ current presidency seat belongs to Benigno Aquino III. In his first year as a president, he has made crucial stand regarding certain legislature especially about the Reproductive Health Bill. Some of his appointees, however, were criticized for lack of credentials to hold some offices. These facts are very important to take note as these might affect the business in the future.

Economic Analysis Philippines is a newly industrialized country. Its prices are greatly affected by changes in the world market and the country has high imports. The economy is dependent on service sector provided by overseas Filipino Workers and Business Process Outsourcing. According to the latest report of the National Economic and Development Authority (NEDA), the country’s fiscal position has been improving over the years and this lures more foreign investors in the country. Several policies like the Reformed Value Added Tax (RVAT) Law are implemented to narrow down the budget deficit of the Philippines.

The Banko Sentral ng Pilipinas (BSP) released a data that shows how inflation rate in the country has been on an up-down situation suggesting the instability of the economy. Increase in oil prices for the past years has greatly affected the over-all prices in the country. Consumers look for products that are cheap and yet could highly suit their necessities. The NEDA report, on the other hand, revealed the improvement of the GDP and GNP growth rate in 2010 as compared to last year’s growth rate. The GDP and GNP growth rate in 2010 were 7. 3% and 7. 2% respectively. It was higher by 6. % and 3. 2% respectively than 2009. Social and Cultural Analysis In an article by Ronald Jabal, he described the Filipino consumers as thrifty. He further said that nowadays, Filipinos tend to bring home their unfinished food from the restaurant unlike in the previous years. He also cited that 36% of consumers switch to cheaper brands while 51% reduce quantity of purchases in food and beverage category. In Ariel Stein’s article entitled, Buyer Behavior Trends in the Philippines, he said that Filipino consumer are more deliberate and that impulse buying are rare in the country.

This tells that buyers make sure that every centavo is accounted for and that the products that they will buy will provide more value for lesser amount. The customers’ consumption in the market is vastly affected by the economic situation of the country. As fewer jobs are offered and fewer citizens earn, fewer people also spend. Stein also wrote in his article that due to the high equity difference in the Philippines, social status is also a factor considered by buyers in their consumption. This idea was supported by an article from Communicaid Group Ltd. , which states that Filipinos are status conscious.

Meaning, those products that would project a high social status are often patronized. Furthermore, colonial mentality exists among Filipinos, where consumers believe that everything imported are of high quality against locally produced products. Snack is a huge part of Filipino culture. Several food or products in the market are made special for “merienda”. Kids love to eat after a long and tiring day at school and so a snack box that they could enjoy will really be something appropriate for them. Technological Analysis Majority of the production processes in the Philippines are run by computers and machine.

The production is continuously developed through constant research and developments that are conducted. Most of the companies have well-defined service or product flows to ensure product or service quality. Computer Aided Design and Computer Aided Manufacturing are also utilized to maintain quality and to avoid defects. Global Technology Forum reported that e-commerce is also utilized in the industry as part of its growth. It also said that three to five years from now, e-commerce will become very huge in the business industry in our country.

E-Commerce Law also exists in our constitution to further provide guidelines and protection with the use of electronic commerce in businesses. Advertising and Promotions are also employed through the use of the web. Social networking sites, such as Facebook, Multiply, and Twitter have been used to disseminate information and awareness about the product and the company itself. Mobile Technology has also been part of the business landscape in the country and is also covered by the guidelines set by DTI. Legal Environment Analysis As mentioned earlier, compliance with specific regulations must be done as the business is put-up.

The Department of Trade and Industry, along with Bureau of Food and Drugs, ensures the safety of consumers’ health by conducting necessary sanitary inspections. The DTI also set the price ceiling for the products in the market. The appropriate packaging and distribution of the product is also monitored by the department. The Department of Environment and Natural Resources makes sure that the production process does not harm the country’s environment. They impose regulations regarding proper waste disposals. The Department of Labor and Employment ensures that workers are given with proper compensation.

In the Philippine setting, workers usually work for eight hours. The current minimum wage rate in the country is at Php. 404. Labor employment is further guided by the Labor Code of the Philippines. Every business in the Philippines also needs to register with the Securities and Exchange Commission (SEC). Certain documents, such as Articles of Co-Partnership must be filed at SEC to be able to legalize the business. Along with it comes registration in the city office for tax and business permit. 30% tax rate must be deducted from the company’s EBIT as part of tax liabilities incurred by partnerships in the Philippines. Analysis of Competition

The fried chicken industry is dominated by large fast food chains led by Jollibee, McDonalds, and Kentucky Fried Chicken (KFC). Their fried chickens are offered in various ways and are often accompanied by rice and fries. The companies’ portfolio provides that they usually target children and family that is why their promotions are usually family-oriented. With a very wide market covered, these companies set a very high cost for new entrants and make it harder for new entrants to penetrate the market. The closest product to Chicpops will be KFC’s snack box which includes bite-size chicken fillet with potato fries and gravy sauce.

KFC is offering the snack box for Php. 55. 00. Chicpops will be offering in the market chicken lollipops with three different flavours, cheese, barbecue, and chilli. It will be served in a snack box-like packaging accompanied by a sauce depending on the choice of the customer. Sauces available are catsup-mayo, catsup, sweet and sour, and garlic-mayo. Small Business Trend described that environment has also been considered part of the companies’ strategy in promoting the business. Measuring the carbon footprints and implementing a good e-waste management are among those that businesses consider in their processes and operations.

In response to this trend and as part of the business’ social responsibility, it will be having carton containers for its packaging. Since it was also cited at the same article by Small Business Trend, quality is also playing a huge role in the competition; the business will also get suppliers that will provide fresh chicken meat. In marinating the chicken, flavoring will be standardized to ensure that each lollipop has the same good taste. Sauces will also be prepared in a standardized manner to make sure that it will compliment the chicken’s taste. Market Segmentation

As mentioned earlier, most of the buyers are greatly concerned with the value that they get from the products that they buy. It is very important for a business to know the target market that it would like to capture so that proper actions may be done to obtain it. It is also important so that the business will be guided about the things it would consider in selling the product. Kids The kids will surely enjoy a snack, incorporated with their favourite food, the chicken. Also, the Chichpops are especially innovated for the satisfaction of the kids. It is conceptualized so that the younger segment of the market will surely be captivated.

People on the go A lot of people are very busy and have no time to take a full meal. People, who travel, want food that can easily be eaten and can be taken with them. The customers who constantly visit Metropoint are students, office workers, and travelers who are definitely on-the-go and usually have limited time for eating and thus, the chickpop will definitely suitable for them. Industry and Market Forecast The latest report of Bureau of Agricultural Statistics showed that by 2009, the Philippines have imported a total of 61. 44 thousand metric tons of chicken meat or an increase of 40. 2 percent compare to 2008. The statistics further revealed that the country’s supply of dressed chicken in 2009 was at 827, 033 or 6. 87% higher than the previous year. These show how big the consumption of Filipino is in terms of chicken meat. In Metro Manila, the average retail price of the fully dressed chicken was Php. 127. 15 per kilo or an increase of 8. 2% than 2008. Based on the inflation rate projection of the Banko Sentral ng Pilipinas, prices are expected to get higher and so the average price per kilo of chicken will definitely be affected by it. Fig. 1 Change in price per kilo of chicken meat.

Production/Operations Plan Description of the Company’s Operations The Chicpops Company orders Chicken Lollipops from Magnolia Inc. Then it would be inspected and separated into three sets: for the Cheese Flavor, Chili Flavor, and Barbeque Flavor. After flavored, chickens are then marinated and stored in the chiller for no more than two days. The processed chickens are delivered to the stalls ready for cooking. The cooked chickens are packed in a small carton and served directly to the customers. The total throughput time would be less than five days since the product is best served while the chickens are fresh.

Flow of Orders for Goods and or Services ACTIVITYIMMEDIATE PREDECESSOR(S)TIME (HOURS) A- Ordering-24 B- InspectionA1 C- SeparationB3 D- Cheese FlavoringC} 1 E- Chili FlavoringC F- Barbeque FlavoringC G- ProcessingD, E, F48 H- ServingG. 5 Total Operation Time: 3days 4. 5hours Critical Path: Chickens Fried:15-20/10mins ? Marketing Plan Product The demand for chicken continues to grow every year. According to a news article from worldpoultry. net, the demand for chicken is projected to stretch to 24. 1 million this year from a 16. 5 million demand in 2007.

Such figures demonstrate a 46% surge in demand for four years. The massive growth in demand for chicken in 2011 supports the viability and salability of the product offerings of the business. The business will offer chicken lollipops with 3 different flavors. The flavors will include cheese, barbecue, and chili. It may be availed individually or via a set. The set will contain 5 chicken lollipops of any flavor with 1 choice of sauce. Sauces will include garlic mayo, sweet and sour, ketchup, and ketchup mayo. The brand name of the business will be Chicpops. It is formed by abbreviating the words chicken and lollipop.

It is catchy and easy to remember. In addition, it denotes the product that the company offers in a hip manner. The chicken lollipops together with the chosen sauce will be packaged in boxes. In addition, the sauce will be packed individually in tiny sealed containers. The boxes used for packaging will be made of paper material for environmental purposes. Such undertaking will contribute to the business’ corporate social responsibility. The main product of the business is composed mainly of chicken. Chicken is a good source of protein. It is also rich in niacin, a cancer-protective B vitamin.

In addition vegetable oil will be used in frying the main product. It helps increase good cholesterol and diminishes bad cholesterol. The ingredients that will be used in the production of the chicken lollipop and the various sauces are as follows: IngredientsPrice Raw Chicken Lollipop ?4. 00 per piece Cheese, barbecue, and chili powder ?18. 00 per pack All-purpose flour ?118. 75 per kilo Vegetable Oil ?45. 00 per liter Ketchup ? Mayonaisse ? Sweet & Sour Sauce ? Garlic Bits? Price Cost-based pricing will be adopted by the company. A markup on cost will be applied. Thus, the price will be ? 5 per piece for any flavor and ? 65 per set. Sauce purchased individually will be ? 5 each for any variant. Prices are set at a level sufficient to cover operating expenses. Factors considered in establishing prices are the direct materials, direct labor, and overhead used in production, and customers’ perception of value. Prices are at a level sufficient to attract and give value to the target consumers. The costs of the various product offerings and their respective markup are as follows: CostMarkupSelling Price Chicken Lollipop1225%15 Sauce2150%5 Set(5 pcs + 1 sauce )624. 8%65 Place

Upon the introduction of the product, it will be offered through the adoption of a food cart at Metropoint Shopping Mall. Metropoint Shopping Mall is located at Edsa Corner Taft Avenue, Pasay. It is nearby various establishments such as the Kabayan Hotel, Mcdonalds, and Sogo Hotel. It is an ideal place of business because it is where the MRT and LRT passengers converge. People boarding and disembarking the MRT, LRT, and other forms of transportation destined at the target location will pass by the company’s food cart. Thus, a huge volume of people may avail the product offerings of the company. Promotion

Promotions will be in the form of print ads and free samples. Upon the introduction of the product in the market free samples will be given to passersby. Tarpaulins will be put up in the nearby areas of the chosen location. Flyers will also be given out to passersby within the area. ? Management Team The management team will initially depend on the partners and will take on additional help in certain key areas as the business expands. The General Manger oversees the overall performance of the business. He provides leadership for the whole organization as he develops the business goals and long term plans.

He is responsible in keeping track of the business’ growth through evaluating progress reports provided by each of the departments. He also assists them in making proposals as needed to meet the company’s short and long term goals. The HR Manager is responsible for the recruitment and contracting of the production staffs. He develops policies for performance management and programs for employee development and training. He handles salary and payroll negotiations and collaborates with the finance department with any salary related issues.

The Marketing Manager organizes the advertising opportunities for the business. He develops implements and evaluates marketing plans for the business products. He develops pricing strategies and develops the business marketing budget. The Finance Manager prepares the business financial statements. He evaluates these reports and provides analysis and recommendations regarding the effective utilization of the business assets. He manages the business investments and financing activities to ensure the solvency of the company. The Operations Manager directs and oversees the production staff and personnel.

He provides standards for the products quality and regulatory compliance. He ensures safety and cleanliness within the production site. He will be the company’s front line manager who handles customer’s inquiries and complaints. He provides details on the business growth and expansion plans and assists the financing department regarding the preparation of the financial budget. ? Financial Plan Major Assumptions Used 1. Selling price and all expenses are adjusted to inflation. 2. Inflation rate will increase 4% each year. 3. Equipments are depreciated using the straight-line method. . Advertising expense would be P5,000 per year. 5. Income tax rate will be fixed at 30% for the next five years. 6. Budgeted Sales will increase 10% each year. ? Schedule A – Sales Budget Schedule B – Cash Collection Schedule C – Production Budget Schedule D – Direct Materials Budget Schedule E – Overhead Budget Schedule F – Selling and Administrative Expenses Schedule G – Employee’s Compensation Schedule and Employer’s Premium Contribution Schedule H – Cost Of Sales Schedule I – Pre-operating expenses Chicpops Income Statement For the years ending 2012-2015

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