Business Plan

Table of Contents

Company and Business Profile 4

1.1 Name and Address41.2 Ownership and form41.3 Mission and Vision Statement51.4 Objectives and Core values51.5 Nature of Business71.6 Brief History71.7 Statement of Financing8

Product/Service 9

2.1 Product/Service Description92.2 Product/Service Benefits/Advantage112.3 Product Sources12

Operation/Production 13

3.1 Process or Methodology133.2 Technology/Facility Used133.3 Manpower Requirement163.4 Operating hours16

Market Analysis 174.1 Industry Description and Outlook 174.2 Target Market Segmentation 184.3 Market needs and opportunities 194.4 Market Trend 194.5 Competitors 20

Marketing Strategy 215.1 Competitive Edge215.2 Place or Location215.3 Pricing225.4 Promotion235.5 Distribution235.6 Packaging245.7 Delivery25

Management Organization 266.1 Organizational Chart266.2 Management Profile276.3 Functional Department30Financial Plan 32

7.1 Start-up Cost 347.2 Operational Cost357.3 Sales Forecast377.4 Cost Sales Forecast397.5 Projected Financial Statements447.6 Break-even Analysis477.7. Financial Ratio Analysis51Appendices

1. Introductory

0. Name and address of the BusinessThe business will be named 4Js Cupcakes. Its production area will be situated at Lumbo, Valencia City, Bukidnon while its store for display will be located in Alkuino Emporium. The location will be advantage to the business since its target market is mostly students. The business derived its name from the combined initials of the partners. 4Js means Jasmin, Joshlyne, Jean, and Jeanne.

1.2 Ownership and formNameResidenceJasmin D. AmbosPoblacion, Esperanza, Agusan del SurJoshlyne MijaresTalahiron, Kibawe, BukidnonRose Jean A. PernitoPoblacion, Esperanza, Agusan del SurLovely Jeanne G. PoncePoblacion, Pitogo, Zamboanga del Sur

4Js Cupcakes is a general partnership organized by the partners. The capital sources are the specific capital contribution of the partners. The profit and loss ratio are equally divided or a percentage of 25% each partner.

1.3 Mission and Vision Statement

Mission4Js Cupcakes mission is to provide the costumer with the finest and unique cupcake catering. It exists to attract and maintain customers by providing the highest quality cupcake products and the best possible services to the food industry. It will add value to the community by maintaining a friendly, familial work environment.VisionBe the leading cupcake concept and benchmark for new competitors in the market. While 4Js Cupcakes is extending its market, customer satisfaction will be the basis for its success, and more importantly bringing the smile and laughter to all our customers with its creative delicious cupcakes.

1.4 Objectives and Core ValuesObjectives

To be a well-known cupcake store in Valencia City and gain at least 30% in total market share. Generate increased brand awareness quantified by reactions or feedbacks of customer. To expand overall business operation and an addition of product line of the business. Reach profitability within 1-3 years and maintain positive steady growth each month.

Core values

The 4Js Cupcake Delicacies, as part of its corporate social responsibility is bound and devoted to provide its clientele quality products and products for the attainment of the business goals and objectives and of course customer satisfaction. Specifically, it aims the following values:

Customer Service - Every person who walks through the door is considered as a friend. Treat them with love and respect. Great Cupcake - 4Js Cupcake never serve a cupcake not to be proud of. Inclusive - An organization that does not align itself with any particular politics. Providing a Fun Experience - Let the costumer express their own emotions through cupcake designing. The smells, sounds and taste should catapult everyone back in time and provide each person with a fun and enjoyable experience. Associative - Work hand-in-hand to achieve the common goal of creating value for customers. Excellency - Be the leading supplier for customized celebration cupcakes providing quality products to the markets.1.5 Nature of the business

4Js Cupcakes is part of food industry specifically bakery industry that offers different flavors of cupcakes with affordable and reasonable prices that caters students, employees, married couple and even travellers from neighbouring places.

Since 4Js Cupcake actually makes its own cupcake from scratch, it is a manufacturer because they buy their ingredients pre-made, prepare them to an edible state, and then sell it. It is also a service retailer because it sells cupcake to the public and offers delivery to costumers. Hence, it performs a service.

1.6 Brief History

As a business student graduates; Jasmin, Lovely, Joshlyne and Rose Jean form a partnership and engage in business. They decided to put up a cupcake business because of their passion for food. For some reason, the bakery industry is on a rise. Many people have full-time jobs, and dont have enough time to bake, so they hire a professional to do, thats where 4Js Cupcake comes in. However, included in the main reason why we come up with the business is seeing the great opportunity that the Valencia City lacks a food chain business that offers unique and satisfactory products with affordable prices and service. Unique, since it allows the costumer pick up their designs and express oneself and enable order-delivery transaction at their convenience for an additional charge.1.7Statement of Financing

The initial investment of the business amounted to P 1,200,000.00 of which all the following partners: Jasmin, Joshlyne, Lovely and Rose Jean will contribute equal investment in the amount of P300, 000.00. The money contributed by the partners will cover the expenses incurred and the assets to be acquired that will be used in the normal course of the business operations and the industrial partners expertise in food preparation and processing. This investment will also cover the rent payment for the space that will be used by the partnership.

II.Product/Service

2.1Product/Service Description

More and more people have busy careers and dont have the time to bake for special occasions which will result to a high demand for cupcakes. 4Js Cupcakes is a confectionery business in Valencia City that sells high-end cupcake goods to retail and wholesale customers.

It makes plain cupcakes with sides of icing, frosting, gel, sprinkles, marshmallows and sugary decorations to work with. The designs of the cupcakes will be unique, colourful and eye-catching; people will be drawn into them, with their small shape and cute appearance. 4Js cupcake icing and sprinkles will come in a variety of colours. The business will design some cupcakes based on different seasons and holidays. In addition, customers can personalize designs on their cupcakes in such a way that they able to express their self and form it into amazing objects. The products of 4Js Cupcakes are the following:

Ordinary Cupcake Life Cupcake Simple Cupcake- Medium Vanilla Cupcake- Medium Ube Cupcake- Medium Chocolate Cupcake Complex Cupcake- Chocolate Cupcake- Strawberry Cupcake- Vanilla Cupcake Cupcake with styles

Vanilla Cupcake Ube Cupcake Chocolate Cupcake Strawberry Cupcake

Since catering and delivery service is a great way to set your cupcake business apart from your competitors. 4Js Cupcake allow customers to pre-order their cupcakes and arrange for the sweet treats to be delivered to their homes, offices and other locations for special events. The business may also go a step further and develop a website where customers can customize their orders.2.2Product/Service Benefits/Advantage

The benefits of cupcakes are that it can give a small sugar rush, and can moderately fill a persons appetite. The features of cupcakes are that it makes a special occasion better, and can replace a normal cake. Since this is a perishable baked good, cupcakes have a best before date. 4Js Cupcakes personnel in charged will tell the costumers to eat the cupcakes the day they are purchased or the day after, so that the cupcakes are fresh and enjoyable. The company can also make little stickers to indicate the best before date.

Many people have dietary restrictions that make it difficult for them to eat traditional cupcakes. The distinct business idea of 4Js Company is to bake cupcakes that accommodate a variety of dietary restrictions. According to MayoClinic.com, the top food allergens include gluten, dairy, nuts and soy. As such, add specialty cupcakes to the menu that are gluten-free, dairy-free or soy-free. These options will expand the business to an untapped consumer market. Customers with dietary limitations will be thrilled to eat cupcakes that are specially baked for their needs.

2.3 Product SourcesThe ingredients to be used in making cupcakes will come mainly from Valencia City in SSK77 store situated in front of Bao Sheng in Guinoyoran Road. Specifically, the baking soda, oil, salt, butter, sugar, eggs, different flavoured products such as vanilla, strawberries, chocolate and ube, sugary decorations such as icing, marshmallows, frosting, sprinkles. The flour will be purchased at the Golden Warehouse in front of GV Hotel at Sayre Highway, Valencia City. The milk will be taken at Philippine Carabao Center at Maramag, Bukidnon. Through these, it can save and minimize costs which could be a great advantage in the business. Drinks will be delivered by the supplier to minimize transportation costs.

1. Operation/ Production

3.1 Process/MethodologyThe business will rent a vacant space available for business atAlkuino Emporium, Valencia City, Bukidnon. Establishment and expanding of branches to different places will occur after the prosperous operation of the business subject for the unanimous decision by partners. The following requisites are needed to start the business operation: Business permit from the Valencia City Sanitary Permit Clearance needed for approval of operation Other documents necessary for the legality of business and its security.

3.2Technology/FacilitiesThe business will be using the following utensils and equipment for the operation of business: Food preparation utensils: (P77000) Knives Plates Glasses Forks Spoons Oven Saucers Bowls cupcake stands ladle mixer blender kitchen utensils needed for forming different cupcakes.

Kitchen Equipment Refrigerator Electric stove with oven

Store Entertainment Audio devices Air-conditioner POS Machine

Furniture and fixtures Tables chairsStraight-line method will be used in computing for annual depreciation for non-current assets. Thus:

EquipmentAcquisition costSalvage ValueEstimated Useful Life (in years)Annual Depreciation

RefrigeratorP 27000P300020P1200

Electric Stove w/ ovenP 50000P500015P3000

Audio deviceP 11000P20005P1800

Air-conditionerP 17000P20008P1875

POS MachineP 12000P010P1200

TableP 200005P 400

ChairsP 400005P 800

Delivery VanP300,000P3000020P13500

TOTALP123000P23775

3.3 Manpower RequirementDuring the first year of operation, the business will require a driver for delivery of products ordered. There will be an expected annual salary expense of P36, 000.

3.4Operating HoursThe business will start to operate from 3:00am of which the employees are required to come in time for the preparation before the normal operation. The store opens at 8:00 a.m. and closes at 8:00 p.m.

IV.Market Analysis4.1Industry Description and OutlookThis section contains the future views and prospective of the entity with regards to trends and analysis of competitors, forecasts about the market and the industry it belongs and the market segmentation.Food is one of the basic needs of an individual. Food industry has been streaming in the market. Different occasions tend to have specific food to be served. People prefer to avail those that are unique, quality and cheaper in terms of prices. It is quite a challenge to create an inimitable product that will surely attract the increase of consumer marketability.The current economic situation dictates the market to provide quality products yet at an affordable cost is of the primary concern.4-Js Cupcakes aspiration is to aid the market by providing expeditious and delicious cupcakes at very affordable prices. Through this, the partnership will achieve the expected rate of return at a specified period of time, gain the customers patronage, build a better standing in this industry in the area of Valencia and achieve consistency and success in its operations.

4.2Target Market Segmentation4 Js Cupcake Delicacies initial establishment will be in the City of Valencia. This city has a population that will be a huge target market. The area is nearby schools, cooperatives, malls, shops and other establishments which make it achievable to provide such business opportunity. The partnership will focus on extending marketing activities to high school and college students which will comprise the 45% of the revenues. Married couples will comprise the 25% of the revenues. The employees working on the establishments located near the area will consist the 20% of the revenues and the remaining 10% who dont belong to the classifications mentioned above. The market research presents that these are the customer groups that are most likely to patronage the products.

Figure 4.1. Market Segmentation4.3Market Needs/OpportunityThe place of Valencia as one of the City of Bukidnon is already in the verge of socialization. The people within and even in the nearby places are looking for delicacies that are not just simple and ordinary but those that are rare and extraordinary for special occasions. And this bequeathed us an idea to create a shop that offers not just cupcakes but extravagantly unique cupcakes similar to a cake ordinary which address the expanding needs of the public. As humans are celebrating both special and even just ordinary occasions, this business would certainly survive.4.4Market TrendThe current status in the food industry is incredibly changing as the country is progressing and developing. Angel Cachuela, Trade Commissioner-Consumer products, stated that the increasing urbanization of the local population has changed the local retail food market, and is seen as the driver in the lifestyle change amongst consumers.There is a big market for retail food products in the Philippines. Food is considered the highest expenditure in each Philippine household, with an average of 35% spent on food products. Considered price sensitive, they assess the value of products before purchase, vis--vis their retail price. The priority imported retail product categories sought after in the Philippine market are snacks or crunchers such as biscuits and chips and individual-packed pastries including cakes, cookies and cupcakes.As one of the sought after products by Filipinos, the partnership has come to operate an entity that serves cupcakes for its fellow citizens. Through time, the partnership is striving to reach its desired objectives in providing services to its valued customers. It will commence its business operation renting the space in Alkuino Emporium. Continuing the progress of this entity, it will likely open branch stores in the different municipalities in Bukidnon. Upon reaching its fifth year of success, the partnership will open its door to further investors and capitalists towards the adoption of the business into a corporation. Growing and growing into the bigger scope of market, the island of Mindanao will be definitely covered and the business entity will explore more into the national wide level of business expansion.

4.5CompetitorsCompetition is very much likely to exist in the business world. Bakebites, Goldilocks and Jocels are the main competitors of 4Js Cupcakes and not to mention other shops that are offering cakes and cupcakes in their own. Bakebites located in the Roy Plaza; Goldilocks in NVM Mall; Jocels situated at the side of the public market. In addition, one of the nationals distributors of delicacies is the Angels Log. The goods that it serves are the highest quality of taste. But as the worth gets higher and so does the prices it offers. The other company that also offers such delicacies is the Bakebites, Jocels and Goldilocks. Many are buying in this entity because it offers delicacies at an affordable price. But still, the satisfaction that customers are looking for has not been fulfilled. The advantage point in these entities is that they are located in an area where people frequently visit the most. And for they were located as such, the prices in comparison to the quality of delicacies they are serving are quite not fair. V. Marketing Strategy5.1 Competitive Edge

Advantages 4Js Cupcakes have over to its competitors. First business entity in the city that would offer different service related in decorating or shaping cupcakes to any dimension their costumer prefers. Cater and deliver services to costumer and allow them to tell whatever they want to do in their particular orders. It keeps on updating to any innovation to expand and stay on track.

5.2 Place or Location4Js Cupcakes main store is situated at the Alkuino Emporium, Valencia City, Bukidnon and its production area is located at Lumbo, Valencia City. The location is projected to effectively accommodate the targeted market, the general public. In addition, the store is placed where in the costumer could have an easy access thereof.

5.3 Pricing

It is stated in the mission to ensure the satisfaction of its customers and for the business to continue to remain in service, 50% mark-up rate based on its cost incurred to the products offered will be deemed reasonable.

ProductDescriptionPrice

Ordinary Cupcake- small and plain cupcake- mediumcupcakedesigned a little to serve one person- baked in a small thin paper or aluminium cupP10/piece

Cupcake with Style1. Vanilla1. Chocolate1. Strawberry1. Ube- topped with frosting or other cake decorations- they may be filled with frosting, fruit, or pastry cream P20.00/pieceP20.00/pieceP20.00/pieceP25.00/piece

Life Cupcake

1. Simple Cupcakes

1. Complex Cupcakes

-these cupcakes are composed of ordinary, plain, complex cupcakes which can be form into an object with the suggestion of the buyers regarding on the designs and object to be formed.

- comes with variety of flavors such as: Medium Vanilla Cupcake Medium Ube Cupcake Medium Chocolate Cupcake

- comes with variety of flavors such as: Chocolate Cupcake Strawberry Cupcake Vanilla Cupcake

P350/orderP600/ orderP400/ order

P500/ orderP650/ orderP450/ order

5.4PromotionTo catch the attention of the customers, business will launch and advertise its products or offers through flyers and poster. It will also use the World Wide Web. Specifically, the social media give and make its own webpage, in order the public will be aware to the service they offer.

5.5 Distribution

Since it is the nature of the business to cater and deliver service, the product will be directly delivered to the customer homes or other location where the special event will be held in and to assure that the satisfaction of the costumer will be met, the business team will be the one to set up the decorated cupcakes based on the theme of the occasion (as requested).

5.6Packaging

The Life Cupcake will be put in a box appropriate to its sizes. Moreover, the business will make sure to maintain the cleanliness of the products. For other category of cupcakes, when a customer order or buy half (1/2) dozen to one (1) dozen it is preferable to put it also in a box according to its sizes. The order less than half dozen will be put in a paper bag.

5.7Delivery

The product named Life Cupcake will be delivered directly within the City of Valencia as requested by the buyer, which is the principal location of the firm and the scope of its limitations. However, the costumer may prefer to pick up the product at the store. The additional charges for delivery will be P50.00 minimum. The amount collected shall be considered as other income since the cost of gas for the delivery will be considered an expense. There is a 50% expected delivery in every life complex cupcake ordered.

VI.Management and Organization

6.1Organizational ChartThis part entails the information regarding the positions and responsibilities of the respective employees in the business.

6.2 Management Profile

NameProfileResponsibility

Ms. Joshlyne M. MijaresGeneral ManagerA degree holder of Bachelor of Science in Accountancy in Central Mindanao University

A lover of food and most likely delicaciesAttended few seminars and trainings regarding leadership and managerial skills.

-to oversee activities directly related to the operation of business-to review financial statements, sales and activity reports, and other performance data to measure productivity and goal achievement-to manage staff, preparing work schedules and assigning specific duties-to establish and implement departmental policies, goals, objectives, and procedures-to determine staffing requirements, and interview, hire and train new employees, or oversee those personnel processes-to plan and direct activities such as sales promotion, coordinating with other department heads as required

Ms. Lovely Jeanne G. PonceMarketing ManagerA degree holder of Bachelor of Science in Accountancy in Central Mindanao University

An exceptional experienced supervisor in work and has a remarkable track record in the field of managing operations

A diploma holder in commercial cooking and culinary arts majoring in baking and pastry-to coordinate with the quality assurance personnel in ensuring that the goods meet an acceptable standard and generates positive feedback from clients.-to determine the type of equipment needed to fulfill the organizational quality policy-to monitor the operations of the entity from time to time

Ms. Jasmin D. AmbosFinancial ManagerA Degree holder of Bachelor of Science in Accountancy

With an undeniable proficiency and understanding in bookkeeping, account handling and auditing

A diploma holder in commercial cooking and culinary arts majoring in baking and pastry-responsible for the finances, payrolls, billings, taxes and other matters related to the management of the entitys finances

Ms. Rose Jean A. PernitoHuman Resource and Operation ManagerA degree holder of Bachelor of Science in Accountancy

An adept in the field of human resource and is very erudite in labor legislation and labor practices.

A diploma holder in commercial cooking and culinary arts majoring in baking and pastry

-responsible for hiring new employees-in charge in the development and training of the employees-to ensure the smoothness of operations in various processes that contribute to the production of goods and services of the organization

6.3Functional Department

Floor Plan

Chair-Front Display Rack-Table-Door-Side Display Rack-

20

Business LocationCommercial SpacesCommercial SpacesSan Augustine Institute of Technology

Jollibee TH ValenciaLand BankCommercial SpacesValencia Public MarketCagayan de Oro CityMaramagNVM MallEmporium Building

VII.Financial Plan

This page contains the financial assumptions, projected income statement, projected balance sheet, and statement of cash flows, beak-even point analysis and source of funds. Calendar year will be used by the entity in accounting the financial transactions. Sales will be 100% made in cash. Sales in second year will increase 20% based on prior year of sales and on third year of business, sales is expected to increase 30% based on first year of sales. The rent expense is arises from a P5,700 (monthly) for the store and P2,500 (monthly) for the production area. There will be an increase of 10% in the variable cost of sales and 15% in the second and third year of operation respectively. It assumes a 30% income tax expense. The estimated order from customer of different product is shown in next page

ProductsExpected no. of orders weekly

Life Cupcakes:

Simple Cupcake

Medium Vanilla Cupcake 8 orders

Medium Ube Cupcake 4 orders

Medium Chocolate 6 orders

Complex Cupcake

Chocolate Cupcake 3 orders

Strawberry 4 orders

Vanilla 7 orders

Cupcake w/ style

Vanilla Cupcake 150 pieces

Ube Cupcake 120 pieces

Chocolate Cupcake 150 pieces

Strawberry Cupcake 150 pieces

Ordinary Cupcake 720 pieces

7.1Start-up Capital The partners will contribute 300,000 each as source of capital. In its first year of operation, the business is expected to incur expenses related to its start up. Estimated expenses are as follows:

QuantityUnit costTotal Cost

Rent Expenses98,400

Office Supplies

Bookkeeping and other office suppliesP10000

POS machine1P12000P12000

SubtotalP22000

Promotional and Marketing Expenses

FlyersP12000

Radio AdvertisementP40000

SubtotalP52000

Legal Expenses

SEC RegistrationP20000

Business PermitP3000

Sanitary PermitP1500

ClearancesP1000

Other legal ExpensesP3000

Subtotal P28500

Equipment and other facilitiesP500000

Miscellaneous Expenses

Cleaning MaterialsP5000

Lease ImprovementP10000

TOTALP715,900.00

7.2Operational Expenses (Annually)On the succeeding years of operation, the business is expected to incur the following expenses related to its operation.

QuantityUnit costTotal Cost

Rent Expenses98,400

Office Supplies

Bookkeeping and other office suppliesP10000

SubtotalP10,000

Promotional and Marketing Expenses

Flyers and other promotional paraphernaliaP12,000

Radio AdvertisementP40,000

SubtotalP52,000

Legal Expenses

Business PermitP3,000

Sanitary PermitP1,500

ClearancesP1,000

Other legal ExpensesP3,000

Subtotal P8,500

Miscellaneous Expenses

Cleaning MaterialsP5,000

Utilities ExpensesP120,000

TOTALP293,900.00

7.3Sales Forecast3-year Sales ForecastSales in Pesos (Php) Orders per Week Price(in Php) Year 1 Year 2 Year 3

Life Cupcakes

Simple Cupcake

Vanilla Cupcake 8 350.00 140,000.00 168,000.00 182,000.00

Medium Ube Cupcake 4 600.00 120,000.00 144,000.00 156,000.00

Medium Chocolate 6 400.00 120,000.00 144,000.00 156,000.00

Complex Cupcake -

Chocolate Cupcake 3 500.00 75,000.00 90,000.00 97,500.00

Strawberry 4 650.00 130,000.00 156,000.00 169,000.00

Vanilla 7 450.00 157,500.00 189,000.00 204,750.00

Cupcake w/ style -

Vanilla Cupcake 150 20.00 150,000.00 180,000.00 195,000.00

Ube Cupcake 120 25.00 150,000.00 180,000.00 195,000.00

Chocolate Cupcake 150 20.00 150,000.00 180,000.00 195,000.00

Strawberry Cupcake 150 20.00 150,000.00 180,000.00 195,000.00

Ordinary Cupcake 720 10.00 360,000.00 432,000.00 468,000.00

TOTAL P 1,702,500.00 P 2,043,000.00 P 2,213,250.00

It assumes 50 weeks a year. Thus, estimated no. of order per week is multiplied to 50 to get the order annually. The increase in sales in Year 2 and Year 3 is 20% and 30% respectively.

Figure 7.1 Projected Weekly Sales

7.4Cost of Sales

Cost of Cupcake Production

Life Simple Cupcake An estimate of 60 cupcakes in every form One form=One order

IngredientsQuantityPrice

All-purpose flour4 1/2 cups P22

Sugar(Granulated)2 2/3 cupsP25.6

Baking powder6 teaspoonsP15

Salt1 teaspoonP1

Shortening oil 1 cupP24

Evaporated Milk2 cupsP60

Vanilla Extract2 teaspoonsP10

Large eggs4P22

FrostingP50

TOTALP229.6


All-purpose flour4 1/2 cupsP22

Sugar2 2/3 cupsP25.6


Salt1 teaspoonP1

Shortening1 cupP24


Ube flavoring40 mlP97

Large eggs6P30

Yoghurt cupP80

FrostingP50

TOTALP404.6

Medium Vanilla cupcake Medium UBE Cupcake

Medium Chocolate CupcakeIngredientsQuantityPrice




Salt1 teaspoonP1

Shortening Oil1 cupP24



Large eggs4P22

Unsweetened Chocolate 2 cupsP30

FrostingP50

TOTAL P259.6

Life Complex Cupcake An estimate of 60 cupcakes for Chocolate and Vanilla while 70 pieces for strawberry in every form. One form=One order


All-purpose flour3 cupsP14.52

Strawberry Jam300 mlP77

Sugar (granulated)3 cupsP33.6

Baking powder2 tablespoonsP15

Salt2 teaspoonP1

Cake flour3 cupsP14.25

Milk (Evaporated)2 cupsP75

Large eggs8P44


Unsalted butter2 cupsP90

FrostingP50

TOTAL P434.37


All-purpose flour4 cups P22



Salt1teaspoonP1

Shortening2 cupP24

Milk(Evaporated)2 cupsP60


Large eggs4P22


Enhancing costP100

TOTAL P339.6

Strawberry Complex Cupcake Chocolate Complex Cupcake

Complex Vanilla CupcakeIngredientsQuantityPrice




Salt1 teaspoonP1




Large eggs4P22

FrostingP100

TOTALP287

Cupcakes with Design/Style





Salt1 teaspoonP1




Large eggs4P22

FrostingP150

TOTALP329.6

Vanilla cupcake (for 40 cupcakes)

Cost Per Cupcake = P8.24





Salt1 teaspoonP1

Shortening1 cupP24



Large eggs6P30

Yoghurt cupP80

FrostingP150

TOTAL P504.6

UBE Cupcake (for 40 cupcakes)


Chocolate Cupcake (for 40 cupcakes)IngredientsQuantityPrice




Salt1 teaspoonP1




Large eggs4P22


FrostingP150

TOTAL P359.6

Cost per Cupcake = P8.99






Salt2 teaspoonP1



Large eggs8P44



FrostingP150

TOTALP534.37

Strawberry Cupcake (for 50 cupcakes)


Ordinary Cupcake





Salt1 teaspoonP1




Large eggs4P22

Sprinkles and otherP50

TOTALP229.6

Vanilla cupcake (for 60 cupcakes)






Salt1 teaspoonP1

Shortening1 cupP24



Large eggs6P30

Yoghurt cupP80


TOTALP404.6

UBE Cupcake (for 60 cupcakes)






Salt1 teaspoonP1




Large eggs4P22



TOTAL P259.6

Chocolate Cupcake (for 60 cupcakes)


Strawberry Cupcake (for 50 cupcakes)IngredientsQuantityPrice





Salt2 teaspoonP1



Large eggs8P44




TOTAL P434.37


The total of each product refers to the cost per order of the product. The prices are based on the current prices of the market. If the quantity of cupcakes the customer buys reaches in at least 6, it will be properly packaged. The cost will be the same as if it was bought individually. Utilities Expense of P72, 000.00 related to production will be added to the fixed cost of every cupcake equally in determining breakeven.

7.5 Projected Financial Statements

7.6Breakeven Analysis

Break-even Point Analysis ( in Pesos )

ProductUnits in a Year*Sales Mix(a)Sales Mix Ratio(b)Selling PriceCost/unit( c )CM/unit(d)CM Ratio(e) Composite CM Ratio(f)

Medium Vanilla Cupcake240001400000.082232012350256.184615493.815384620.2680439560.022041794

Medium Ube Cupcake120001200000.070484581600431.1846154168.81538460.2813589740.01983147

Medium Chocolate Cupcake180001200000.070484581400286.1846154113.81538460.2845384620.020055574

C-Chocolate Cupcake9000750000.044052863500366.1846154133.81538460.2676307690.011789902

C-Strawberry Cupcake140001300000.076358297650465.3853846184.61461540.2840224850.021687473

C-Vanilla Cupcake210001575000.092511013450313.5846154136.41538460.3031452990.028044279

Vanilla Cupcake-S75001500000.088105727208.68307692311.316923080.5658461540.049854287

Ube Cupcake-S60001500000.0881057272513.0630769211.936923080.4774769230.042068451

Chocolate Cupcake-S75001500000.088105727209.43307692310.566923080.5283461540.046550322

Strawberry Cupcake-S75001500000.0881057272011.133076928.8669230770.4433461540.039061335

Ordinary Cupcakes360003600000.211453744105.9730769234.0269230770.4026923080.085150796

16250017025000.386135683

Formulas:

*50 weeks in a yeara- Forecasted sales in year 1b- Sales Mix/Total Sales Mixc- Cost of cupcake + Cost of variable overhead 229.6 + (((MVC in a year /162500 cupcakes in a year)*72000)/MVC)*number of cupcakes in an order)d- Selling Price - Cost/Unite- CM per Unit / Selling Pricef- Sales Mix Ratio*CM Ratio

Fixed Cost(FC) = Annual rent expense98400

Fixed Overhead36000

Operating Expenses (All is Fixed)229275

363675

Ave. CMR0.386135683

CBEP= FC/AVE. CMR941,832.15

ProductUnits in a Year*Sales Mix (a)Salex Mix Ratio(b)Selling PriceCost/unit( c )CM/unit (d)Composite CM/unit( e )

Medium Vanilla Cupcake240004000.006051437350256.184615493.815384620.56771791

Medium Ube Cupcake120002000.003025719600431.1846154168.81538460.510787851

Medium Chocolate Cupcake180003000.004538578400286.1846154113.81538460.516559991

C-Chocolate Cupcake90001500.002269289500366.1846154133.81538460.303665774

C-Strawberry Cupcake140002000.003025719650465.3853846184.61461540.558591877

C-Vanilla Cupcake210003500.005295008450313.5846154136.41538460.722320493

Vanilla Cupcake-S750075000.113464448208.68307692311.316923081.284068428

Ube Cupcake-S600060000.0907715582513.0630769211.936923081.083533108

Chocolate Cupcake-S750075000.113464448209.43307692310.566923081.198970092

Strawberry Cupcake-S750075000.1134644482011.133076928.8669230771.006080531

O-Vanilla Cupcake36000360000.544629349105.9730769234.0269230772.193180496

162500661009.945476551

Break-even Point in Units

Formulas:

*50 weeks in a yeara- Forecasted sales in year 1b- Sales Mix/Total Sales Mixc- Cost of cupcake + cost of variable overhead 229.6 + (((MVC in a year /162500 cupcakes in a year)*72000)/MVC)*number of cupcakes)d- Selling Price - Cost/Unite- Sales Mix Ratio*CM Ratio

Composite Breakeven Point (units) = Fixed Cost/Ave. Units Contribution Margin =363675 /9.945476551 = 36567 units in a year or 731 units in a week

7.4Financial Ratios

First Year of Operation

Profit Margin on Sales = Profit/Net Sales = P200354.70/P1702500 = 11.77%*The amount of profit by every peso of sales is 11.77 %.

Rate of return on Assets = Profit/Ave. Total Assets = P200354.7/P1200354.7 = 16.69 %*The overall profitability of assets is 16.69%.

Rate of return on Equity= Profit/Ave. Equity = P200354.70/1200345.7 = 16.69%**The overall profitability of equity is 17.92%. Free Cash Flow = Net Cash from operating activities- Cash used for investing = P216129.7- 500000 = (P283870.3)** The excess of operating cash flow over basic needs is (P283870.3)Capital Intensity ratio= Total Assets/Net Sales= P1200354.7/1702500= 70.5%

Fixed Assets to Total equity= Fixed assets/Total Equity= P484225/ 1200354.7= 40.34%Cash Flow Margin = Cash flow for operating activities/ Net Sales= P216129.7/1702500= 12.69 %Operating Profit Margin = Operating Profit/ Net Sales= 311221/1702500= 18.28%

Second Year of Operation

Profit Margin on Sales = Profit/Net Sales = P379547.42/P2043000 = 18.58%*The amount of profit by every peso of sales is 18.58%.

Rate of return on Assets = Profit/Ave. Total Assets = P379547.42/P1379902.12 = 27.51%*The overall profitability of assets is 27.51%.

Rate of return on Equity= Profit/Ave. Equity = P379547.42/P1379902.12 = 27.51%**The overall profitability of equity is 27.51%. Capital Intensity ratio= Total Assets/Net Sales= P1379902.12/2043000= 67.54%Fixed Assets to Total equity= Fixed assets/Total Equity= P458450/1379902.12= 33.22Operating Profit Margin = Operating Profit/ Net Sales= P567210.6/2043000= 27.76%Third Year of OperationProfit Margin on Sales = Profit/Net Sales = 461597.78/P2213250 = 20.86%*The amount of profit by every peso of sales is 20.86%.

Rate of return on Assets = Profit/Ave. Total Assets = P461597.78/P1641499.9 = 28.12%*The overall profitability of assets is 28.12%.

Rate of return on Equity= Profit/Ave. Equity= P461597.78/P1641499.9=28.12%**The overall profitability of equity is 28.12%. Capital Intensity ratio= Total Assets/Net Sales= P1641499.9/2213250= 74.17%Fixed Assets to Total equity= Fixed assets/Total Equity= 432675/1641499.9= 26.36%Operating Profit Margin = Operating Profit/ Net Sales= P563210.6/2213250= 25.45%

Business Plan

Documents

Transcript of Business Plan