WEBSITES: http://oilhealthbenefits.com/aloe-vera-oil/ BOOKS AND RESEARCH PAPERS: Coconut Revival: New Possibilities for the “Tree of Life” Asian and Pacific Coconut Community activities, Achievements and Future Outlook. Australian Centre for International Agricultural Research. (2005) S.W. Adkins, M. Foale and Y.M.S. Samosir Virgin Coconut Oil Production Manual for Micro and Village Scale Processing. FAO Regional Office for Asia and the Pacific, Bangkok (2006) Divina D. Balawan Keith R. Chapman PPKT: Working with the Community to Grow the Business. (2011) Diyanto Iman 1
Transcript
WEBSITES:
http://oilhealthbenefits.com/aloe-vera-oil/
BOOKS AND RESEARCH PAPERS:
Coconut Revival: New Possibilities for the “Tree of Life”
Asian and Pacific Coconut Community activities, Achievements and
Future Outlook. Australian Centre for International Agricultural
Research. (2005)
S.W. Adkins, M. Foale and Y.M.S. Samosir
Virgin Coconut Oil Production Manual for Micro and Village Scale
Processing.
FAO Regional Office for Asia and the Pacific, Bangkok (2006)
Divina D. Balawan
Keith R. Chapman
PPKT: Working with the Community to Grow the Business. (2011)
Diyanto Iman
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Executive Summary
The business, MnC Naturals is introducing a new innovated
product in Cabanatuan City, the Aloe Vera Oil. It is a partnership
where the owners contributed expertise, ideas and resources in forming
the business. The business is located at N.E. Pacific Mall, Cabanatuan
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City. The business’ target market ranges from the young and the old
and from the rich to the average to the urban poor members of society.
Aloe Vera Oil has different uses from head to toe and sometimes
even when taken internally. Aloe Vera as its main ingredient has been
widely used especially here in the Philippines for hair and skin
treatment. MnC Naturals has done some innovations to the Aloe Vera to
maximize its uses. It varies from hair growth, hair gloss, dandruff
treatment, skin treatment of insect bites, psoriasis, stretch marks
and for massaging, when taken internally, as a laxative for effective
bowel movement, lowering blood sugar level and as a shoe polish.
The industry of essential oils is rampant. But nowadays, organic
product is a lucrative industry. The business aims to combine both of
the idea of essential oils and organic products.
The business has no direct competitor/s as the product is newly
introduced and is newly innovated but the business will not stop in
innovating and improving the product. Indirect competitors will be the
other essential oil manufacturers such as Johnson and sons, Aldritz,
King’s Herbal and many more. With these companies in mind, the
business is prepared for the enhancements or improvements each them
can or will contribute. The business will use promotional mix in
promoting the product. Penetrating varied media especially the
internet would most likely be done since many people are using social
networking sites in finding new trends. The business is foreseen to
last in a tight and volatile market by innovating and improving the
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product it could offer and assuring the consumers its effectiveness,
safety and its affordability.
The business will operate by pooling funds amounting to P800,000.
The business will hire a total of 5 employees, a driver, a saleslady
and three production workers.
The business’ forecasted Return on Investment is 43.00%, the
Return on Equity is 20.00% and a payback period of approximately 2
years and 10 months of operation.
INTRODUCTION
Nowadays, many products are introduced and innovated by
different manufacturers and businesses. It is quite hard to
choose what product is beneficial or not, healthy or can cause
side effects. Most of the products that are in the Global Market
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today may contain chemicals that can probably cause side effects
to the consumers who are using the products.
Herbal plants are widely used by many people in the
Philippines. Filipino ancestors started using it to cure diseases
such as fever, wound, cough, etc. It is still widely used today
and has been innovated to form a product made by herbal plants or
so called “Natural Products”.
Aloe Vera species is frequently cited as being used in
herbal medicine since the beginning of the first century AD. Aloe
Vera is widely used in cosmetic products and alternative medicine
industries, being marketed and variously having rejuvenating,
healing or soothing properties. It has scientific evidence of
effectiveness and safety for either cosmetics or medicinal
purposes.
The essential oils of plants have been known throughout the
ages as the most potent beautifying agents for the skin. They
have a unique lipid structure that allows them to penetrate cell
membranes and transport oxygen and nutrients to each cell of the
body. Essential oils are some of the highest known sources of
antioxidants that can prevent free radical damage and thus have
an anti-aging effect on the skin.
Aloe Vera Oil is one of the essential oils which possess
benefits for skin, hair, and supports immune system and for
digestive tract. For the skin, it helps to heal wounds, insect
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bites, skin abrasion, and minor burns, soothes and promotes skin
renewal, psoriasis, antioxidant and it removes stretch marks. For
hair, it contributes to the hair strength, hair growth, and
treating dandruff. It cleanses and supports your digestive
system, and it aids constipation and it can also be used as shoe
polish.
The side effects that are found is that people who have
diabetes who are taking glucose-lowering medications should be
cautious due to the reason that Aloe Vera lowers blood sugar
level and people who would take it internally may suffer diarrhea
with often use. It is advisable to take it internally when the
person is feeling bloated and does not release its solid remains
a few days after his/her last release.
“The beauty in using essential oils as medicines is that
they don't have negative side effects like the synthetic drugs
and chemicals of modern pharmacology.” (Stahl, 2010)
PRODUCT
The business is introducing a newly innovated product as
cosmetic and alternative medicine. It has a broader than the
other essential oils that are commonly purchased by consumers.
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Aloe Vera Oil provides health benefits for hair, skin, and
digestive tract problem. For skin, Aloe Vera Oil is good for
treating skin wounds, skin diseases, brilliant moisturizer, sun
protection, insects bite, protects the skin from free radical
damage, anti- irritant and consists of astringent that shrink the
skin and make it taut. For hair, Aloe Vera Oil reduces dry scalp
condition, dandruff and it keeps the hair growth and hair
strength. Aloe Vera Oil is not just a cosmetic product it is also
used also as an alternative medicine for laxative, diabetes, and
diuretics.
Aloe Vera Oil is made up of 100% organic product. Coconut
oil is used as the extender of Aloe Vera Oil.
In purchasing Aloe Vera Oil, there would be a stall inside
N.E. Pacific Mall. The product would also be available at online
shops. For the retailer and wholesaler, the company will have
their contact or telephone number for the transactions of
delivering the products.
The key components or raw materials to be used are the
following:
1. Aloe Vera – Aloe Vera barbadensis is the most commonly used
in making Aloe Vera Oil.
2. Coconut Oil – It will act as an extender of the Aloe Vera Oil.
For the future development of the product, the business will
continuously improve the product. The business will develop
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different essences of Aloe Vera Oil. Aside from Aloe Vera Oil,
the business will also introduce different products that are also
made of Aloe Vera like, Aloe Vera cream, Aloe Vera gel and Aloe
Vera shampoo.
TECHNOLOGY
The business will use common kitchen utensils in the
production of Aloe Vera Oil. The equipment that will be used are
less expensive and easily found in the market. The equipment to
be used are:
KNIFE
The knife is used to cut the Aloe Vera.
SPOON
The spoon is used to scrape the gel of the Aloe Vera.
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COOKING POT
The cooking pot is used to cook and to keep warm the Aloe
Vera and the Coconut Oil.
PLASTIC CONTAINERS
These plastic containers are used as packaging of the product.
BLENDER
The blender is used to crush the Aloe Vera gel.
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LADLE
The ladle is used to mix the Aloe Vera and Coconut oils.
GAS STOVE
The gas stove is used to heat the Aloe Vera Oil and Coconut
Oil to incorporate and to dissolve the Aloe Vera Gel.
MEASURING CUP
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The measuring cup is used to measure the Aloe Vera oil
before putting it in the plastic container.
LIQUID PETROLEUM GAS
The Liquid Petroleum Gas or LPG is used as a heat source of
the gas stove.
KALAN DE KAHOY
Kalan de kahoy is used as an alternative heat source where
discarded coconut husk can be used.
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STRAINER
The strainer is used to strain the lumps or Aloe Vera Fiber and
also to strain the coconut meat when skimming.
ALOE VERA LEAVES WASHER
The Aloe Vera Leaves Washer is used to wash the leaves before gel
extraction.
FILING, CAPPING AND LABELING MACHINE
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The filling, capping and labeling machine is used to transfer the
Aloe Vera Oil into the bottle, capping it and labeling it.
COCONUT GRINDER MACHINE
The coconut grinder machine is used to shred the coconut
meat.
COCONUT PRESSER MACHINE
The coconut presser machine is used to extract coconut milk.
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ALOE VERA GEL EXTRACTOR MACHINE
The Aloe Vera Gel Extractor machine
separates the Aloe Vera Gel from the
leaf part.
INTENDED MARKET ENVIRONMENT
The business will introduce innovation to the consumer who
uses cosmetic products and alternative medicine. The aim of the
owners is to introduce natural products that are more effective
and safe to use and to become successful in the Global Market.
The expected buyers are the consumers who are health
conscious, or mostly women who use cosmetic products. It can be
used by young and old persons. The store would be located along
the highway, inside a mall and the product would be available in
online shop and other local drugstores.
Most consumers purchase products because of their skin,
hair, or to remedy digestive tract problems. The product is made
of organic herbal plants and it specifically contains natural
nutrients that will surely be effective and safe to use as well
as affordable. The product has its uniqueness compared to other
essential oils because it can be taken internally (laxative) and
externally (skin and hair problems).
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The product can be found in Maharlika Highway, Cabanatuan
City and the product would be offered to drug stores, groceries,
and seller of cosmetic products who will be competitors of the
business itself. The seller will serve as the advocator of the
business to introduce, advertise, and sell the innovative product
to the public so the consumers will try the newly introduced
organic product.
The income of the seller usually fluctuates depending on the
consumers’ need of the products. This is why the researchers
conducted a survey where the business would be established and
the consumers can be found. The consumers are assumed to buy two
bottles a year based on the consumers’ knowledge on the uses of
oils.
Aloe Vera Oil can be kept in warm or cool places. But if it
will be used as cure to insect bites, it is much better kept in
the refrigerator or chilled before application.
Business-to-Business Market
The business will offer the product to drugstores, groceries
and sellers of cosmetic products. Based on the survey and
interview conducted, the sellers are willing to have an initial
inventory of 20-50 bottles. The sellers will place purchase
orders every other month. The drugstores, groceries and sellers
are to be found at Cabanatuan City and in the future, in whole of
Nueva Ecija and whole country.
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Business-to-Consumer Market
The business will be at N.E. Pacific Mall, Maharlika
Highway, Cabanatuan City. Based on the data gathered, it is
assumed by the researchers that each willing consumer will buy
two bottles a year. The business target consumers are not limited
to the young and to the old, to the rich and to the poor. The
product caters to consumers who have a healthy lifestyle and who
have an open mind in trying new product.
COMPETITION
Direct Competition
There are no seen or no perceived direct competitor as the
product is newly developed and newly introduced.
Indirect Competition
There are few indirect competitors as there are other herbal
oils that are already available to the target market most
commonly produced by long time established companies in the
market like Johnson and sons, Aldritz, Vicore and King’s Herbal.
Their products would serve as the key barrier in penetrating the
target market.
Competitive Advantage of the Product
When it comes to benefits that may be acquired from the
product, it is more beneficial than other essential oils. It is
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not just an ordinary oil commonly used for massaging. It has a
uniqueness compared to other essential oils because the product
cannot only be taken externally (hair and skin) but it can also
be taken internally(laxative, diuretics, and diabetes), acting as
an alternative medicine.
Response Strategy
Different essential oils now exist in the Global Market. As
for the response strategy of the business for the competitors of
the product, the company will seek for more information that may
improve the product and continue innovating the product and the
business in producing another product line from the Aloe Vera by-
products and/or the product itself.
INDUSTRY
The industry of essential oils is mostly made up of coconut
oil and many consumers of Cabanatuan City buy this product. To
have a long life span in the industry, the company would
continuously improve the product and find new innovation to
develop a product that eventually will help the sales to go up.
Future expansion of the company will be set after its success in
Cabanatuan City. The target is for the Aloe Vera Oil to be known
in the Philippines.
The market for the product will not decline due to the
changing taste of the consumers who seek for a product that is
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more beneficial than other products. For instance, Acai Berry is
not just an ordinary juice. It often cures and reduces what ails
the drinker. The consumers are now more aware and curious of what
are the contents of a product. Based on this occurrence, it is
safe to conclude that the consumer would be pleased to buy a
product from the company.
In Ansleigh Prince’s video blog Ecogal Indiegogo Campaign
(2014), most of the persons Ecogal interviewed really wanted to
know the product’s components, the manufacturer’s background
especially if it is a hygiene product.
The business will ensure that production will continuously
flow by the having the list of contact numbers of the suppliers
in case the other supplier fails to deliver or commit with the
requirements and specifications of the company.
The factor considered is to look for a supplier who is mass
producing in case there will be a time the business will need a
sudden supply. The business will not settle only on one to two
suppliers. The business will find a certain community where it
could support the community by planting the raw materials
supplying the leaves, especially farm lands where it only depends
on the rainy season. The business will be aware of the increase
in demands by observing its trends for effective forecasting to
place the orders to the suppliers avoiding delay of supply.
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Business Model
Usually, essential oil is made up of coconut oil. The
business will introduce Aloe Vera Oil, an innovative product that
is more beneficial than other essential oils.
The chart shows the cycle of the business which starts from
the production of the product until it gains profit.
Flow of the Business
Figure 1.1. Business Flow
The nature of business is manufacturing because it processes
raw materials into finished goods and distributed to the
consumers. The excess inventory for a day is stored in the stock
room and sell it again the following day. The income that the
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Raw MaterialsIncome
Selling Processing
PackagingStoring
BUSINESS
business will receive in the operation will be used for the
continuous improvement and expansion of production.
The business’ aim is to provide a new healthy organic
product which is Aloe Vera Oil to those consumers who seek for
more beneficial products and are health and beauty conscious and
value affordability. The management will ensure that it is purely
organic, sanitary, affordable, effective, and safe to use. Income
generation will come from selling of Aloe Vera Oil and also from
the saleable materials that are discarded through the production.
The business will likewise accept retail and wholesale orders
that would help the business in increasing its sales.
After the coconut oil is made, the coconut shell and husk
would be collected. The coconut shell would be sold to other
businesses that use it as their main ingredient in their business
like production of charcoal and the coconut husk will become the
alternative heat source in cooking in case the LPG would not be
enough in cooking. The business will also supply companies who
use coconut husks to make rope, coir or mats and the coconut
residue (sapal) can be sold to other businesses like animal feeds
manufacturer or to local bakeries that use coconut residue in
their ingredients like in making macaroons or cookies. The fried
coconut solid (latik) will be sold to local Filipino delicacy
producers who use latik in their products like sapin-sapin,
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bibingkang kanin, suman, etc. These will be done to avoid waste
materials and to serve as an additional income to the company.
MARKETING AND SALES STRATEGY
The business will consider the 4P’s of the Marketing Mix for
the utilization and development of strategies to penetrate and
achieve customer satisfaction.
The 4P’s of the Marketing Mix:
Product
The business will maintain and ensure the quality,
reliability and effectiveness of the product and at the same time
improving it for customer’s use.
The product is a cosmetic and act as an alternative
medicine. It prevents hair and skin problems. It can be taken
internally for treating laxative, diuretics and diabetes
problems.
Price
The business will apply the lowest price possible in order
for the customers to patronize the natural herbal essential oils.
Due to the use of natural herbal plants and its easy access to
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suppliers, lower price can be achieved because of its cost
effectiveness.
The cost of the product is based on the mark-up of the
respondents (seller) of the product which is 10%. The raw cost of
the product is P 59.31. The cost plus mark-up is P 65.00.
By the time when the business acquires their own
plantation, decreased on cost can be considered.
Place
The business will strategize where there is enough space for
convenience and comfort of delivery for suppliers, wholesale and
retail customers. Production will be done at Barangay Kapitan
Pepe, Cabanatuan City. The selling place will be at N.E. Pacific
Mall in a place where it is easily accessible. As to wholesale
customers and sellers, the business will introduce the product to
local drugstores and willing resellers.
Promotion
The business will use Promotional Mix in promoting its
products in order to effectively communicate and make the product
known to the target market. The business will use technology like
the internet for its product advertisement as many people are
into the social media nowadays making informative, creative
videos, posting tarpaulins and giving leaflets to the target
market. The business will advertise and promote the product
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thoroughly in the first two years. For the succeeding years,
video of customers’ testimonials will be shared and posted
online.
Production and Operating Requirements
The business intends to produce Aloe Vera Oil in Cabanatuan
City. Cabanatuan City has limited number of vacant lots, but
there are many buildings for lease and also spaces for rent in
various commercial buildings.
The production house will be at Barangay Kapitan Pepe,
Cabanatuan City. The business will be leasing a 1-storey building
approximately 180 square meters. The building is for lease for P
50,000 a month and is under contract for five years.
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Washing Area
Aloe Vera GelExtraction
Coconut Meat
Grinding and
Extraction
Workers’Quarters
Garden
Figure 1.2. Production Floor Plan
The company will lease a space in N.E. Pacific Mall with a
cost of P 10,000.00 per month.
The business will soon capitalize on a farm lot to provide
its own organic Aloe Vera to minimize costs. The farm lot is
located at Palayan City, Nueva Ecija. It measures 500 square
meters.
Aloe Vera plant is a semi tropical succulent plant therefore
it is abundant in the Philippines. The Aloe Vera plant, as the
main raw material could be outsourced at an Aloe Vera plantation
in General Santos, South Cotabato. The Aloe Vera cost is P 10.00
per kilo.
The company will produce its own coconut oil. Coconut oil
acts as an extender in the product. Coconuts will be acquired in
Dingalan, Nueva Ecija, the nearest supplier. Widespread rooted
coconut trees can be found in Dingalan and are cheap in cost. The
coconut cost is P 13.70 per nut.
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CookingArea
PackagingArea
Receiving
Area
Parking
The company will outsource the bottle, parchment paper and
twine for packaging. It will be purchased at Divisoria, Manila
and an online supplier, either of the two who could commit with
the company’s needs. It will be bought in bulk to earn discount
and goodwill with the supplier and also to save in freight
expenses. The business will have an open communication with the
suppliers and ensure that the suppliers can commit to purchase
orders and that when suppliers cannot commit, the suppliers must
notify the business beforehand.
Production schedule
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MANAGEMENT AND PERSONNEL
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OWNERS
Figure 1.3. Organizational Chart
The chart will show the flow of authority in the company.
The flow of authority starts from the owners who direct and
control the business. The business is composed of (3) employees
namely: production workers (3), driver (1), and sales attendant
(1).
The business is in the form of partnership which will be
located at Cabanatuan City, Nueva Ecija. Partnerships are
relatively easy to establish, capitalization of the business is
easy and because of the mutual interest of the owners,
partnerships provide moral support and will allow for more
creative brainstorming and there is opportunity for income
splitting, an advantage of particular importance due to resultant
tax savings than a sole proprietorship and the business become
lucrative, a greater tax is imposed.
The management’s responsibilities to the company are to
plan, control, direct, staff, organize, and lead the whole
business operation. The management will be the one to seek for
the employees who are qualified for the position in the company.
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Production
Workers
Sales Attendant
Driver
The success of the operation is in the hands of the managers
which are the also the owners.
In selecting the right employees for the company, the
employees would undergo interviews and trainings. This is to
ensure that precisely the suitable persons are hired. The
employees will be guided by guidelines and procedures of the
duties and responsibilities assigned to them by the company.
DUTIES AND RESPONSIBILITIES
The owners direct and manage the entire business
production. The production workers’ responsibilities are in the
production process. The driver is the one who would deliver the
products to its various sellers in good condition. The sales
attendant’s responsibilities are in selling the products and
inventory.
Qualifications of the Employees
Production workers
- 18-45 years old
- Preferably female
- With good character
- At least elementary graduate
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- Physically and mentally fit
- Hard working
Driver
- 20-45 years old
- Has driver’s license
- Male
- Mentally and physically fit
- Having been a delivery driver before is an advantage
The table above shows the compensation rates of the
employees. It is based on the Current Regional Daily Minimum Wage
Rates as of December 2014 by the Department of Labor and
Employment (DOLE). Workers’ salaries would increase in accordance
with the law. The business will also give incentives and other
increments based on the workers’ performance. The employees who
will be hired will work in shifts every day because not all
employees can work every day and that way there will be more
employees hired and can earn income for the employees’ families.
The employees could also work part-time as the work can be done
in bulk and task can be done early that can result to more source
of income.
Due to the acquisition of land, the business will hire two
farmers. The giving of bonuses can be considered, especially when
the business operation is satisfactory.
Regulation and Environmental Issues
In consideration of the legality and smooth-sailing of the
business, it should comply with the rules and regulations,
requirements and restrictions that are set by the government for
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businesses in the country. Needed permits and accreditations must
be acquired.
Appropriate hygiene must be observed by the production
workers and the area as well as the sellers to ensure the
product’s quality and to have a good impression to customers. In
accordance with this, the business must be accredited by the
concerned agency like Department of Trade and Industry (DTI),
Department of Environment and Natural Resources (DENR), Bureau of
Internal Revenue (BIR) and the Government of Cabanatuan City’s in
assessing the production area and the product itself.
The business itself is built with the aim of taking care of
the environment and such. The business should practice its fair
share in saving the environment. Proper garbage waste disposal
must be observed and eventually participate or organize an
environmental program.
The required licenses and permits for a hassle-free
business are: Sanitation Permit, Mayor’s Permit, BIR
Registration, DTI Registration, Business Permit and DENR Permit.
Critical Risk Factors
In establishing the business, there are always draw backs
that are commonly experienced by many other businesses. In
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relation to this, proper handling, forecasting and observation
will be needed.
Every business has its own strengths, weaknesses,
opportunities and threats.
For the strength of the business, the data gathered shows
that the most of the respondents are willing to try the
product. It showed during conversations with respondents
that they are kind of hyped and amazed that Aloe Vera itself
could have many uses other than as a hair growth aid and
anti-dandruff plant.
For the weakness, based on the data gathered, most of the
respondents do not know Aloe Vera and its uses as it is like
a traditional aid and are not widely used today.
There will be more opportunities that can be seen in the
business if it became well-established and lucrative.
One of the possibilities is that it can expand its operation
not only in Cabanatuan City but also outside the province of
Nueva Ecija and other supermarkets, drugstores or entities
who would want to become partners in distributing or even
sharing creative input that could help in improving the
product’s efficiency.
For the threats that could hover over the business, the
assumed biggest draw backs are: future competitors, and disasters
like typhoon, flood, and drought.
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Future Competitors. Although the product will be innovated
and the business will continue to research on developing new
products, there will always be another existing product
which the customers might substitute with another product.
Insufficient Supply. It is possible even though the product
is not perishable and is mass produced.
The raw materials delivery delay is an inevitable event
especially when there are disasters and pests as the raw
material is prone to those events. Also, courier mishandling
could possibly occur.
Risks and threats would always be present, it is with proper
handling, patience, hard work and perseverance that corresponding
solutions and prevention could be obtained. Like what Orson
Scott Card, says on Ender's Game (2013), “If you try and lose
then it isn't your fault. But if you don't try and we lose, then
it's your entire fault.”
The business’ keys in addressing its threats and weaknesses
are:
Innovating and improving the product such as adding essence,
enhancing its smell with different essence such as mint,
orange and lemongrass. Adding a no fiber (settles at the
bottom of the bottle) variant for easy drinking.
Transforming the product into creams and lotions for non-
oily application to skin when used for skin treatment.
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The business will consider an outside party where it could
enhance the use of the product and act as another
manufacturer but it is only an enhancing facility.
Investing on a farm lot for planting its own organic Aloe
Vera to compensate insufficient supply until it can totally
supply the production to decrease its cost.
Timetable
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COST DETAILS
A. Cost of Utensils
Measuring Cup (5) P 100.00
Kitchen Knives (5) P 100.00Knife Sharpener (2) P 150.00
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Spoons (5) P 75.00Strainer (3) P 150.00LPG (2) P 1,780.00Casserole (4) P 800.00Ladle (2) P 40.00 Subtotal P 3,295.00
B. Cost of Equipment
Blender (3) P 3,750.00Gas Stove (2) P 1,996.00Kalan de Kahoy (2) P 600.00Aloe Vera Leaves Washer P 100,000.00Filling, Capping and Labeling Machine P 112,014.00Aloe Vera Gel Extractor P 95,000.00Coconut Grater Machine P 4,500.00Furniture and Fixtures P 50,000.00Computer and Printer P 23,000.00Vehicle P 70,000.00Coconut Presser Machine P 8,000.00 Subtotal P 473,860.00TOTAL P 477,155.00
PRODUCT COSTING
Direct Cost
Raw Material ( 1/2 kg Aloe Vera Leaves) P 5.00Ingredients used P 13.70
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Packaging Material P 11.24 Total Direct Cost P 29.94Indirect Cost:Labor Cost ( 345 x 3 / 50 bottles) P 20.70Gas, Water and Electricity (300.00/ 50 bts.) P 6.00Contingency Cost (10 % of DC) P 2.67 TOTAL INDIRECT COST P 29.37
Production Cost per 100ml Bottle
TDC P29.94
Add:TIC P29.73
Total over the 100ml yield P 59.31
Ingredients used (Extender)
Coconut Oil P 13.70
Packaging
Bottle P 9.95
Parchment Paper P 0.22
Sticker P 0.66
Twine P 0.33
Scotch Tape P 0.08
TOTALS (Extender and Packaging): P 24.94
Capital Requirement Strategy
The pool of funds will come from individuals who will
contribute equal amounts of cash. The initial capital requirement
for the proposed business is P 800,000.00
Pre-Operating Expenditures
Licenses:
DTI Registration 150.00
Mayor’s Permit 100.00
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Business Permit 8,360.00
BIR Registration 500.00
Sanitary Permit 560.00
DENR Permit 6,300.00
Administrative Expense 457,595.27
TOTAL PRE-OPERATING EXPENDITURES P 473,565.27
Cash Working Fund P 326,434.73
Statement of Assumptions
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1. Sales are expected to increase by 3% and purchases are
expected to increase 5% for the next four years.
2. Ending inventory is computed at 2% of TGAS.
3. Sales are made on a cash and trade credit.
4. All assets under plant, property and equipment are
depreciated under straight line method.
5. Office and Selling Supplies Expense will increase by 3% for
the next four years.
6. It is assumed that the Other Income from selling discarded
materials is 2% of net sales.
7. It is agreed by the owners that P 350,000.00 of the cash
will be invested in a time deposit that earns 3% per annum.
8. Income tax expense is computed as 30% as the standard rate.
