Philippine College of Technology

College of Accounting Education

A PROJECT FEASIBILITY ON THE ESTABLISHMENT OF FOOD TRUCK AND

PRODUCTION OF SATTI, DARAL, AND PASTIL

In final fulfilment of the requirements in

MGT 7 MANAGEMENT CONSULTANCY

Presented to:

MR. RIKK NICHOLSON NALZARO, CPA, CTT

Intructor

Presented by:

ALCANTARA, MARIELLE EDLEN T.

HAMIN, RHEALIZA RHADZHAFATNI M.

 ACKNOWLEDGEMENT

DEDICATION

TABLE OF CONTENTS

LIST OF FIGURES

LIFT OF TABLES

CHAPTER I

SUMMARY OF THE PROJECT

A. Overview of the Enterprise

 Name

The Food Truck business are engaged into moving to different locations

where they sense they have potential customers which is why they were

considered as the mobile version of a restaurant business by many, thus, making

them one of the hottest trends in the food industry. According to a study from

Ibisworld food industry marketing research, due to the changes of consumer’s

taste and preferences, the demand for food truck business has increase over the

past years and will continue to rise in the prospective years. Meanwhile, the

manufacturers of the food trucks are keen towards developing the hygiene of the

said food trucks because of the health issues within the industry.

In a recent study conducted by Food Truckr, it has conveyed that food

truck business dominated the global market because of the strategies that the

food truck industry has adopted such as its interior design and serving style.
Furthermore, because of the rapid change in rising busy schedule, rise in

working women population, and inclination towards street food, these factors

have given the Food Truck Industry more opportunities.

The Food Trucks business has enlarged over the past 5 years to 2017

and is one amongst the best-performing segments within the broader food-

service sector. The industry's outstanding rise has been mostly owing to ever-

changing shopper preferences in favor of distinctive, gourmand cooking at more

cost-effective costs. Cities like Portland, Los Angeles, and capital of

Texas have sought-after to differentiate themselves by crafting laws

and making areas specially designed for mobile food trucks.

These trends area boon for the Food Trucks business,

as shoppers have sought-after to

maximize their income by pampering in little conveniences like cheap gourman

d food.

Over the past 5years, the Food Trucks business has full-grown by 7.3% to

succeed in revenue of $960m in 2017. Within the same timeframe, the amount of

companies has full-grown by 7.2% and therefore the range of staff has full-

grown by 6.9%, according to IBworld.com.

Since the food truck industry is booming and has predicted to continue to

grow in the coming years, the proponents decided to established a food truck

business within the Davao City’s premises. The business will inherit the cultural

practices of Zamboanga and will be using the name La Vivienda. becaus the

business La Vivienda as it trace back to their cultural practices in Zamboanga

City. La Vivienda, according to Spanish Dictionary it is clled “the living place”, but

it also consists of Viva, Vinta and Merienda which all formed La Vivienda and

gives the name an enlightening vibe.

Viva or Vivir means to live in Chavacano, it tells us that we should not give

up in life and that you should always keep on fighting despite the hardships that

you will encounter. (reference)

Vinta or Regatta represents a small boat which has colorful patterned sail.

It is a common practice that every festival we have a sporting event consisting a

series of boat races and who among the vintas has the most colorful sails.

(reference)

Merienda because our products are basically snacks that are from our

hometown which is a mixture of Muslim and Christian style food unlike the other

snacks of our competitors. All in all, La Vivienda is offering a taste of zamboanga

culture that we don't want you to miss. (reference)

The proponents chose vinta as the main symbol of the business logo (as

shown in Figure ____) because it is the best representation of Zamboanga.

When people see vinta, they perceived that the products are from Zamboanga

which is an advantage for us as it differentiate our brand from other competitors

selling the same products.

 The different colors found in the logo symbolizes joy, enlightenment and

unity to emphasize the life of the people living in Zamboanga and the relationship

between Christians and Muslims living together harmoniously.

Our proposed business offers a variety of products specifically, Satti,

Daral, and Pastil to suit people’s taste preferences and also, to appeal to a wide

range of potential customers. Secondly, for them to buy directly from us since we

sell a variety of products than our competitors, thus, It is our competitive edge

against the competitors who already sell the same product but lacked the ability

to create the products mentioned and the ability to create a product that fits

dabawenos taste.

 Location

Choosing a location is futile to the success of the business. Our products

must be sold through a place where it is accessible to our target market

and convenient on our part and so we decided to establish our business in

the Barangay 20-B. if we established our business in that area we are

closer to the school, the residents, and the workers in that particular area.

Furthermore, we chose the area besides the Halo-Halo store, it will

increase the chances of customers purchasing the proposed products and

also, halo-halo is a complement with satti, daral, and Pastil products.

Moreover, it is common for a lot of people to get tired easily and they

preferred to walk the shortest distance possible , that is why we are

directly setting in a location near to them so that it is convenient for them

 and also, for us to distribute our products. Since we know who are target

market is, of course, we want to make them be aware of our products and

so it will be easy for them to locate us.

 Methodology

Method and procedures used in gathering and analysing data are surveys,

interviews, related literature and related studies necessary for the

information of the following:

1. Target Market. The study will center on the residents and workers of

Barangay 20 – B and college students, faculty and staff of University of

SouthEastern Philippines. The responses of these 3 segments will be

the key factor in determining the marketability of the food truck

business and the products proposed in this study.

2. Survey. Aside from data gathering through related literatures and

studies, a survey will be administered to residents and workers of

Barangay 20-B and college students, and faculty and staff of University

of SouthEastern Philippines – Obrero campus of Davao City. The

survey will consist of (13) questions for those who know the proposed

products and also, (13) questions for those who does not know about

the proposed products. The questions are related to the respondents’

preferences and opinions about the food truck business and the selling

of the proposed products under this study. Furthermore, their financial

capability and willingness to purchase the product offered will also be

 assessed and evaluated accordingly. Sample Survey Questionnaire is

shown on Appendix___.

3. Sample Size. The researchers have gathered and obtained relevant

statistics for the total population of barangay 20-B including the

number of workers associated in the said location and the college

students and faculty and staff from the University of SouthEastern

Philippines – Obrero Campus. Using this information, the researchers

have computed the sample population of respondents using the Robert

Slovin’s formula for sample size determination. Presented below is the

formula used and computations made to compute for such:

𝑁
𝑛=
(1 + 𝑁𝑒 2 )

Where;

n = Number or samples

N = Total Population

e = Margin of error (5%)

Table 1 below shows the approximate number of the total population of

residents, the workers, and the students, faculty and staff of University of

the Southeastern Philippines – Obrero Campus and also, their percentage

composition with respect to the total population and the sample size for

each segment. In determining the respective percentage proportion of

each segment, the separate population for residents, workers, students,

and faculty and staff are divided to their sum. After which, the sample size
of each segment is computed by multiplying the percentage composition

of the select segment to the computed total sample size for both groups.

Market Segments Population Percentage Sample Size

Residents 4,581 26% 102

College Students 8,340 47% 184

Workers 4,840 27% 105

TOTAL 17,761 100% 391

(*Computed using the Slovin’s formula)

17,761
𝑛=
[1 + (17,761(5%)2 ]

17,761
𝑛=
45.4025

𝑛 = 391.19 𝑜𝑟 391

4. Suggested Selling Location. Among others, the proponents have

considered the Lacson Street located at Barangay 20 – B as the

prospective site for the proposed business since it has an open space

and it is closest to the target market. Other aspects such as demand

from consumers purchasing the product being offered and the

corresponding fees and bills to sell the product on the said location will

be taken into account for further examination.

5. Additional data. Any supplementary information necessary to support

the findings, claims and propositions in this study and complete this

paper will be acquired through interviews, related literature and related

 studies. This is to increase the understanding of the different factors

that might come into play in the production and sale of the product

offered. Information will include but are not limited to the product’s

production process, supplier information and competitive information.

6. Product cost and selling price. As for the start-up and input cost

incidental to the establishment of the planned business and the

production and sale of the product being proposed, they will be

identified and examined thoroughly so that the initial capital will be

utilized with optimum maximization. On the one hand, the retail price

charged on the product will be computed based on the mark-up added

on the cost of producing such.

7. BFAD approval. Since this study focuses on producing and selling a

food product, it would have to be registered then under the Bureau of

Food and Drugs agency. The Bureau of Food and Drug agency is the

prime administration of the Philippine government responsible for the

approval, certification, monitoring and regulation of the flow of products

particularly on the food, drugs, cosmetics, medical devices and

household hazardous waste category within the country’s borders.

8. Permits and licenses. Like every establishment that conforms with the

rules and regulations, La Vivienda is also obliged to follow the rules in

order to legalize its business. The following are the business permits

and Licenses needed to acquire by the Food Truck Business:

a. Barangay Clearance – A Barangay Clearance certificate entails that

La Vivienda had complied with the requirements of the barangay.

b. SEC Certificate of Registration – Since the establishment is a

partnership organization, La Vivienda needs to secure a certificate

of partnership from SEC to be considered as a juridical entity.

c. Mayor’s Business Permit – La Vivienda needs to secure a Mayor’s

Business Permit to prove that it conducts a legal business in the

City.

d. BIR Certificate of Registration – Since La Vivienda is a food truck

business, it must register with the Bureau of Internal Revenue to

comply with the Philippine tax requirements. The BIR will assign a

Tax Identification Number to La Vivienda and it will give the

business the authority to print its official receipts and invoices, and

register its books of accounts.

e. SSS Employer’s Registration – According to Republic Act 8282 or

otherwise known as the Social Security Act of 1997, it is required

for the establishment to register with SSS for the security of their

employees.

f. PhilHealth Employer’s Registration- Requires all businesses and

their employees to register with PhilHealth to provide health

insurance coverage to the employees.

 g. Pag-IBIG Employer’s Registration – Requires employers to register

with Home Development Mutual Fund (HDMF) to be able to provide

benefits to their employees.

h. DOLE Registration – This requires establishments to register for

the sole purpose of monitoring their compliance with the Labor

Code.

9. Study completion. After all the data have been gathered and

interpreted, the proponents of this study will then consolidate and

evaluate all these to formulate the necessary conclusions and

recommendations.

 Scope and Limitations

This study was conducted to determine the feasibility of food truck

business and profitability of producing and selling Satti, Daral, and Pastil

to residents, college students and workers of the Barangay 20-B. Also, the

corresponding marketing, technical, management, financial, and socio-

economic aspect in the feasibility study will be taken into account to

maximize the market share of the business being proposed.

The analysis of the study will be primarily based on the data gathered

through surveys, interviews, related literature and related studies. As for

the number of respondents totalling to 394 have been identified as an

adequate sample size. As for the competitors of the business presented in

this study, only the top three business presently in operation within the
 barangay 20 – B determined through the survey responses are taken into

consideration.

The financial projections underlying the business proposed in this paper

will be limited to the first five (5) years of operations only. Should there be

economic and financial factors that may affect the financial projections

associated with the establishment and operation of the proposed business

but are non-quantifiable and difficult to observe, they will be accounted as

beyond the scope of this study.

B. Descriptive Definition of the Enterprise

a. Project Proponents

b. General Objectives of the Study

Primary Objectives:

1. To determine if the establishment of Food truck business and production and

sale of Daral, Satti, and Pastil in Barangay 20-B is feasible.

2. To determine whether or not this type of business will be profitable for the first

three years of its establishment.

Secondary Objectives:

Marketing Aspect

 To be able to determine the demand and supply of the proposed business in

the market.
 To determine how the food truck business can penetrate in the market

successfully given the presence of the different competitors.

 To be able to price the product that it will yield a profit and is acceptable to

buyers.

 To determine the marketability of the food truck in the proposed location.

Management Aspect

 To be able to apply the most suitable method for the management in handling

the operations of the business.

 To be able to propose a good vision and mission for the business.

 To determine how the food truck business would be managed, including the

duties and responsibilities of the owners in running such business, as well as the

compensation needed for the operation of the business and also the food truck’s

policies and regulations.

Technical Aspect

 To be able to identify the assets needed in order to run the food truck business

effectively and efficiently.

 To be able to illustrate the production and operation flow of the food truck

business.

 To be able to illustrate and determine the ingredients used in producing the

products.

 To be able to completely show the scheduling and the production cost.

Financial Aspect
  To determine the financial requirement needed to produce and sustain the

products.

 To be able to determine how to maximize the profit and at the same time

minimize the costs.

Socio-Economic Aspect

 To determine the benefit of the product produced and how it can contribute to

the community of Davao City.

 To be able to prove that that the proposed business will provide benefits to the

government as well.

 To be able to show that the business will give enough contributions to the

country.

c. Long Range Objectives (next 5 to 10 yrs.)

 To determine if it is feasible to own and operate a sit-down restaurant.

 To determine whether it could sustain its growth for the next five years.

C. Feasibility Criteria (what are the five aspect of feasibility)

The following are the five aspects of feasibility which contained information

based on the findings and data that were gathered and analysed.

Under the Marketing Aspect, the data gathered showed that there is a gap

between the supply of spicy snacks sold by the competitors and the demand for such.

Based on the calculations and illustration presented in the preceding chapters, only
68% of the demand is supplied by the competitors. Furthermore, in a survey conducted

amongst the 391 respondents, it was determined that the market acceptability for the

product offered is around 96%. Therefore, given the high market acceptability of the

product and existing supply gap in the market for spicy snacks, it is feasible for La

Vivienda to enter such market. In the same way, the food truck business has a potential

to expand and settle in a sit-down restaurant in the future considering the presence of

supply gap.

As for the technical aspect, the different costs associated with the food truck

business and its maintenance and the production and sale of the product being

proposed such as startup costs and working capital requirements have been estimated

reasonably and accordingly using the information provided by suppliers, current market

prices, several economic assumptions and market projections, and other published

studies containing data and information similar to this paper. Other technicalities found

in this feasibility study such as the production site, store location, and solid waste

management had been dealt properly. Hence, the resulting total project cost and other

technical requirements are deemed to be reasonable and attainable for a partnership to

establish a business.

With reference to the Management aspect of this paper, various details and

subject matters pertaining to the management of the food truck business proposed have

been properly defined. The qualifications, functions, duties and responsibilities of the

members of the organization have been appropriately established. Different policies and

processes involving recruitment, compensation and employment benefits, and

employee and business policies have also been placed. Overall, the business can be
clearly handled and the policies and processes are simple and straightforward giving

the impression that the business can be easily managed.

In relation to the Financial Aspect, the projected financial aspect showed that the

business would be earning profits until its fifth year of operations. In totality, the

business is a sound business venture given the income generated during its first five

years of operations.

With regards to the Socio-Economic Aspect, the food truck business will have

various meaningful contributions to the different aspects of society and the economy in

general. Although the effect may be minimal unlike large enterprises and corporations,

the business would still be beneficial and helpful in many ways particularly in the local

area – to the local economy, government agencies, employees, customers, competitors

and suppliers and service providers.

INTRODUCTION

Highlights of the Study

a. History of the Project

"It is important to share culture, because as much as we know about each

other, we have a lot to learn. - culture is a way to sustain people in the worst

times and culture is a way to lift up in your best times”. - Sabrina Lynn Moly.

The Food Trucks business has enlarged over the past 5 years to 2017

and is one amongst the best-performing segments within the broader food-

service sector. The industry's outstanding rise has been mostly owing to ever-
changing shopper preferences in favor of distinctive, gourmand cooking at more

cost-effective costs. Cities likePortland, la and capital of Texas have sought-

after to differentiate themselves by crafting laws and making areas specially

designed for mobile food trucks. These trends area boon for the Food

Trucks business, as shoppers have sought-after to

maximise their income by pampering in little conveniences like cheap gourmand f

ood. Over the past 5years, the Food Trucks business has full-

grown by seven.3% to succeed in revenue of $960m in 2017. within the same

timeframe, the amount of companies has full-grown by seven.2% and therefore

the range of staff has full-grown by half-dozen.9%.

Food portrays a huge part of our life. It becomes the comfort food we seek as

adults in times of frustration and stress. It plays an important role in our

culture such as the traditional cuisine which is passed down from one

generation to the next. Food is a portal into culture and it should be treated as

such. Also, it is an expression of cultural identity.

The proposed products such as Satti, Daral, and Pastil represents the unity

of Christian and Muslim culture. With the recent crisis about war between

cultures, we want people to realize that the food itself remembers the history

among the harmonious relationship between different religions and their

beliefs. Spreading the proposed products is a way of preserving our cultural

relationships and values while at the same time making people embracing
their cultural identity, informing them about other cultures and reconnecting

with our fellows coming from western mindanao who might have forget that it

is tgeir birthplace that have shaped their personality. the food itself is a

symbol of peace, since the act of eating is something we can all relate to. As

the famous cookbook author James Beard said, "Food is our common

ground, a universal experience. "

we cater food not just with our fellow zamboanguenos but also to a wide

range of customers whom have differrnt preferences. There are alterations

made with our products to suit the taste of the dabawenos yet it still retain the

cultural significance of our products. we want people to acknowledge us so to

increase respect and understanding between our groups.

Davao City is widely known for its cultural diversity and the Kadayawan

Festival which as described by the people who lives here, it signifies the

celebration of life and the wealth of every culture. Choosing Davao is

essential for us, we want to share our knowledge with them so that it will

[tatak] in their minds that they still need to learn other important culture

coming from the same mindanao, specifically, western mindanao.

Furthermore, because of their emphasis on love and respect of one's culture

and the friendship they offer to various culture, Davao City is a great place for

us to reach out.
 Based on research, food trucks are becoming popular nowadays as it is

innovative and brings convenience on the part of owners and the potential

customers. it is a great way to operate a business selling the proposed

products with just minimal investment. Since it is low on operation cost, we

can save much more unlike the standby restaurants, on another note, we

could also expand our brand making it known for the entire city.

b. Nature and Problems of the Industry

Selling food street-side dates back to the America in the late 17 th Century

when living conditions were cramped and many people did not have

resources to cook their own meals. Vendors sold food from small carts that

has continued throughout the world. Today, food trucks have been adapted

from the rest of the world and had come in every type of cuisine conceivable.

But as with any food establishment, food trucks also encounter problems

such as permit, license ,and health and safety issues. Some cities have

restrictions regarding food trucks business, you cannot just park your food
truck on any open space without the approval of the authority and since the

food truck industry is serving food to the general public, they are required to

comply with health and safety guidelines. There would be inspections

regarding compliance with health and safety regulations and whether the

entity has the authority to operate within that area.

Food truck regulations are evolving in cities across the country, and city

leaders often must weigh competing interests when considering proposed

changes. Many cities are attempting to balance those interests by regulating

food and traffic safety without impeding the creation of a new and popular

market in the food industry.it is not likely that a market will roll away any time

soon. In fact, a 2011 study released by Technomic, a food industry consulting

and research firm, found that “91% of consumers polled who are familiar with

food trucks say they view the trend as having staying power and not a

passing fad.”

Not only do food trucks offer opportunities for entrepreneurs to break into the

food industry, but they also offer growth opportunities for established

restaurants. Opening a food truck is a way for an existing restaurant to

increase its name recognition and to reach additional consumers who may

sample a unique dish from a restaurant’s food truck and be inspired to later

dine at the corresponding sit-down restaurant. Mobile units can open the door

to large catering opportunities, community outreach, and untapped markets.

According to a study performed by Portland Bureau of Planning and

Sustainability in 2008, which found that the trucks promote social interactions,
 provide employment opportunities, and have positive impacts on street vitality

and neighbourhood life.” The estimated cost to start a food truck is

significantly less than the estimated amount of capital necessary to launch a

restaurant.

c. Mode of Financing

d. Initial Cost and Initial Working Capital

e. Summary of Assumptions and Findings/ Results

f. Conclusion)

CHAPTER II

MARKETING ASPECT

A. Product Description

a. Products

Satti, Daral, and Pastil, the products of La Vivienda, will be served to all

customers with a certain alteration of making the products less spicy to fit in the

preferences of the Dabawenos. The Satti product comes in three variants: beef with

tamu, chicken with tamu, and chicken and beef with tamu. Moreover, the business will

focus on the taste of its product offering since this was the most regarded aspect by the

respondents whenever purchasing a snack; and which the proponents consider as top

priority in its promotion.

Place
 As for the location of the planned food truck business, it will be located at Lacson

Street, Barangay 20 – B, Davao City. It is considered as the most strategic and practical

location for the business as it is accessible and convenient to meet the needs of the

target market and cost efficient on the part of the management. In addition, our

business is located near the Halo-halo business that sells ice-based products, it will

serve as a complement with the proposed products.

Promotion

Apart from online marketing, other promotional tactics were designed and

prepared to make our target market fully aware of La Vivienda’s outset. The following

promotions are as follows:

a. Free food samples. Based from the survey, most of the

respondents have not yet eaten Satti, Daral, and Pastil, but they

are willing to taste one if it’s available for sale within their premises.

Thus, giving a free food samples to the select target market would

increase the number of potential buyers and customers of La

Vivienda. The promotion put forth does not only pique the interest

of the consumers, but also, it increases the likelihood of having

sales or increased sales for the business. That way, La Vivienda

would most likely become profitable or more. Furthermore, the free

food samples will provide an opportunity for the management of La

Vivienda to improve its product should there be feedbacks from

 potential and present customers about the product sold. The free

food samples will commence before the start of the operations of

La Vivienda.

b. Social Media Contest. At present, a lot of people are into social

media. Thus, this provides an avenue for La Vivienda to extend its

branding and popularity through social media outlets. Campaign

promotions on social media platforms may be in the form of contest

wherein the declared winner are rewarded with Satti that comes

with beef, chicken, and tamu, alongside with, Pastil and Daral. The

contest mechanics would require customer-participants the

following:

1. Post a photo online of the products of La Vivienda that they

have purchased, either through Facebook, Twitter or Instagram;

2. Include a caption detailing their experience buying from La

Vivienda; and

3. Tag the official account of La Vivienda.

The entry with the most number of likes will be proclaimed as the

winner. The contest will last for a week after the launch. Through

this kind of promotion, La Vivienda will gain prominence in a

broader market at the same time, indirect endorsements and

referral from customers.

c. Enhanced customer relations. To sustain customer retention and

adequate sales, a more sophisticated and dedicated cutomer

 engagement by the frontline personnel will be done; similar to that

of top notch fast food chains in the Philippines like Jollibee and

McDonalds. Customer service amongst frontline staffs would have

to be likened to the services performed by cashiers and crew in

Jollibee and McDonalds whereby politeness, attentiveness, and

friendliness are valued and regarded in paramount importance. To

add, constructively responding to any complaints from the

customers are to be expected from the enhanced customer

relations.

d. Information Graphics. To properly introduce the product in the

market, the business will provide information graphic materials that

are placed at the stall such as the signboard and menu board to

attract paser-by customers and to provide the answers to potential

buyers mind as to what kind of product are our food truck business

is selling.

 Price

The proponents of this study used cost plus strategy to set the price of the Satti,

Daral, and Pastil wherein the suggested price will be based on the aggregated costs of

raw materials, labor, and overhead plus mark-up. Also, the daily allowance of college
students, workers, residents, and faculty and staff and the budget they set aside when

buying snacks have been taken into account in pricing such.

Market Description

 Market Demographics

The proponents of this study have done a research based on the

majority of who will purchased our product if this is introduced to the

market.

 Geographical Location

We only have considered a single location which is located in

Barangay 20-B near the Halo-Halo business. We are engaged to food

truck business so to have the opportunity of growing our own sit-down

restaurant. The researchers made a list of the possible places to put a

business and at the same time determining our target market and out

of all the possible locations, Barangay 20-B is the only location that fits

our description, which is a residential area, with students, faculty and

staff, and also, the halo-halo business that is compatible with our

business. We also chose this location because we don’t have

competitors selling the same kind of food, but we have considered

those who sell dish and bread as our competitor.

 Market Segmentation

 Major Consumers
 Based on conducted survey, our major consumers are the residents,

college students and workers ranging from the age of 18-44. The data

conducted was a proof that the major consumers are the ones who

have the capacity and the willingness to purchase the proposed

products because the income-level of the major consumers ranged

from P6,000 to above P20,000 per month. The information gathered

from them had shown that they love to eat our products everyday,

every other day, and also twice in a week. Moreover, they have

expressed that they are fond of tasting newly introduced products in

the market.

 Potential Buyers

Our potential customers are those who expressed to eat our snacks

once a week and twice in a month, they are the residents and workers

ranging from the age 45-65. In addition, they prefer to eat once a week

or twice in a month, since they perceived the product as harmful

towards their health if they eat it everyday or twice a week.

b. Demand

 Factors affecting demand

Based on the conducted survey, the target market chose two factors that apply to

them when buying certain products and these factors are affordability and refreshing

attribute. If the producs

 Historical/ Past Demand

 Demand Forecast
 Market Share

c. Supply

 Present Supply

 Supply Forecast

d. Demand-Supply Analysis

The demand and supply gap analysis is necessary to determine the

market share of La Vivienda. The gap or the unsatisfied portion of the

market is obtained by subtracting the projected demand to the

projected supply which signifies the available market for La Vivienda.

To determine the existence of any gap between the consumer’s

demand and competitor’s supply, a calculation is presented below to

show such.

As shown above (Figure 10), only 68% of the total annual demand are

being supplied by the three competitors namely Mang Tinapay,

Creamery Rock and Bread and Beyond which is equivalent to 101,821

units. With that being given, the remaining 48,214 units supply

deficiency may be capitalized by Mochirap as its target market. Since

the said food stalls are not yet open for possible future expansions, it

can be deduced that supply will remain constant for the next five

school years. However, as for the total annual demand in the following

years, possible population increase had been considered at a constant

 rate. Therefore, the total annual demand for five school years will

increase significantly given a constant growth thereby, increasing the

supply gap as well in those five years (see Table 13).

e. SWOT Analysis

STRENGTHS EXPLANATION

1. Location The business is located near its target market.

2. Ingredients The products are available and the ingredients

will be supplied by the farmers.

3. Product Innovation/ Offering various food combinations and

Entrepreneurial Ability
creating new products that will make customer

loyal to us even more.

4. Product edge We are the only food truck business that sells

Daral and Pastil in the entire Davao City. In

addition, we are the only business that offers

mild spicy variation of Satti.

WEAKNESSES EXPLANATION

1. Pooling Funds In starting a business, we must have the

necessary funds.

2. Product unknown People might not be aware of our products.

OPPORTUNITIES EXPLANATION
1. Population growth More customers and wider markets.

2. Special occasions/ Season of Ramadan and wet season, there is

Feast celebrations an increase in sales.

3. Food Truck Festival Food Truck Festival which has started since

2017 which entails yielding profit and has

positive impact on street vitality.

THREATS EXPLANATION

1. Dry season Lesser people will buy our products.

2. New to the business Customers might have undue loyalty to our

competitors.

3. Additional Laws and Government may impose additional laws and

regulations regulations to the food truck industry which may

affect the operations of the business.

4. Copy Cat Competitors Competitors would offer similar products

quickly.

5. Storm If the storm is great, few customers would buy

our products.

Analysis

f. Price Study of the Competitors

 The pricing study of the competitors are the same pricing strategy that we used

except we have more of other pricing methods to yield more profit. We interviewed

many establishments that we have considered as a real competitor and with the data

we have accumulated, it was found out that they are only using the cost-based pricing

approach, they only intend to sell whatever they have in the market. They do not think of

other means to improve the marketability of their establishment. It is logical for some

establishments that it is the only pricing strategy they had, given that they were only

selling variants of food or as we call it an eatery, but for some who are selling baked

goods, we are surprised that they did not think of other methods to increase their sales

or minimize their costs.

Pricing Strategy of the Enterprise

In pricing our proposed products, we have consider the following practical methods and

which based from our data support our conclusions:

a. Cost-Based Pricing. In this strategy, we first begin with identifying

expenditures in relation with the food truck business and the producing

and selling of the proposed products. At that point, we add the mark-up

cost that will cover the capital expenditures so for us to earn profit and

after that, divide it among the products that we would sell. Actually, in

this type of cost-based pricing, we have used the Break-even analysis

to determine at what amount is the break-even point and what amount

 should we charge our products to reach our profit objectives and also,

covering the expenditures.

b. Bundle and Psychological Pricing. With bundle pricing, we can

move unsold items that are taking up space in our facility and also, can help us

meet our quota. In this strategy, we sell multiple products in a lower rate than if

we sell them individually which makes customers more willing to purchase the

proposed products. Also, since customers perceived that buying products by

bundle is more affordable we have think of increasing the price of bundle pricing,

but still at the same time more lower than purchasing item individually. Using this

cognitive bias to our advantage, buyers will be likelier to think that they are

getting a great deal.

g. Marketing strategy of the Competitors

Based on the information we have gathered from our competitors, the only marketing

strategies each one have are the following:

a. Information Graphic. In using this strategy, customers can see

directly what the business is selling and how much each product

costs. In their information graphics, they intend to make the

products look bigger than the actual look of the product, so to

increase their demand by creating an illusion of enhanced value for

the buyers.

b. Cleanliness of the place. In this practical strategy, our competitors

does not want customers to avoid purchasing their products

 because of how the customers perceived that the products they are

selling contained other compound which may induce food

poisoning. The competitors always make a way to clean their place

so the place will be inviting for their potential customers.

c. Displaying Food. Competitors are fond of displaying their food as

this will make potential customers engage in their product.

According to them a food creates an appetite, when the potential

customers see their product, they generate the feeling of being

hungry and that will push them to buy the products they see.

h. Marketing Study of the Enterprise

 CHAPTER III

TECHNICAL ASPECT

After having determined the market size and area, product demand and growth, the

potential and technical feasibility of may be analyzed. This part of the study deals with

the allocation of resources needed to satisfy the market. The soundness of the technical

analysis will be considered complete if all technical aspect of the proposal have been

taken into account in the analysis and if the planned establishment of the business and

production and sale of the product conforms to the relevant regulatory framework and

accepted standards and practices. The estimated cost of the proposal should be as low

as any other reasonably available alternatives which would produce intended results.

The objective of this portion of the feasibility study is to determine the extent to which

the project meets the technical soundness criteria.

A. The Product/ Service

La Vivienda Food Truck Co. is a food truck business that will sell Tausug

cuisines, specifically, the Pastil, Daral, and Pastil. These products are commonly

found in Western parts of Mindanao like in Zamboanga City. As mentioned in the

previous chapters of this study, the diversity of Davao City and the longingness of

the proponents of this study as to their hometown’s cuisines led to the idea of

bringing these proposed products to the city. The proposed products are not

common to the city and this could be an advantage for the business to position in the

industry.
 The main ingredients of the products can be easily found within the city such

as the coconut for the Daral, and bihon and sprouted monggo for the Pastil. As for

the sSatti, the highlight of this dish is its sauce which is made from different spices

such as the turmeric, chilli, pepper, and coconut milk.

Figure ___. The proposed products (Daral, Pastil, and Satti)

B. The Production Process

The overall production process of the business will include the Purchasing,

Preparation, and Distirbution.

Figure ____. Production Process

PURCHASE PREPARE DISTRIBUTE

(2 hours) (1 hour 30 mins) (30 minutes)

Purchase

In this phase, all of the ingredients of the products are being purchased. There

are a lot of sources of ingredients in the city but the target is to contract to local supplier

such as those in Bangkerohan Public Market.

The proposed quantity of the purchase of the ingredients should be good for a

week and should be done once a week. This will be done every start of the business

week but there will be an allotted budget for contingencies if there will be an unexpected

additional purchases. This is proposed with the consideration of preserving the

freshness of the ingredients.

Prepare

The preparation or half-cooking phase will all be done in the food truck. It will

only be half-cooked because the final preparation or cooking will be done in the

distribution phase. There will be an allotted time for the preparation of the product which

is shown in the Production Schedule. The detailed production for the products are as

follows:

Table ___. Production Process of Daral

DARAL

INGREDIENTS: (Good for 8-12 pcs.)

 150g (1 ¼ Cups) Flour

 1 Large Egg

 ¼ tsp. Sea Salt

 150ml Coconut Milk

 50ml water
  100ml Pandan Juice

 1 tbsp. Oil

 Coconut Filing

Pandan Juice:

 In a blender, process about 6-8 large Pandan leaves with 150ml of water.

Pour through a fine strainer and discard solids. Measure out the required

amount of juice specified in the recipe.

Coconut Filing:

 Combine 100g of sugar and 75ml water. Bring it to a boil and simmer until

the sugar dissolves.

 Simmer until the liquid starts to thicken and become caramelized. (10

minutes)

 Add 1 knotted Pandan leaf and 100g of grated coconut and continue to

cook over a low heat until the coconut filing is thick and glossy. (15 to 20

minutes)

 Cool and use as desired.

Crepes:

 Sit flour and salt into a medium-sized mixing bowl. Make a well in the

center and pour in the eggs, coconut milk and Pandan juice.

 Using a whisk, gradually incorporate the flour into the liquid, making a

smooth batter free from lumps.

 Thin the batter down with the additional 65ml of water and stir the oil. Mix

well.
 Cover the bowl and allow the batter to stand for 20 to 30 minutes.

 To fry the crepes, heat a small non-stick frying pan or a crepe pan over a

medium heat.

 Lightly brush the pan with oil and make sure that the pan I s sufficiently

hot. Stir batter.

 Pour slightly less than ¼ cup or 4 tbsp batter into the pan and immediately

rotate the pan so that the batter covers the base with a thin layer. Allow

batter to set and just begin to brown.

 Flip the crepe and allow the other side to cook, just for a fw seconds.

 Turn the crepe out onto a plate. Continue making the crepes, stacking the

finished ones on top of each other as you go along.

 As the batter tends to thicken as you cook the crepes, you might to thin

down with a tablespoon or two of water as you go.

 Place about 2 tablespoons of filling in the center of the crepe, fold both

sides towards the middle and roll the crepe away from you, neatly

enclosing the filling and creating a small parcel.

 Table ____. Production Process of Pastil

PASTIL

INGREDIENTS:

 Bihon/ Sprouted Monggo

 Salt

 Pepper

 Sugar

 Flour

 Corn Starch

 Vinegar

 Garlic

 Onion

 Chili

 Soy Sauce

 Oil

Pastil Dough:

 In a bowl, mix the flour, corn starch, sugar, salt, and pepper.

 Add some water and then mix the ingredients until it becomes thick and

sticky.

 Pour a handful of the dough between the palms. Roll it and form a circle.

 Place the circled dough in a straight pan or platform. Press it until it

flattens.
  Place the bihon or sprouted monggo (must be boiled, add salt and pepper

for flavoring) on the dough.

 Cover it by folding the dough.

 Fry until golden brown.

Pastil Sauce:

 Saute onion, garlic, and chili.

 Pour soy sauce and vinegar. Make sure that vinegar is more than the soy

sauce.

 Add pepper, salt, and sugar.

 Let it boil.

 Before removing it on fire, make sure to taste it. Add more pepper, salt,

sugar if it still lacks based on the preferred taste.

Table ___. Production Process of Satti

SATTI

INGREDIENTS: (8 quart pot)

 ¼ Cup Chili

 4 Thumb size Ginger

 1 tsp turmeric

 1 bulb onions
  5 leaves oregano or 1 tsp if powder

 Oil

 ½ tsp shrimp paste

 1 tomato

 ¼ cup flour

 ½ cup Corn Starch

 1tsp salt

 15g Parika

 1 tsp peanut butter

 1 tsp curry powder

 2 inches tumon

Procedure:

 Boil 6 quarts of water. Add the tumon. Add 14,15,16,17, when boiling, stir.

 Mince and blend ingredients 1 to 5. Add a small amount of water just enough to

start the blend.

 Mix ingredients 9 to 13. Add 1 cup or more water, stir until free of lumps.

 SAute shrip paste and tomato with oil then add the mixed ingredients 1 to 5.

Saute until partly dried.

 Pour the saute into a boiling water, stir, then add coconut coconut milk. Add the

milk from step 3. Add water to reach desired thickness.

 Keep in medium flame for 15-30 minutes or more with frequent stirring to avoid

sticking to the pot. Add water to lessen the thickness of the soup (if preferred).
  Cool down for 2 minutes then serve.

Beef or Chicken on sticks:

 Marinate with calamansi,pepper, salt sugar, and turmeric.

 Brush with coconut milk.

Rice:

 Cook rice in the coconut leaves with less water just enough to cook the rice.

 Serve with grilled beef or chicken and sauce.

Distribute

In this phase, the sale of the products will be done. This also includes the final

preparation such as frying and heating or until the finished output of the products will be

done. This is because of the idea that freshly cooked products must be served or

distributed to the customers. This also include the packaging of the products if it will be

for take-out.

C. Plant Size and Production Schedule

The proposed production schedule is shown below:

Table ___. Day-to-Day Production Schedule

ACTIVITY MON TUE WED THUR FRI SAT SUN

Purchase of 6:00AM

ingredient to

8:00AM

Preparation 8:00AM 8:00AM 8:00AM 8:00AM 8:00AM 8:00AM 8:00AM to

 to to to to to to 9:00AM

9:00AM 9:00AM 9:00AM 9:00AM 9:00AM 9:00AM

Break 9:00AM 9:00AM 9:00AM 9:00AM 9:00AM 9:00AM 9:00AM to

to to to to to to 10:00AM

10:00A 10:00A 10:00AM 10:00AM 10:00AM 10:00AM

M M

Distribution 10:00A 10:00A 10:00AM 10:00AM 10:00AM 10:00AM 10:00AM

M to M to to to to to to 3:00PM

3:00PM 3:00PM 3:00PM 3:00PM 3:00PM 3:00PM

Rest 3:00PM 3:00PM 3:00PM to 3:00PM to 3:00PM to 3:00PM to 3:00PM to

to to 4:00PM 4:00PM 4:00PM 4:00PM 4:00PM

4:00PM 4:00PM

Preparation 4:00PM 4:00PM 4:00PM to 4:00PM to 4:00PM to 4:00PM to 4:00PM to

to to 5:00PM 5:00PM 5:00PM 5:00PM 5:00PM

5:00PM 5:00PM

Distribution 5:00PM 5:00PM 5:00PM to 5:00PM to 5:00PM to 5:00PM to 5:00PM to

to to 7:00PM 7:00PM 7:00PM 7:00PM 7:00PM

7:00PM 7:00PM

D. Plant Location and Plant Layout

The proposed location of the food truck is in Lacson St., Barangay 20-B, Davao

City. A map of the proposed location of the business is shown below.

On the other hand, the proposed layout of the work area inside the food truck is

shown below.

E. Machinery and Equipment

 Table ___. Machineries and Equipment

TOTAL

PARTICULARS USE SUPPLIER UNIT COST QTY. COST

Multi Cab Use as the Bontella P350,000 1 P350,000

production and Food

distribution area Truck

Refrigerator Use to store Gaisano 15,995.00 1 15,995.00

ingredients to Mall of

keep its Davao

freshness

Fukuda Use to cook the Gaisano 949.00 1 949.00

GasStove ingredients that Mall of

requires heat Davao

Matrix Box Fan Use to provide Gaisano 849.00 1 849.00

ventilation for Mall of

the employees Davao

Superbrands Use to exhaust Gaisano 1,110.00 1 1,110.00

Exhaust Fan the heat inside Mall of

the food truck Davao

Total P368,903.0

Table ___. Furnitures and Fixtures

PARTICULARS USE SUPPLIER UNIT COST QTY. TOTAL

COST

Monobloc To provide DIY P359.75 4 P1,439.00

Chair relief for Hardware

employees

while

waiting for

the

customers

Extension Use to DIY 389.75 2 779.50

Cord power Hardware

devices that

have short

cables

Cash Box Use to DIY 1,799.75 2 3,599.50

safeguard Hardware

bills and

coins

Total P5,818.00

Table ___. Depreciation Schedule for the Machinery and Equipment

PARTICULARS TOTAL ESTIMATED DEPRECIATION

 COST USEFUL LIFE Year 1 Year 2 Year 3

Multi-Cab P350,000 10 35,000 35,000 35,000

Refrigerator 15,995.00 10 1,599.5 1,599.5 1,599.5

Steamer 1,599.00 5 319.8 319.8 319.8

Cooking Pan 6,599.50 5 1319.9 1319.9 1319.9

Griller 580.00 5 116 116 116

Frying Pan 779.75 5 155.95 155.95 155.95

Deep Frying Pan 680.00 5 136 136 136

Blender 1,195.00 5 239 239 239

Medium Sized 445.00 5 89 89 89

Pot

Stove 949.00 5 89 89 89

F. Raw Materials and Supplies

Table ____. List of Raw Materials needed for the production

RAW POTENTIAL UNIT COST QUANTITY TOTAL COST

MATERIAL SUPPLIER PER MONTH

Chili Gaisano 36/kg 30kg P1080.00

Supermarket

Ginger Bangkerohan 15/kg 15kg 225.00

Public Market
Turmeric Gaisano 150/kg 5kg 750.00

Supermarket

Onion Gaisano 65/kg 15kg 975.00

Supermarket

Oil Gaisano 527/3.5L 50 liters 7,528.57

Supermarket

Oregano Gaisano 151.2/kg 5Kg 756.00

Powder Supermarket

Shrimp Gaisano 167.5/340g 20Kg 985.29

Paste Supermarket

Tomato Bangkerohan 55/kg 15kg 825.00

Public Market

Flour Gaisano 45.20/kg 60kg 2712.00

Supermarket

Corn Starch Gaisano 46/kg 60kg 2760.00

Supermarket

Sugar Gaisano 53/kg 50kg 2650.00

Supermarket

Salt Gaisano 12.5/kg 20 kg 250.00

Supermarket

Paprika Gaisano 646/kg 10 kg 6,460.00

Supermarket

Chicken Gaisano 271/500g 5kg 2710.00

Cubes Supermarket

Coconut Gaisano 56/kg 50kg 2,800.00

Milk Supermarket

Curry Gaisano 656.80 10 kg 6568.00

Powder Supermarket

Tumon Gaisano 60/kg 10kg 600.00

Supermarket

Beef Gaisano 380/kg 80kg 30,400.00

Supermarket

Chicken Gaisano 158/kg 80kg 12,640.00

Supermarket

Bihon Gaisano 94.3/kg 50kg 4715.00

Supermarket

Sprouted Bangkerohan 35/kg 50kg 1,750.00

Monggo Public Market

Black Gaisano 235/kg 10 kg 2350.00

Pepper Supermarket

Vinegar Gaisano 115.8 15 gal 1737.00

Supermarket

Garlic Bangkerohan 90/kg 15kg 1350.00

Public Market

Soy Sauce Gaisano 133.2 15 gal 1998.00

Supermarket
 Egg Gaisano 180/tray 30 trays ( 36 5400.00

Supermarket pcs each)

Pandan Bangkerohan 80/kg 10kg 800.00

Leaves Public Market

Coconut Bangkerohan 30/kg 30kg 900.00

Meat Public Market

TOTAL P101,914.86.00

Table ____. List of Kitchen Utensils

PARTICULARS USE SUPPLIER UNIT COST QTY. TOTAL

COST

Steamer Use to keep the Gaisano P1,599.00 1

products warm Mall of P1,599.00

Davao

Cooking Pan Used to cook Gaisano 3,299.75 2 6,599.50

the products Mall of

(Daral Filling, Davao

and Pastil

Sauce)

Griller Use to grill the Gaisano 580.00 1 580.00

meat for the Mall of

Satti Davao
Frying Pan Use to make the Gaisano 779.75 1 779.75

crepe for Daral Mall of

Davao

Deep Frying Use to fry the Gaisano 340.00 2 680.00

Pan Pastil Mall of

Davao

Food Storage Use for storing Gaisano 169.75 5 848.75

Box cooked products Mall of

Davao

Blender Use to blend the Gaisano 1,195.00 1 1,195.00

ingredients Mall of

Davao

Medium Sized Use to make the Gaisano 445.00 1 445.00

Pot Satti sauce Mall of

Davao

Kitchen Use to store Gaisano 572.10 1 572.10

Utensils kitchen utensils Mall of

Cabinet Davao

Euroched Tong Use to grip and Gaisano 61.78 1 61.78

fry pastil Mall of

Davao

Anchor Chef Use to cut/slice Gaisano 77.61 2 155.22

Knife ingredients Mall of

 Davao

Clear Stackable Use to hold Gaisano 124.34 2 248.68

Mixing Bowl ingredients Mall of

while they are Davao

being mixed

Fas Pack 500ml Use to store Gaisano 62.30 1 62.30

Plastic excess Mall of

Container ingredients that Davao

(5 per bundle) can still be used

Wooden Cutting Use to place Gaisano 184.82 1 184.82

Board ingredients and Mall of

meat for Davao

chopping or

cutting

Pot Holder Use to carry or Gaisano 35.00 2 70.00

open hot pots or Mall of

pans Davao

Ceramic Bowl Use to place Gaisano 50.00 5 250.00

cooked products Mall of

for dine in Davao

customers

Ceramic Pearl Use to place Gaisano 45.00 5 225.00

Plate cooked products Mall of

 Davao

Long Bottle Use to put hot Gaisano 95.00 4 380.00

pastil sauce Mall of

Davao

Omega Soup Use to place Gaisano 95.75 5 478.75

Mag cooked products Mall of

for dine in Davao

customers

TOTAL P15,415.65

Table ___. List of Sanitary Supplies

PARTICULARS USE SUPPLIER UNIT QTY TOTAL

COST COST

Dishwashing Gaisano 50.88 2 P101.76

Liquid Supermarket

Scotch Brite Gaisano 20.45 3 61.35

Sponge Supermarket

Toily Giant Gaisano 126.67 1 126.67

Premium Rolls Supermarket

Magic Towel Gaisano 19.73 4 78.92

Supermarket

XL Gaisano 46.72 5 233.6

Biodegradable Supermarket

Trash Bag
 Safeguard Gaisano 102.79 3 308.37

Hand Soap Supermarket

Isopropyl Gaisano 66.19 3 198.57

Acohol Supermarket

Biogenic

Hair Net 10.38 4 41.52

Broom Bangkerohan 67.49 1 67.49

Public

Market

Dust Pan Bangkerohan 92.93 1 92.93

Public

Market

TOTAL P1,317.18

Table ___. List of Consummables

PARTICULARS USE SUPPLIER UNIT QTY. TOTAL

COST COST

Brown Paper Gaisano P31.15 24 P747.6

Bag Supermarket

Plastic Gaisano 34.26 2 68.52

Supermarket
Disposal

Gloves

Plastic Gaisano 62.30 100 6230

 Container Supermarket

Nescafe Gaisano 162 2 324

Coffee Supermarket

Petron Gasul Petron 863.87 1 863.87

LPG Gasul

Plastic Spoon Gaisano 30/pack 350 10,500

and Fork Supermarket

TOTAL P18,733.99

Table ___. List of Office Supplies

PARTICULARS USE SUPPLIER UNIT COST QTY. TOTAL

COST

Ballpen The Paper P8.05 5 P40.25

Tree

Record Book The Paper 42.57 2 85.14

Tree

Calculator The Paper 341.60 1 341.60

Tree

TOTAL P466.99

G. Utilities

PARTICULARS SOURCE BASIS RATE TOTAL COST

Power and 1000

Light

Water 300

1300

H. Waste Disposal

Proper observance of City Ordinance No. 0371-10 or the Davao City Ecological

Solid Waste Management of 2009. There will be three garbage bins to be placed

outside the food truck. One for biodegradable, another for non-biodegradable, and

the other one is for recyclable. CLAYGO or Clean-As-You-Go will be imposed.

I. Labor Requirements

The business will be hiring a total of 4 employees comprising the following: the

Production and Sales Staff, the Operations Staff, and the Cashier. There will be no

hiring as to the Manager since it will be the managing manager who would act as such.

The manager will first create the job description (shown in table 20) and other

necessary information that includes essential functions to be performed in the roles and

advantages of working for the business. After the process of defining the necessary

information about the employees the business owner will then post and promote job

opening for the positions of Production and Sales Staff, Operations Staff, and Cahier.

Then the recruitment process applicants will go under the screening of the business

owner. Screening process includes interviews, talent assessment, and background

check. The process will then end when the decision will be made immediately by the

business owners and the hired applicants will be required to pass the necessary
documents implemented by the Department of Labor and Employment. The onboarding

process of the employees will include trainings about the operations of the business

before undergoing through the actual process.

SALARIES/WAGES/FRINGE BENEFITS Salaries and Wages

All employees' salaries and wages are based on the nature of their work and on

amounts that are within a reasonable range of compensation as provided by

www.indeed.com.ph. Basic minimum wage of P300.00 per day under the Labor Code of

the Philippines is also considered in setting the compensation packages, especially for

those whose work are measured by the hours in service. All individuals that will be

employed will be considered regular employees subject to one-year probation period.

However, notwithstanding the probation period, employees will still receive their full

compensation in accordance with the compensation set by the management. The table

below shows the salary and wages for each employee. No compensation shall be paid

below what is set on the table.

Table ___. Salaries and Wages Table

POSITION NO. OF RATE NO. OF WAGE ANNUAL

EMPLOYEE PER WORKING PER COST OF

DAY DAYS PER MONTH WAGES

MONTH

Production and 2 300 25 P15,000 P180,000

Sales Staff

Cashier 1 300 25 7,500 90,000

Operations Staff 1 300 25 7,500 90,000

TOTAL 5 P38,750 360,000

Salaries and Wages will be paid directly to the employees on their respective pay

days. Employees earning fixed salaries will be paid at the end of every month (30th/31st

day), while employees earning wages will be paid every 15th and 30th/31st day of the

month. However, when payday falls on holidays or Sundays, the payout shall be made

on working days prior to the said days.

Regular Shift, Night Shift, and Other Working Days

Compensation shall be based on the number of hours an employee spent on

work during working days. Each employee shall work eight (8) hours per day. Regular

pay (100%) shall be given to employees working 8 hours per day. Employees working

on night shifts shall be paid a night shift differential of not less than ten percent (10%) of

his regular wage for each hour of work performed between ten o‟clock in the evening

and six o‟clock in the morning. Employees may work beyond 8 hours and will receive an

additional compensation equal to his regular pay plus 25% of such pay, provided that

prior approval of the management to work on those hours is given. Employees may also

work on rest days, Sundays or special holidays. Such employees shall receive an

additional pay of 30% of their regular pay. Rest days and special holidays shall not be a

paid day unless the employee worked on such days with permission. However, on

regular holidays, employees shall be paid compensation equal to their regular pay.

Employees working on regular holidays under requirement by management shall be

paid twice their regular pay.

Allowable Absences or Leaves

Employees are not only given compensation on the working hours/days they

have worked, but also paid benefits that are essential to their employment and well-

being. The following benefits shall be given to all employees given that requirements

specific to each paid benefit are met.

Vacation Leaves

Every employee who has rendered at least one year of service from the date of

employment shall be entitled to a yearly paid vacation leaves on basis of the table

below. Earned but unused vacation leaves can be accumulated up to two years

equivalent and converted into 50% of its cash value

Table___. Allowed Vacation Leaves per employee

POSITION NUMBER OF VACATION LEAVES

Production and Sales Staff 7

Operations Staff 7

Cashier 7

Sick Leaves

Sick leaves are given to employees and can only be availed of only in true cases

of sickness. Regardless of the position, employees are entitled to 10 days of paid sick

leave every year starting on the date of the regular appointment of an employee. Sick

leave taken shall entitle the employee a day of regular pay. Earned but unused sick
leaves on each year cannot be accumulated and carried over the next year. Statutory

Contributions and Benefits

Under the Labor Code of the Philippines, each individual legally employed in the

country shall be given basic benefits which are specifically mandated by such code. The

following must be observed in order to comply with the requirements of the law: Social

Security System (SSS) Contributions Benefits under SSS law shall be granted in

accordance with applicable laws. The social security system is aimed at providing

protection for the SSS member against socially recognized hazard conditions, such as

sickness, disability, maternity, old age and death, or other such contingencies not

specifically stated but resulted in loss of income or into a financial burden. Social

security benefits are paid out monthly to retired workers and their spouses who have,

during their working years, paid into the social security system. Contributions shall be

made every month by the employer to an amount equal to 0.0737 (7.37%) of the

monthly compensation base of every employee. Computations shall be based on the

table provided by the Social Security System.

PhilHealth Contributions

The business shall contribute an amount equal to 0.0125 (1.25%) of the monthly

compensation base of an employee. Computations shall be based on the table provided

by PhilHealth. Beneficiaries have access to a comprehensive package of medical

services once they are a PhilHealth member. Implementation of procedures relative to

entitlement of said benefits should be done in accordance with the regulations to be

promulgated by the management.

Home Development and Mutual Fund (HDMF) Contributions

All employees shall be made members of HDMF. The business shall contribute

not less than P100.00 per month to the employee's Home Development and Mutual

Fund. In accordance to the periodic remittance schedule provided by HDMF, the

employer will remit this contribution, in addition to that of the employee's, which is to be

deducted from such employee‟s payroll. 13th Month Pay The 13th month pay of an

employee shall be equivalent to 100% of his basic monthly compensation and shall be

given not later than 24th of December of each year, regardless of the nature of his/her

employment.

Compensation Deductions

Payroll deductions are made from each payday to comply with certain laws and

certain benefits and for other circumstances to follow company policy related to salary

deductions. The following should be deducted to an employee‟s monthly compensation

when such deduction is applicable:

 Withholding Income Tax

 SSS Contributions (Employee‟s Share)

 PhilHealth Contributions (Employee‟s Share)

 HDMF Contributions (Employee‟s Share)

 Tardiness Deductions

 Absences or Leaves in excess of those allowable

 Loans or Advances to employees

 Other necessary deductions

 CHAPTER IV

ORGANIZATION AND MANAGEMENT ASPECT

A. Form of Ownership

The proposed form of the business is a partnership between the

proponents of this study. In this form of business, it would likely help the business

to contribute or to have more funds as compared to sole proprietorship and as to

the management of the business. One partner would act as the managing

partner and the other one would be a capitalist partner. The share of the partners

as to the profits of the business would be 60:40.

B. Organizational Structure

The proposed organizational structure for the business is as follows:

MANAGER

CASHIER PRODUCTION/SALES STAFF OPERATIONS STAFF

 C. Duties and Responsibilities

 Manager

The manager is assigned for the supervision of the day-to-day operations of

the business. She will also be in-charge in hiring personnel. She is also in-charge in

analysing and implementing business strategies and also makes the budget for the

operations. She makes sure that proper internal control is being implemented and

observe within the organization. She must also visit the location every day to make

sure that

 Production and Sales Staff

They are assigned in preparing the products until it will be ready for

distribution to consumers. They make sure that the proposed quality and quantity of

the product is met.

 Cashier

He/She is assigned in collecting payments from customers and makes sure

that correct amount and change is given to customer. He/She must record the

correct amount of sales and remits the collections every day to the manager.

 Operations Staff

He/She is assigned in driving and parking the food truck in its proper location.

He/She is also assign in maintaining the good condition of the food truck. He/She is
also assigned in helping the production and sales staff by taking the orders of the

customers since he/she will not be driving the whole day.

D. Organizational Policies

Since the production of the products will take place at the food truck, the

employees who are responsible in the production must arrive at the production

area before 8:00 AM to prepare the necessary equipment, ingredients, and

supplies for the production of the La Vivienda. At around 8:15AM to 9:00AM, the

employees should start half-cooking the products that are good for 65 units each

products. Half cooked products are placed in the containers. After preparing, the

employees could take an hour rest from 9:00AM to 10:00AM before they will

open the store to the public.

Business policies of LaVivienda would serve as a guideline for the

employees, or all individuals involved, and their performances at work. They

should follow the policies and should be well-disciplined to be able to offer

customers appropriate service and to avoid damaging the reputation of La

Vivienda. However, such business policies can be changed, in which it will result

to a more efficient and effective performance of the employees at work. To be

able to properly account for the actions of the employees at the workplace, the

following policies should be taken into consideration:

Policies concerning Attendance and Punctuality

La Vivienda employees are expected to arrive before the actual working

hours of the business. This is to ensure that before the working hours,
 employees are ready to perform their tasks and duties assigned to them thus,

minimizing the risk of being idle and maximizing efficiency at work. Policies

concerning attendance and punctuality emphasize regular and timely attendance

of the employees, policies due to tardiness and absences at work. These policies

include:

(1) The attendance of the employees is recorded through a time card

before and after operating hours and authorized by the owner to avoid tampering

the time card.

(2) The employees are granted valid of 2 days of unforeseen absences

per month. Days taken beyond those valid days are deducted to their salary.

(3) Employees who arrive at the workplace late and has accumulated to 3,

it shall be equivalent to 1 absence.

(4) Continuous tardiness at work will alert the owner and might possibly

result to a dismissal of such employee.

(5) In case of sick leave, employees are required to report to the owner

indicating the reason and provide a medical certificate. When the owner found

out that medical certificate is unauthentic, such employee may result to a

dismissal at work.

Policies concerning Health and Safety

For a healthy and safe environment at work, employees should take in

consideration the policies of La Vivienda concerning health and safety. When

employees are at the workplace anyone can be susceptible in facing risks while

working. Establishing such policy would help lessen the possibility of incidents

caused by the negligence of such employee. Also, the owner is responsible in

providing instructions to employees as a precaution during work hours. On the

other hand, employees should also follow these policies and the instructions

provided to avoid any damages that one might suffer. These policies include:

(1) Employees are not allowed to enter the production area if such

employee is not assigned to work at the production area.

(2) When an individual suffers some injury or an accident has occurred, it

must be reported immediately.

(3) The driver must strictly follow the traffic rules and safety precautions

upon delivery such as wearing seatbelts. (4) All employees should inform the

owner about their allergies or health, to be able to assign them to a different

working area that is suitable for them.

(5) Employees are not allowed to smoke at the workplace and during

break time. The owner will provide 3 warnings when caught smoking, in which

the last warning results to dismissal at work.

(6) Employees should not force one-self to work when he/she is sick.

(7) Drugs and alcohol are strictly prohibited when caught such employee

results to dismissal at work.

Policies concerning Salaries, Bonuses, and Overtime

 To be able to recognize for the hard work of the employees and their great

excellence in working, La Vivienda find bonuses a way to award these

employees for their accomplishments. The type of bonus given to the employees

may be monetary or non-monetary. This is also a way to increase the productivity

of the employees at work and to stimulate the employee‟s loyalty to La Vivienda.

All full-time employees are accounted for their yearly performance at work. These

policies include:

(1) Employees are not allowed to work overtime.

(2) Employees are given year-end bonuses given that La Vivienda has

achieved its targeted sales for the year or has exceeded its annual

financial target.

(3) Salaries are authorized first by the owner before distributing to

employees.

Policies concerning Dress Code

La Vivenda policies concerning dress standards are only followed upon

working. After working hours, employees are free to dress as to what suits them.

All employees must casually wear clothes at work, preferably jeans and shirt.

Polo shirts are given to the employees after their orientation.For employees at

the production area, the cook must wear hairnets, and gloves while working. This

is to ensure that the product will not be contaminated. These policies include:

(1) Personnel working at the stall must not wear clothes that are revealing

too much skin, this also applies to both men and women.
 (2) Employees should wear shoes that are comfortable in working.

Wearing high heels and slippers are strictly prohibited while working.

(3) Wearing of jewelries at work is strictly prohibited.

E. Revenue and Expenditure Flowchart

F. Internal Control Measures

Proper Segragation of Duties will be followed to avoid conflict in roles.

Custodianship, Authorization, Recording, and Execution duties should be

segregated and distributed to different personnel to avoid future risks.

From time to time, the manager will visit the food truck in order to assess

and view the employees’ condition and as well as if their production goes

well.

All payments should only be received by the cashier. Remittances and

Remittance Report must be submitted and checked by the manager at the

end of the day in order to verify the proper recording of sales.

G. Project Schedule

The project schedule for the proposed business is shown below:

ACTIVITY MONTH

PHASE 01 02 03 04 05 06 07 08 09 10 11 12

PRE-PERFORMANCE
(REPORTING) PERIOD

Conduct research about the X X

proposed business

Write a business plan or X X X X X

conduct a feasibility study

Inquire about licensing and X

permit requirements for the

proposed business

Inquire about how to obtain X

permit to operate food truck

business in Barangay 20-B

Conduct a survey X

Revised and finalize the X

business plan as necessary

Apply for local license and X X

permit with the city

Apply for business name and X

pay necessary filing fees

PERFROMANCE (REPORTING)

PERIOD

Apply for business operation X

in proposed location

Open bank account and apply X

business loan

Obtain employer number X

Purchase and customize food X X X

truck, and equipment and

arrange for delivery

Purchase supplies X

Purchase inventory X

(ingredients)

Prepare job description and X

place job posting to attract

qualified employees

Set up equipment in the food X

truck

Hire qualified employees X X

Call for general meeting and X

orientation for employees

Train production and X

operations staff for the

production of Daral, Satti, and

Pastil

Crate social media accounts to X

advertise for the grand

opening
Test functionality of the food X

truck and equipments

Clean the production area X X X X X X

(inside the food truck)

POST-PERFORMANCE

(REPORTING) PERIOD

Record transactions X X X X X X X X X X

Make financial statements X

Post-performance evaluation X
 CHAPTER V

FINANCIAL ASPECT

This aspect presents the projected financial outcomes of the business‟s operation

for the next five years. It includes the estimated total project cost, the source of

financing, different assumptions, the projected set of financial statements, and the

financial ratios and analysis. This aspect will provide information whether the business

will be profitable through the projected financial information and given that the

assumptions are constant throughout the business‟s five-year operation period.

A. Major Assumptions

General Assumptions

 The projected financial statements, which comprise of the Statement of Financial

Position, Statement of Comprehensive Income, and Statement of Cash Flows,

shall be in accordance with the Philippine Financial Reporting Standards (PFRS).

The operations of the proposed business will start on Janaury 2019. It shall

follow a calendar year for its accounting period.

 All applicable regulatory requirements to the industry shall be strictly followed.

 The business shall operate on normal hours even on special university events.

 The inflation rate used is based on the information provided by market research

firm Statista.

Statement of Financial Position

Inventory
 The presentation of the line-item “Inventory” shall follow the recognition and

measurement principles provided by the Philippine Accounting Standard (PAS) 2

Inventories.

 The prices of supplies and other inventories are subject to inflation.

Fixed Assets and Depreciation Method

 The presentation of fixed assets shall follow the recognition and measurement

principles provided by the PAS 16 Property, Plant and Equipment.

 The straight-line depreciation method should be used in computing for the

depreciation of the Fixed Assets. The depreciation begins when the asset is

available for use, and ceases when the asset is derecognized.

 The residual value of the fixed assets is zero.

 The useful lives of Fixed Assets are based on the total estimated useful lives of

Property, Plant and Equipment obtained from the website of Commission on

Audit - coa.gov.ph (See Appendix)

Statement of Comprehensive Income

Sales

 The line-item “Sales” in the Statement of Comprehensive Income shall only

include cash sales. There shall be no credit given to customers and other parties.

Hence, no “Accounts Receivable” must be presented in the Statement of

Financial Position.

 The computed sales figure per year shall also represent the net sales amount

because neither sales returns and allowances nor sales discounts are allowed to

take place in the five year course of operations.

 Statement of Cash Flows

Disposal of Fixed Assets

 Fixed Assets are disposed when they are fully depreciated. Unless, it is

assessed that such assets can still function efficiently for the purpose of the

business.

Salaries and Wages

 All salaries and wages of the employees shall be from the proposed business‟

cash fund. There shall be no advances and loans made to the employees.

 The salaries and wages are paid at the end of each month.

 The Sole Proprietor shall grant its employees 50% of their monthly net

compensation on each of the two idle months (April and May) to ensure that they

will remain employed in the business for the next operating cycle. This will also

form as a bonus to the employees.

 No salary increase will be made throughout the first five-year operation of the

business.

Utilities and Rent Expense

 The payment for rent shall be made at the University Finance Office upon the

receipt of the billing statement.

B. Total Project Cost

TOTAL PROJECT COST

ASSETS

Particulars

Machineries and Equipment 368,903

Furnitures and Fixtures 5,818

Kitchen Utensils 15,416.65

Sanitary Supplies 1317.18

Office Supplies 466.99

Total Assets P391,921.82

INITIAL WORKING CAPITAL

Direct Materials 101,914.86

Direct Labor 38,750

Utilities 2000

Consummables 18,733.99

Total Initial Working Capital 161,398.85

START UP COSTS

Registration Fees, Permits, 6013.89

and Licenses

Pre-operating Expenses 37375

Total Start Up Cost 43,388.89

Total Project Cost P596,709.56

Registration Fees

SEC Registration Fee P 1,193.39

Barangay Clearance 50.00

Community Tax Certificate 5.00 5.00

Business Permit Mayor’s Permit ₱ 500.00

50.00

Permit Fee for Retail Business 2,000.00

Sanitary Inspection Fee 100.00

Health Certificate Fee 50.00

Police Clearance 50.00

Fire Safety Inspection Certificate 285.00

Business Plate and Sticker 300.00

BIR Registration Costs

Documentary Stamp Tax 15.00

Annual Registration Fee 500.00

Certification Fee 100.00

Special Books 120.00

Printing of Receipts 750.00

TOTAL 6,018.39

C. Initial Working Capital Requirements

Inventory Management

Cash Management

D. Alternative Source of Financing

The following are the feasible start-up financial schemes that the proponents are

taking into consideration to finance the business project:

(1) PLAN A – Partners will contribute Php 300,000.00 each as their initial

investment to the business

 (2) PLAN B – Partnership will get a bank loan.

(3) PLAN C – Partners will contribute Php 150,000.00 each as their initial

investment to the business and contract loans from the bank for the remaining

balance that the business need amounting to Php 300,000.00.

The proponents propose plan C as the best choice to be this project‟s source of

funding scheme because it maximizes both equity and debt financing. The

researchers will be applying a personal loan from Bank of the Philippine Island

(BPI). Provided are the table for the loan both for Plan B and Plan C.

Table ___. BPI Loan for P600,000

LOAN

AMOUNT P600,000

TERM 12 18 24 30 36

Monthly P57,200 P40,533.33 P32,300.00 P27,200.00 P23,866.67

Installment

*calculated using BPI Loan Calculator

Table ___. BPI Loan for P300,000

LOAN

AMOUNT P300,000

TERM 12 18 24 30 36

Monthly P28,600 P20,266.67 P16,100.00 P13,600.00 P11,933.33

Installment

*calculated using BPI Loan Calculator

E. Financing Model for the Enterprise

(Capital Structure, Cost of Capital, Profit/ Loss Sharing or Withdrawal Policies
F. Projected Financial Statements

La Vivenda Food Truck Co.

Projected Statemet of Financial Position

Fot the year ending December 31

Note 2019 2020 2021 2022 2023

ASSETS

Current Assets

Cash

Inventory 101,914.86

Supplies Inventory 15882.64

Total Current Assets

Non Cureent Assets

Machineries and Equipment 368903

Furnitures and Fixtures 5818

Total Noncurrent Assets

TOTAL ASSETS

LIABILITIIES AND EQUITY

Current Liabilities

Loans

Utitlities Payable

Total Current Liabilities

Noncurrent Liabilities

Loans Payable

Total Noncurrent Liabilities

Total Liabilities

Partner’s Equity

Alcantara, Capital

Hamin, Capital

Total Partner’s Equity

TOTAL LIABILITIES AND EQUITY

 La Vivienda Food Truck Co.

Projected Stated Comprehensive Income

For the year ended December 31

Note 2019 2020 2021 2022 2023

Sales P2,165,952
P2,339,228.16 P2,526,366.41 P2,728,475.73 P2,946,753.78
Cost of Goods Sold 1,687,948.8
1,822,984.70 1,968,823.48 2,126,329.36 2,296,435.71
Gross Profit 478,003.20
516243.456 557542.9325 602146.3671 650318.0764
Expenses:

Operating Expenses 333,678.15

360,372.40 389,202.19 420,338.37 453,965.44
Genral and 37375.20

Administrative Expenses
0 0 0 0
Interest Expense 43,200.00
43200 43200 43200 43200
Total Expenses 414,253.35
403,572.40 432,402.19 463,538.37 497,165.44
Net Income P63,749.85
P112,671.05 P125,140.74 P138,608.00 P153,152.64
 La Vivienda Food Truck Co.

Projected Statement of Changes in Partner’s Equity

For the eyar ending December 31

2019 2020 2021 2022 2023

Beginning Capital

Add: Investments

Net Income

Ending Capital
 La Vivienda Food Truck Co.

Projected Statement of Cash Flows

For the year ending December 31

NOTE 2019 2020 2021 2022 2023

CASH FLOWS FROM

OPERATING

ACTIVITIES

Net Proft (Loss) P63,749.85

P112,671.05 P125,140.74 P138,608.00 P153,152.64
Adjustments for:

Operating Expenses 333,678.15

before Working Cap.

Changes
360,372.40 389,202.19 420,338.37 453,965.44
Increase (Decrease) in 24,000.00

Utilities Payable

Net cash from 421,445.39 473,043.45 514,342.93 558,946.37 607,118.08

operating activities
CASH FLOWS FROM

INVESTING

ACTIVITIES

Cash paid for the 368,903

acquisition of

machineries and

equipment

Cash paid for the 5,818

acquisition of

furnitures and fixtures

Net cash from (274,721)

investing activities

CASH FLOWS FROM

FINANCING

ACTIVITIES

Cahs proceeds from 300,000

loan borrowed

Cash paid for loan 100,000 100,000 100,000 - -

borrowed

Net cash from 200,000 (100,000) (100,000) - -

financing activities

Net Increase in Cash 246,724.39

and Cash Equivalents

Cash and Cash 300,000 546,724.39

Equivalents, beginning

Cash and Cash P546,724.39

Equivalents, ending

NOTES TO FINANCIAL STATEMENTS

Note 1. Inventory

Note 2. Supplies Inventory

Note 3. Machineries and Equipment

Note 4. Furnitures and Fixtures

Note 5. Loan Borrowed

Note 6. Utilities Payable

Note 7. Sales

2019 2020 2021 2022 2023

PASTIL

Units Sold 20166 21,779 23,521 25,403

18672
Selling Price 6 6 6 6
6
Sales 120,996 130,674 141,126 152,418
112,032
DARAL

Units Sold 20166 21,779 23,521 25,403

18672
Selling Price 10 10 10 10
10
Sales 201660 217,790 235,210 254,030
186720
SATTI A

Units Sold 20166 21,779 23,521 25,403

18672
Selling Price 40 40 40 40
40
Sales 806,640 871,160 930,040 1,016,120
746,880
PASTIL B

Units Sold 20166 21,779 23,521 25,403

18672
Selling Price 60 60 60 60
60
Sales 1,29,960 1,306,740 1,411,260 1,524,180
1,120,320
TOTAL P2,165,952
P2,339,228 P2,526,366 P2,728,476 P2,946,754

Note 8. Cost of Goods Sold

2019 2020 2021 2022 2023

PASTIL

Units Sold 20166 21,779 23,521 25,403

18672
Product Cost 4.52 4.52 4.52 4.52
4.52
COGS 91,150 98,441 106,315 114,822
84, 397
DARAL

Units Sold 20166 21,779 23,521 25,403

18672
Product Cost 9.04 9.04 9.04 9.04 9.04
COGS 182,301 196,882 212,630 229,643
168,795
SATTI A

Units Sold 20166 21,779 23,521 25,403

18672
Product Cost 22.6 22.6 22.6 22.6
22.6
COGS 806,640 871,160 930,040 1,016,120
746,880
PASTIL B

Units Sold 20166 21,779 23,521 25,403

18672
Product Cost 54.24 54.24 54.24 54.24
54.24
COGS 1,093,803 1,181,292.96 1,275,779 1,377,859
1,012,769
TOTAL 1,687,948.8
1,822,984.70 1,968,823.48 2,126,329.36 2,296,435.71

Note 9. Operating Expenses

Note 10. Genral and Administratuve Expense

Note 11. Depreciation Expense

Note 12. Cash Paid for the Acquisition of Machineries and Equipment
 G. Financial Analyses

 Breakeven Point

The breakeven point is the level wherein the total costs incurred and the total sales generated are equal.

Thus, the total profit reported is zero. For the computation of the breakeven point, there is a need to take

into consideration for the contribution margin wherein it is the amount of revenue that is left after all variables

costs (manufacturing and non-manufacturing) are deducted. Contribution margin is needed for the

computation of the breakeven point in terms of units and peso. Below are the formulas used for the

computation of breakeven point.

Breakeven (Units) =Fixed Cost/ Sales Price per unit – Variable costs per unit

Breakeven (Pesos) =Fixed Cost/*Contribution Margin Ratio

*Contribution Margin Ratio = Sales – Variable Costs/Sales

 Financial Ratios

Liquidity Ratio

Current Ratio The current ratio is a primary test of solvency of a business wherein it tells how much current assets can

pay off its current liabilities. Formula is shown below. Current Ratio = Current Assets/ Current Liabilities

Activity Ratios
Fixed Asset Turnover Ratio

The Fixed Asset Turnover Ratio it roughly tests the efficiency of the owner and the employees in handling and keeping the

plant properties in the business. The formula is shown below.

Fixed Asset Turnover Ratio = Net Sales * Net Fixed Assets *Net Fixed Assets = Fixed Assets, Beginning + Fixed Assets,

Ending /2

Total Asset Turnover Ratio

The total asset turnover ratio is used to measure the business‟s efficiency in using the available resources or the assets

to generate sales. The formula is shown below.

Total Asset Turnover Ratio = Net Sales *Average Total Assets *Average Total Assets = Total Assets, Beginning + Total

Assets, Ending 2

Leverage Ratios

Debt Ratio

The debt ratio is used to measure the percentage of total assets financed with the debt of the business. The formula is

shown below.
Debt Ratio = Total Liabilities Total Assets

Profitability Ratios

Gross Profit Margin

The gross profit margin measures the proportion of earnings to the sales after the cost of sales is paid. The formula is

shown below.

Gross Profit Ratio = Gross Profit Net Sales

Return on Assets

The return of investments tells the measurement of the overall effectiveness of the owner in generating profits with its

available assets. Return of Assets is sometimes referred as Return on Investment. The formula is shown below.

Return on Assets = Net Profits *Average Total Assets *Average Total Assets = Total Assets, Beginning + Total Assets,

Ending 2

CHAPTER VI

SOCIO-ECONOMIC ASPECT
Every business established has a purpose. No matter what big or small, simple or complex it may be, if not all, most of

them are established with a primary purpose of obtaining profit from their economic endeavors. Despite this, they cannot

go away with the fact that they operate in a social environment. This aspect discusses in sufficient detail the

responsibilities and relationship of the business towards the society within which it operates.

DAVAO CITY

The city of Davao is one of the richest cities in the Philippines. According to an article posted in mindanews.com,

last 2018, Davao City was ranked as the 9th richest with total assets worth P13.18B.

GOVERNMENT AND ITS AGENCIES

The government is the backbone of every society. Without its regulations, businesses would cease to

flourish or even exist. However, in order to effectively and efficiently impose its regulations, it would need funds or

budget which is provided by the people. Setting up a business does not only benefit its owners, management and

employees but also, it benefits the government – in so many ways in fact. For beginners, a business generates

income and a portion of which is forwarded to the government in the form of taxes. As defined in the Benefit-

Received Theory of Taxation, people pay taxes and in return, they get to receive services and protection from the

government or state. More employment in the city may also lessen the government‟s allocation of funds for

programs, projects and initiatives pertaining to reduction of unemployment. In like manner, the more taxes the

government will be able to collect, the more that they get spend meaningfully on education and health services.
EMPLOYEES

No matter how automated or manually generated the business may be, labor will always remain its driving

force. It plays an important role in the success of any business organization particularly in achieving its goals and

objectives. Thus, as an acknowledgment to its valuable contribution, the business will guarantee that its employees

and staffs will be taken care of. Mochirap ensures that every personnel, both in the production site and store

location, will be given just wage and adequate compensation for them to enjoy a good quality of life. They will also

be trained to grow and develop as productive and efficient workers. Should the business becomes successful and

stable in the next five to ten years, security of tenure or work regularization will be provided to qualified employees

and to those who contributed highly satisfactory labor to the business. Permanent employees will receive discounts

on life insurance plans as well as free ones in case of long-term employees who devoted their loyalty to the

organization.

CUSTOMERS

The business is only offering a limited choices of products and its mode of sale is in cash basis, then, its

customers will be the lone source of earnings. Given that fact, the business ensures that customers will receive the

best services it could offer. Should there be concerns and feedbacks from the customers and spectators with

respect to the business‟ customer relations or goods sold, they will be dealt with accordingly by the management.

An affordable snack will be offered to make sure that even the less financially fortunate consumers can afford such
 product sold. Despite the notion and usual criticisms of many about cheaper products being of low-quality, rest

assured that the business will sell its products at the best quality.

SUPPLIERS AND SERVICE PROVIDERS

The business needs it suppliers and service providers in order to meet its demand for economic goods and

services necessary for the production of its products as well as the continuous operation and maintenance of its

production site and store location. It will safeguard the interest of its suppliers and service providers by means of

fair dealings. Liabilities and obligations attached to the services and supplies provided will be settled on time and

credit terms will be honored to ensure good credit relationships and establish good impression. Long term

commitments will also be initiated if it is sound and possible.

CHAPTER VII

CONCLUSINS AND RECOMMENDATIONS

APPENDICES

APPENDIX A- SURVEY RESULT

APPENDIX B- SURVEY QUESTIONNAIRE

APPENDIX C- ESTIMATED USEFUL LIFE OF ASSETS

APPENDIX C – ESTIMATED USEFUL LIFE OF FIXED ASSETS

PROPERTY, PLANT AND EQUIPMENT ESTIMATED USEFUL LIFE (IN YEARS)

Land Improvements

Land Improvements 10

Runways/taxiways 20

Railways 40

Electrification, Power and Energy Structures 10

Buildings – those that are predominantly

Wood 10

Mixed 20

Concrete 30
Leasehold Improvements (Note 1)

Land 10 Building

Wood 10

Mixed 20

Concrete 30

Office, Equipment, Furniture and Fixtures

Office Equipment 5

Furniture and Fixtures 10

IT Equipment - Hardware 5

Library Books 5

Machineries and Equipment

Machineries 10

Agricultural, Fishery and Forestry 10

 Airport Equipment 10

Communication Equipment 10

Construction and Heavy Equipment 10

Firefighting Equipment and Accessories 7

Hospital Equipment 10

Medical, Dental and Laboratory Equipment 10

Military and Police Equipment 10

Sports Equipment 10

Technical and Scientific Equipment 10

Other Machineries and Equipment 10

Transportation Equipment

Motor Vehicles 7

Trains 10
 Aircraft and Aircraft Ground Equipment 10

Watercrafts 10

Other Transportation Equipment 10

Other Property, Plant and Equipment 5

Note 1 – The estimated useful life shall depend on the length of the lease. It shall be the period of the lease or the

estimated useful life of the assets, as given, whichever is shorter.

CURRICULUM VITAE