Submitted to:

Walter Delig, CPA

College of Accounting Education
University of Mindanao

In Partial Fulfillment
Of the Requirements in Strategic Business Analysis (ACC 223)

Cebumit, Floribert

January 2020
 Table of Contents

I Executive Summary
II Business Concept
a. Vision
b. Mission
c. Goal
d. Objectives
e. Description of the Business
f. Location of the Business
III Market Analysis
IV Management Team
a. Organizational Plan
b. Role of the Owners
c. Organizational Chart
V Marketing Plan
VI Financial Plan
VII Operations and Management Plan
I. EXECUTIVE SUMMARY

Life, Love & Sugar: Life’s better with Cupcakes is driven to become a daily
necessity for local cupcake addicts, an escape for daily life's stress and exhaustion.
It is a general partnership business that aims to provide delicious and of excellent
quality cupcakes that ensure the satisfaction of each customer' demands. Life, Love
& Sugar will offer its customers the best prepared cupcakes in the area that can
complement any drinks they want in an affordable price and will definitely satisfy
their cravings.

Life, Love & Sugar will capitalize on its proximity to the University of
Mindanao, Matina Campus to build a core group of repeat customers. The four (4)
owners have secured the location and they also agreed to contribute 75,000 pesos
as start-up capital to ensure that the business’ operations will run smoothly. On the
first day of operation the owners agreed that LLS will sell rich in flavor, moist and
perfect cupcakes with a promo buy 1, take 1 for the first 50 customers. This
promotion is the first step in building good relationship with their customers.
Customers can avail special orders of cupcakes in a box worth P250.00 composed
of 12 cupcakes or individually worth P 25.00. To make the products more accessible
to the target and potential customers, owners made the business’ Facebook account
LLS: Life’sbetterwithcupcakes@yahoo.com

Through the years, the business expects to continue its operation with its mission to
provide high quality cupcakes with unique flavors and toppings that have shelf
appeal and practice work integrity at all cost. With this, the business will be able to
achieve its goal (1) To become one the best and favorite cupcake business of the local
customers, (2) To acquire loyal customers through serving them better recipes of
cupcakes as an edge and (3) To maximize profit through offering on-hand and
mobile services that made the business model flexible.
 In approximately six years, the business will be able to have its payback.
Its projected income in every year is P55,412, P66,607, P77,802, P88,997, and
P112,192 respectively, wherein its projected sales for the first five years is
P330,000, P363,000, P396,000, P429,000, and P471,000 respectively deducted
by its projected expenses, P55,536 for the first five years of the business.

The key factor for excellent products and services is the management
team. It is composed of General Manager, Finance Manager, Production
Manager, and Sales Manager. Ms.Cebumit as General manager who possess
intensive knowledge and skills of overall management process. Mr. Nicolas as
the Finance Manager who is responsible for monitoring company’s finances. Mr.
Gomez De Liano, who’s ought to cultivate and implement performance measures
to ensure production standards are met. Lastly Mr. Montefalco whose work is to
ensure selling efficiency.

Thus, Life, Love & Sugar: Life’s better with Cupcakes is committed to
provide high quality of products and services to achieve its vision and that is
open their 2,300 sq. foot food shop that will enable them to help their customers
relieve their daily stresses by providing a great and peaceful ambiance,
convenient location, friendly customer service, and products of consistently high
quality.
II. BUSINESS CONCEPT

Vision
The owners aim to open their 2,300 sq. foot food shop to help their
customers relieve their daily stresses by providing a great and peaceful
ambiance, convenient location, friendly customer service, and products of
consistently high quality.

Mission

To provide high quality cupcakes focusing on unique flavors and toppings

that have shelf appeal.

Goals

⮚ To become one of the best and favorite cupcake business of the local
customers.
⮚ To acquire loyal customers through serving them better recipes of
cupcakes as an edge.
⮚ To maximize profit through offering on-hand and mobile services that
made our business model flexible.

Objectives

⮚ Life, love and Sugar: Life's better with cupcake is a business driven to
provide variety of flavors at its best quality cupcakes for all cupcake lovers
and addicts out there and will leverage their competitive edge:

● Products- possessed new recipes that focused on new unique

flavors and toppings for cupcakes, with aesthetically attractive
designs perfect for desserts to any celebration.
● Service-employees will be trained to insure the best cupcake
preparation techniques.
 ● Marketing Strategy- aimed to build a solid base of loyal
customers, as well as maximizing the sales of high margin
products, such as chocolate cupcake.

Description of the Business

Life, love and Sugar: Life's better with cupcake sell cupcakes with a
variety of flavors and toppings and the best seller of it is the chocolate cupcake.
Cupcakes are one of the best desserts anyone can have and it was flexible
because you can have it anytime, when you have your cravings and when there
are celebrations. The business fundamental goal is to provide cupcakes of high
quality to satisfy the cravings of its customers with an affordable price, and to
maximize it profits by minimizing its waste with the utilization of its marketing
strategies.

Location of the Business

Life, love and Sugar: Life's better with cupcake is located outside the
University of Mindanao, Matina Campus. The place is accessible to its main
customers - students and faculties. On the other hand, it wasn't also limited there
because you can also order and make reservations on their Facebook account
LLS:Life'sbetterwithcupcakes@yahoo.com.
III. MARKET ANALYSIS

Table: Market Analysis

Market Analysis
Year 1 Year 2 Year 3 Year 4 Year 5

Potential Growth
Customers
Students and 10.00% 12000 13200 14520 15972 17569
Faculty
Teenagers 2.00% 2400 3570 3749 3936 4133

Office workers 2.00% 5000 5100 5202 5306 5412

Other 2.00% 4800 4896 4994 5094 5196

Total 24,000 25,800 27,750 29,864 32,154

 Students and Faculty 50 X 20 days (estimated) X 12 months = 12,000

  Teenagers 10 X 20 days (estimated) X 12 months = 2,400
 Office Workers 25 X 20 days (estimated) X 12 months = 5,000
 Others 20 X 20 days (estimated) X 12 months = 4,800

LLS will cater to people who want to get their daily piece of great-tasting
Cupcakes. Such customers vary in age, although our location close to the University
campus means that most of our clients will be college students and faculty. Our
market research shows that these are discerning customers that gravitate towards
better tasting Cupcakes. Furthermore, a lot of college students consider cupcakes-
sweet, moist and rich in filling sufficient for their cravings. For us, this will provide a
unique possibility for building a loyal client base.

IV. MANAGEMENT TEAM

ORGANIZATIONAL PLAN

Form of the Business Organization

Life, Love & Sugar is a general partnership composed of four (4) owners.
The owners are ought to contribute money or services to the company and have
the rights to divide the generated profit among themselves in accordance to their
agreement. This business is engaged in food manufacturing industry for they sell
high quality cupcakes as snack or dessert to their customers.

Liability of the Owners

 Life, Love & Sugar was created without any paperwork and the owners
agree to carry its operations to generate profit. Each partner is considered a
general partner and is personally liable for the debts of the partnership.

Proposed Salary

In starting a business, owners are demanded to contribute money or

services and if it won’t suffice, they are encouraged to make loans in the bank as
part of the business capital. Year-end profit will be divided according to the
owners’ investment or contribution.

Role of the Owners

POSITION RESPONSIBILITY QUALIFICATIONS

GENERAL MANAGER Responsible for overseeing all
1. Cebumit, Floribert administrative functions in
your business. Also, leading
and directing employees. She
delegates administrative tasks.
Possess intensive knowledge and
skills of overall management
process. Also, must have
experience in supervising a
business and can communicate
well with others.

FINANCE MANAGER Responsible for monitoring Has knowledge and skills of

2. Nicolas, Marcus Isaiah company’s finances. Also, do
more data analysis and advise
senior managers on ideas as to
how to maximize profits and
often work on teams, acting as
business advisers to top
executives.
financial analysis in such areas as
forecasting, budgeting, engaging
in cost reduction analysis, and
reviewing operational
performance.

PRODUCTION Responsible to cultivate and

Has
3. MANAGER implement performance
Strong knowledge on
Gomez De Liano, Psalm measures to ensure
 Christian production standards are met manufacturing standards.
and knowledge of the
organization's industry
standards are therefore
essential.

SALES MANAGER Responsible in achieving Possess intensive knowledge and

4. business objectives through skills of the market sales
Montefalco, Elijah Riley
effective planning, setting planning, budgeting, staffing, and
sales goals, analyzing data on building relationship to
past performance, and customers.
projecting future
performance.

Organizational Structure
 GENERAL MANAGER
Floribert Cebumit

FINANCE MANAGER PRODUCTION MANAGER

Marcus Isaiah Nicolas Psalm Christian V. Gomez De
Liano,

V. MARKETING PLAN
SALES MANAGER
Elijah Riley S. Montefalco
Product

Life, Love & Sugar will offer its customers the best cupcakes in the area.
This will be achieved by using high-quality ingredients and strictly following
preparation guidelines. The store layout, menu listings and marketing activities
will be focused on maximizing the sales of the products.

Place

The business is located outside the University of Mindanao, Matina

Campus in front of the HQ Computer Cafe. It's chosen and secured by the
owners themselves for it to be accessible to the target market.

Price

Prices have a direct effect on the consumers. The prices if the product are
based on the 1.) Product Cost, 2.) Utility and Demand 3.) Extent of competitions
and 4.) Legal Regulations. The owner ensures that the products will be worth its
price and that it can accommodate its target customers well by maximizing the
resources and minimizing the wasted materials.

Promotion

This business can cater any occasions. All you have to do is to order or
make reservations on the actual stall or visit their Facebook account
LLS:Life'sbetterwithcupcakes@yahoo.com for mouth-watering, moist and rich in
flavor ready-to-order cupcakes.

People

Customers are the lifeblood of the business, so business can’t operate

without them. One of the fundamental goal of this business is to satisfy their
customers regardless of its age and bring comfort and escape to their busy lives
 through ensuring the quality of our products and of giving great services to their
needs. Upholding and practicing work ethics is a vital factor of building a solid
base of customers.

Packaging

Packaging is vital to protect the product from damage. Product packaging

not only protects the product during transit from the owner's house to the actual
store but it also prevents damage while the product sits on store shelves. The
business ensure that the product packaging will be of good quality and the
packaging design is timely and of touch of simplicity and elegance that suits any
mood and any occasions.

Positioning

Cupcakes will be sold at a fair price that surely worth its quality and suits
the budget of its customers. The products can be ordered and reserved on the
actual store and online for it to be more accessible to any possible customers,
not just on their target.

VI. FINANCIAL PLAN

Total Projected Cost

Pre-operating Expenses

Business Permit P700.00

 Sanitary Permit 300.00

Office Supplies

Trash Bin P25.00

Calculator 300.00 325.00

Kitchen Tools

3 size set of mixing bowls 340.00

Measuring spoons set 124.00

Sieve 70.00
Electric hand whisk 250.00
Balloon whisk 400.00
Bendy spatula 80.00
Cupcake tray (2pcs) 360.00
Cupcake paper cases 110.00
Disposable piping/icing bags(100pcs) 105.00
Decent set of icing nozzles (42pcs) 240.00
Cake toppers and sprinkles 150.00
Equipment (Electric oven) 3500.00 5729.00

TOTAL Pre-operating Expense P7054.00 (x5)

Honorarium Expense P5000.00 (x5)

Utilities Expense P10000.00 (x5)

5 years Expenses P110,270.00

Financial Statement

Life, Love & Sugar Co.

Income Statement
For the years 2016 to 2021
 REVENUE Year 1 Year 2 Year 3 Year 4 Year 5

Cash Sales 330000 363000 396000 429000 471000

Less: COGM 219,052 240,857 262,662 284,467 306,272

Direct Material 190,608 209,669 228,730 247,790 266,851

Direct Labor 13, 000 14, 200 15, 400 16, 600 17, 800

Manufacturing 15,444 16,988 18,532 20,077 21,621

Overhead

GROSS PROFIT 110,948 122,143 133,338 144,533 164,728

Less: Operating
Expense

Pre- operating 7504 7504 7504 7504 7504

Expense

Administrative 46047 46047 46047 46047 46047

Expense

Marketing Expense 485 485 485 485 485

Depreciation 1, 500 1, 500 1, 500 1, 500 1, 500

Total Expenses 55536 55536 55536 55536 55536

Net Income 55,412 66,607 77,802 88,997 112,192

Notes to Financial Position

Marketing Expense (Note 1)

❖ September 50.00
❖ October 50.00
❖ November 50.00
❖ December 55.00
 ❖ January 50.00
❖ February 50.00
❖ March 30.00
❖ April 30.00
❖ May 30.00
❖ June 30.00
❖ July 20.00
❖ August 30.00

Administrative Expense (Note 2)

❖ September 3945.00
❖ October 3675.00
❖ November 3615.00
❖ December 3945.00
❖ January 3675.00
❖ February 3615.00
❖ March 3675.00
❖ April 3960.00
❖ May 3940.00
❖ June 3940.00
❖ July 3960.00
❖ August 3680.00
VII. OPERATIONS AND MANAGEMENT PLAN

Initial Investments (5 yr. plan)

Life, Love & Sugar : Life's better with Cupcakes shall be financed by the
four (4) members of the group behind this study. Personal contribution will
 amount P375, 000.00 for a total of P1, 500, 000.00 initial total capitals for five
years.

Good for five years:

Pre-operating expense P35,270.00

Honorarium P25,000.00

Cost of Goods Manufactured P1, 313,765.00

Rent Expense P150, 000.00

Marketing Expense P2,425.00

Utilities Expense P50,000.00

5 years’ expenses 1,576,460.00

Cebumit, Capital P75, 000.00

Nicolas, Capital P75, 000.00

Gomez De Liano, Capital P75, 000.00

Montefalco, Capital P75, 000.00

PRODUCTION PLAN

Year 1

Number of Selling Units/Servings Total Monthly units to

Days to be sold per be Produced
 MONTH day

September 20 50 1000

October 20 50 1000

November 20 50 1000

December 20 100 2000

January 20 50 1000

February 20 60 1200

March 20 50 1000

April 20 50 1000

May 20 50 1000

June 20 50 1000

July 20 50 1000

August 20 50 1000

Total Units to 13200

produced

Year 2

Number of Selling Units/Servings to Total Monthly units

Days be sold per day to be Produced
MONTH

September 22 50 1100

October 22 50 1100

November 22 50 1100

December 22 100 2200

January 22 50 1100
February 22 60 1320

March 22 50 1100

April 22 50 1100

May 22 50 1100

June 22 50 1100

July 22 50 1100

August 22 50 1100

Total Units to 14520

produced

Year 3

Number of Selling Units/Servings to Total Monthly units

Days be sold per day to be Produced
MONTH

September 24 50 1200

October 24 50 1200

November 24 50 1200

December 24 100 2400

January 24 50 1200

February 24 60 1440

March 24 50 1200

April 24 50 1200

May 24 50 1200
June 24 50 1200

July 24 50 1200

August 24 50 1200

Total Units to 15840

produced

Year 4

Number of Selling Units/Servings to Total Monthly units

Days be sold per day to be Produced
MONTH

September 26 50 1300

October 26 50 1300

November 26 50 1300

December 26 100 2600

January 26 50 1300

February 26 60 1560

March 26 50 1300

April 26 50 1300

May 26 50 1300

June 26 50 1300

July 26 50 1300

August 26 50 1300
 Total Units to 17160
produced

Year 5

Number of Selling Units/Servings to Total Monthly units

Days be sold per day to be Produced
MONTH

September 28 50 1400

October 28 50 1400

November 28 50 1400

December 28 100 2800

January 28 50 1400

February 28 60 1680

March 28 50 1400

April 28 50 1400

May 28 50 1400

June 28 50 1400

July 28 50 1400

August 28 50 1400

Total Units to 18480

produced
 Proximity to the University campus will dictate certain sales seasonality with
revenues slightly decreasing during the school vacation periods and increasing due to
special occasions such as Valentines and Christmas Day.

To achieve perfection, you’ll need the following baking equipment for cupcakes:

3 size set of mixing bowls-It's useful to have 3 mixing bowls as many recipes
require more than one. Choose glass, metal or plastic according to preference
but it's worth having heatproof ones so that you can put them in the microwave or
over simmering water when melting chocolate

Measuring spoons set- ensure an accurate amount is used.

Sieve- made from metal or plastic is ideal for sifting flour and icing sugar, which
is highly recommended when cake-making.

Electric hand whisk-make short work of whisking and creaming

Balloon whisk-a hand-held tool with metal loops that form into a bulb shape at
the end of a long handle. It's always handy to have one of these in the kitchen as
an addition to whipping cream, whisking egg whites and gently folding in flour.

Bendy Spatula-Avoid leaving cake mixture or melted chocolate in your bowl by

using a bendy spatula to easily skim around the sides.

Cupcake tray-a flat metal tray on which cupcakes can be placed while they are

baked in the oven

Cupcake paper cases- used to contain batter poured into cupcake tins. Made of
paper or foil, they are usually corrugated and are often decorative

Disposable piping/icing bags- used to pipe semi-solid foods by pressing them

through a narrow opening at one end, for many purposes including cake
decoration
 Decent set of icing nozzles-can turn your cake to stunning works of art.

Cake toppers and sprinkles-very small pieces of confectionery used as a

decoration or to add texture to desserts such as cupcakes

Sources of Materials

The finished products mirror its maker's ability, the quality of materials and
equipment utilized in making it. Hence, when it comes to business world, quality is
paramount and that materials and equipment used must be of great concern. Life, Love
& Sugar: Life's better with Cupcakes identified two stores that accommodate its needs
which are the Baker's Basket Supplies that sells finest ingredients and baking supplies
for the cupcake making and SM supermarket for the 3-layer electric oven. These
sources ensure high quality.

Production Cost

Direct Material

Measure Cost Units Cost per unit

Produced

Self-raising Flour 500g 250 100 2.5

Caster Sugar 500g 130 100 1.3

Eggs, lightly beaten 20 pcs. 140 140 1

Vanilla extract 1 bottle 200 100 2

Dark Chocolates 1 pack 300 150 2

Chocolate chips 1 pack 150 150 1

Butter 500g 140 150 .93

Milk 30g 34 14 2.43

Icing Sugar 1280g 150 50 0.33

Food Coloring few drops 90 200 0.45

Cupcake Cases 200pcs 100 200 0.5

Total Direct Material 14.44

Factory Overhead

Table tissue 1 pack 25.00 50 0.5

Cupcake boxes 100pcs 800 1200 0.83

Total Factory Overhead 1.33

Total Product Cost per 15.77

Unit

Production Cost per Unit

Cost per unit “Cupcakes” 15.61

Mark Up (60%) 9.39

Selling Price P25.00