CHAPTER I

INTRODUCTION

THE PROPOSED PROJECT

Nowadays, establishing food kiosk has flourished all

over the world as they are easy to manage and relatively

easy to start.

The first food carts probably came into being at the

time of the early Greek and Roman civilization, with traders

converting old hand-carts and smaller animal-drawn carts

into mobile trading units. Carts have the distinct advantage

of being able to be moved should a location not be

productive in sales, as well as transporting goods to/from

storage to the place chosen from which to trade.

Today, the structure of modern food carts have recently

seen new changes like modular designed carts made with

stainless steel, fiber reinforced plastic and aluminum. Some

have been developed with the ability to be driven by itself.

Porridge, also known as congee, is the mushy food

boiled from rice, millet, or corn. Porridge has a long

history in China. Dated back a thousand years, The Zhou Book

says "Emperor Huang Di was first to cook congee with millet

as the ingredient". Since then, the production method has

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been

innovated constantly with a large variety.

Usually the cooking of porridge adopts two methods -

boiling and braising. But the most common method in

preparing the rice porridge is by boiling it. Porridge is

usually divided into two categories - ordinary porridge and

colored porridge. Ordinary Porridge is prepared simply by

boiling rice and adding some condiments. While the colored

porridge, are prepared by adding different ingredients in

the ordinary porridge. The most common ordinary porridge

here in the Philippines, is the goto that have intestines of

a pig as an additional ingredient.

The proposed business will be Lugaw Express kiosks in

PHINMA-Araullo University that will offer different variety

of porridge. The name of this business comes from the idea

of providing quick servings of porridge for the customer’s

satisfaction. The researchers come up on the idea of

establishing a Lugaw Express kiosk because there is a great

potential here in PHINMA-Araullo University and also to

satisfy the consumer’s desire for hot foods especially

during the cold season.

Since Rice is prominent here in the Philippines, rice

porridge is easy to prepare, and many Filipino can afford to

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eat

it.

REVIEW OF RELATED LITERATURE

LOCAL STUDY

“KalyeOcho”

In Polytechnic University of the Philippines, they

conducted a study called “KALYE OCHO” A Feasibility Study on

Street Food Kiosk (November 2011).

The study is about a food kiosk catering street foods

as its main dish. The objective of the proponents in making

this business possible is to make an impression that usual

Filipino street foods which encounter can also be safe,

savory and be complemented to other dishes. Their business

wants to emphasize that aesthetics, appearances,

presentation of food, personal trust and interaction with

their customers are the most important parameters for

assessing food safety as well as meeting their customer’s

needs and wants. People in all walks of life can now have

the perception that street foods are not just an alternative

food if you want to be a spend thrift but rather these are

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also

foods which will delight you and will give you satisfaction

beyond your expectations.

The market projection of this business is based on the

surveys conducted and other related information gathered

within the vicinity of Paranaque. Projection of demand,

supply, and sales for the first five years of operation is

based on the different factors like the population growth,

market acceptability, capacity to supply and other factors.

This study is feasible because the target populations are

willing and capable of availing their products and services.

This study also considers factors such as their competitors

and prevailing prices of the suppliers that will affect our

prices. Based on the demand supply analysis they found out

that they can supply the available market based on its

production capacity.

The products that they were offering are street foods

with high demand and nutritious for the customer. The

products are kwek-kwek, fishball, isaw, adidas, pork

barbeque, chicken skin, balot and calamares, they also offer

other products that will complement to their products such

as desserts (halo-halo, sorbets,mais con yelo and banana con

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yelo) French fries and drinks (sago’tgulaman, iced tea and

pineapple juice). Machineries and equipment

were enumerated as well as other supplies with their

corresponding cost. The project is feasible based on the

different aspect that consider in operating this business.

KalyeOcho is a partnership form of business ownership

which will handle the management of the business. There is a

store manager who is over all in charged for the day-to-day

operation of the business. At the present, the business has

the total of 11 employees and as the business grows new

employees will be hired for the minor business operation.

Through an organized organizational structure, there will be

a smooth operation of the business and also based on the

technical know-how of the managers, therefore, this business

is feasible in this aspect.

The initial investment of KalyeOcho is P 4,000,000.00

which came from the partner’s contribution to establish this

business. There are no other sources of capital aside from

our contribution. The return of asset will be .15 at first

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year

and the payback period will be exactly 2.83. Therefore,

their financial study is feasible.

“Lugaw Queen”

The second study, Lugaw Queen was established in

November 2007 by Sherwin and Beverly Aquino, it used to be a

small take-out counter located in San Pablo City which just

plain lugaw for as low as P10 per serving.

With only P1, 100.00 starting capital the couple took

all the risk to put up a business which they can call their

own. Considering the affordable ingredients of lugaw and the

passion for cooking of Mrs. Aquino ordinary lugaw was

transformed into a delicious food experience.

In three months, LUGAW QUEEN opened two (2) more

branches in San Pablo City just before the year ended. it

grew to six branches. wih a high demand for its products.

LUGAW QUEEN extended its network within Laguna, Lucena in

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Quezon and Metro Manila. They grew to more the 12 Branches

in Just three years and they are still counting catering to

the cravings of lugaw enthusiasts who want to experience the

true PinoyLugaw with a twist 24 Hours a day!

Before when people talk about lugaw (rice porridge),

the first thing that enters their mind is that lugaw is

food for the sick or merely a breakfast / merienda street

food. With the growing demand for unique and delicious rice-

based cuisine, the old concept now has a new twist.

Aside from the typical lugaw toppings like egg,

chicken, chicken liver, ox stripe, tofu, and chicharon,

Lugaw Queen one of today's successful fast food chains

specializing in lugaw delicacies, offer more than the usual.

At Lugaw Queen, food is not just served hot and fast but is

also served with fresh ingredients is a warm Filipino-

homeatmosphere.

Exceptional in this store are the unexpected

combinations of lugaw with deliciuos surprises. it is only

in Lugaw Queen Where you can find lumpiang shanghai on top

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of an

ordinary lugaw, or a lugaw that tastes like palabok It's

lugaw at its best, at very affordable prices. The creative

blending of flavors and ingredients from the freshst

sources, to the way they are served in hot rice bowls make

Lugaw Queen reign not just in popularity but in lugaw

supremacy.

The Lugaw Queen’s mission is to provide the best

quality and satisfying taste food products at most

affordable price and their vision a leading innovative fast

food chain of quality products with affordable value served

by competent people.

FOREIGN STUDY

In University of Calgary at Alberta, Canada, they

establish a food kiosk that focuses on Olympic athletes.

Local athletes look for well – balanced diet that can give

them strength and energy when they need it most .In order to

help them do that, the Canadian Sport Centre Calgary (CSCC)

has opened a Fuel for Gold food kiosk in MacEwan Hall at the

University of Calgary that serves nutritious meals made with

fresh, organic, locally sourced ingredients, helping both

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tomorrow’s Olympic athletes and today’s university students

reach their goals.

CSCC already had that expertise in place and they had

already been doing something for the athletes, but the idea

was taking it a bit farther so that they could provide

nutritious

food to the staff, students and faculty in their university.

(2012, Haughton)

With one of the world’s top Olympic and Paralympic

sport training environments based on the University of

Calgary campus, the Fuel for Gold program originated four

years ago as a way to provide CSCC-registered athletes with

convenient, affordable and nutritious lunch options. It

began small, with a meal served out of a classroom to

provide a healthy option for the athletes either before or

after their workouts.

It first started as one meal and then there’s a variety

of meals and a variety of options. From Monday to Friday

from 8 a.m. to 6 p.m., athletes can go down any time and

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know

they’re going to get something healthy to eat, rather than

be forced to make some choices that might not be so healthy.

The new kiosk sits among 15 other food offerings in

MacEwan Hall and is what he calls a “healthier hybrid

version” of what was available. The student union — which

runs Mac Hall and already featured several well-known food

brands — came on board after learning about the kiosk’s

healthy, fresh, organic approach.

The customers embrace it right away because, in their

eyes, the student body was looking for something else in the

university, adding the concept of supporting local athletes

was well received. (2012, Haughton)

Sourcing most of its food from Gunther’s Fine Baking,

Gordon Food Services and local farmers’ markets, the Fuel

for Gold kiosk menu was created by a team of CSCC staff.

These included longtime professional chefs along with

nutritionist Kelly Anne Erdman, who is currently in London

to ensure the dozens of Canadian athletes have healthy foods

while competing at the 2012 Summer Olympics.

The goal was to create a menu that met the nutritional

needs of athletes but would appeal to everyone, by

incorporating home cooked and healthy options. Think quinoa

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and

vegetable salad; fresh mozzarella, tomato and basil on an

olive ciabatta; or roasted Alberta bison with sweet potato

wedges and grilled vegetables.

By expanding the Fuel for Gold program, Haughton says

CSCC is creating sustainability and creative ways to

operate, without being solely dependent on funding from

government and other supporting partners.

As interest in the program grows, there are plans for

expanding and collaborating with the universities of Alberta

and Toronto during the 2015 Pan Am Games, as well as with

Win Sport Canada as it continues its development.

STATEMENT OF THE PROBLEM

The study aims to determine the feasibility of

establishing a “Lugaw Express” kiosk in PHINMA – Araullo

University.

Specifically it aims to answer the following questions:

1.) How may the Marketing Aspect of the study describe in

terms of:

 Description of Target Market

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  Size

 Location

 Patterns of Consumption

 Existing Competition

 Demand and Supply Analysis

 Demand for Product for the Last Five Years

 Supply for Product for the Last Five Years

 Supply and Demand Forecast

 Projected Demand for the Next Five Years

 Projected Supply for the Next Five Years

 Marketing Program

 Terms of Sales

 Pricing

 Packaging

 Distribution Channels

 Means of Transportation

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  SWOT Analysis

2.) How may the Technical Aspect of the study describe in

terms of:

 Production Facilities

 Location/Layout

 Building and Other Facilities

 Machinery and Equipment

 Manufacturing/Production/Operation Systems and

Processes

 Product Description

 Production Process

 Production Capacity/Schedule

 Raw Materials and its Sources

 Utilities and Other Operating Costs

 Waste Disposal

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3.)

How may Organization and Management Aspect of the study

describe in terms of:

 Form of Business Organization

 Organizational Structure

 Manpower Requirements

 Qualification Standards

 Duties and Functions of Personnel

 Compensation Package

 Legal Requirements

 Company Policies

4.) How may the Financial Aspect of the study describe in

terms of:

 Assumptions

 Total project cost

 Sources of Financing

 Projected Income Statement

 Projected Cash Flow Statement

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  Projected Balance Sheet

 Financial Statement Analysis

 Liquidity

 Solvency

 Profitability

 Break – even

5.) What will be the socio – economic contribution of the

proposed business and its benefits to the PHINMA – Araullo

University community?

SIGNIFICANCE OF THE STUDY

The study will provide relevant information that may

benefit to the following:

 For the Students

This study will help the students, especially the

business students to have knowledge and an overview of

what are the processes when establishing this kind of

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 business inside the school or university. Aside from

that, since the students are part of the target market

they will benefit in terms of fulfilling their needs.

 For PHINMA-Araullo University

This study will serve as an additional reference

to the library and also serves as an additional income

in terms of rentals from concessionaire.

 For the Employees of PHINMA – Araullo University

When this proposed business is established, the

employees will be able to eat a different variety of

porridge that can satisfy their appetite and at the

same time, they can provide information to their

students who will conduct similar study.

 For the Prospective Owner

This study will help the prospective owner if this

business is feasible to establish and can be profitable

in the near future.

 For the Internal Customer

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 This proposed business will be useful in providing

employment for the internal customer/s that can serve

as their source of income.

 For the Future Researchers

This study will serve as a basis for those who are

willing and interested to conduct the same kind of

study in the near future.

SCOPE AND DELIMITATION OF THE STUDY

The respondents of the study were the students enrolled

and current employees in the first semester of the school

year 2015-2016 at PHINMA-Araullo University (main campus)

located at Maharlika Highway, Brgy. Bitas, Cabanatuan City.

The study was conducted during the first semester of

school year 2015 – 2016.

Definition of Terms

 Braise - to cook slowly in fat and little moisture in a

closed pot.

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  Condiments –
especially a pungent seasoning.

 Kiosk – a small structure with one or more open sides

that is used to vend merchandise or services.

 Millet – any of various small-seeded annual cereal and

forage grasses cultivated for its grain which is used
for food.

 Mushy – having the consistency mush or soft.

 Storage – space where you put things when they are not
being used.

CHAPTER II

METHODOLOGY

This chapter consists of the design of the research. It

discusses the respondents, locale of the study, instrument,

data gathering procedures and statistical treatment that

used.

RESEARCH DESIGN

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 The researchers used the descriptive method of research

in this study. Descriptive method describes the particular

individual, group or situation being studied. It also answer

the questions who, what, where, when, why and how.

The purpose of using the descriptive method is to

depict the participants in an accurate way that the

researchers will know the accurate set off data.

(www.study.com)

RESPONDENTS OF THE STUDY

The respondents of the study were the current employees

and students enrolled in academic year 2015-2016 of PHINMA –

Araullo University (Main campus).

The researchers used the Slovin's Formula to determine

the number of respondents.

Formula:
n = N
1+Ne2

Where:

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N =

the number of people who qualify in the area of study

e = margin of error which is 5%

n = number of needed respondents

LOCALE OF THE STUDY

The study was conducted within PHINMA – Araullo

University located at Maharlika Highway, Brgy. Bitas,

Cabanatuan City Nueva Ecija.

INSTRUMENT

The researchers used the survey method by distributing

questionnaires as the primary instrument in gathering data.

Questionnaire is a research instrument consisting of a

set of questions to be asked of a number of people usually

in order to gather information or opinions.

(http://www.merriam-webster.com)

DATA GATHERING PROCEDURE

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 The rese

office and human resources’ office for the total population

of students and number of employees in PHINMA – Araullo

University for the first semester of school year 2015-2016.

The survey questionnaire was distributed and retrieved

by the researchers. After the data has been collected, the

responses have been tallied and analyze.

STATISTICAL TREATMENT

The statistical treatments of data used in this study

were percentile and frequency method. Frequency and

percentile distribution used to tabulate the data gathered

and also used the stratified sampling and convenience

sampling in gathering data from the target market.

(www.freedictionary.com)

Formula:
• Percentage Method
P = (F / N) * 100
Where:
P = Percentage N = Total Number of Respondents
F= Frequency (Number of Respondents per Item)

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 CHAPTER III

MARKETING STUDY

A. DESCRIPTION OF THE TARGET MARKET

The target market describes in terms of the size,

location, pattern of consumption and existing competition.

LOCATION

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 The location

University. Since the business outlet is located at food

strip of PHINMA Araullo University. The location of the

business is strategically placed because none of the stores

there sells lugaw and also the food strip is occupied by

many tables and chairs.

PATTERN OF CONSUMPTION

The pattern of consumption of the target market is

based on the result on the questions no. 2 (How often do you

eat Lugaw?) & no. 3 (What time do you usually eat Lugaw?) of

the questionnaire. This signifies that many of

the respondents consume the product in the morning (which is

44.78%) and once a month (which 61.19%).

EXISTING COMPETITION

The proposed business has no direct competitors in

selling their product, inside PHINMA Araullo University but

there are many indirect competitors in terms of snacks like

Foodie HUB, Shake and Waffles, Russels Snack Haus,

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O’Noodles, Aigie’s Kiosk and also other many indirect

competitors in terms of eatery like Tita A’s Cuisine,

Gek&Gelang Eatery, Norma’s Eatery, Levie’s Eatery, Manong

Ricky & Ate Arni’s Eatery, Ate Sita’s Eatery. It was

distinguished in order to know the market share of the

business.

B. DEMAND AND SUPPLY ANALYSIS

DEMAND ANALYSIS

A demand is a willingness and ability of a consumer to

purchase a commodity or service.

(www.merriam-dictionary.com)

Since the target market of the business are the

enrolled students and current employees of PHINMA Araullo

Page 24
University, the researchers gathered the historical

population and projected population of the university and

conduct a survey to estimate the potential demand of the

proposed business.

B.1 Historical Demand

Table 1

Historical Population of PHINMA Araullo University

Year 2010-2015

School Year Total Population Growth Rate

2010-2011 -
5,369
2011-2012
5,808 8.18%

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 2012-2013
5,820 0.21%
2013-2014
6,564 12.78%
2014-2015
7,611 15.95%
Average Growth Rate: 9.28%

Source: Registrar and Human Resource Department

The table shows the historical population of PHINMA

Araullo University. Its corresponding growth rate and the

total computed growth rate that supposedly must use to

compute for the projected population of the campus 5 years

after.

COMPUTATION:
Current year−Previous Year
Growth Rate = Previous Year
x 100

Projected Demand:

Table 2

Projected Population of PHINMA Araullo University

for the Next Five Years

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School Year Population Growth Rate

2015-2016
8,317 9.28%
2016-2017
9,089 9.28%
2017-2018
9,932 9.28%
2018-2019
10,854 9.28%
2019-2020
11,861 9.28%

The table shows the projected population of PHINMA

Araullo University. It has an estimated fix growth rate of

9.28% every year.

Table 3

Market Demand

Projected
Question # 1 Question # 7
YEAR Population for the
(97%) (93%)
next five years

2015 8,317 8,067 7,503

2016 9,089 8,816 8,199

2017 9,932 9,634 8,960

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 2018 10,854 10,528 9,791

2019 11,861 11,505 10,700

*Question no. 1 – Do you eat Lugaw?

97% answered yes.

*Question no. 7 - If we are going to establish a Lugaw

Express Kiosk here at PHINMA Araullo University, will you

patronize the business?

93% answered yes.

This table shows market demand and the percentage of

Questions no. 1 and no. 7. By using this table, the

researchers will be able to get the projected demand of

Lugaw Express Kiosk for the next five years.

Market Demand

= Projected Population x Question No. 1 x Question No. 7

Projected annual volume of demand for the next 5 years

Table 4

Market Demand For the Year 2015

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 2015

Market % of Frequency Market Demand per

Demand Respondents choices
7,381 4% Everyday 60,024
(200 days)
7,381 13% Once a week 39,016
(40)

7,381 20% Twice a week 120,048

(80)

7,381 63% Once a month 47,269

(10)

Total 100% - 266,357

Formula:
Total demand = potential market x frequency x
percentage

Table 5

Projected Demand

Year Previous Increase in Projected

Demand Demand (5.22%) Demand

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 2015
- - 266,357
2016
266,357 24,718 291,075
2017
291,075 27,012 318,087

2018
318,087 29,518 347,605
2019
347,605 32,258 379,863

The table shows the projected demand for the next five

years by multiplying the previous demand to the average

growth rate, which is 9.28%, and the product will add to the

previous demand to get the demand for 2016, 2017, 2018 and

2019.

Formula:
Projected Demand= [previous demand x average growth rate
(9.28%)] + previous demand

SUPPLY ANALYSIS

A supply is the total amount of specific good or

service that is available to consumers at a given price.

(www.investopedia.com)

Page 30
 Lugaw Express

is the only business that will sell porridge inside the

university, but it has indirect competitors such as Tita A’s

Cuisine, Ram on Stix, Aigie’s Kiosk, Foodie Hub, O’ noodles,

Pick A Pick, Gek&Gelang, Russel Snack Hauz, Shake and

waffles, Norma’s Eatery, Levie’s Eatery, Manong Ricky’s

Eatery and Ate Sita’s Eatery.

B.2 Historical Supply

Table 6

Estimated Supply of the Existing Competitors for the Past

Years (2014-2015)

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 COMPETITORS DAILY WEEKLY MONTHLY ANNUALLY

Tita A’s 200 1,000 4,000 40,000

Cuisine
Norma’s Eatery 230 1,150 4,600 46,000

Levie’s Eatery 310 1,550 6,200 62,000

Manong Ricky’s 150 750 3,000 30,000

Eatery
Ate Sita’s 200 1,000 4,000 40,000
Eatery
Total 1,090 5,450 21,800 218,000
Table 6.1.Eatery

Table 6.2.Snacks

COMPETITORS DAILY WEEKLY MONTHLY ANNUALLY

Tita A’s 200 1,000 4,000 40,000
Cuisine
Ram on Stix 100 500 2,000 20,000
Aigie's Kiosk 110 550 2,200 22,000
Foodie Hub 200 1,000 4,000 40,000
Pick A Pick 500 2,500 10,000 100,000
Russel Snack 105 525 2,100 21,000
Hauz
Shake and 100 500 2,000 20,000
Waffles
Total 1315 6575 26300 263000

Sources: Competitors inside PHINMA Araullo University

The table shows the number of products sold daily,

monthly and annually. It illustrates the current supply for

product in PHINMA Araullo University. The researchers

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gathered data through interview and took the average daily

customers of the above competitors. Pick A Pick sells the

largest number of daily supply. By using this table, the

researchers will be able to compute the projected supply for

the next five year.

Supply Weekly = Supply daily x No. of operating days in a

week

Supply Monthly = Supply weekly x 4

Supply Yearly = Supply monthly x 10

Table 7

Growth Rate of the Competitors

Table 7.1.Eatery

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 Competitiors Year 2014 Year 2015 Annual Growth
rate
Tita A’s Cuisine 50,000 40,000 -20%
Norma’s Eatery 40,000 46,000 15%
Levie’s Eatery 61,500 62,000 1%
Manong Ricky’s Eatery 40,000 30,000 -25%
Ate Sita’s Eatery 40,000 45,000 13%
Gek&Gelang Eatery 20,000 24,000 20%
TOTAL 3%
Average Growth Rate (3%/6) 0.50%

Table 7.2.Snacks

Competitiors Year 2014 Year 2015 Annual Growth

rate
Tita A’s Cuisine 50,000 40,000 -20%
Ram on Stix 30,000 20,000 -33%
Aigie's Kiosk 20,000 22,000 10%
Foodie Hub 45,000 40,000 -11%
Pick A Pick 65,000 100,000 54%
O’ Noodles 18,000 21,000 17%
Shake and Waffles 25,000 20,000 -20%
Russel Snack Hauz 20,000 21,000 5%

TOTAL 1%
AVERAGE GROWTH RATE (1%/8) 0.13%

The table shows the annual growth rate, total growth

rate and average growth rate of the competitors. The

researchers gathered the competitor’s growth rate through

Page 34
interview with the owner and employees of different food

businesses. By using this table, the researchers, can now

determine the projected supply of competitors for the next

five years.

Average Growth Rate = Total Growth Rate / 14

Table 8

Page 35
 Projected Annual Volume of the Supply for the Next Five

Years

Table 8.1.Eatery

Year Previous Average Projected

Annual Growth Rate Annual Supply

Supply (0.50%)

2014-2015 - 242,000

2015-2016 242,000 1,210 243,210

2016-2017 243,210 1,216 244,426

2017-2018 244,426 1,222 245,648

2018-2019 245,648 1,228 246,876

Table 8.2.Snacks

Year Previous Average Projected Annual

Annual Growth Rate Supply

Supply (5.22%)

2014-2015 - 263,000

2015-2016 263,000 342 263,342

2016-2017 263,342 342 263,684

2017-2018 263,684 343 264,027

2018-2019 264,027 343 264,370

Page 36
 The table

next five years of the competitors. The projected annual

supply was computed by multiplying the previous annual

supply to the average growth rate, which are the 0.50% and

0.13%, and the product will be going to add to the previous

annual supply.

Formula:

Projected Annual Supply = (Previous Annual Supply *

Average Growth Rate)+Previous Annual Supply

Page 37
 Table 9
Demand and Supply Analysis
Table 9.1.Eatery

Year Projected Projected Demand Market

Demand Supply Supply Gap Share

2015 266,357 242,000 24,357 32,000

2016 291,075 252,890 38,185 35,200

2017 318,087 264,270 73,661 38,720

2018 347,605 276,162 101,957 42,592

2019 379,863 288,590 132,987 46,851

Table 9.2.Snacks

Year Projected Projected Demand Market

Demand Supply Supply Gap Share

2015 266,357 263,000 3,357 32,000

2016 291,075 263,342 27,733 35,200

2017 318,087 263,684 54,403 38,720

2018 347,605 264,027 83,578 42,592

2019 379,863 264,370 115,493 46,851

The table shows the gap or the market share that is

not yet tapped by the existing competitors since the

populatio

Page 38
 The table

not yet tapped by the existing competitors since the

population yearly increase.

Formula:

Gap = Demand – Supply

Market Share = Daily Capacity * Number of
Operating Days

C. MARKETING PROGRAM

The marketing program of the proposed business

describes in terms of sales, pricing, packaging,

distribution channels, means of transportation and SWOT

analysis.

C.1 Terms of Sales

The Lugaw Express Kiosk will use the Cash Basis Method

in recognizing the sales. The staff will collect the payment

before preparing the orders of the customers.

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C.2

Pricing

The product of the business was based on the Cost –

Plus Pricing Method. The computation of the price would be

based on the expense that will incur on the materials used

plus mark up.

Table 9

Lugaw Express Price List

PRODUCT MENU PRICE

Plain ₱10.00

Eggcaldo ₱15.00

w/ Tokwa’tBaboy ₱15.00

Goto ₱25.00

Arrozcaldo ₱25.00

Page 40
C.3 Packaging

The packaging of the proposed product will be made of

the paper bowl.

Photo No. 1

Packaging Design

Page 41
C.4 Distribution Channels

LUGAW
CUSTOMER
EXPRESS

DISTRIBUTION CHANNEL

FIGURE 1

Lugaw Express will serve directly to the consumer. It

does not have any middlemen (agent, distributor or

wholesaler)

C.5 Means of Transportation

The transportation use to deliver the product to the

business location is tricycle owned by the owner.

Page 42
C.6 SWOT Analysis

STRENGHTS WEAKNESS

Well Known Food Perishable Goods

Healthy Snack Food

Affordable Price

Accessible Location

OPPORTUNITIES THREAT

No Direct Competitors Market Competition

Increasing Number of Weather

Students and Employees

Annually

Table 9

Page 43
Strength

*Well Known Food

- every people know this product, as for the sick

and due to its flavorful taste, it can serve as a meal on

its own that can satisfy the hunger of every person, so it

is easy to introduce it to the market.

*Healthy Snack Food

- white rice is the main ingredient of the product

which contains carbohydrates that provide energy for the

body, especially the brain and nervous system.

*Affordable Price

- Lugaw Express provides delicious and healthy

porridge for the students, employees and staff of the

university at affordable price with equivalent quality

product.

Page 44
 *Accessible Location

- customers can easily access to the business,

because it is located inside PHINMA Araullo University,

specifically in the food strip. It is strategically put

inside the university because the students, faculty and

staff is the main target market of the business.

Weakness

*Perishable Goods

- the product can only last for one day. The

amount of supply per day should be good enough to provide

the demand of the customer in order to avoid leftovers, so

that the business can sell hot and tasty porridge every day.

Opportunities

*No Direct Competitors

- Lugaw express is the only kiosk which sells

different variety of porridge in the main campus of PHINMA

Araullo University.

Page 45
 *Increasing Number of Students and Employees Annually

- the increasing population of students and

employees every year in PHINMA Araullo University gives a

great opportunity for the business. The business will

generate more profit because of the large percentage of the

target market.

Threats

*Market Competition

- the business may encounter hard competition in

the target market, because of the alternative products

offered by other food kiosk within PHINMA Araullo

University.

*Weather

- hot weather condition affects the buying

decision of the consumers. Large number of the target market

may choose to buy other products instead of porridge which

may lead to suspend the operation of Lugaw Express Kiosk for

the day.

Page 46
 Selling Process

Kindly greet the

customer.

Take the
customer’s order.

Collect the
payment.

Prepare the
order.

Serve the order

and thank the
customer.

Figure 2

Selling Process

The staff will prepare and clean the area in the

morning. Then, prepare the necessary condiments, utensils

Page 47
and

equipment. Once the kiosk is open and ready for service, the

staff will kindly greet the customers. After that, they will

take the customer’s order and collect the payment. Then, the

staff will prepare the order of the customers. Lastly, they

will serve the order and thank the customer.

Table 10

Projected Sales

Variety Quantity Price Projected Projected

Sales Sales
(Daily) (Annually)
Plain 15 P10 150 P30,000

Eggcaldo 45 P15 675 P135,000

w/ Tokwa'tBaboy 20 P15 300 P60,000

Goto 40 P25 1000 P200,000

Arrozcaldo 40 P25 1000 P200,000

Total 160 P625,000

Page 48
 Photo No. 2

Business Logo

The logo shows the business name “Lugaw Express” which

means to provide quick servings of porridge for customer

satisfaction. In the middle shows the picture of porridge

that will be offer to the customer.

Page 49
 Photo No. 3

Tarpaulin

Page 50
 TALLY SHEET

Question #1 Do you eat Lugaw?

Choices No. of respondents Percentage

Yes 194 97%
No 7 3%
Total 201 100%

Question #2 How often do you eat Lugaw?

Choices No. of respondents Percentage

Everyday 7 4%
Twice a week 25 13%
Once a week 39 20%
Once a month 123 63%
Total 194 100%

Question #3 What time do you usually eat Lugaw?

Choices No. of Percentage

respondents
Morning 90 46.39%
Afternoon 10 5.16%
Early Dinner 38 19.59%
Snack time- Morning 17 8.76%
Snack Time- 39 20.10%
Afternoon
Total 194 100%

Page 51
Question #4 Where do you usually eat Lugaw?
Choices No. of respondents Percentage
Mall 24 12.37%
Street 111 57.22%
Market 13 6.70%
Others 46 23.71%
Total 194 100.00%

Question #5 How much are you willing to spend for

one(1)serving of Lugaw?

Choices No. of respondents Percentage

₱10.00 27 13.92%
₱15.00 47 24.23%
₱20.00 51 26.29%
₱25.00 69 35.57%
Total 194 100%

Question #6 What varieties of Lugaw do you prefer?

Choices No. of respondents Percentage

Plain 37 5.75%
Arrozcaldo 105 16.30%
With Tokwa’tBaboy 92 14.29%
With Kwek-kwek 20 3.11%
With tinapa/ tuyo flakes 7 1.09%
Goto 105 16.30%
Eggcaldo 116 18.01%
With meatballs 13 2.02%
With sisig 27 4.19%

Page 52
 With Calamares 19 2.95%
With beef 27 4.19%
With chicharon 25 3.88%
With isaw 19 2.95%
With tokwa 32 4.97%

Question #7 If we are going to establish a Lugaw Express

Kiosk here at PhinmaAraullo University, will you patronize
the business?

Choices No. of Percentage

respondents
Yes 187 93%
No 14 7%
Total 201 100%

The table above shows the tally of the results from the

respondent’s answer and its percentages.

Page 53
 Chapter IV

Technical Aspects

After the market study examined, the technical study

wasanalysed and includes three basic issues the product

quality resources, the availability and accessibility and

optimal use of resources.

Technical aspect of Lugaw Express Kiosk is presented by

describing and making the necessary calculation of the

following:

Page 54
 Manufacturing/Production/Operation Systems and

Processes

4.1 PRODUCT

Photo 4 Product Description

The proposed product of the business will be Lugaw. Lugaw is

the Filipino version of congee. It is very similar to

Cantonese style congee; however, Lugaw is typically a

thicker consistency retaining the shape of the rice while

achieving the same type of texture. It is boiled with fresh

ginger. A lot of times it is topped with spring onions, salt

and pepper and other toppings according to their individual

Page 55
taste. Lugaw Express will served hot and may be accompanied

by other side dishes or varieties of Lugaw that

the respondents most prefer to eat such as Plain Lugaw ,

Goto, Arrozcaldo , Eggcaldo and with Tokwa’tBaboy.

Product Process

Lugaw Plain
Ingredients
¼ kg of glutinous
(sticky) rice.
¾ kg of long-grain rice
2 tbsp. of cooking oil
4 cloves of garlic,
minced
2 thumb-sized pieces
of ginger, julienned

C About 5 c. of good

ooking time: 1 hour(s) quality brothPatis (fish

sauce), to taste
Procedure Pepper, to taste

1. Rinse the rice and drain. 1 pack of safflower

2. Heat the cooking oil in a

thick-bottomed pot. Saute the garlic and ginger until

fragrant and lightly toasted, about two minutes.

Page 56
 3.

Add the rice. Pour in the broth. Stir and scrap the

bottom of the pot. Season with patis and pepper.

4. Bring to the boil, lower the heat, cover and simmer for

an hour until the rice grains puff.

5. Stir often to help the rice release the starch into the

broth to make a thick lugaw. Add more broth, no more

than half a cup each time, if the lugaw looks too thick

before the rice grains are sufficiently puffed.

6. Taste occasionally too and add more patis or pepper, or

both, as needed.

7. Add the safflower for additional color and aroma.

8. Serve the piping hot topped with crispy fried onion

slices, toasted garlic bits and finely sliced scallions

(green onions).

Table 11

Quantification
Ingredients Unit Quantity Total No. of Cost per
Cost Cost Servings Servings
Rice 44 ¾ kg 33 160 0.21
Glutinous 60 ¼ kg 15 160 0.09
Rice
Total 48 0.3

Cost per Servings = Total Price of Ingredients

No. of Serving

= 48/160

= 0.3
Page 57
Arrozcaldo
Ingredients (Serves: 5)
¼ kg glutinous rice
¾ kg rice
2 tablespoons oil
1 onion, diced
2 cloves garlic, crushed
1 (5cm) piece fresh root
ginger, peeled and thinly
sliced
1kg chicken meat split and

Cooking time: 1hr tips discarded

1 teaspoon fish sauce for
Procedure
sprinkling, if desired
1. Heat the olive oil in a
1.25L chicken stock (or 2
large pot over medium heat. chicken cubes)
Salt and pepper to taste
2. Cook and stir the onion,
1 spring onion, chopped
garlic and ginger in the hot
1 lemon, sliced
oil until fragrant, about 5 1 tablespoon safflower
(kasubha)
minutes.

Page 58
 3.

Add the chicken meat, cook and stir together for 1

minute. Stir the fish sauce into the pot, cover, and

cook another 2 minutes.

4. Pour the chicken stock into the pot. Add the rice and

stir. Bring the mixture to the boil, cover and cook for

10 minutes, stirring occasionally to assure the rice is

not sticking to the bottom of the pot.

5. Add the safflower for additional color and aroma.

6. Season with salt and pepper. Garnish with the spring

onion, and serve with lemon slices and additional fish

sauce, if desired.

Table 12

Quantification

Ingredients Unit Quantity Total No. of Cost per

Cost Cost Servings Servings
Chicken 130 1 kg 130 40 3.25
Meat
Total 130 3.25

Cost per Servings = Price of Ingredients × Quantity

No. of Serving

Page 59
Lugaw with Tokwa’tBaboy Ingredients:

¾ kg of rice
¼ kg of glutinous rice
1 clove garlic ( minced
and toasted)
1 onion, diced
1/4 cup ginger strips
3 stalks spring onions
salt and pepper to taste
fish sauce(optional)
1 cup fried tokwa
Cooking Time: 1 hour and 30 minutes
( diced)
Procedure 1 cup pork's ear (strips)

1. Sauté the garlic, onion, and "baboy"

1 liter of water
ginger until brownish then add
ground pepper
1 tablespoon safflower
(kasubha)

Page 60
 the rice and saute it together with fish sauce, salt

and pepper.

2. Add the water, and then cover (stirring constantly so

that the rice will not stick at the bottom of the pot).

3. Continue simmering until the rice is so tender making

the porridge thick in texture.

4. Add the safflower for additional color and aroma.

5. Serve it hot with tokwa'tbaboy, spring onion, ground

pepper and toasted garlic.

Table 13

Quantification

Ingredients Unit Quantity Total No. of Cost per

Cost Cost Servings Servings
Pork 140 1/2 kg 70 20 3.5
Tokwa 20 1 block 20 20 1
Total 90 4.5

Cost per Servings = Total Price of Ingredients

No. of Serving
=90/20
=

Page 61
 Ingredients

¾ kg of rice
¼ kg of glutinous rice

Goto ½ kg ox tripe, cut into

serving pieces
17 ounces water (about 500
ml)
17 ounces beef stock (about
500 ml) or 1 piece beef
cube(bouillon) diluted in 17
ounces of water
2 tablespoons fish sauce
1 teaspoon garlic, minced
½ teaspoon ground black
Cook time: 90 mins pepper
Total time: 1 hour 45 mins.
1 cup onion, minced
1 cup scallions (green
Procedure onions), minced

1. In a pot, heat the cooking oil 2 knobs ginger, julienned

1 tablespoon safflower
then sauté the garlic, onion,
(kasubha)
and ginger. 1 piece lemon or 4 pieces
calamansi
¾ cup chicharon (pork
Page 62 rinds), crushed
2 tablespoons cooking oil
 2.

Dash-in some ground black pepper.

3. Add the ox tripe and cook for 2 minutes.

4. Pour-in the fish sauce and water then simmer until the

ox tripe is tender (you may use a pressure cooker for

faster results.

5. Add the uncooked rice and stir.

6. Pour-in the beef broth and bring to a boil.

7. Stir occasionally until the rice reaches the desired

consistency (about 40 minutes). Add water as needed

8. Put-in the hard boiled eggs then stir.

9. Add the safflower for additional color and aroma.

10. Serve hot with minced green onions and lemon.

Table 14

Quantification

Ingredients Unit Quantity Total No. of Cost per

Cost Cost Servings Servings
Ox tripe 140 ½ kg 70 40 0.875
(Tuwalya)
Total 70 0.875

Cost per Servings = Total Price of Ingredients × Quantity

No. of Serving

Page 63
Eggcaldo
Ingredients

¼ kg of glutinous (sticky)
rice
¾ of long-grain rice
2 tbsp Of cooking oil
4 cloves of garlic, minced
2 thumb-sized pieces
of ginger, julienned
about 5 cups of good quality
brothpatis (fish sauce),
Cooking time: 1 hour(s) pepper,(to taste)
1 hardboiled egg
Procedure 1 tablespoon safflower

 Rinse the rice and drain. (kasubha)

 Heat the cooking oil in a

thick-bottomed pot. Sauté the garlic, onion and ginger

until fragrant and lightly toasted, about two minutes.

Page 64
  A d d t h e r i c

bottom of the pot. Season with patis and pepper.

 Bring to the boil, lower the heat, cover and simmer for

an hour until the rice grains puff.

 Stir often to help the rice release the starch into the

broth to make a thick lugaw. Add more broth, no more

than half a cup each time, if the lugaw looks too thick

before the rice grains are sufficiently puffed.

 Taste occasionally too and add more patis or pepper, or

both, as needed.

 Serve the piping hot topped with crisp fried onion

slices, toasted garlic bits and finely sliced scallions

(green onions).

Table 15

Quantification

Ingredients Unit Quantity Total No. of Cost per

Cost Cost Servings Servings
Egg 4 45 pc 180 45 4
Total 180 4

Cost per Servings = Total Price of Ingredients

No. of Serving
= 180/45
=4
X

Page 65
 Quantification per Bowl

 Plain Lugaw

Table 16

Quantification

Regular Cup of Plain Lugaw

Ingredients Quantity Total Cost

Plain Lugaw 2 scoop of .3

porridge
Paper Bowl 1 1.4
Spork 1 1.25
Total 2.95

 Arrozcaldo
Table 17

Quantification

Regular Cup of Arrozcaldo

Ingredients Quantity Total Cost

Plain Lugaw 2 scoop of .3

porridge
Chicken Meat 1 3.25

Page 66
 Paper Bowl 1 1.4

Spork 1 1.25

Total 6.22

 With Tokwa’t Baboy

Table 18

Quantification

Regular Cup of Lugaw with Tokwa’t Baboy

Ingredients Quantity Total Cost

Plain Lugaw 2 scoop of .3

porridge
Tokwa’t baboy 3 servings spoon 4.5
Paper Bowl 1 1.4

Spork 1 1.25

Total 7.45

 Goto

Table 19

Quantification

Regular Cup of Goto

Ingredients Quantity Total Cost

Page 67
 Plain Lugaw 2 scoop of .3
porridge
Ox tripe (Tuwalya) 3 servings spoon .875
Paper Bowl 1 1.4

Spork 1 1.25

Total 3.825

 Eggcaldo

Table 20

Quantification

Regular Cup of Eggcaldo

Ingredients Quantity Total Cost

Plain Lugaw 2 scoop of .3

porridge
Egg 1 4
Paper Bowl 1 1.4

Spork 1 1.25

Total 6.95

Page 68
 Production Schedule

Daily Capacity Computation

Estimated Capacity per Day = 160 servings of Lugaw

The estimated daily capacity is computed as follows:

Peak Hours × 60 minutes × No. of Service Crew

Over standard processing time

= 2 hrs × 60 min × 2
1 minute and 30 seconds
= 160 orders

Where:

 Standard processing time = 1 minute and 30 seconds

per servings

 Peak Hours = ( 9:00 am to 11:00 am ) = 2 hours

 Number of Crew = 2

5.1 Daily Production Capacity

The schedule of production is dependent on the

capacity of the business so it is expecting to produce

120 servings of Lugaw daily. The production starts at

Page 69
 every 4:00 am to 7:00 AM.The Lugaw Express Kiosk will be

open during school hours from 9 a.m. to 6:00 p.m.,

Mondays to Fridays. It has the capacity to produce

finished product equally to 120 paper bowls daily.

Table 21

Shelf Life Matrix

Shelf Life Matrix

The Lugaw and hardboiled egg only has a shelf life of 1 day.

Ox tripe, Tokwa’tBaboy and Chicken for Arrozcaldo has a shelf

life of 2 to 3 days, and it should be place in the refrigerator

to avoid contamination.

Production Location

Ma
nufacturing Site

Page 70
 The manufacturing location of Lugaw Express will be

located at Narra 1, Bitas Cabanatuan City.

Foodstrip Layout Location

LUGAW EPRESS
EXPRESS

Food
Strip

Lugaw ExpressAigie’sKiosk
Geck& Gelang Eatery Ram-a-stick
Russel’s Snack House Shakes & Waffles

Location is one of the major factors to be considered

in establishing a business. It must be assumed that it is

accessible to the target market. Right choice of location

means reaching your target customers and you respond

correctly to their market needs.

Page 71
 Based on the management, food strip is the place to

locate our business. With that we’ve decide to put our

business in food strip at PHINMA Araullo University (main

campus) because we believed that it would be accessible to

our target customer.

Food Stall Lay-out

Photo 5. Lugaw Express Stall

Page 72
Materials cost = Php 12,780.00
Labor Cost = Php 4,473.00
Total Cost = Php 17, 253.00

Raw Materials and its Sources/Machinery and

Equipment/Utilities and Other Operating Costs/Waste Disposal

Table 22

I. Raw Materials and its Sources

Raw Materials Quantity Unit Total

Function Cost Cost

¾ kg ₱33.00
Main ₱44.00/
ingredient of kg
Lugaw

Rice

Page 73
 ¼ kg ₱15.00
Serve as the ¼ ₱60.00/
of Lugaw kg
process

Glutinous rice
1 kg ₱130.00
Ingredient for ₱130.00/
Arrozcaldo kg

Chicken
1/2 kg ₱70.00
Ingredient for ₱140.00/
tokwa’tbaboy kg

Pork
1 block ₱20.00
Ingredient for ₱20.00
tokwa’tbaboy /block

Tokwa

1/2 kg ₱70.00
Main
ingredient for 140/kg.
goto

Ox Tripe (Tuwalya)

45 pcs ₱180.00
Main ₱4/
ingredient for pieces
Eggcaldo

Page 74
 Egg
1/4 kg ₱25.00
Ingredient for
sautéing the ₱100/kg
porridge

Garlic
Ingredient for 2 pc ₱ 10.00 ₱10.00
sautéing the
porridge

Ginger
Ingredient for ¼ kg ₱80/kg ₱20.00
sautéing the
porridge

Onions
Aroma for the 1 pack ₱20.00 ₱20.00
porridge /pack

Safflower
(kasubha)
250 ml ₱80.00 ₱20.00
Use to sauté /liter
lugaw

Oil

Page 75
 Add to taste 1 pack ₱12.00 ₱12.00

Fish Sauce (Patis)

Use to season 5pcs ₱3.00/ ₱15.00
the porridge pc

Seasonings
Use to garnish 1 pack ₱ 10.00 ₱10.00
the porridge /pack

Calamansi

Use to season ¼ kg ₱ 60/kg ₱15.00

or garnish the
porridge

Spring Onions

Use to season 1 pack ₱10.00

the Porridge ₱
10.00
/pack

Pepper
TOTAL ₱675.00

(Good for 1 day )Source: Sangitan Public Market

Page 76
 ‘

Table 23

II. Machinery and Equipment

Description Function Quantity Unit

Cost Total
Cost

Stores
perishable 1 ₱230.00 ₱230.00
goods and
use for
cooling
Cooler purposes

Kitchen 1 ₱450.00
appliance ₱450.00
designed
for the
purpose of
cooking
food

Page 77
 Gas Stove

Used to
cook food
together 1 ₱1,500 ₱1,500
with the
gas stove

Gas Tank
Total ₱2,180.00

Source: Sangitan Public Market

Table 24

III. Utilities and Other Operating Costs

3.1 Utensils

Unit Total Cost

Description Function Quantity Cost

A filter to 1 ₱30.00 ₱30.00

retain larger
pieces while
small pieces
and liquid
pass through

S
trainer
₱250.00 ₱250.00
1
A kitchen
utensil design
to fry, to
sear, and to
sautè and food

Page 78
 Frying Pan

1 ₱50.00 ₱50.00
A kitchen
utensil used
as a surface
on which to
cut or slice
things

Chopping Board

1 ₱100.00 ₱100.00

A kitchen
tools used to
cut different
kinds of foods

Kitchen Knives Set

1 ₱35.00 ₱35.00

A hard-held
tool that is
used for
lifting,
flipping or
spreading
substances

Spatula

Page 79
 A round vessel 1 dozen ₱96.00 ₱96.00
that is open
at the top;
used chiefly
for holding
food or
liquids

Bowl

A broad, 1 dozen ₱144.00 ₱144.00

mainly flat
vessel on
which food is
served

Plate
An open
metal, 1 ₱40.00 ₱40.00
ceramic, or
plastic
container with
sloping sides,
typically uses
for holding
water or
washing

Basin
Deep dish used 2 ₱260.00 ₱520.00
both in the
oven and as a
serving vessel

Casserole

Page 80
 Deep dish used 1 ₱700.00 ₱700.00
to cook the
porridge as a
serving vessel

Use to hold 4 ₱25.00 ₱100.00

food for
toppings like
tokwa’tbaboy,
hardboiled egg
and etc.

Canister

Use to hold 4 ₱12.00 ₱48.00

the condiments
such as
pepper, salt
etc.

Condiment Sets

Page 81
 Use to hold 1 ₱160.00
water for ₱160.00
drinking
purposes

Juice Jar

Use to scoop 1 ₱90.00 ₱90.00

the porridge

Ladle
Used in food 3 ₱15.00 ₱45.00
preparation to
mix, stir and
toss
ingredients

Serving Spoons

Page 82
 Used to scoop 1 ₱20.00 ₱20.00
the beverages

Plastic Ladle
2 ₱15.00 ₱30.00
A kitchen tool
for handling
food items

Tong
Primary 5 packs ₱15.00 ₱125.00
utensil use per
for eating pack

Spork
Good for 3 ₱50.00 ₱150.00
protecting
clothes while
cooking and
working

A
pron

Page 83
 Use to hold 5 packs ₱35.00 ₱135.00
the porridge per
pack

Paper Bowl
Total ₱2,868.00
Source: Sangitan Public Market

Table 25

3.2 Furniture and Fixture

Description Function Quantity Unit Total

Cost Cost
For seating 1 ₱180.00 ₱180.00
purposes of
the employee

Chair

Page 84
 Use for 1 ₱550.00 ₱550.00
keeping the
employees

Electric Fan
For better 1 ₱85.00 ₱85.00
ambiance

Fluorescent Lamp

Use to display 1 ₱550.00 ₱550.00

products

Display Cabinet

Total ₱ 1365.00
Source: Sangitan Public Market

Table 26
3.3Sanitary

Description Function Quantity Unit Total

Cost Cost

Page 85
 A piece of 4 ₱5.00 ₱20.00
textile used
to hold hot
kitchen
equipment like
pots and pans

Pot Holder

Used to dry 5 ₱10.00 ₱50.00

hands and for
sanitation
purposes

Cleaning Towel

Used to scrub 2 ₱20.00 ₱40.00

plates and
utensils.

Sponge and Scrub

Used to clean 1 ₱55.00 ₱55.00
plates and
other utensils

Dishwashing Liquid

Page 86
 For sanitary Per packs ₱50.00 ₱50.00
purposes

Tissue

Use for 1 pack ₱30.00 ₱30.00

handling
product to
avoid
contamination

Disposable Gloves
Use for 1 ₱90.00 ₱90.00
garbage
disposal

Trash Bin

Use for 1 pack ₱50.00 ₱50.00

garbage
disposal

Trash Bag

Page 87
 Use to sweep 1 ₱30.00 ₱30.00
the floor

Broom
Use to collect 1 ₱25.00 ₱25.00
dust and waste

Dustpan

Total ₱440.00
Source: Sangitan Public Market

Table 27
3.4 Supplies

Description Function Quantity Unit Total

Cost Cost
Use in 2 ₱3.00 ₱6.00
writing
important
details or
documents

Ball pen
Use for 1 ₱50.00 ₱50.00
computation

Page 88
 Calculator

Use for 1 ₱40.00 ₱40.00

recording
and
reference
purposes

Log Book

Total ₱96.00
Source: Sangitan Public Market

3.5 Other Operating Costs

Electricity

It is one of the primary utility requirements of a food

business. Lugaw Express will greatly need this for its

proper and smooth operations. This will also set the

atmosphere of the kiosk for its proper lighting and

ambience. The store electricity will be provided by the

school management for it is included at their monthly rental

payment of the kiosk.

Water Supply

As the kiosk executes its operations, it needs a good

water supply in order for them to continuously do their job

and tasks. A good water supply can able them to perform

tasks such as cleansing the raw materials, as an ingredients

Page 89
to

the dishes and cleansing of the kitchen utensils, machines,

and equipment, and the overall store to ensure safety of the

customers. Water Supply payment will also be provided by the

school management included in the monthly rental fee.

Telecommunications

Telecommunications is a form of communication that is

said to be indispensable to the duration of a business of

Lugaw Express, as one of newest in the market, need these so

called telecommunications in order to have a clear and

proper negotiation with suppliers and especially with the

customers regarding their feedbacks, suggestions,

recommendation and other customer concerns that can might

help and contribute to the business growth, development and

profitability.

Rentals

Amount paid by the owner for the place where the kiosk

stands.

Table 28

Utilities Expense

Monthly Annually

Electric Bill 200 2,000

Page 90
 Water Bill 150 1,500

Total 350 3,500

Source: Jannelie B. Flores, Coordinator GSD

Table 29

Rent Expense

Rent Cost
3 Months Security Deposit 9,000 Php
1 Month Advance 3,000 Php
Total 12,000 Php
Source: Jannelie B. Flores, Coordinator GSD

VI. Waste Disposal

Our customers are always our priority. We would like to

give them a one hundred percent satisfaction and the

maintenance of cleanliness in all areas of our store is

included in the customer requirements. So, Lugaw Express

encourages the members of the organization especially we are

in the food industry to strictly comply with the set of

standards in cleanliness specifically with the proper

disposal of waste. Lugaw Express will provide trash bins in

the kitchen area with cover and proper label for segregation

Page 91
will be

observed to assure the safety on the preparation of our

products. And there will also trash bins in the left sides

of the store area with cover and proper label for

segregation for the customers. The accumulated garbage per

day will be collected by the utility man of the school. This

kind of system will be continually observed in our day to

day operation.

CHAPTER IV

ORGANZATION AND MANAGEMENT STUDY

This aspect describes the form of business

organization, the organizational structure, manpower

requirements, legal requirements and the company policies.

Form of Business Organization

Page 92
 The researchers

of business organization because it is easy to start and

organize.

A sole proprietorship is a form of business

organization owned by one person who has a complete control

and decision making power over business and at the same

time, acquires all the profits derive from the business

operations.

Organizational Structure

OWNER/MANAGER

STAFF 1 STAFF 2

Page 93
 Figure 3

The organization is composed of owner/manager as the

top management and his two staff as his subordinates.

Manpower Requirements

Table 30

POSITION NO. OF EMPLOYEES

Owner/Manager 1

Staff 2

Total 3

Number of Personnel

This table shows the number of personnel needed in this

business.

Manpower Schedule

Table 31

Time Schedule of the Personnel

Position Monday Tuesday Wednesday Thursday Friday

Page 94
 Staff 1 8:30 am 8:30 am 8:30 am 8:30 am 8:30 am

to 6:00 to 6:00 to 6:00 to 6:00 to 3:00

pm pm pm pm pm

Staff 2 6:00 am 6:00 am 6:00 am 6:00 am 6:00 am

to 3:30 to 3:30 to 3:30 to 3:30 to 12:00

pm pm pm pm pm

Qualifications Standards

These are the qualifications of needed personnel to the

business:

STAFF

 Male or Female

Page 95
  18-25 years old

 At least high school graduate

 With pleasing personality

 Good communication skills

 Have a knowledge in this kind of business

 At least have a working experience in selling

Requirements in hiring an employee

 Resume

 Health Permit

 Police Clearance

 Barangay Clearance

Duties and Responsibilities

The duties and responsibilities of every personnel in

the organization are as follows:

Owner

 Supervise the overall business operation

Page 96
  Responsible for the financial transaction of the

business

 Creates the rules and regulation of the business

 Selects or hires the employees

 Direct, supervise and motivates the employees

 Gives the proper wages, compensation or benefits for

the employees

 Monitor and evaluate the performance of every employee

 Signatory on all the documents and business papers

 Responsible in purchasing and ordering supplies and

materials

 Resolve customer complaints about food quality and

service

Staff 1

 Greet kindly the customer.

 Prepare and serve the product to customers.

 Responsible for collecting the payment of the

customers.

 Responsible in keeping the tools, utensils and

equipment clean and organize.

Page 97
Staff 2

 Responsible in cooking of lugaw.

 Responsible in recording of daily sales.

 Maintain cleanliness of materials, tools and equipments

inside the kiosk.

Table 31

Compensation Package

Position Daily Weekly Monthly Annual

Salary Salary Salary Salary

Staff 1 200 1,000 4,000 40,000

Staff 2 200 1,000 4,000 40,000

Total 400 2,000 8,000 80,000

Compensation Package

Table 32

Legal Requirements

Permits Amount

DTI P515

BIR P500

Mayor’s Permit P1,198

Page 98
 Sanitary Permit Fee P150

Community Tax Certificate P36

Barangay Clearance P30

Police Clearance P100

Total P2,529

Store Policies

 No work, no pay is strictly enforced

 Wear proper prescribed clothing

 Maintain proper hygiene and cleanliness within work

area

 Salaries will be given every 15th day and 30th day of

the month

Page 99
  Employee should arrive 30 minutes before opening of the

kiosk

 30 minutes break will be given to the employees

allocated for lunch

Chapter V

FINANCIAL STUDY

Financing a business is one of the major reasons on how

investor creates its wealth. In this section, it involves an

analysis of the cash flow profile of the project. The Major

Page 100
Assumptions used in making a projection to the financial

statements i.e. Projected Income Statement, Projected Cash

Flow, and Projected Balance Sheet with supporting schedules.

The total project cost, and also the analysis of financial

statements in terms of Liquidity, Solvency, Profitability

and Break-even.

A. MAJOR ASSUMPTIONS USED

 The Projected timetable/schedule is set at 5 years.

 The Projected Sales is set to increase to 10%

annually.

 The Cost of sale shall increase by ten percent (10%)

annually.

 The Depreciation is computed based on a Straight

Line Method, its Salvage value is 10% of its cost.

 The Useful life of the Assets is based on COA

Circular No.

 Tax rates used is based on the prevailing tax rates

set by the Bureau of Internal Revenue.

 All sales/expenses arecollected/paid in cash.

Page 101
  Utilities expense like Water and Electricity are

included in the Rental Expense of the Company.

 The Owner will be allowed to withdraw 10,000 pesos a

month.

 The business will only be financed by the owner, no

assumed liabilities will be incurred.

Page 102
B.

TOTAL PROJECT COST

Table 33

Total Project Cost

PROJECT COST
Fixed Asset Requirements In Peso
Machinery and Equipment 2180.00
Kiosk 17253.00
Utensils 2868.00
Furniture and Fixtures 1365.00
SUB TOTAL 23666.00
Initial Working
Capital
Requirements
Initial Inventory (one-week stocks) 3375.00
Permits and licenses 2529.00
Supplies 96.00
Sanitary 440.00
Rental fee( 1 month Advance, 3 Months 12000.00 18440.00
Deposits)
SUB TOTAL 42106.00
Contingency Fund(at 10% based on total 4210.60
project cost)
TOTAL 46316.60

C. SOURCES OF FINANCING

Since the form of the business will be a Sole

Proprietorship, the source of financing is solely provided

by the prospective owner.

Page 103
D. PROJECTED INCOME STATEMENT

Table 34

Projected Income Statement

Projected Income Statement

Year 1 Year 2 Year 3 Year 4 Year 5

Sales 625000.00 687500.00 756250.00 831875.00 915062.50

Less: Cost of Sales 52730.00 58003.00 63803.30 70183.63 77201.99

Gross Income 572270.00 629497.00 692446.70 761691.37 837860.51

Less: Pre- Operating

Expenses

Salaries Expense 80000.00 80000.00 80000.00 80000.00 80000.00

Rent Expense 30000.00 30000.00 30000.00 30000.00 30000.00

Sanitary Expense 3435.00 3435.00 3435.00 3435.00 3435.00

Supplies Expense 310.00 310.00 310.00 310.00 310.00

Depreciation Expense 3725.91 3725.91 3725.91 3725.91 3725.91

Total Operating Expense 117470.91 117470.91 117470.91 117470.91 117470.91

Operating Income (EBIT) 454799.09 512026.09 574975.79 644220.46 720389.60

Income Tax Expense 88939.73 106107.83 124992.25 147150.55 171524.67

Net Income 365859.36 405918.26 449983.54 497069.91 548864.93

Page 104
E.

PROJECTED CASH FLOW STATEMENT

Table 35

Projected Cash Flow Statement

Projected Statement of Cash Flow

Year 1 Year 2 Year 3 Year 4 Year 5
Operating Activities

Net Income 365859.36 405918.26 449983.54 497069.91 548864.93

Add: Non-Cash/Unpaid
Expenses
Depreciaton Expense 3725.91 3725.91 3725.91 3725.91 3725.91
Income Tax Expense 88939.73 106107.83 124992.25 147150.55 171524.67
(current)
Less: Income Tax Expense 0.00 88939.73 106107.83 124992.25 147150.55
(prior)
Cash Provided by Operating 458525.00 426812.27 472593.87 522954.12 576964.96
Activities

Investing Activities

Furniture and Fixtures (1365.00) 0.00 0.00 0.00 0.00

Sanitary (3435.00) (3435.00) (3435.00) (3435.00) (3435.00)
Supplies (96.00) (46.00) (46.00) (46.00) (46.00)
Kiosk (17253.00) 0.00 0.00 0.00 0.00
Utensils (2868.00) 0.00 0.00 0.00 0.00
Machinery (2180.00) 0.00 0.00 0.00 0.00
Cash Used by Investing (27197.00) (3481.00) (3481.00) (3481.00) (3481.00)
Activities

Financing Activities

Withdrawals (120000.00 (120000.00 (120000.00 (120000.00 (120000.00

) ) ) ) )
Investment 46316.60 0.00 0.00 0.00 0.00
Cash Used by Financing (73683.40) (120000.00 (120000.00 (120000.00 (120000.00
Activities ) ) ) )

Net Cash Provided 357644.60 303331.27 349112.87 399473.12 453483.96

Beginning Cash 0.00 357644.60 660975.87 1010088.75 1409561.86

Page 105
 Ending Cash Balance 357644.60 660975.87 1010088.75 1409561.86 1863045.82
F. PROJECTED BALANCE SHEET

Table 36

Projected Balance Sheet

Projected Statement of Financial Position

Year 1 Year 2 Year 3 Year 4 Year 5
ASSETS
Current Assets
Cash in Bank 357644.6 660975.8 1010088.7 1409561.8 1863045.82
0 7 5 6
Inventory 1002.00 628.12 2181.68 3735.24 5288.80
Total Current Assets 358646.6 661603.9 1012270.4 1413297.1 1868334.62
0 9 3 0
Noncurrent Assets
Utensils 2868.00 2868.00 2868.00 2868.00 2868.00
Kiosk 17253.00 17253.00 17253.00 17253.00 17253.00
Accumulated Depreciation (1552.77) (3105.54) (4658.31) (6211.08) (7763.85)
- Kiosk
Furniture and Fixtures 1365.00 1365.00 1365.00 1365.00 1365.00
Accumulated Depreciation (245.70) (491.40) (737.10) (982.80) (1228.50)
- FxF
Permit and Licenses 2529.00 2529.00 2529.00 2529.00 2529.00
Machinery and Equipment 2180.00 2180.00 2180.00 2180.00 2180.00
Accumulated Depreciation (1927.44) (3854.88) (5782.32) (7709.76) (9637.20)
- Machinery & Equipment
Total Noncurrent Assets (net) 22469.09 22598.06 20799.59 19001.12 17202.65
TOTAL ASSETS 381115.6 684202.0 1033070.0 1432298.2 1885537.27
9 5 2 2

Liabilities & Equity

Income Tax Payable 88939.73 106107.8 124992.25 147150.55 171524.67
3
Capital 292175.9 578094.2 908077.76 1285147.6 1714012.60
6 3 8
TOTAL LIABILITIES & EQUITY 381115.6 684202.0 1033070.0 1432298.2 1885537.27
9 5 2 2

Page 106
G. STATEMENT OF CHANGES IN EQUITY

Table 37

Statement of Changes in Equity

Projected Statement Changes in Equity

Year 1 Year 2 Year 3 Year 4 Year 5
Beginning Capital 0.00 292175.96 578094.23 908077.76 1285147.68

Add: Investment 46316.60 0.00 0.00 0.00 0.00

Net Income 365859.36 405918.26 449983.54 497069.91 548864.93

Less: Withdrawals 120000.00 120000.00 120000.00 120000.00 120000.00

ENDING CAPITAL 292175.96 578094.23 908077.76 1285147.68 1714012.60

H. PROJECTED SALES

Table 38

Projected Sales

Projected Sales
Product Quantity Price Projected Sales Projected
(Daily) Sales
(Annually)
Plain 15 P10 150 P30,000
Eggcaldo 45 P15 675 P135,000
w/ Tokwa't 20 P15 300 P60,000
Baboy

Page 107
 Goto 40 P25 1000 P200,000
Arrozcaldo 40 P25 1000 P200,000
Total 160 P625,000

I. COST OF SALES

Table 39

Cost of Sales

Cost of Sales for 2015-2016

Product UNIT COST Sales Volume Total Cost (DAILY) Total Cost (Annually)
PLAIN 0.30 15.00 4.50 900.00
EGGCALDO 4.30 45.00 193.50 7290.00
W/ TOKWA'T 4.80 20.00 96.00 5500.00
BABOY
GOTO 1.18 40.00 47.00 7040.00
ARROZCALDO 3.55 40.00 142.00 32000.00
TOTAL 52730.00

J. SALARIES AND WAGES

Table 40

Salaries and Wages

Salaries and Wages

Position Daily Weekly Salary Monthly Salary
Salary
Staff 1 200 1,000 4,000
Staff 2 200 1,000 4,000
Total 400 2,000 8,000

Page 108
 K. PERMITS AND LICENSES

Table 41

Permits and Licenses

Permits and Licenses

Permits Amount
DTI P515
BIR P500
Mayor’s Permit P1,198
Sanitary Permit Fee P150
Community Tax Certificate P36

Barangay Clearance P30

Police Clearance P100
Total P2,529
SOURCES: BIR, DTI AND CABANATUAN CITY HALL

Page 109
L. DEPRECIATION SCHEDULE

Table 42

Depreciation Schedule

Schedule of Depreciation
Acquisition Salvage Value Depreciable Estimated Annual
Cost (10%) Value Useful Life Depreciation
Building 17253.00 1725.30 15527.70 10 1552.77
(Kiosk)
Machineries
and
Equipment
Cooler 230.00 23.00 207.00 10 20.70
Gas Stove 450.00 45.00 405.00 10 40.50
Gas Tank 1500.00 150.00 1350.00 1 1350.00
Utensils 2868.00 286.80 2581.20 5 516.24
Furniture and
Fixtures
Chairs 180.00 18.00 162.00 5 32.40
Electric Fan 550.00 55.00 495.00 5 99.00
Fluorescent 85.00 8.50 76.50 5 15.30
Lamp
Display 550.00 55.00 495.00 5 99.00
Cabinet
Total 23666.00 3725.91

M. RENT EXPENSE

Page 110
 Table 43

Rent Expense

Rent Expense
Year 1 30000.00
Year 2 30000.00
Year 3 30000.00
Year 4 30000.00
Year 5 30000.00
N. ANNUAL INCOME TAX

Table 44

Annual Income Tax

Tax Expense
Year 1 Year 2 Year 3 Year 4 Year 5
Operating Income 454799.09 512026.09 574975.79 644220.46 720389.60
Personal 75000.00 75000.00 75000.00 75000.00 75000.00
Exemption
Taxable Income 379799.09 437026.09 499975.79 569220.46 645389.60
In Excess of 250000.00 250000.00 500000.00 500000.00 500000.00
Multiply by: Tax 30.00% 30.00% 32.00% 32.00% 32.00%
Rate
Total 38939.73 56107.83 (7.75) 22150.55 46524.67
Add: Basic Tax 50000.00 50000.00 125000.00 125000.00 125000.00
Income Tax 88939.73 106107.83 124992.25 147150.55 171524.67
Expense

Page 111
 Table 45

TAX

Amount of Net Taxable Income Rate

Over But Not Over
P10,000 0.05
P10,000 P30,000 P500 + 10% of the
Excess over P10,000
P30,000 P70,000 P2,500 + 15% of the
Excess over P30,000
P70,000 P140,000 P8,500 + 20% of the
Excess over P70,000
P140,000 P250,000 P22,500 + 25% of the
Excess over P140,000
P250,000 P500,000 P50,000 + 30% of the
Excess over P250,000
P500,000 P125,000 + 32% of the
Excess over P500,000 in
2000 and onward
O. FINANCIAL STATEMENT ANALYSIS

The financial results will be useless if not analyze and

interpreted. In this section, the financial stability of the

proposed project will analyse.

P. PAYBACK PERIOD

Table 46

Payback Period

Payback Period

Page 112
 Period Annual Cash Flow Amount to be recovered Year(s)
46316.60
Year 1 357644.60 (311328.00) 1
Payback Period 1 Month and 15 Days

Q. RETURN ON INVESTMENT

Table 47

Return on Investment

Return on Investment
Period Net Income Net Investment ROI
Year 1 365859.36 46316.60 790%
Year 2 405918.26 46316.60 876%
Year 3 449983.54 46316.60 972%
Year 4 497069.91 46316.60 1073%
Year 5 548864.93 46316.60 1185%

Page 113
 CHAPTER VII

SOCIO – ECONOMIC DESIRABILITY

This aspect enumerates the social significant of the proposed

business to the economy and to the community.

1. Owner

The proposed business will be benefited the owner by the

generated profit from the business that may be consumed for

personal use or for financing the business operations.

2. Internal Customers

The business will provide employees fair salary for their

work. They will also be given incentives to motivate them

to do their work in an efficient and effective way.

3. Customers

The proposed business will provide quick service for better

customer satisfaction. It is also provide different

varieties of porridge and beverages that will surely

patronized by the customers.

4. Community

Page 114
 The establishment of the proposed business will provide good

quality products at a reasonable price and it may also help

unemployed to be employed individual.

5. Phinma Araullo University

The University will be benefited by means of paying rentals

by the concessionaire, where the proposed business is

located.

6. Government

The government will be benefited in terms of paying taxes,

permits and license that can contribute additional income.

Page 115