Colegio de San Juan de Letran: College of Business Administration and Accountancy

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Colegio de San Juan de Letran

COLLEGE OF BUSINESS ADMINISTRATION AND ACCOUNTANCY
Chapter I
Executive Summary
1.1 Company Profile
Healthy Temptations will be offering cakes that are delicious,
nutritious and healthy. The business will be located at Vinzon’s Place, Taft
Avenue, Manila. Healthy Temptations aims to provide the market a cake
that is fat-free yet fulfilling and make cakes not just an occasional dessert
but an everyday snack. The product is for health-conscious people of all
ages, especially students.
1.2 Nature of the Products
Healthy Temptations offers five (5) varieties of healthy cakes:
Green Tomato cake, Pumpkin Jelly Roll cake, Honey Graham cake,
Coffee-frosted Cocoa cake and Red Velvet cake. The Green Tomato cake
is made from fresh green tomatoes, with cinnamon powder, topped with
chocolate drizzles. Pumpkin Jelly Roll is made from pumpkin with reduced
fat cream cheese and Mock Mascarpone filling. Honey Graham is made
with graham crackers, honey used as an alternative to sugar and fat-free
milk, topped with ripe mangoes. Coffee-frosted cocoa cake is made from
unsweetened cocoa with coffee frostings. Red Velvet cake is made from
unsweetened cocoa and reduced fat cream cheese as the cake’s top
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frosting. These cakes are available anytime of the day, perfect for health-
conscious people and students.
1.3 Size and Growth Trend of the Market
The Market Analysis of the proponents shows that there is a
consistent growth in the number of establishments in the Food and
beverage Industry from 2004 to 2009. The proponents viewed that the
location of the business will be expecting to increase its number of
population through the succeeding years.
1.4 Background of the Management Team
The management team is composed of Kristine Karl Ahorro,
Krischelle Jaena and Millet Grace Landingin. They are the Junior
Hospitality Management students of Colegio de San Juan de Letran.
The General Manager and Operations Head will be Kristine Karl
Ahorro, responsible for the over-all operation of the business, and provide
strategic plans to develop profit for the business. Krischelle Jaena will be
the Marketing Officer. She will implement promotional activities and
advertisements. Millet Grace Landingin is the Finance Officer. She will
monitor daily sales and determine the profit and expense of the business.
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1.5 Financing Requirements
Each member of Healthy Temptations will contribute and invest
Php40,000 to a total of Php120,000 as the initial capital of the business.
Below is the summarized contribution of the members:
Ahorro – Php 40,000 (33.34%)
Jaena – Php 40,000 (33.33%)
Landingin – Php 40,000 (33.33%
_______________
Total: Php 120,000.00
The said amount of money from each partner will be collected in order
for the proponents to obtain all the assets, which are necessary in the
business establishment, and for its operations. In addition, the partners also
decided to share equally all the profits that the company will receive.
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1.6 Key Projections
Healthy Temptations
Income Statement
For the year ended October 31, 2012
2012 2013 2014 2014 2014
Revenues:
Gross Sales 877,150.67 1,175,381.901,575,011.742,110,515.732,828,091.08
Net Sales 877,150.67 1,175,381.901,575,011.742,110,515.732,828,091.08
Cost of Goods Sold

Merchandise Inventory, November 1 0.00 117,538.19 157,501.17 211,051.57 282,809.11
Purchases 324,022.68 587,690.95 787,505.87 1,055,257.871,414,045.54
Total Goods Available for Sale 324,022.68 705,229.14 945,007.04 1,266,309.441,696,854.65

Less: Inventory, October 31 117,538.19 157,501.17 211,051.57 282,809.11 311,090.02
Cost of Goods Sold 206,484.49 547,727.96 733,955.47 983,500.33 1,385,764.63
Gross Profit 670,666.18 627,653.93 841,056.27 1,127,015.401,442,326.45
Total Income 670,666.18 627,653.93 841,056.27 1,127,015.401,442,326.45
Less: Expenses
Salaries 349,056.00 349,056.00 349,056.00 349,056.00 349,056.00
Store supplies 44,136.22 47,225.76 50,531.56 54,068.77 57,853.58
Utilities 18,000.00 19,260.00 20,608.20 22,050.77 23,594.33
Rent 108,000.00 115,560.00 123,649.20 132,304.64 141,565.97
Office Supplies 4,000.00 4,280.00 4,579.60 4,900.17 5,243.18
Advertising 8,800.00 9,416.00 10,075.12 10,780.38 11,535.00
000
Repairs and Maintenance 4,000.00 4,000.00 4,000.00 4,000.00 4,000.00
Taxes and Licenses 8,500.00 9,500.00 10,500.00 11,500.00 12,500.00
Depreciation Expense - Bakery and Store Equipment 3,871.44 3,871.44 3,871.44 3,871.44 3,871.44
Depreciation Expense - Office Equipment 1,599.00 1,599.00 1,599.00 1,599.00 1,599.00
Total Expenses 549,962.66 563,768.20 578,470.12 594,131.18 610,818.51
Net Income 120,703.52 63,885.74 262,586.15 532,884.22 831,507.94
Provision for Income Tax 36,211.06 19,165.72 78,775.84 159,865.27 249,452.38
Net Income after tax 84,492.46 44,720.01 183,810.30 373,018.96 582,055.56

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Figure 1.6.1 Income statement
Chapter II
Business Description
2.1 Mission Statement
Healthy Temptations will bring healthy, delicious and nutritious
cakes to the discriminating palettes of our customers.
2.2 History of the Business Idea
The idea of Healthy Temptations started when a friend of one of the
researchers related the story of his grandmother who is suffering from
diabetes. The grandmother used to love cakes and all those sweet foods.
Oftentimes, the diabetic grandmother ends up watching her grandchildren
eating the foods she used to love. This common scenario experienced by
diabetic patients prompted the researchers to pursue a pastry business
that caters even the diabetic and other unhealthy populace. Hence, the
idea of Healthy Temptations was born. The aim of the business is to
deliver healthy cakes to every household in the Philippines. The story

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made the proponents realize the need of the market to nutritious and
healthy products.
2.3 Company’s Proposed Legal Form
Healthy Temptations is a partnership type of business partnership
between Krischelle Jaena, Kristine Karl Ahorro and Millet Grace
Landingin. The proponents agreed to contribute money to initially start the
business.
2.4 Proposed Entry Strategy and Time Line of Events
The entry strategy of the Healthy Temptations is having free taste
of the product to the area, giving flyers, posting tarpaulins in nearby
locations and the Healthy Temptations will also give 50% discount to the
first 100 customers. Through these promotions the people will know about
the product and will be encourage buying healthy cakes.

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Table no. 2.4.1 Time Line of Events
11-May
11-Aug
10-Nov
11-Nov
10-Dec
11-Sep
11-Feb
11-Mar
11-Jun
11-Jan
11-Apr
11-Oct
JULY
11-
Activities
Formulation of
idea/Deciding the
business
name/Product
formulation and
development/ Market
analysis
Preparation of the
marketing
strategies/Product
testing/Formulation of
product costs
Sales forecasting and
budget preparation
Business
registration/Setting up
the stall
Business opening and
start of operation
Securing the initial
sales of the business
and watching the
market demand of the
product
Assessment/Evaluation
of the business
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2.5 Product Description
Healthy Temptations offers a variety of cakes with nutritional value
that promotes health wellness to its customers. The products are made
with natural ingredients like fruits and vegetables.
2.5.1 Coffee-frosted Cocoa cake
Best for coffee lovers! Coffee-frosted cocoa cake is made from
unsweetened cocoa with coffee frostings. Feel free to eat this lovely
coffee-frosted cocoa cake because of its satisfying taste of coffee, without
having worries of too much caffeine.
2.5.2 Green Tomato cake
A cake that is so perfect for health conscious people, what is
special to this cake is the green tomatoes which has one of the most
powerful antioxidant called lycopene that is good for the skin and the
heart.
2.5.3 Pumpkin Jelly Roll cake
Pumpkin Jelly Roll is made from pumpkin with reduced fat cream
cheese and Mock Mascarpone filling. Pumpkin is low in fat and calories
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and rich in disease-fighting nutrients such as: Alpha-carotene, Beta-
carotene, Fiber, Vitamins C and E.
2.5.4 Honey Graham cake
A cake with lovely honey accent served with a Mango fruit and
whipped cream on top.
2.5.5 Red Velvet cake
Red Velvet cake is made from unsweetened cocoa and reduced fat
cream cheese as the cake’s top frosting. The cake contains vegetable oil
that has low cholesterol content.

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Chapter III
Market Analysis
3.1 Description of the Industry
Healthy Temptations is under the Food and Beverage industry.
Today, the food industry is very competitive and has many innovations on
selling their products. The food industry comprises of techniques on
selecting their food products and methods on how to cook it for human
consumption. The industry has type of stores starting from wholesaling to
retailing, from factory to the nearest store in your area. The retailing
industry has a large variety of sellers from sidewalk vendors, wet and dry
markets, sari-sari stores and convenience stores. The food industry
nowadays is also influenced by technologies because of the POS or the
point of sale software which allows the seller to take orders, conduct
delivery reports, and payment inquiries and stocking of items in a minimal
human involvement.
3.1.1 Macro Industry Analysis

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There is an increase and decrease in the employment rate of the
Hotel and Restaurant industry. From 2004 the employment rate decreased
to 1.5% in 2006. In 2008 it increased to about 0.11%. While in the
establishment rate from 2004-2009, there was a very small amount of
increase and decrease of establishment in the Hotel and Restaurant
industry, which means only few numbers of new hotel and restaurants
were established through the span of 9 years.
3.1.2 Micro Industry Analysis
The proponents identified its primary competitors in the location of
the business. The competitors are divided into two: small business
establishment like food carts, stalls and such; and large establishments
wherein the business has already gained popularity in the market and
occupies building spaces.
Table 3.1.2.1 List of Competitors by Location
Direct Competitor Indirect Competitor

Starbucks Red Ribbon
Caffe Molinari Goldilocks
3.2 Target Market
The business is located at Vinzon’s place Taft Avenue, Metro
Manila which is a university area, the target market of the business is the
students and employees within the location, because they are the
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potential buyers of the product. The business also targets the residence in
the hotel and residential building in the area.
3.2.2. Market Survey Results
The proponents have tallied the result of the surveys made within
the proposed location of the business. The following tables show the result
of the survey.
Table 3.2.2.1 Age Range of Respondents
Frequenc
Age Range y Percentage

15 - 25 yrs old 65 65%
26 - 36 yrs old 23 23%
37 - 50 yrs old 12 12%
TOTAL 100 100%
The 65% of the proponents’ respondents belong to the 15 – 25
years old age group; and 23% belongs to the 26 – 36 years old group. The
12% belong to the 37 – 50 years old group.
Table 3.2.2.2 Gender of the Respondents
Frequenc
Gender y Percentage
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Female 56 56%
Male 44 44%
TOTAL 100 100%
The proponents chose 56 out of 100 female respondent and 44 out of 100
male respondents, as seen in the table above.
Table 3.2.2.3 Occupation of the Respondents
Frequenc
Occupation y Percentage
Student 59 59%
Employee 39 39%
Entrepreneur 1 1%
Laborer 1 1%
TOTAL 100 100%
59% percent of the respondents chosen by the proponents were
students, while 39% were employees from nearby business
establishments. While the remaining 2% is a entrepreneur
Table 3.2.2.4 Most Preferred Desserts of the Respondents
Dessert Rank
Cakes 1
Pastries 4
Ice creams 2
Candies 5
Salads 3
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On the table above, cakes are found to be the most preferred
dessert of the respondents, seconded by ice creams, then salads.
Pastries and candies were the least preferred dessert of the respondents.
Table 3.2.2.5 Respondent’s Tendency in Purchasing Cakes
Frequency Frequency Percentage

Everyday 5 5%
Once a week 24 24%
Once a month 11 11%
Occasionally 60 60%
TOTAL 100 100%
The table above shows the respondent’s tendency of purchasing
cakes. It shows that 60% of them buy occasionally. Assuming during
birthdays and special occasions where the family gathers, cakes are
always present. There is a 24% of the respondents buy once a week, 11%
buys once a month while the remaining 5% buys every day.
Table 3.2.2.6 Most Considered in Purchasing Cakes
Type Rank
Appearance/Design 3
Taste 1
Nutritional Content 5
Price 2
Brand Name 4
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The respondent’s first consideration in purchasing a cake is its
taste, seconded by the price. Then they consider its appearance or design
after which they look at the brand name and lastly its nutritional content.
Table 3.2.2.7 Respondent’s Preferred Cost per Slice of a Cake
Price Range Frequency Percentage

Less than Php 35 24 24%
Php 35 - Php 50 28 28%
Php 50 - Php 75 31 31%
More than Php 75 17 17%
TOTAL 100 100%
Out of 100 respondents, 31% of them spend PHP 50 to PHP 75 per
slice of cake and a 17% spends more than PHP 75. The table indicates
that buyers are willing to purchase a product as long as it is of good
quality and taste.
Table 3.2.2.8 Respondent’s Preferred Cost for a Whole Cake

Less than 100 11 11%
Php 100 - Php 250 17 17%
Php 250 - Php 500 47 47%
TOTAL 100 100%
The table above shows how much the customers are willing to
spend in buying whole cakes. 47% of the 100 respondents are willing to
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pay PHP 250 – PHP 500 and only 11% will buy a cake that cost less than
PHP 100.
Table 3.2.2.9 Buyers Preferred Bakeshops
Bakeshops Frequency Percentage

Red Ribbon Bakeshop 60 60%
Goldilocks 31 31%
Conti's Pastry Shop 4 4%
Martha's Bakeshop 2 2%
Other's 3 3%
TOTAL 100 100%
Red Ribbon Bakeshop is the most favored bakeshop of the 60 out
of 100 respondents while 31% of the respondents favored Goldilocks. The
remaining 9% favored other bakeshops such as the Conti’s Pastry Shop,
Martha’s Bakeshop and others.

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Table 3.2.2.10 Respondent’s Response of Knowing a Bakeshop that Offers
Healthy Cakes
Response Frequency Percentage

Yes 54 54%
No 46 46%
OVERALL 100 100%
The table above shows the responses of the respondents when
asked whether they know a bakeshop that offers healthy cakes. 56% of
the respondents know a bakeshop that offers a healthy cake while the
44% do not know any bakeshop that offers a healthy cake.
Table 3.2.2.11 Respondent’s Response If They Have Been to a
Bakeshop That Offers Nutritious Cakes

Yes 46 46%
No 54 54%
OVERALL 100 100%
Though 54% of the respondents have heard of a bakeshop that
offers or sells healthy cakes, only 46% of them have been to that
bakeshop.
Table 3.2.2.12 Respondents Willingness to Buy a Healthy Cake
Frequenc
Response y Percentage
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Yes 95 95%
No 5 5%
OVERALL 100 100%
95% of the respondents are willing to buy a healthy cake while the
5% is not willing to buy a healthy cake. It shows that the buyers are now
aware of wellness and healthy lifestyle.
Table 3.2.2.13 Respondents Preferred Cost per Slice of Cake
Price Range Frequen.cy Percentage

Php 35 - Php 50 29 29%
Php 50 - Php 75 33 33%
TOTAL 100 100%
The 33% of the 100 respondents are willing to pay PHP50 – PHP
75 per slice of cake, while 15% will buy a slice of cake that cost more than
PHP 75, as seen in the table above.
Table 3.2.2.14 Respondents Preferred Cost for a Whole Cake

Php 100 - Php 250 15 15%
Php 250 - Php 500 45 45%
TOTAL 100 100%
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45% of the 100 respondents will purchase a cake that cost PHP
250 – PHP 500 as long as they know that the cake is meeting their
expectation. 25% of the respondents will buy a whole cake at a price
range of less than Php100 while the remaining 30% of the respondents
equally will purchase a whole cake at a price range of Php100 – Php250
and more than Php 500.
Table 3.2.2.15 Respondents Response on Purchasing a Healthy Cake
for Dessert

Yes 81 81%
No 19 19%
OVERALL 100 100%
As seen above, 81% will consider buying healthy cakes for dessert
but 19% of the respondents will not consider buying a healthy cake for
dessert.
Table 3.2.2.16 Respondents Tendency of Purchasing a Healthy Cake
Frequency Frequency Percentage

Everyday 25 25%
Once a week 15 15%
Once a month 45 45%
Occasionally 15 15%
TOTAL 100 100%
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Out of 100 respondents, 45% will buy a healthy cake once a month,
while the 30% will equally buy once a week and occasionally.
Table 3.2.2.17 Respondents Response on Passing By or Going to Vinzon’s
place

Yes 81 81%
No 19 19%
OVERALL 100 100%
The respondents were students of De La Salle University, De La
Salle College of St. Benilde and St. Scholastica’s College, therefore the
81% of the 100 pass by or go to Vinzon’s Place. The 19% of the
respondents do not pass by Vinzon’s Place because its out of their way or
do not have time to hang out.
Table 3.2.2.18 Respondents Reasons for going to Vinzon’s place
Reason Frequency Percentage

Meet and chat with friends 37 37%
Play computer games 25 25%
Eat 23 23%
To do homeworks 15 15%
TOTAL 100 100%
The 37% of the 100 respondents go to Vinzon’s Place to meet and
hang out with friends while 25% of the respondents play computer games.
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23% go there to eat while the remaining 15% of the respondents do their
homework in Vinzon’s Place.
3.3 Competition
The proponents identified the following key factors of the business’
internal strengths and weakness and the business opportunities and
threats in the future.
Table 3.3.1Internal Factor Evaluation Matrix

Weigh Weighted
Key Internal Factors t Rating Score

STRENGTHS
1 Nutritional value 0.2500 4.00 1.00
2 Quality 0.1000 3.00 0.30
3 Team work 0.0500 4.00 0.20
4 Location 0.1000 3.00 0.30
5 Appearance of the product 0.0500 3.00 0.15
WEAKNESSES
1 Price 0.2000 2.00 0.40
2 Manpower 0.0500 1.00 0.05
3 New business establishments/stalls 0.0500 1.00 0.05
4 Advertising 0.1000 2.00 0.20
5 Popularity of the business 0.0500 1.00 0.05
TOTAL 1.0000 2.70
The proponents’ strengths are the cakes nutritional value, the
teamwork of the management, the location of the business and the

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product’s appearance and quality. The proponents weakness are the
inexperienced manpower, the entry of new business establishments and
food stalls, the proponents limited budget in advertising and marketing and
the business’ popularity to its target markets. The result shows that
Healthy Temptations has an average scale in the internal factors.
Table 3.3.2 External Factor Evaluation Matrix

Weight
Key External Factors Weight Rating Score

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OPPORTUNITIES
Capturing other markets other than
1 the target market 0.1000 2.00 0.20

2 Market reach in terms of location 0.2500 3.00 0.75
3 Innovative Ideas 0.1000 2.00 0.20
4 Franchising 0.0500 2.00 0.10
Be part of the catering
5 business/industry 0.0500 2.00 0.10

THREATS
1 Large number of competitors 0.1500 3.00 0.45
2 Bargaining power of the buyers 0.0500 3.00 0.15
3 Inflation of raw ingredients 0.1000 2.00 0.20
4 Economy 0.1000 3.00 0.30
5 Purchasing power of the buyers 0.0500 2.00 0.10
TOTAL 1.00 2.55
The proponents identified opportunities in the industry; the business
can capture markets other than its target market and reach markets
outside the location of the business. Other opportunities are the
proponents or other peoples’ innovative ideas that can develop the
product, and eventually join and be part of a catering business and to be
able to franchise the business.
The result shows that Healthy Temptations has an average scale
when it comes to the external factors that may lead to be the business’
threats and weakness.
Table 3.3.3 Competitive Profile Matrix
Healthy
Red Ribbon Goldilocks
CRITICAL SUCCESS Temptations
Weight
FACTORS Weighted Weighted Weighted
Rating Rating Rating
Score Score Score
1 NUTRITIONAL VALUE 0.3000 4.00 1.20 3.00 0.90 2.00 0.60

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2 PRICE 0.2500 2.00 0.50 1.00 0.25 2.00 0.50

3 AVAILABILITY 0.2000 2.00 0.40 4.00 0.80 4.00 0.80
4 PLACE 0.2000 3.00 0.60 4.00 0.80 4.00 0.80
5 PROMOTIONS 0.0500 2.00 0.10 4.00 0.20 4.00 0.20
TOTAL 1.0000 2.80 2.95 2.90
In the table 3.3.3 Healthy Temptations is compared to the two cake
establishments, the Red Ribbon and Goldilocks. It has the lowest rating
but still has a competitive result. Goldilocks has the second low rating but
also has a competitive result. Red Ribbon has the highest rating of 2.90,
which also has a competitive result.
3.4 Barriers to Entry
• Limited Capital
The capital is considered as a barrier because the proponents are still
studying and are incapable financing the business that will result to limited
resources for the business.
• Competitors/Competition
There are already established competitors, which make it as a barrier
for the business. Instead of buying to the business the market will prefer to
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buy to an established shop, like Starbucks because Starbucks is a well-
known shop that sells cakes and coffee.
• Inexperienced in managing the business
The proponents are students that do not have any experience in
handling business, which makes it harder to enter in an industry wherein
there competitor are already experienced and experts in managing
businesses.
CHAPTER IV
OPERATIONS
4. 1 Marketing Strategy
This chapter will present the various marketing strategies to the
target market. Since marketing is one of the critical elements of business,
the proponents will be dynamic and diverse in implementing the marketing
strategies so as to attract and captivate more customers.
4.1.1 Overall Marketing Strategy

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Healthy Temptations will use the Market Development as the over-
all strategy of the business. Market development is a strategy, which looks
for none buying buyers to consume the product. There is a minimal direct
competitor in the location, which makes this strategy applicable.
The proponents are looking for ways to make cakes not just an
occasional dessert but also an everyday snack, a “merienda,” available
anytime.
4.1.2 Pricing Strategy
The business will be using a Price Skimming strategy where the
proponents will set an initial reasonable price so that the proponents could
easily encourage the target market to buy the product. The proponents will
provide capital for the development cost and allow future price reduction to
handle competition. The products are also cost-based where ingredients
and raw materials are considered to determine its selling price.
4.1.3 Promotions
The proponents will be giving discounts to the first 100 customers
on its opening day. Then, the proponents will also offer free tasting of our
new products to introduce our cakes to the target market whenever there
is a new flavor to sell. Promos such as “buy one, take one” will be
considered in a quarterly basis.

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To reach a wider base of the target market, a website will be put in
the Internet. Posters, tarpaulins and flyers will also be utilized as tools of
advertising.
Figure 4.1.3.1 Facebook Page of Healthy temptations

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Figure 4.1.3.2 Healthy Temptations Tarpaulin
Figure 4.1.3.3 Healthy Temptations Logo

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FRONT BACK
Figure 4.1.3.4 Healthy Temptations Flyers
4.1.4 Distribution and Sales
The products will be produce in the station at Quezon City and will
be delivered to the proposed location in Vinzon’s Place, Taft Avenue,
Manila. The products will be offered in boxes for take-outs and paper
plates for dine-ins.

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4.2 Operation Model of Healthy Temptations
Figure 4.2 Production Process
4.2.1 Production Plan
Healthy Temptations will be producing constant number of products
in the first year of operation and will have a two percent increase in the
succeeding years. Healthy Temptations will produce 24 whole cakes and
288 slices of cakes for each type in a month.

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4.2.2 Business Location
The business is located at Vinzon’s Place, Taft Avenue Manila, a
commercial establishment where food stalls and kiosks are well-liked. The
location is a university and residential area (see Figure 4.2.3). The
location is very accessible to people because it is near the main road, and
the LRT, buses, cabs, and jeepneys drop off this area. The location is also
close to the target markets, which are the students, employees, and
residents. Since establishments and well-known universities e.g. De La
Salle University, De La Salle College of St. Benilde and St. Scholastica’s
College surround the area, there is enough security around the location.
PACKAGING
AREA CASHIER
SELLING AREA
Figure 4.2.1 Floor Plan Operations Model

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Figure 4.2.2 Healthy Temptations Stall Model
Figure 4.2.3 Healthy Temptations Location

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4.2.3 Facilities and Equipment
Table 4.2.3.1 Equipment Prices and Suppliers
Name of the Purpose Quanti Suppliers Prices

Equipment ty
neede
d
Industrial Oven To bake the 1 Landmark Php
products Trinoma 15,530.00
Mixing bowl To mix the 5 Divisoria mall Php 500.00
ingredients
Hand Mixer To mix the 2 Landmark Php 1,120.00
ingredients Trinoma
Measuring cup To measure 3 Landmark Php 415.50
and spoon the Trinoma
ingredients
Knife To cut the 3 Divisoria mall Php 450.00
ingredients
Spoon To scoop the 2 Divisoria mall Php 20.00
ingredients
and for
tasting
Fork For tasting 2 Divisoria mall Php 20.00
the product
Pastry bag and To decorate 2 Landmark Php 699.50
tip the cakes with Trinoma
icings
Baking pan To bake the 4 Divisoria mall Php 300.00
square 9 inch cakes
Baking pan To bake the 4 Divisoria mall Php 240.00
Round 9 inch cakes
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Refrigerator To store the 1 Landmark Php 1,500.00

cakes Trinoma
Tupperware To store the 6 Divisoria mall Php 270.00

excess
ingredients
Molder To mold the 5 Landmark Php 448.75
cakes or the Trinoma
decorations
for the cakes
Weighing scale To weigh the 1 Divisoria mall Php 95.00
ingredients
Blender To blend the 1 Landmark Php 799.75
ingredients Trinoma
Plate To let the 2 Divisoria mall Php 50.00
cakes set
Chopping board To chop the 3 Divisoria mall Php 225.00
ingredients
Scissors For cutting 1 Divisoria mall Php 50.00
TOTAL Php22,733.5
4.3 Personnel
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Table 4.3.1 Personnel and Responsibilities
PERSONNEL RESPONSIBILITIES
- Responsible for the over-all operation of the
business
- Coordinates the other aspects of the business
GENERAL MANAGER to ensure the efficiency of the staffs
- Responsible for the daily accounting
procedures such as bookkeeping, preparation
FINANCIAL OFFICER of income statements, balance sheets, etc.
- Responsible for the implementation of the
marketing strategies and promotional ads.
- She/he will observe increasing competition
MARKETING OFFICER around the area.
- Responsible for the production of the
goods/products
- She/he will ensure the quality of the products
PRODUCTION STAFF before delivered
- Responsible for the distribution of the products

SALES AND - She/he will ensure the products sold are of
DISTRIBUTION STAFF good quality and in good condition
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4.4 Customer Support
The business will be open for customer suggestions, complaints
and inquiries. One way to do this is putting a suggestion box and by
conducting surveys to evaluate the services and products of the business.
4.5 Future Research and Development Plan

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Healthy Temptations will continuously look for possible expansion
through development of new products other than cakes that will suit the
needs and preferences of the market.
This will be done through research studies. Thus, penetrating or
widening our market base will be achieved.
4.6 Corporate Social Responsibility
The business will recognize its corporate social responsibility, First
and foremost to offer quality of the products by maintaining the hygienic
working environment in the production process of the cakes. The well-
being and safety of the customers is a top priority. Second, use of
environmental- friendly materials in the packaging of the products will be
implemented. If the business will survive, profit-wise on its first year
operation, Healthy Temptations will participate or co-sponsor a community
outreach program of any cause –united group, private firm, or government
agency like feeding program for children, medical and dental missions and
the like.
The company can independently organize and sponsor a
community service of its own, if it has the financial capability.
Chapter V
38

The Management Team
5.1 Background and the Primary Responsibilities of the Management
Team
Healthy Temptations aims to provide healthy and worry-free
lifestyle to its customers. The business will be comprised of disciplined,
responsible and productive employees to achieve quality cakes.
The business is composed of:
The General Operations Manager will be Kristine Karl Ahorro, She
is a 3rd year hospitality management student of Colegio de San Juan de
Letran. She has working experience as a student assistant. She knows
the basic knowledge on operations and functions in managing or handling
business routines.
The General Operations Manager will be the one to provide the
strategic plans for the development of the product and the business. She
will organize the business so that it will perform well and produce quality
products.
The Marketing Officer will be Krischelle Jaena, She is finishing her
undergraduate in Hospitality Management in Colegio de San Juan de
Letran. She has also a working experience as a student assistant, which
can help on carrying out her functions in the business.
The Marketing Officer will be the one who will think of solutions on
how to make the product profitable. She is also assigned to make

39

promotional activities to encourage customers, and she will be the one to
gather suggestions to improve the product and will face the customers
with complains to the product or to the service of the business.
The Financial Officer monitors cash flows on a daily basis and the
determination of the profit and expenses of the business.
The Financial officer will be Millet Grace Landingin. She is a junior
hospitality management student in Colegio de San Juan de Letran. She
had a working experience as a treasurer during her secondary education.
Table 5.1.1 Designation of Work to Owners
General Financ Marketing Sales and Operations

Manager e Officer Distribution Manager
Officer Officer
Ahorro, X X
Kristine
Karl
Jaena, X X
Krischelle
Landingin, X
Millet
Grace
5.2 Organizational Structure

40

The General Manager is the highest authority of the business,
under is the operations manager and finance officer, under the operations
manager, the subordinates are the sales and distribution officer and the
marketing officer.
Figure 5.2.1 Organizational Chart
5.3 Ownership
Healthy Temptations is owned by Kristine Karl Ahorro, Krischelle
Jaena, and Millet Grace Landingin. Kristine Karl Ahorro is the General
Manager. She will have a 33.33% of the total shared investment.
Krischelle Jaena, the Marketing officer and Millet Landingin, Financial
officer, will both have a 33.33% of the total investment.
Table 5.3.1 Investment Shares of the Business Partners

41

Name Position Personal Percent of

investment in ownership
the company
Kristine Karl General Manager Php 40,000 33.34%
Ahorro
Krischelle Jaena Marketing Officer Php 40,000 33.33%
Millet Grace Financial Php 40,000 33.33%
Landingin Manager
TOTAL Php 120,000 100%
42

Chapter VI
Critical Risks
6.1 External Risks
The proponents identified three factors that may affect the
business’ operation.
Listed below are the factors that can’t controlled by the business.
a. Environmental Factors
Climate change causes the weather to be unpredictable. Heavy
rains, typhoons and floods are expected. If such events will take place, the
business will be affected because the customers will have difficulties
reaching the location of the business.
b. Economic Factors
Inflation is a threat to the business because if the cost of the raw
ingredients will increase, then there will be a tendency of a lesser income.
During semestral breaks, the demand of the consumers may decrease

43

and may increase in the start of the semester. Thus, the seasonality of the
targeted consumers will be one of the external risks of the business.
c. Social Factors
Changes of preferences of the target market can pose a threat to
the sale and profit of the business.
6.2 Internal Risks
There are three risks factors that the proponents anticipate in the
operation of the business. These are the factors that may affect the
business and can be controlled by the management.
a. Operations
Equipment problems such as oven malfunction,
storage/refrigeration breakdown may affect the business because the
production of the products will be interrupted.
b. Human Resources
Changes in the opinion of the proponents, if not solved/agreed, can
lead to a misunderstanding that can pose as a threat.
c. Financial Resources
Since the proponents are still studying and are student, the budget
and capital for the business is limited. There may not be enough funds for
developing, advertising and marketing the product.

44

6.3 Insurance Provision
The proponents will acquire the following insurances for the
business.
a. Product Liability Insurance
The proponents decided to purchase the product liability insurance
because it will protect the business against financial loss as a result of a
defected product that can cause bodily harm for the customers.
b. Commercial Property Insurance
The proponents will also purchase the commercial property
insurance, which will cover damages and loss of the company due to
variety of events. The insurance will cover fire, storms, floods, civil
disobedience and vandalism of the company properties.
6.4 Contingency Plan

45

Below is the plan of the proponents in case problems should arise
in the business.
Table 6.4.1 Contingency Plan
Risks Contingency Plan

The proponents will always be prepared with
storage areas for its products and
equipments that will not be affected by
Environmental Factors floods and storms.
If the cost of the raw ingredients will
increase, the selling price of the product
should also increase and lesser promotional
products will be distributed. During the
semestral breaks, promotional products and
Economic Factors marketing strategies will be maximized.
The business will develop and produce more
variety of products so that it will meet the
Social Factors wants and preferences of the consumers.
The business will prepare and reserve
products good for 1 week so that if there will
be equipment breakdown, the supply of the
Operations product will be affected.
Financial Resources The proponents will solicit from Non-
Government Offices and Government Office
46

to help the business financially.

The proponents will immediately solve the
problems so that the business will not be
Human Resources affected.
Chapter VII
Financial Analysis
7.1 Financial Assumptions
The key underlying assumptions are:

1. Price of each product of the company is assumed to be constant.
2. Mark up percentage for each product are as follows with 25.8%
overhead cost:
Green Tomato Cake = 60%
Coffee Frosted Cocoa Cake = 60%
Honey Graham Cake = 60%
Red Velvet Cake = 60%
Pumpkin Jelly Roll Cake = 60%
3. Constant cost of raw materials is assumed to be constant on the first
year of operation.
4. Quantity sold per day for the 1st year of operation is based on the
market survey.
5. A 2% increase in sales every month is assumed due to the following:
47

5.1 The population in the De La Salle University, De La Salle-

College of St. Benilde and St. Scholastica’s College increases every
semester.
6. 24 working days per month.
7. Rent expense is Php9,000 per month.
8. Electricity and Water supply expense is Php1,500 per month.

9. There will be a 34% increase on the gross of sales on the following
years.
10. Personnel will be hired on a contractual basis; thus, the company will
not shoulder SSS and other benefits.
11. There’ll be a 7% increase in the electricity and water expense per year.
12. All sales transactions are in cash basis.
7.2 Unit Cost Computation
Table 7.2.1 Green Tomato Cake
Green Tomato Cake 12 servings

Amount Unit Cost
Ingredients Needed (Php)
Margarine/Butter 80g 12.00
Apple Sauce 80g 32.00
Confectioners Sugar 420g 36.75
Green Tomato 20g 0.80
Orange 15g 0.30
Vanilla 10g 13.33
All Purpose Flour 350g 14.00
Cocoa 120g 15.00
Baking Powder 12g 0.25
Baking Soda 10g 0.20
Salt 2.50g 0.03
Ground Cinnamon 5g 2.50
Fat-free Milk 120g 12.00
48

Total 1,245g Php139.16

Plus 60% mark up Php83.50
Plus 25.8% overhead cost Php57.34
Selling Price Php25/slice Php 280/whole
Table 7.2.2 Red Velvet Cake
Red Velvet cake 12servings

Amount Unit Cost
Granulated Sugar 300g 18.00
Shortening 90g 5.40
Eggs 100g 10.00
Vanilla 17.5g 23.34
Food color (red) 30g 40.00
Unsweetened cocoa 10g 0.35
Powdered sugar 350g 30.63
Fat-free milk 10g 1.00
Selling Price Php25/slice Php295/whole
Table 7.2.3 Honey Graham Cake
Honey Graham 12servings

Ingredients Amount Unit Cost
49

Needed (Php)
Vegetable oil 160g 16.00
Shortening 240g 14.40
Eggs 200g 10.00
Honey 60g 51.43
Lemon juice 45g 3.38
Baking powder 17g 4.20
Baking soda 7.50g 3.00
Salt 2.50g 0.05
Cinnamon powder 10g 2.67
Total 922.50g Php111.12
Table 7.2.4 Coffee-frosted Cocoa Cake
Coffee-frosted Cocoa
cake 12 servings
Amount Unit Cost
Sugar 360g 21.60
Margarine 120g 18.00
Egg 100g 10.00
Vanilla 5g 5.00
Flour 480g 19.20
Unsweetened Cocoa 180g 7.20
Baking soda 10g 4.00
Salt 5g 0.05
Instant coffee 15g 1.13
Powdered sugar 240g 21.00
Fat-free Milk 45g 4.50
Plus 25.8% overhead
cost Php47.03
50

Table 7.2.5 Pumpkin Jelly Roll Cake
Pumpkin Jelly Roll cake 12 servings

Amount Unit Cost
Egg 150g 15.00
Sugar 120g 7.20
Pumpkin (small) 120g 12.00
Pumpkin spice 7.50g 7.50
Cream of tartar 1.25g 0.35
All Purpose Flour 120g 4.80
Sour cream 45g 36.00
Baking powder 2.50g 1.00
Salt 1.25g 0.125
Reduced-fat cream
cheese 8g 200.00
Total 620.50g Php288.475
Plus 25.8% overhead
cost Php119.08
7.3 Financial Ratios

51

Ratio Analysis
Current Ratio = Current Assets/Current Liabilities
= Php203,195.11 / Php36,211.06
= 5.6
Gross Profit Margin = Gross Profit/ Sales
= 1,992,109.44 / 3,362,160.00
= 0.76
Return on Equity = Net Income/Owners Equity
= Php120,703.52 / 208,223.6
= 0.58
Return on Assets = Net Income/Total Asset
= Php120,703.52 / Php244,434.67
= 0.49
52

7.4 Financial Statements

53

MONTHLY TRANSACTIONS
Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Total
CASH INFLOW
A, Capital 40,000.00 40,000.00
B, Capital 40,000.00 40,000.00
C, Capital 40,000.00 40,000.00
D, Capital 0.00
Sales 65,400.00 66,708.00 68,042.16 69,403.00 70,791.06 72,206.88 73,651.02 75,124.04 76,626.52 78,159.05 79,722.24 81,316.68 877,150.67
Collection of Accounts
0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Receivable
Interest Income 0.00
Proceeds from long-term
0.00
debt
TOTAL CASH INFLOW 185,400.00 66,708.00 68,042.16 69,403.00 70,791.06 72,206.88 73,651.02 75,124.04 76,626.52 78,159.05 79,722.24 81,316.68 997,150.67
CASH OUTFLOW Unit Cost

Payment for Purchases 24,159.00 24,642.18 25,135.02 25,637.72 26,150.48 26,673.49 27,206.96 27,751.10 28,306.12 28,872.24 29,449.69 30,038.68 324,022.68
Payment for Bakery and Store
19,357.50 19,357.50 38,715.00
Equipment
Payment for Office
7,995.00 7,995.00
Equipment
Payment for Furniture and Fixtures 0.00
Payment of Accounts Payable (debit) 0.00
Salaries and Wages 29,088.00 29,088.00 29,088.00 29,088.00 29,088.00 29,088.00 29,088.00 29,088.00 29,088.00 29,088.00 29,088.00 29,088.00 349,056.00
Store Supplies 8,152.58 2,957.06 3,016.20 3,076.53 3,138.06 3,200.82 3,264.83 3,330.13 3,396.73 3,464.67 3,533.96 3,604.64 44,136.22
Utilities 1,500.00 1,500.00 1,500.00 1,500.00 1,500.00 1,500.00 1,500.00 1,500.00 1,500.00 1,500.00 1,500.00 1,500.00 18,000.00
Rent 9,000.00 9,000.00 9,000.00 9,000.00 9,000.00 9,000.00 9,000.00 9,000.00 9,000.00 9,000.00 9,000.00 9,000.00 108,000.00
Office Supplies 1,000.00 0.00 0.00 1,000.00 0.00 0.00 1,000.00 0.00 0.00 1,000.00 0.00 0.00 4,000.00
Advertising 2,000.00 1,500.00 800.00 500.00 500.00 500.00 500.00 500.00 500.00 500.00 500.00 500.00 8,800.00
Telephone 0.00
Repairs and Maintenance 2,000.00 2,000.00 4,000.00
Taxes and Licenses 8,500.00 8,500.00
Interest Expense 0.00
SSS, Philhealth, and Pag-ibig
0.00
contributions
SSS, Philhealth, and Pag-ibig payable 0.00
VAT payable 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Income tax payable (6,553.05) (32.33) 2,854.23 (3,731.14)
TOTAL CASH OUTFLOW 110,752.08 88,044.74 68,539.23 63,249.20 69,376.54 71,962.31 71,527.47 71,169.23 71,790.85 76,279.14 73,071.65 75,731.32 0.00
3,482,160.0
CASH BALANCE 74,647.92(21,336.74) (497.07) 6,153.80 1,414.53 244.58 2,123.56 3,954.81 4,835.67 1,879.91 6,650.59 5,585.36
0
NON-CASH TRANSACTIONS
Depreciation Expense - Bakery and Store
322.62 322.62 322.62 322.62 322.62 322.62 322.62 322.62 322.62 322.62 322.62 322.62 3,871.44
Equipment
Depreciation Expense - Office Equipment 133.25 133.25 133.25 133.25 133.25 133.25 133.25 133.25 133.25 133.25 133.25 133.25 1,599.00
Depreciation Expense - Furniture and
0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Fixtures
455.87 455.87 455.87 455.87 455.87 455.87 455.87 455.87 455.87 455.87 455.87 455.87 5,470.44
NON-CURRENT ASSETS (Property, Plant, & Equipment)

Bakery and Store Equipment 38,715.00 0.00
Office Equipment 7,995.00
Furniture and Fixtures
46,710.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
COST OF SALES
Purchases 24,159.00 24,642.18 25,135.02 25,637.72 26,150.48 26,673.49 27,206.96 27,751.10 28,306.12 28,872.24 29,449.69 30,038.68 324,022.68
ACCOUNTS PAYABLE
Beg. Balance 0.00 19,357.50 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Purchases 0.00
Bakery and Store Equipment 19,357.50
Office Equipment
Furniture and Fixtures
Payment of Accounts Payable (19,357.50) 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
19,357.50 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
INCOME TAX PAYABLE

Income tax due for the
(6,553.05) (32.33) 2,854.23 39,942.20 36,211.06
quarter tax
Income
6,553.05 32.33 (2,854.23) 3,731.14
paid
0.00 0.00 (6,553.05) 6,553.05 0.00 (32.33) 32.33 0.00 2,854.23 (2,854.23) 0.00 39,942.20 39,942.20
54

H e a lth y T e m p t
M O N T H L Y IN C
F o r th e p e r io d
55

H e a th y T e m p ta tio n
B a la n c e S h e e t
A s o f O c to b e r 3 1 ,
A s s e ts
C ash
56

H e a lth y T e m p ta ti
B a la n c e S h e e t
a s o f O c to b e r 3 1
A s s e ts
57

H e a lt h y T e m
S ta te m e n t o
F o r t h e f iv e
58

Healthy Temptations
Income Statement
For the year ended October 31, 2012
2012 2013 2014 2014 2014
Revenues:
Gross Sales 877,150.67 1,175,381.90 1,575,011.74 2,110,515.73 2,828,091.08
Net Sales 877,150.67 1,175,381.90 1,575,011.74 2,110,515.73 2,828,091.08
Cost of Goods Sold

Merchandise Inventory, November 1 0.00 117,538.19 157,501.17 211,051.57 282,809.11
Purchases 324,022.68 587,690.95 787,505.87 1,055,257.87 1,414,045.54
Total Goods Available for Sale 324,022.68 705,229.14 945,007.04 1,266,309.44 1,696,854.65
Less: Inventory, October 31 117,538.19 157,501.17 211,051.57 282,809.11 311,090.02
Cost of Goods Sold 206,484.49 547,727.96 733,955.47 983,500.33 1,385,764.63
Gross Profit 670,666.18 627,653.93 841,056.27 1,127,015.40 1,442,326.45
Total Income 670,666.18 627,653.93 841,056.27 1,127,015.40 1,442,326.45
Less: Expenses
Salaries 349,056.00 349,056.00 349,056.00 349,056.00 349,056.00
Store supplies 44,136.22 47,225.76 50,531.56 54,068.77 57,853.58
Utilities 18,000.00 19,260.00 20,608.20 22,050.77 23,594.33
Rent 108,000.00 115,560.00 123,649.20 132,304.64 141,565.97
Office Supplies 4,000.00 4,280.00 4,579.60 4,900.17 5,243.18
Advertising 8,800.00 9,416.00 10,075.12 10,780.38 11,535.00
000
Repairs and Maintenance 4,000.00 4,000.00 4,000.00 4,000.00 4,000.00
Taxes and Licenses 8,500.00 9,500.00 10,500.00 11,500.00 12,500.00
Depreciation Expense - Bakery and Store Equipment 3,871.44 3,871.44 3,871.44 3,871.44 3,871.44
Depreciation Expense - Office Equipment 1,599.00 1,599.00 1,599.00 1,599.00 1,599.00
Total Expenses 549,962.66 563,768.20 578,470.12 594,131.18 610,818.51
Net Income 120,703.52 63,885.74 262,586.15 532,884.22 831,507.94
Provision for Income Tax 36,211.06 19,165.72 78,775.84 159,865.27 249,452.38
Net Income after tax 84,492.46 44,720.01 183,810.30 373,018.96 582,055.56

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1

Colegio de San Juan de Letran

1.1 Company Profile

Healthy Temptations will be offering cakes that are delicious,

Avenue, Manila. Healthy Temptations aims to provide the market a cake

but an everyday snack. The product is for health-conscious people of all

ages, especially students.

1.2 Nature of the Products

Healthy Temptations offers five (5) varieties of healthy cakes:

with graham crackers, honey used as an alternative to sugar and fat-free

Colegio de San Juan de Letran

conscious people and students.

1.3 Size and Growth Trend of the Market

The Market Analysis of the proponents shows that there is a

consistent growth in the number of establishments in the Food and

location of the business will be expecting to increase its number of

population through the succeeding years.

1.4 Background of the Management Team

The management team is composed of Kristine Karl Ahorro,

Hospitality Management students of Colegio de San Juan de Letran.

The General Manager and Operations Head will be Kristine Karl

the Marketing Officer. She will implement promotional activities and

advertisements. Millet Grace Landingin is the Finance Officer. She will

Colegio de San Juan de Letran

1.5 Financing Requirements

Each member of Healthy Temptations will contribute and invest

Php40,000 to a total of Php120,000 as the initial capital of the business.

Below is the summarized contribution of the members:

Ahorro – Php 40,000 (33.34%)

Jaena – Php 40,000 (33.33%)

Landingin – Php 40,000 (33.33%

Total: Php 120,000.00

Colegio de San Juan de Letran

1.6 Key Projections

Net Sales 877,150.67 1,175,381.901,575,011.742,110,515.732,828,091.08

Cost of Goods Sold

Total Goods Available for Sale 324,022.68 705,229.14 945,007.04 1,266,309.441,696,854.65

Total Income 670,666.18 627,653.93 841,056.27 1,127,015.401,442,326.45

Total Expenses 549,962.66 563,768.20 578,470.12 594,131.18 610,818.51

Net Income 120,703.52 63,885.74 262,586.15 532,884.22 831,507.94

Provision for Income Tax 36,211.06 19,165.72 78,775.84 159,865.27 249,452.38

Net Income after tax 84,492.46 44,720.01 183,810.30 373,018.96 582,055.56

Colegio de San Juan de Letran

Figure 1.6.1 Income statement

2.1 Mission Statement

Healthy Temptations will bring healthy, delicious and nutritious

cakes to the discriminating palettes of our customers.

2.2 History of the Business Idea

The idea of Healthy Temptations started when a friend of one of the

researchers related the story of his grandmother who is suffering from

Oftentimes, the diabetic grandmother ends up watching her grandchildren

diabetic patients prompted the researchers to pursue a pastry business

idea of Healthy Temptations was born. The aim of the business is to

deliver healthy cakes to every household in the Philippines. The story

Colegio de San Juan de Letran

2.3 Company’s Proposed Legal Form

Healthy Temptations is a partnership type of business partnership

between Krischelle Jaena, Kristine Karl Ahorro and Millet Grace

Landingin. The proponents agreed to contribute money to initially start the

2.4 Proposed Entry Strategy and Time Line of Events

The entry strategy of the Healthy Temptations is having free taste

of the product to the area, giving flyers, posting tarpaulins in nearby