The Feasibility of a New Sisig Restaurant in
Malate, Manila
In Partial Fulfillment
Of the Requirements for the Degree of
Bachelor of Science in Hotel and Restaurant Management
By
Genelyn Doctor
Liezel Calonce
Mark Angelo Tinguha
Sator Martinez
San Juan De Dios Educational Foundation Inc.
Table of Contents
page
List of Tables
iii
List of Figures
ix
Executive Summary
v
1
2
3
4
Introduction
Statement of the Problem
2
Project Profile
I.
Name of Enterprise/Firm
II.
Location: Head Office/Plant
III.
Descriptive Definition of the Project
A. Brief Profile of the Business
B. Nature or Kind of Industry
C. Type of Organization
3
3
4
4
5
5
Management Structure and Requirements
I.
Objective of the Study
II.
Form of Business Ownership
III.
Organizational Structure
IV. Personnel
A. Requirements
B. Qualifications
C. Sources
D. Compensation and Benefits
V.
Legal Requirements
VI. Pre-operating Period
VII.
Gantt Chart
7
7
7
8
8
8
11
11
13
13
14
Marketing Study
I.
Basic Consideration
II.
Target Market
III.
Marketing Research
IV. Demand and Supply Analysis
V.
SWOT Analysis
VI. Marketing Strategy
15
16
17
17
18
18
A.
B.
C.
D.
E.
F.
5
6
7
Product
Menu
Price
Place
Channels of Distribution
Promotion
Technical or Production Feasibility
I.
The Product
II.
Raw Materials and Supplies
III.
Manufacturing Process
IV. Plant Location
V.
Plant Size and Production Schedule
VI. Plant Layout
VII.
Building and Facilities
VIII.
Machine and Equipment
IX. Utilities
X.
Waste Disposal Method
18
18
19
19
19
19
20
20
23
24
24
25
25
26
35
35
Financial Feasibility
I.
Total Project Cost
II.
Major Financial Assumptions
III.
Initial Working Capital Requirement
IV. Sources of Financing the Project
V.
Financial Analysis
A. Measures of Profitability
B. Measure of Solvency
C. Measure of Stability
37
38
38
38
38
39
41
42
Conclusion
49
Bibliography
Appendix
51
52
List of Tables
Table 1.
Table 2.
Table 3.
Table 4.
Table 5.
Table 6.
Table 7.
Table 8.
Table 9.
Table 10.
Table 11.
Table 12.
Table 13.
Table 14.
Table 15.
Table 16.
Table 17.
Table 18.
Table 19.
Table 20.
Table 21.
Table 22.
Table 23.
Table 24.
Table 25.
Table 26.
Table 27.
Table 28.
Table 29.
Table 30.
Table 31.
Table 32.
Table 33.
Qualifications and Responsibility Matrix
Cost of Staffing
Benefits
Gantt Chart
Target Market
Quantity Demanded for the Next Five Years
Projected Market Share and Selling Price
SWOT Analysis
List of Raw Materials and its Acquisition Cost
Allocated Space for Restaurant Facilities
Cost of Machineries and Equipments
Cost of Office Supplies
Cost of Furniture and Fixtures
Utilities Consumption
Project Cost
License and Permit Fees
Rate of Return of Sales
Gross Profit Rate
Return on Equity
Return on Investment
Cash Payback Period
Inventory Turnover
Conversion Period
Equity Ratio
Projected Sales
Raw Materials Used
Raw Materials Purchases
Direct Labor
Manufacturing Overhead
Depreciation
Projected Cash Flow Statement
Projected Income Statement
Projected Balance Sheet
8
12
13
15
17
18
18
19
21
26
27
29
34
36
38
38
40
40
41
41
41
42
42
43
44
44
44
44
45
45
46
47
48
List of Figures
Figure 1.
Figure 2.
Figure 3.
Organizational Structure
Location of THE SISIG HOUSE
Plant Layout
7
25
26
Executive Summary
THE SISIG HOUSE will be a superior specialty restaurant, located in the busy street of
Malate, Manila, serving Sisig varieties for lunch and dinner. This new restaurant will give the
place the opportunity to offer students and faculty members near the area a unique and welcome
alternative in casual dining.
THE SISIG HOUSE is a 32-seater specialty restaurant. It will feature a cozy and relaxing
atmosphere, comfortable furnishings and décor with soothing warm tones. The restaurant will
operate seven days a week, from 10 am to 9 pm. The service will be relaxed, very friendly and
correct. We will hire the best people available, training, and motivating and encourage them, and
thereby retaining the friendliest most efficient staff possible.
The company is a joint venture partnership between the principals, Genelyn Doctor,
Liezel Calonce, Mark Angelo Tinguha and Sator Martinez. Each of them will contribute P 250,
000, in total of P 1,000,000. Since it’s an equal capital contribution, the profit will also be
divided equally to the proponents.
One of the primary goals of this new restaurant is to provide value to the customers.
Menu pricing will be set based on the objective to have a meal below P 100.00 for the students.
Our start-up requirement come to P 767,476.00 which is largely single time fees
associated with opening the store. These costs are financed by the proponents. An anticipated
sale during the first year is P 7,756,250.00 with projected 13% increases during the following
years. The total cost of investment can be recovered within five (5) months.
CHAPTER 1
INTRODUCTION
The paper is to present a proposal which seeks to conduct a feasibility study for a
restaurant selling Sisig in Malate, Manila.
Sisig was one of the first Kapampangan words explained to Spanish missionaries by the
Augustinian priest Fray Alvaro de Benavente. In his book, “Arte de Lengua Pampanga”
published in 1699, he referred to “sisig” as a manner of preparing food as in “guisar con vinagre,
v.t, ensalada” or simply, to cook with vinegar, or make a salad.
Also, sisig was defined by another Augustinian priest named Fray Diego Bergaño. In his
book, Bocabulario de Pampango en Romance, y Diccionario de Romance en Pampango
(published in 1732), he defined “sising” as a salad, including green papaya or green guava
sprinkled with salt, pepper, garlic and vinegar. Although he spelled it as “sising”, which is unlike
the “sisig” of Fray Benavente, they both have compatible definitions.
With these, the sisig known to the ancient Kapampangan is the achara or mixed salad
greens without meat or otherwise sour green raw fruits or vegetables that were soaked and
marinated in vinegar with garlic, salt and pepper. This is specifically prepared for pregnant
women who are feeling nauseated.
Over the years, the sisig has changed in form, substance and preparation. From being a
side dish like cold achara dip or plainly salad, it is now a smoking hot main dish and appetizer
featured on the dining table. Unlike before that it was prepared for pregnant women, now it is
served mainly for drinking men as a form of their favorite “pulutan”.
In the late 1970s, Lucia Cunanan (or popularly known as Aling Lucing) of Angeles City
caused major changes in the preparation and serving of sisig. She reinvented sisig by using a
sizzling plate to make the dish crispier. The Philippine Department of Tourism has
acknowledged that her “Aling Lucing’s” restaurant had established Angeles City as the “Sisig
Capital of the Philippines” in 1974. Her trademark sisig was developed in mid-1974 when she
served a concoction of boiled and chopped pig ears and cheeks seasoned with vinegar, calamansi
juice, chopped onions and chicken liver and served in hot plates. It was believed that the addition
of a pig’s head and innards in the dish came from the “recycling” the excess meat from the
commissaries of Clark Air Base in Angeles City, Pampanga. Pig heads were purchased cheap
since they were not used in preparing meals for the U.S Air Force personnel stationed there
during the American Occupation of Luzon and Visayas.
Hundreds of sisig variations are available today ranging from the original pigs face
(mascara) ingredient to a more healthy seafood concoction such as squid, tuna, milkfish
(bangus), and mussels.
The major reason for this study is the writers own interest to set up an own Sisig
restaurant in Manila and for the love of the dish as well. The challenges faced with this type of
business are quite enormous as there are many good different restaurants to compete with each
other in the said area.
The proposed study seeks to decide the feasibility of opening a restaurant with only
variety of sisig as its menu in Malate, Manila. The following discussion will provide the reader
with an understanding of the background of the study, the purpose of the study, reasons why this
topic was important and methods selected for data collection and analysis.
Statement of the Problem
The purpose of the study is to determine the feasibility of opening a Sisig restaurant in
Malate, Manila. The key areas which were considered by this study are the following:
1. Nature and extent of the market for Sisig
2. Production and technical aspects for the Sisig restaurant
3. Appropriate management structure for the project
4. Financial feasibility of the project
CHAPTER 2
PROJECT PROFILE
I.
Name of Enterprise/Firm
THE SISIG HOUSE is designed to create a community atmosphere as a good,
cozy, friendly, neighborhood restaurant. The location at 2579 Leon Guinto Street puts the
diner in heart of lively, downtown Malate, Manila.
A priority of THE SISIG HOUSE will be serving fresh, healthy food with all
selection made on the premises from “scratch”. To keep food costs down, the menu will
be simple, yet creative with many interchangeable ingredients. Foods will come from
local and regional suppliers whenever possible, with a preference for organically grown
product.
Setting the mood of cozy restaurant with modern décor, the SISIG HOUSE will be
a simple 32-seater with 8 tables with white and green signage, and checkered tile floors,
with grey booths with Formica and has ceiling fans. And have very accommodating
waiters to assist and provide great dining experience to our customers.
Our customers can order in single serve, family size or even bulk orders. In
increasing numbers of single households and dual earner household with limited time for
food preparation, many consumers are seeking fast, nutritious meals. College students,
another large group of consumers for THE SISIG HOUSE, are well-known for their
appetite for quickly prepared good food.
Future plans include expanding the branches of THE SISIG HOUSE, to have takeout counters for those who are in hurry, possible downtown and university delivery, and a
continuing effort to become more proficient in carrying out operations.
II.
Location: Head Office/ Plant
Malate is a district of Manila which serves as Manila’s center for commerce and
tourism, alongside with Ermita. It was believed that the word Malate was stemmed from
the corruption of the Filipino word “maalat” (salty). Tradition notes that the tidewaters
from Manila bay flowed far inland and that saltwater intruded into the freshwater
collected from wells, thus making the sea water in the area salty.
During the Spanish colonial period, Malate was an open space with a small
fishing village. But after the United States of America (USA) annexed the islands in
1898, American expatriates and some of the old Spanish mestizo families populated the
district in modern high rise apartments and bungalows. Despite the damage from the
Second World War, the whole district was still exclusively residential until the 1970s.
The once exclusive residential areas on the western portion of Malate began to
transform in the 1970s into a commercial area with some large homes and residential
apartments being converted into small hotels, specialty restaurants and cafes. It became a
bohemian enclave and safe haven. Malate is continuously transforming itself in the
present as the center of recreation and entertainment for Manila with more restaurants,
boutiques, bars, discos and novelty stores opening for business.
III.
Descriptive Definition of the Project
The SISIG HOUSE is a partnership composed of Liezel Calonce, Genelyn Doctor,
Sator Martinez and Mark Angelo Tingula with a contribution of Php 250,000.00 each for
the total of Php 1,000,000.00. THE SISIG HOUSE is designed to create a community
with an atmosphere of a good, cozy, friendly, neighborhood restaurant which will be
located at 2579 Leon Guinto St. Malate Manila.
With the help of the owners, staff, and loyal customers we can achieve our goal to
continue providing a wholesome dining experience that will exceed costumer
expectations.
The restaurant will continue to offer good service and serve high quality of food at
an affordable price. The key to success is to establish and to constantly improve on our
product and customer relationship. It is also important to strengthen our passion and skills
in this business so that we can pursue our dream to take actions to be one of the best
restaurants in our country.
A. Brief Profile of the Business
The business is owned and managed by the fourth year Bachelor of
Science in Hotel and Restaurant Management students of San Juan De Dios
Educational Foundation Inc. namely Genelyn Doctor, Liezel Calonce, Sator
Martinez and Mark Angelo Tinguha. They came up on this kind of lucky venture.
It has a catchy name where costumers will wonder what its taste could be and it
will be marketable as the result of the conducted feasibility study.
Objectives
To provide prompt and high quality food and services in a friendly and
courteous manner.
Mission
The SISIG HOUSE restaurant is dedicated to provide quality service and
excellent but affordable meals for students and ordinary employees, and to
experience cozy ambience that fits with their budget/allowance.
Vision
The SISIG HOUSE restaurant will constantly provide outstanding food
service to our customers by offering them delicious food. We also aim to expand
and to have more branches over Metro Manila and continue delighting customers
from all walks of life.
B. Nature or Kind of Industry
The industry in which the restaurant firms operate has increasing
consumer demand for every improving product. The growth is proven by the
rapid expansion of food outlets in key areas in Metro Manila and the provinces.
The market is large but consumers are price conscious and exhibit brand loyalty.
With a wide range of restaurants to choose from, pricing schemes and marketing
strategies determine market shares. With this, THE SISIG HOUSE aim to achieve
two primary objectives: 1) hammer in “value-for-money” concepts; and 2) create
brand consciousness and loyalty.
C. Type of Organization
THE SISIG HOUSE is a small business which operated by the binding
proponents who contributed money, time and effort to a common goal, to earn not
just for profit but a lifetime experience, with the intention of dividing the profits
equally. The business specializes with high quality food at low costs.
THE SISIG HOUSE is a general partnership where the proponents
conducting a business jointly have unlimited liability, which means personal
assets are liable to the proponent’s obligations. The proponents are the operators
and the owners of the business, which is entered into for profits, in which
responsibility for management, profits, and most importantly the liability for debts
is shared by proponents.
CHAPTER 3
MANAGEMENT STRUCTURE AND REQUIREMENTS
I.
Objectives of the Study
This study is presented to show the marketing aspects, technical procedure and
economic viability of a Sisig restaurant in Malate, Manila.
II.
Form of Business Ownership
The proponents prefer partnership to enable them to work altogether that will give
the business greater impetus. Although compatible partners are hard to find in a
partnership, personal friction among the proponents can be avoided since they know each
other for years now.
III.
Organizational Structure
Restaurant
Manager
Operations
Manager
Marketing
Manager
Cook
Cashier
Helper
Service
Crew
Figure 1: Organizational Structure
IV.
Personnel
A. Requirements
1. 3 pieces of 1x1picture (white background)
2. 1 piece of 2x2picture (white background)
3. SSS number
4. Medical exam and health permit
5. Barangay clearance
6. Police clearance
7. Birth certificate
8. TIN number or BIR form 1902
B. Qualifications
Qualifications and Responsibility Matrix
POSITION
QUALIFICATION
RESPONSIBILITY
- Must be 27 to 35 years old
-Must have completed at least Bachelor
Degree in Food and Beverage Service
Management or Hotel and Restaurant
Management, or equivalent
Restaurant
Manager
-Must have strong leadership and public
relation skills
-Must have at least two years experience
in managing a restaurant
-Must have strong ability to promote
superior quality customer service
-Effective management
of labor and capital
resources
-Ensure that the
restaurant will operate
efficiently and profitably
-Must have the ability to solve practical
problems effectively with internal and
external customers
Operations
Manager
-Must be 27 to 35 years old
-Must have completed at least Bachelor’s
Degree in a related field (Information
-In charge of the
implementation of
business measures, new
Technology, Information System or
Computer Science)
-Must have at least two years working
experience in the same capacity
guidelines or strategies
-Ensure the successful
continuance of business
operation
-Must be 27 to 35 years old
-Must have completed at least Bachelor’s
Degree
Marketing
Manager
-Must have strong leadership, marketing
and public relation skills
-Promote products,
services or brands and
oversee all marketing
activity
-Must be creative and have great
attention to detail
-Must be 20 to 25 years old
-Must have the capacity and ability to
handle large amount of money
-Must have good Math skills
Cashier
-Must be available to work on shift
schedule
-Must have a good customer service skill
to maintain a friendly environment
-Complete all retail
transactions for
customers at the cash
register
-Bookkeeping
-Must have at least two years experience
in secretarial and bookkeeping work
-Must be 20 to 25 years old
Service
Crew
-Must have at least a Bachelor’s Degree
in Hotel and Restaurant Management or
in Food and Beverage Service
Management
-Must be able to work in flexible hours
-Must have excellent communication and
people skills
-Provide excellent
customer service
-Must have pleasing personality
-Must be 25 to 35 years old
-Must have Bachelor’s Degree in Hotel
and Restaurant Management, major in
Culinary Arts
-Must have at least two years of working
experience
Cook
-Must have the ability to prepare quality
variety dishes in a stipulated time
-Must have good communication skills
-Must possess a good knowledge in food
preparation
-Must be familiar with kitchen
equipments
-Must be 25 to 35 years old
-Must be at least high school graduate
-Must have at least two years of working
experience
-Must be able to work full time
Helper
-Must be hardworking
-Must have very good physical strength
to lift heavy pots, dishes, pans and other
food preparation items
-Must have good ability to communicate
with manager and other staff
Table 1: Qualifications and Responsibility Matrix
-Oversee and participate
in the preparation and
cooking of food
-Check quantities and
quality of stock received
and notify suppliers of
deficiencies
-Oversee washing and
cleaning of floors,
utensils, work surfaces
and other kitchen
equipments to ensure that
necessary hygiene and
health and safety
standards are maintained
Hiring Process
1. The manager takes charge in the processing of all applicants.
2. The general manager renders final decision on whether to accept any
applicant for employment which includes screening, testing, conducting
interviews.
3. When an applicant has been properly selected, every effort will be made to
facilitate orientation in the organization. The manager or authorized
representative will provide all necessary information about his job terms
or employment and general rules and regulation.
4. A prospective employee is required to submit a medical certificate and all
necessary pre-employment requirements.
C. Sources
Finding money to start a business is usually one of the first problems that
entrepreneurs face. For most people, this process can be too hard and very
frustrating. What makes this process frustrating is a combination of wrong
expectation and looking for money in all the wrong places.
Since THE SISIG HOUSE is in a partnership form, proponents will pool
for the initial capital. Each proponent contributes to the capital from their personal
savings and tapping their families. Self-funding or bootstrapping is an ideal
source for financing a business. It will put the proponents in full control of how
much they are going to get. Furthermore, there will never be a need to justify the
business to investors. The proponents have the freedom to operate as they see
well.
D. Compensations and Benefits

Salaries and Wages
Employees shall receive their respective salaries or wages as
provided in their contracts of employment every 15th and last day of the
month. Cut-off for payroll computation is every 10th and 25th day of the
month.

Overtime Pays
It may be required to work beyond the shift or even on rest day due
to work requirements. Every effort should be made to avoid unnecessary
overtime work and to keep work within reasonable limits. All overtime
work should have prior written approval from the store manager. Every
employee should file their overtime within the pay-period to be
compensated. No overtime slip means no overtime pay.

Cancelled Day-off / Holiday Pay
Every employee shall be provided with a rest period of twenty-four
(24) hours after every six (6) consecutive normal working days.
Work performed on a regular holiday shall be compensated with
an add compensation equivalent to 100% of his regular salary. Work
performed on an employee rest days or on a special holiday shall be paid
an additional compensation of 30% of his regular salary.

13th month Pay
The 13th month pay of an employee which shall be equivalent to
1/12 of his basic salary earned within a calendar year shall be given not
later than December 24 of each year.

SSS
Benefits under SSS shall be granted in accordance with applicable
laws. Implementation of procedures relative to entitlement of said benefits
should be done in accordance with the regulations to be promulgated by
the management.
Staffing and Cost
Manpower Requirement
POSITION
No of
Employee
Salary
per day
Total
salary per
day
Monthly
salary per
employee
Total
monthly
salary
Total annual
salary
Restaurant
Manager
1
850.00
850.00
22,100.00
22,100.00
265,200.00
Operations
Manager
1
750.00
750.00
19,500.00
19,500.00
234,000.00
Marketing
Manager
1
750.00
750.00
19,500.00
19,500.00
234,000.00
Cook
2
600.00
1,200.00
15,600.00
31,200.00
374,400.00
Cashier
1
491.00
491.00
12,766.00
12,766.00
153,192.00
Service
Crew
1
491.00
491.00
12,766.00
12,766.00
153,192.00
Helper
1
491.00
491.00
12,766.00
12,766.00
153,192.00
Total
8
4,423.00
5,023.00
114,998.00
130,598.00
1,567,176.00
Table 2: Cost of Staffing
Benefits
Employee
No. of
Employee
Employee
Restaurant
manager
1
P 1,200.00
Operations
manager
1
Marketing
manager
Employee
Pag-ibig
Thirteen
month
P 337.00
P 150.00
P 22,100.00
P 1,000.00
P 237.00
P 100.00
P 19,500.00
1
P 1,000.00
P 237.00
P 100.00
P 19,500.00
Cook
2
P 1,400.00
P 380.00
P 200.00
P 31,200.00
Cashier
1
P 550.00
P 150.00
P 100.00
P 12,766.00
Service
crew
1
P 550.00
P 150.00
P 100.00
P 12,766.00
Helper
1
P 550.00
P 150.00
P 100.00
P 12,766.00
Total
(monthly)
8
P 6,300.00
P 1,641.00
P 850.00
P 75,600.00
P 19,692.00
P 10,200.00
POSITION
Total
(annual)
Philhealth
SSS
Table 3: Benefits
P 129,598.00
Considering the size of the proposed establishment, it is assumed that the
proponents would be managing the overall affairs of the restaurant. They will be required
to process and check bills, invoices and receivables management, maintain accounts, etc.
for record. The proponents will also ensure safe custody of the store keys and it is
important to note that many food outlets tend to lose out due to inadequate cash control
by owners especially during rush hours where the counter staff can easily slip out one or
two payments.
V.
Legal Requirements
Starting a business in the Philippines can be a bit confusing because of the many
legal requirements necessary before a business can operate. However, it is very important
to secure these essential legal requirements. The consequences of operating a business
without the said legal requirements range from the closure of business, to the imposition
of monetary fines, and finally to imprisonment. The legal requirements needed for the
project are as follows (see Appendix A for the Application Form):
a. Securities and Exchange Commission (SEC) – Partnerships have to secure a
certificate of partnership with the SEC to be considered as legal or juridical
entities
b. Department of Trade Industry (DTI) registration – for registering business
trade names
c. Mayor’s Business Permit – for getting the license to operate in the city and
payment of local business taxes
d. Bureau of Internal Revenue (BIR) registration – for getting tax
identification number (TIN), official receipts and invoices, registering books
and accounts, and paying the national internal revenue taxes
e. Social Security System (SSS), Philhealth, Pag-ibig Fund Registration – for
registering the company as an employer and for remitting the employees’
contribution together with the employer’s share
VI.
Pre-operating Period
In the pre-operating period, the proponents are expected to finish all the necessary
tasks at hand such as getting permits; purchasing equipments, etc. (see Table 4 for
complete list of pre-operating activities). For the advertising of the business, it is planned
to give away flyers and pamphlets to passerby near the location of the restaurant. Also,
posters will be given and posted to every corner near the location. As for the social
media, a facebook page will be made for THE SISIG HOUSE. Few of its posts will be
promoted so that more people will see it.
VII.
Gantt Chart (Projected Time Table)
The Gantt chart is an important part of the organization plan. It is a list of all the
activities to do prior to launching the business and the time frame for accomplishing
them. Preparing the Gantt chart is a useful exercise that allows a person to have a view of
the pre-operation activities and the cost required in each activity. Since the business will
have four proponents, it is decided to divide the tasks and work will be done
simultaneously. The table below shows the activities, its duration, and the doer.
Activity
Month 1
Month 2
Week No.
Week No.
1 2 3 4 1 2 3 4
Securing of Licenses and Permits (Proponent 1)
Purchasing of Equipments, Office Supplies, Furniture and
Fixtures (Proponent 2)
Redecorating of the Store
(Proponent 2)
Hiring of Employees (Proponent 3)
Employee’s Training and Orientation
(Proponent 3)
Promoting/Advertising the Business
(Proponent 4)
Purchasing of Raw Materials
(Proponent 4)
Mock Operation
Table 4: Projected Time Table of Pre-operating Activities
CHAPTER 4
MARKETING STUDY
I.
Basic Consideration
There are many things needed to be taken into consideration when projecting a
business’s potential income. The location of a restaurant can have a large effect on the
amount of income that a restaurant obtains which is why finding a good location for a
restaurant is important. The better the location, the more people will know about it and
want to stop in. Having a restaurant in a place where foot traffic is heavy can be
beneficial to the restaurant’s success because people walking down the street could see
the restaurant and decide to stop in and eat. In order to see how much money could be
made, a business should develop projected financial statements so they can see how much
the business would cost to run the restaurant.
Besides projecting income and expenses, there are many other things that a
restaurant owner should take into consideration when trying to figure out if the restaurant
will be profitable. A restaurant has a better chance of being profitable if it has a creative
menu. The key to success would be to offer many different types of food that would be
unique to a particular restaurant. Another thing that indirectly affects a restaurant’s
potential income is the relationship that the employees have with their managers (Davis,
Schoorman, Mayer and Tan, 2000). In a study, it was found that the trust between
management and employees can affect the restaurant financially because employees are
willing to work harder for a manager that they can trust. A restaurant’s profit can also be
affected by inventory control. New business should be conservative with their inventory.
This is very important because there are many types of food and ingredients that can go
bad if not used in a short span of time, which causes the restaurant to lose money from
having to waste their inventory.
The price of items on the menu is also very important. If prices of the food are too
high then customers will feel that they are being treated unfairly, which will keep them
from coming back to the restaurant. It is important for a restaurant to have consistent
customers because they will help bring in new business by telling others how good the
restaurant is.
In the following chapters, we will tackle how will THE SISIG HOUSE responds
to the basic considerations in putting up a new restaurant. Readers can also expect for
specific details regarding the restaurant.
II.
Target Market
The proposed project would cater to the target market, mostly composed of the
people near our restaurant, students, office workers, and employee from the schools and
establishment within and without the vicinity of our restaurant site, located at Vito Cruz,
Manila.
De La Salle University (DLSU) – have approximately 11, 107 students and from that
number of enrolled students, our target customer is at least 25% - 30% or 2,526 to 3,032
student from upper class to middle class. We are confident enough that the ambience and
food-service of THE SISIG HOUSE will suit the taste of DLSU students including the
faculty members.
De La Salle-College of Saint Benilde – The students of Saint Benilde is approximately
9,250 students and just like DLSU our target customer is 25% up to 30% of the enrolled
students.
St. Scholastica’s College – Consists of approximately 5,360 enrolled students. Since
THE SISIG HOUSE is just across the street, it’s convenient for the students, some
parents and faculty members of the school. And since it is near, we can cater for the
school whenever they have special events coming.
POPULATION
TARGET MARKET
-
Number of Undergraduate applicant : 3,738
Number of Freshmen, First Year, Undergraduates
enrolled : 1,200
Total number of Graduate Student : 4,661
Approximately 11,107 Student Enrolled
De La Salle College of
Saint Benilde
-
Approximately 9,250 students enrolled
St. Scholastica’s College
-
Approximately 5,360 students enrolled
De La Salle University
Table 5: Target Market
III.
Marketing Research
Recent studies show that Filipino customers value the following characteristics of
restaurant products and services as the most important according to priority: 1) flavor and
taste; 2) value for money/nutrient content; 3) presentation and packaging; 4) variety; 5)
systematic ordering and selling; 6) feeling of security in food and environment; 7) prompt
delivery and service; 8) consistency of service; 9) fueling of recognition and importance
and 10) feeling of security in location and accessibility. For the youth, which dominates
the local market in terms of numbers, eating out is a regular activity. Key factors that
make restaurants and fast food establishments attractive to this group include the
simplicity of food preparation, high quality of food served in a clean, orderly
environment, prompt service and relatively inexpensive prices.
IV.
Demand and Supply Analysis
The table below shows the potential market (see Appendix B for computation) for
Sisig restaurant in three universities in Malate, Manila. It is assumed that the demand for
Sisig is projected to grow parallel to the universities’ population increase, the product
being a food item.
Demand for the Next Five (5) Years
Year
Quantity Demanded
2018
1,173,338
2019
1,185,072
2020
1,208,773
2021
1,245,036
2022
1,294,838
Table 6: Quantity Demanded for the Next Five Years
The proposed project will cater to students and faculty members. Competitiveness
of the product will greatly depend on its taste and nutritional value. The project aims to
get at least 8% share of the market or 91,250 orders on its first year of operation at the
selling price of P 85.00 per order and a 1% annual increase in market share and 3%
increase in selling price per order.
Year
2018
2019
2020
2021
2022
Market Share in Sisig
91,250
100,375
110,413
121,454
133,599
Selling Price per Sisig
P 85.00
P 87.55
P 90.18
P 92.88
P 95.67
Table 7: Projected Market Share and Selling Price
V.
SWOT Analysis
STRENGHTS
WEAKNESS
Our strength is that we offer our
version of expensive menu in very
affordable price, and we will let our
customer experience a very cozy
ambience and dining experience that
most expensive restaurant has to offer
without paying too much.
Our location is field with so many
well established competitors like
Yellow Cab, Burger King, Jollibee,
and Bagnet and since we are just
starting it may be our weakness for
now to compete with those
established companies.
OPPORTUNITIES
THREATS
Our location is an advantage since we
are just across the street of St.
Scholastica’s Colleges. We can take
the opportunity to offer their school a
catering service whenever they have
school events. Aside from that, our
business will be also open for walk in
customers. Hopefully this will open
another door of opportunity to expand
our business thru word of mouth from
our satisfied customer.
The threats would be the big
competition from our well established
competitors. We also consider
ourselves as our own competitors to
challenge ourselves to innovate and
push our boundaries on providing great
food and service to our customers.
Table 9: SWOT Analysis
VI.
Marketing Strategy
A. Product
We will make sure that we are going to offer food that will tickle the
tastes buds of our customers and that they will keep on asking for more. And the
whole dining experience in a very cozy environment will keep our customers
come back for more.
B. Menu
With our undeniably delicious food, we will make our customer satisfied.
The menu includes Pork Sisig, Chicken Sisig, Seafood Sisig, Black Chicken, and
Sinigang sa Ube, among others.
C. Price
Pricing will be based on major cost components such as raw materials,
direct labor cost and overhead expenses. The price will be fair enough for the
proprietors, the customers, and the competitors to enable the proposed project a
fair market share and survive competition. Here on THE SISIG HOUSE, we will
offer delicious yet affordable food. And we will offer value meals to attract
students and the people working along the area.
D. Place
Since the location is near the school we are going to give leaflets in St.
Scholastica’s Colleges across the street and even along the Vito Cruz LRT station,
the leaflets include the location of our SISIG HOUSE as well as the complete
menu the customers well have an idea where can they visit us.
E. Channels of Distribution
A distribution channel in marketing refers to the path or route through
which goods and services travel to get from the place of production or
manufacture to the final users. Its main function is to provide a link between
production and consumption. For this project, we will be using the directmarketing channel, since it has no intermediary levels. With this distribution
system, the product and service leaves the producer and goes directly to the
customer.
F. Promotion
Just like any other businesses, THE SISIG HOUSE will be promoted to
prospective customers by using simple techniques. Among these are the use of
sign boards and streamers to make the consuming public aware of the existence of
the restaurant. Since the location is near the school, we will also give leaflets to
the students and even along the Vito Cruz LRT Station. We will also invade the
social media network like facebook, twitter, Google + etc. to promote our SISIG
HOUSE. Less expensive in promoting yet so effective especially that our primary
target is students which is so into social media networking.
Potential or future customers will be invited to witness the opening day of
THE SISIG HOUSE. The first 50 costumers will be treated to the half the price of
our product.
CHAPTER 5
TECHNICAL OR PRODUCTION FEASIBILITY
I.
The Product(s)
Sisig is a popular appetizer that originated from the culinary capital of the
Philippines, Pampanga. It has evolved over the years into a popular dinner entree. The
most popular sisig is composed of chopped pigs face (snout included) and ears with a
generous amount of chicken liver. It is usually served in a sizzling plate with sunny side
up egg as its toppings.
II.
Raw Materials and Supplies
The list of raw materials as well as indirect or consumable materials including
detailed specifications, quantity needed, and when these are needed should be clearly
defined. Alternative raw materials always are taken into consideration. Single source of
materials should be avoided. The list of the ingredients below is good for one day only
and can attribute to 250 orders of Sisig (125 Chicken Sisig and 125 Pork Sisig). Also, it
will show that the estimated cost per order is P 38.62.
INGREDIENTS
QUANTITY
UNIT COST
TOTAL
COST
(daily)
½ gallon
P 308.00
P 308.00
P 9,240.00
1 kg
P 110.00
P 110.00
P 3,300.00
MONTHLY
COST
Oil
Butter
2 kg
P 100.00
P 200.00
P 6,000.00
2 kg
P 60.00
P 120.00
P 3,600.00
1 kg
P 150.00
P 150.00
P 4,500.00
½ kg
P 52.00
P 52.00
P 1,560.00
1 small can
P 350.00
P 350.00
P 10,500.00
1 kg
P 120.00
P 120.00
P 3,600.00
1 gallon
P 220.00
P 220.00
P 6,600.00
Garlic
Onion
Bell pepper
Ground pepper
Squid ink
Chili powder
Mayonnaise
Liver spread
1 kg
P 120.00
P 120.00
P 3,600.00
1 bottle
P 140.00
P 140.00
P 4,200.00
1 kg
P 30.00
P 30.00
P 900.00
10 kg
P 110.00
P 1,100.00
P 33,000.00
1 kg
P 90.00
P 90.00
P 2,700.00
1 kg
P 74.50
P 74.50
P 2,235.00
10 kg
P 200.00
P 2,000.00
P 60,000.00
Soda water
1 case
P 576.00
P 576.00
P 17,280.00
Baking powder
½ kg
P 26.50
P 26.50
P 795.00
Cooking wine
Salt
Chicken
Flour
Corn starch
Pork
Vodka gin
1 bottle
P 30.00
P 30.00
P 900.00
Chili sauce
4 bottle
P 26.50
P 106.00
P 3,180.00
Brine
1 gallon
P 220.00
P 220.00
P 6,600.00
Calamansi
2 kg
P 40.00
P 80.00
P 2,400.00
Egg
5 trays
(small)
P 110.00
P 550.00
P 16,500.00
Rice
25 kg
P 43.00
P 1,075.00
P 32,250.00
Tomato
1 kg
P 40.00
P 40.00
P 1,200.00
Back ribs
2 kg
P 160.00
P 320.00
P 9,600.00
Pork face
10 kg
P 150.00
P 1,500.00
P 45,000.00
Potato
1 kg
P 80.00
P 80.00
P 2,400.00
P 9,788.00
P 293,640.00
Total acquisition cost
Table 9: List of Raw Materials and its Acquisition Costs
III.
Manufacturing Process
The production process is very simple and does not require sophisticated
equipment, as discussed below. The process included the following:
For the Braised Pork (or Chicken):
Combine the soy sauce, vinegar, salt, sugar, peppercorns, garlic, pig ear, jowl,
snout and tongue in a large stockpot and add enough water to completely cover the pork.
Simmer on low heat until the pork is soft but not completely tender, approximately one
hour and 30 minutes. Remove the pork and chill.
For the Pork Sisig (or Chicken):
Preheat a charcoal grill to high heat, preferably using lump charcoal. Grill the
pork parts until the skin is crispy and slightly charred, and then refrigerate.
Dice the pork parts into small pieces. Sauté the ginger, garlic, chili, and onions in
a large sauté pan for one minute. Add the pork and sauté for four minutes. Add the soy
sauce, calamansi juice and coconut vinegar.
Divide the pork among four pre-heated fajita platters. Crack one egg onto each
platter and mix the egg and pork together. Serve atop the rice.
IV.
Plant Location
THE SISIG HOUSE is located at 2579 Leon Guinto St. Malate Manila, opposite
side of De La Sale University, near St. Scholastica’s College. In the figure below, the
yellow star represents THE SISIG HOUSE. This will be the ideal location to establish the
business since it’s very near to the school and Church area and also accessible to the
offices and students.
Figure 2: Location of THE SISIG HOUSE (see yellow star)
V.
Plant Size and Production Schedule
Since it is a relatively new industry, it is proposed that the proponents start with a
production of 250 orders of sisig daily, to increase gradually over time. This will allow the
proponents to build goodwill among its customers, emphasizing quality among other
considerations. The bulk of production will be from 10 in the morning to one in the afternoon
because it will be the peak hour since it is lunch time. The workers are expected to cover the
proposed orders daily.
VI.
Plant Layout
Figure 3: Plant Layout
VII.
Building and Facilities
The land requirement is around 1,500 square feet in densely populated area where
all utilities and facilities are properly available. The floor space needs to be carefully
allocated to allow for maximum dining space for customers in rush hours. The allocation
of space between different sections would be as follows:
Details
% (square feet)
Size (square feet)
Dining
55%
825
Kitchen and Preparation
30%
450
Counters
5%
75
Comfort room
10%
150
Table 10: Allocated Space for Restaurant Facilities
The proposed premises will be acquired on a rental basis. For this study, the
monthly rent is assumed to be approximately P 26,000.00
VIII.
Machine and Equipment
Basic kitchen equipment and machineries are required for the operation of the
project. The lists of needed equipments and its acquisition cost are shown in Table 7.
MACHINERIES
AND
EQUIPMENTS
GAS STOVE
ELECTRIC GRILL
DESCRIPTION
AND CAPACITY
In cooking, a gas stove
is a cooker which uses
natural gas and other
flammable gas as a
fuel source for
cooking.
It is a form of cooking
that involves dry heat
applied to the surface
of food.
FREEZER
A refrigerator
compartment for
making frozen desserts
at very low
temperatures.
UPTIGHT FREEZER
A refrigerated
compartment for
preserving food and
for making frozen
dessert at very low
temperature.
UNIT
TOTAL
COST
COST
P 2,499.00
P 2,499.00
P 1,199.00
P 1,199.00
P 24, 800.00
P 24, 800.00
P 19,000.00
P 19, 000.00
QUANTITY
1
1
1
1
FRYING PAN
Fry pan or skillet is a
flat bottomed pan used
for frying, searing, and
browning food.
P 1,100.00
P 3,300.00
3
1
P 80.00
P 80.00
MEASURING CUP
A measuring cup is a
kitchen utensils used
primary to measure
the volume of liquid or
bulk solid liquid
ingredients.
30
P 10.00
P 300.00
SPOON
Utensils for use in
eating, stirring and
etc., consisting of a
small, shallow bowl
with a handle.
2
P 85.00
P 170.00
CHOPPING BOARD
A flat piece of
material used as a
board in chopping of
vegetables, fruits and
etc.
A sharp blade attached
to a handle that is used
for cutting.
2
P 90.00
P 180.00
An implement with a
board, flat, usually
flexible blade, use for
blending food or
removing them from
cooking.
2
P 150.00
P 300.00
KNIFE
KITCHEN SPATULA
LADLE
A long-handled spoon
having a deep bowl for
serving or transferring
liquids.
2
P 60.00
P 120.00
It is use to measure the
weight of an item.
1
P 490.00
P 490.00
WEIGHING SCALE
P 52,438.00
Total
Table 11: Cost of Machineries and Equipments
Other equipments and materials needed for the business and its office are as
follows:
Equipment
Description and
uses
Quantity
Unit cost
Total
Unit
COMPUTER
WALL CIOCK
An electronic
machine that can
store and work with
large amount of
information.
1
P 12,799.00
P12,799.00
A device for
indicating or
measuring time
commonly by means
of hands moving on
a dialect.
2
P 60.00
P 120.00
FIRE
EXTINGUISHER
BROOM
An active fire
protection device
used to extinguish or
control small fires,
often in emergency.
1
P 650.00
P 650.00
An implement for
sweeping consisting
of a brush of straw
or stiff strands of
synthetic material
bound tightly to the
end of a long handle.
1
P 50.00
P 50.00
A short –handled
shovel like utensil
into which dust is
swept for removal.
1
P 40.00
P 40.00
A bundle of coarse
yarn, a sponge, or
other absorbent
material, fastened at
the end of a stick or
handle for watching
floors, dishes plastic.
1
P 65.00
P 65.00
A container for
temporarily storing
wastes, and is
usually made out of
metal or plastic.
2
P 80.00
P 160.00
DUSTPUN
MOP
TRASH BIN
TOILET BRUSH
DIPPER
DISWASHING
LIQUID
A device composed
of bristles typically
set into a handle and
used for scrubbing.
1
P 40.00
P 40.00
A large spoon with a
long handle that is
used for dipping
liquids.
1
P 35.00
P 35.00
A highly –foaming
mixtures of
surfactants used for
hand washing of
glasses, plates,
cutlery, and cooking
utensils in a sink or
bowl.
3
P 30.00
P 90.00
A liquid soap used
for cleaning hands
and etc.
1
P 50.00
P 50.00
A tool or cleaning
aid consisting of
porous material.
Sponges are usually
used for cleaning
impervious.
2
P 10.00
P 20.00
HANDSOAP
SPONGE
A bag that open at
the top and is used
for holding or
carrying garbage.
10
P 2.00
P 20.00
An open container
with a handle that is
used to carry water
and other liquids.
1
P 30.00
P 30.00
1 pack (100
pcs.)
P 30.00
P 30.00
PLASTIC GLOVES
Used to cover the
hand that has
separate part for
each finger.
1 pack
P 25.00
P 25.00
FOLDER
A folded sheet of
light cardboard used
to cover or hold
papers, letters, etc.,
as in a file.
A book or binder
often ruled pages for
recording.
1
P 120.00
P 120.00
A written
acknowledgment of
having received or
taken into ones
possession, a
specified amount of
money, goods, etc.
5
P 50.00
P 250.00
GARBAGE BAG
BUCKET/PAIL
JOURNAL
NOTEBOOK
RECEIPT PAPER
BALL PEN
A writing instrument
which dispenses a
viscous ink from an
internal reservoir.
12
P 5.00
P 60.00
A paper that can be
used for document.
1 rim
P 150.00
P 150.00
A small electronic
device that is used
for adding
subtracting and etc.
2
P 100.00
P200.00
A tool used for
cutting paper, cloth
and etc.
2
P 20.00
P 40.00
A tool used to staple
papers, document
and etc.
1
P 50.00
P 50.00
A piece wire bent
into flat loops that
are used to hold
sheets of papers
together.
1 box
P 20.00
P 20.00
BOND PAPER
CALCULATOR
SCISSORS
STAPLER
PAPER CLIPS
A wire used to
attach or join papers.
1 box
P 15.00
P 15.00
A device used to cut
holes or notches in
paper or cardboard.
1
P 115.00
P 115.00
A substance that
used to stick things
tightly together.
1
P 10.00
P 10.00
PAPER
FASTENER
PUNCHER
GLUE
P 15, 254.00
Total
Table 12: Cost of Office Supplies
The furniture and fixtures needed are as follows:
FURNITURE
AND
FIXTURE
CHAIRS
DESCRIPTION
AND USES
A seat, especially for
one person, usually
having four legs for
support and a rest for
the back and often
having rests for the
arms.
An article of furniture
consisting of a flat,
slab like top supported
on one or more legs or
other. Supports such a
piece of furniture
QUANTITY
UNIT
COST
TOTAL
COST
32
P 250.00
P 8,000.00
8
P 300.00
P 2,400.00
TABLE
OFFICE
TABLE
OFFICE
CHAIR
specifically used for
serving food to those
seated at it.
An article of furniture
consisting of a flat,
slab like top supported
on one or more legs or
other supports.
1
P 2,100.00
P 2,100.00
A seat, especially for
one person, usually
having four legs for
support and a rest for
the back and often
having rests for arms.
1
P 900.00
P 900.00
An instrument for
producing a current of
air.
3
P 850.00
P 2,550.00
Often called cash
register, till is a
machine that tabulates
the amount of sales
transactions.
1
P 11,700.00
P 11,700.00
Used for cooling and
drying the air in a
room.
2
P 45,000.00
P 90,000.00
CEILING FAN
TILL
AIR
CONDITIONER
PENDANT
LIGHT
It is a lone light fixture
that hangs from the
ceiling. It is energysaving low voltage
models.
5
P 10,000.00
P 50,000.00
P 167,650.00
TOTAL
Table 13: Cost of Furniture and Fixtures
IX.
Utilities
Basically, utilities of small and medium enterprises include electricity, water, fuel
and Internet. Below, Table 8, shows the monthly and annual computation for the
estimated utilities to be used.
UTILITIES CONSUMPTION
Total Consumption
Monthly Cost
Annual Cost
P 1,200.00
P 14, 400.00
P 4, 000.00
P 48, 000.00
P 2, 800.00
P 33,600.00
P 1, 200.00
P 14, 400.00
P 9, 200.00
P 110, 400.00
Table 14: Utilities Consumption
X.
Waste Disposal Method
THE SISIG HOUSE looks for Waste Management as the right partner when it
comes to environmental concerns.
THE SISIG HOUSE will use the well-known concept of “3r” which refers to
reduce, and recycle. It calls for an increase in the ratio of recyclable materials, further
reusing of raw materials and manufacturing waste, and over-all reduction in resources
and energy used. These ideas are applied to the entire life cycles of production and
services- from design and extraction of raw materials to transport, manufacture, use,
dismantling/reuse and disposal.
THE SISIG HOUSE will also implement the segregation of wastes from
biodegradable to non- biodegradable. The establishment will also implement the solid
Waste Management (SWM). It refers to an integrated approach of controlling the
generation, as well as managing the storage, collection, transfer and transportation,
processing and disposal of solid waste in a manner that is in accord with the best
principles of public health, economics, engineering, conversation, aesthetics and other
environmental considerations, which is responsive to public needs.
CHAPTER 6
FINANCIAL FEASIBILITY
I.
Total Project Cost
The total project cost is approximately P 767,476.00. The cost components are as
follows:
Pre-Operating Expenses
Advertising and Promotion
License and Permit
Miscellaneous Fees
Receipts and Invoices print
Training (employees)
P 7,000.00
P 20,705.00
P 3,000.00
P 4,000.00
P 3,200.00
P 37,905.00
Building (rent deposit)
Furniture and Fixtures
Kitchen Equipment
Office Supply
Fixed Capital
P 26,000.00
P167,650.00
P 52,438.00
P 15,254.00
P 261,342.00
Working Capital (1 month)
Building (rent)
Labor Cost
Employees' Benefits
Raw Materials
Utilities
P 26,000.00
P130,598.00
P 8,791
P 293,640
P 9,200
P 468,229.00
P 767,476.00
Total project cost
Table 15: Project Cost
Shown below is the composition of License and Permit fees:
SEC Reservation of Company's Name
SEC Registration of Company
Documentary Stamp Taxes
Community Tax
Barangay Clearance
Mayor's Permit
Tax Identification Number
Total
Table 16: License and Permit Fees
P 40.00
P 2,997.00
P 4,670.00
P 500.00
P 800.00
P 11,583.00
P 115.00
P 20,705.00
II.
Major Financial Assumptions
1.
2.
3.
4.
The proposed project will be funded fully by the proponents.
It is estimated that it will take two months before the operation can start.
Working capital requirement is for one month.
The proposed project shall cater to 250 orders a day or 91,250 for its first year of
operation and is projected to increase by 10% annually.
5. Selling price is assumed at P 85.00 per order and projected to increase by 3% per
year.
6. Spoilage is not assumed because the number of Sisig to be produced will be
limited only to pre-arranged orders.
7. Cost increments is estimated at 3% per year.
8. Sales commission will be given at 5% of gross annual sale.
9. All expenses are projected to increase by 15% more or less annually except
depreciation and amortization.
10. Pre-operating expenses are to be amortized for five (5) years.
11. Depreciation is computed using the straight-line method without residual value.
12. Expenses on taxes and licenses are estimated at 2% of gross sales.
13. Personal Drawings shall be provided for five years.
III.
Initial Working Capital Requirement
The estimated initial working capital for one month is P 468, 229.00. It includes
the cost for raw materials, employees’ wages and benefits, building rental, and utilities
expenses. In the preceding chapters, we already break down the items for these expenses,
either daily or monthly or annually. The allotted budget for the initial working capital is
approximately 50% of the projected capital.
IV.
Sources of Financing the Project
As discussed in Chapter 3, the sources for this project will be from the
contribution of the proponents. The four proponents will each contribute P 250,000.00,
for a total of P 1,000,000.00 Their contributions will be drawn from their personal
savings and sourcing out from their families. Also, the net profit will be divided equally
to the proponents.
V.
Financial Analysis
Financial analysis is a judgmental process of evaluating a business’s past financial
performance and its future prospects. The process requires the application of common
sense and judgment in addition to analytical techniques and typically involves analyzing
and interpreting the business’s financial statements and other financial data. Financial
analysis helps users’ basis for decision making. It helps in providing some understanding
on what lies behind the numbers. But it must be remembered that evaluation of the
business is not based on numbers alone. It involves qualitative considerations such as the
quality of management and its products.
A.
Measures of Profitability
1. Rate of Return on Sales
Net Income
Sales
Net Income
/Sales
2018
2019
2020
P 512,602 P 632,530 P 779,903
P7,756,250 P8,787,831 P9,956,613
0.066089
0.071978
0.078330
2021
2022
P 943,380 P 1,124,194
P11,280,842 P12,781,194
0.083627
0.087957
Table 17: Rate of Return of Sales
Also called net profit margin, this measures the percentage of each
peso sales remaining after deducting all expenses. The rate of return on
sales in 2018 and 2019 is 7%, 8% from 2020 and 2021 and 9% in 2022 or
an average rate of return for five years of 8%. This means that for every
peso in sales, the business will earn P 0.08. This profit margin is fair
enough for the business since it involves perishable goods and that high
rate of return would mean lesser sales volume and lower inventory
turnover.
2. Gross Profit Rate
Gross Profit
Sales
Gross Profit
/Sales
2018
2019
2020
P1,876,209 P2,139,620 P2,441,316
P7,756,250 P8,787,831 P9,956,613
0.241896
0.243475
0.245195
2021
P2,786,876
P11,280,842
2022
P3,182,693
P12,781,194
0.247045
0.249014
Table 18: Gross Profit Rate
This is also called gross profit margin. It indicates the percentage
of each peso sales after deducting the cost of goods sold. It also indicates
management’s effectiveness in pricing, generating sales and controlling
production costs. The average gross profit rate of the business for five
years is 25%. This means that for every P 1.00 sales, P 0.25 is available to
cover the cost of selling the product, administering the business and
earning a margin of profit. This also indicates that the business will be
utilizing their facilities effectively and economically.
3. Net Income to Owner’s Equity
This is also known as Return on Equity or ROE. This measures the
rate of return realized by business’s stockholders on their investments and
serves as an indicator of management performance. A high ROE indicates
effective management performance and a low ROE indicates otherwise. In
the table below, it is shown that the proponents will earn P 0.41 in 2018, P
0.39 in 2019, and P 0.37 in 2020, P 0.35 in 2021 and P 0.33 in 2022 or an
average of P 0.37 for every peso invested. All of the assets can last up to
10 years so it is suggested that acquisitions of additional equipment, repair
of expansion of the building be made after six to seven years.
Net Income
Owner's Equity
Net Income
/Owner's Equity
2018
P 541,202
P1,312,602
2019
P 661,130
P1,695,131
0.412312
0.390017
2020
2021
2022
P 808,503 P 971,980 P1,152,794
P2,175,034 P2,768,414 P3,492,607
0.371720
0.351042
0.330067
Table 19: Return on Equity
4. Return on Investment
This also called return on assets. This measures the overall
effectiveness of management in generating profits from its total
investment in assets. In the case of this business, the return on investment
is 1.08 which means that the proponents will earn P 1.08 out of every peso
that they will invest. This only shows that the total project cost will be
utilized fully.
Average Net Income
Total Project Cost
Average Net Income/Total Project Cost
P 827,122
P 767,476
1.08
Table 20: Return on Investment
5. Cash Payback Period
Total Project Cost
Average Net Cash Inflows
Total Project Cost/Average Net Cash Inflows
Table 21: Cash Payback Period
P 767,476
P 1,739,411
0.441227
The cash payback period is only five (5) months. This means that
the total cost of investment can be recovered within five (5) months.
B.
Measure of Solvency
1. Inventory Turnover
This ratio measures the efficiency of the firm in managing and
selling inventory. High inventory turnover generally indicates superior
selling practices and improved liquidity and profitability because money is
tied up in inventory. However, high inventory turnover also signifies lost
sales due to insufficient inventory. Low turnover may indicate that a firm
carries obsolete inventory. Low inventory turnover may also indicate
stockpiling in anticipation of a strike or price increase. The turnover of
inventory will be 370 times in 2018, 361 times in 2019, 351 times in 2020,
342 times in 2021, and 334 times in 2022 or an average of 352 times
annually.
Cost of Goods Sold
2018
5,367,440
2019
6,015,681
2020
6,735,394
2021
7,550,587
2022
8,474,307
Merchandise Inventory
14,500
16,675
19,176
22,053
25,361
370.1683
360.7605
351.2362
342.3885
334.1526
Table 22: Inventory Turnover
The conversion period of which is only one (1) day. This shows
that there will be no left-over Sisig order during the business’ daily
production. Every single Sisig made will be sold out daily.
Conversion Period
2018 2019 2020 2021 2022
1.0
1.01
Table 23: Conversion Period
1.04
1.07
1.09
C.
Measure of Stability
Every asset acquisition will be financed by the investor and not through
the availment of credit facilities. The proportion of the assets that will be provided by the
owner is 1.00 for the period of five (5) years.
2018
2019
2020
2021
2022
Owner's Equity
P1,312,602 P1,695,131 P2,175,034 P2,768,414
P3,492,607
Total Assets (net)
P1,312,602 P1,695,131 P2,175,034 P2,768,414
P3,492,607
1
1
Table 24: Equity Ratio
1
1
1
List of Schedules
Schedule I- Sales
Year Sales Volume Selling Price Total Sales
2018
91,250
85.00
7,756,250
2019
100,375
87.55
8,787,831
2020
110,413
90.18
9,956,613
2021
121,454
92.88
11280842
2022
133,599
95.67
12781194
Table 25: Projected Sales
Schedule II- Raw Materials Used
2018
2019
2020
2021
2022
91,250
100,375
110,413
121,454
133,599
P 38.62
P 39.77
P 40.97
P 42.20
P 43.46
P3,523,680
P3,992,329
P4,523,330
P5,124,920
P5,806,517
Projected Annual Market Share
of Sisig
Multiply by Estimated Cost per
Order
Total Raw Materials Used
Table 26: Raw Materials Used
Schedule III- Raw Materials Purchases
2018
2019
2020
2021
2022
P3,523,680 P3,992,329 P4,523,330 P5,124,920 P5,806,517
Total Raw Materials Used
Add: Raw Materials Inventory, end
P 27,624
P 17,580
P 20,031
P 22,878
P 25,960
P3,551,304 P4,009,909 P4,543,361 P5,147,798 P5,832,477
Total Available for Use
Less: Raw Materials Inventory, beg
Total Raw Material Purchases
P 27,624
P 17,580
P 20,031
P 22,878
P3,551,304 P3,982,285 P4,525,781 P5,127,767 P5,809,599
Table 27: Raw Materials Purchases
Schedule IV- Direct Labor
2018
2019
2020
2021
2022
P 31,200 P 35,880 P 41,262 P 47,451 P 54,569
Cook (2)
P 12,766 P 14,681 P 16,883 P 19,415 P 22,328
Helper
P 43,966 P 50,561 P 58,145 P 66,867 P 76,897
Total Monthly Salaries
Multiply by no. of months in a year
12
12
12
12
12
P 527,592 P 606,731 P 697,740 P802,401 P922,762
Total Direct Labor Cost
Table 28: Direct Labor
Schedule V- Manufacturing Overhead
2018
2019
2020
2021
2022
P14,400
P14,832
P15,277
P15,735
P16,207
Water
P48,000
P49,440
P50,923
P52,451
P54,024
Electricity
P33,600
P38,640
P44,436
P51,101
P58,767
Gas/LPG
P14,400
P14,832
P15,277
P15,735
P16,207
Internet
P489
P489
P489
P489
P489
Depreciation-Equipments
P110,889
P118,233
P126,402
P135,512
P145,695
Total Monthly Manufacturing Overhead
12
12
12
12
12
Multiply by no. of months in a year
P1,330,668 P1,418,796 P1,516,825 P1,626,142 P1,748,336
Annual Manufacturing Overhead
Table 29: Manufacturing Overhead
Schedule VI- Depreciation
Manufacturing
Overhead
Gas Stove
Electric Grill
Freezer
Uptight Freezer
Frying Pan
Acquisition
Cost
P 2,499
P 1,199
P 24,800
P 19,000
P 3,300
Useful Life
(yrs)
5
5
10
10
5
Annual
Depreciation
P 500
P 240
P 2,480
P 1,900
P 660
Miscellaneous
Kitchen Equipments
P 1,640
5
P 328
Sub-total
Operating
Expenses
Total Annual
Depreciation
P 6,108
Building
Computer
Cash Register
Air Conditioner
Pendant Light
Furniture and
Fixtures
Miscellaneous
Office Supplies
P 312,000
P 12,799
P 11,700
P 90,000
P 50,000
5
5
10
10
10
P 31,200
P 2,560
P 1,170
P 9,000
P 5,000
P 15,950
10
P 1,595
P 2,455
5
P 491
Sub-total
Total
Depreciation
P 51,016
P 57,123
Table 30: Depreciation
PROJECTED CASH FLOW STATEMENT
For the Period of Five (5) Years
Pre-operating
Period
Dec. 2018
Dec. 2019
Dec. 2020
Dec. 2021
Dec. 2022
P7,756,250
P8,787,831
P9,956,613
P11,280,842
P12,781,194
P7,756,250
P8,787,831
P9,956,613
P11,280,842
P12,781,194
Cost of Sales
P5,409,564
P6,007,812
P6,740,346
P7,556,310
P8,480,697
Operating Expenses
P1,876,209
P2,139,620
P2,441,316
P2,786,876
P3,182,693
Drawings
P 200,000
P 250,000
P 300,000
P 350,000
P400,000
P 299,247
P7,485,773
P8,397,432
P9,481,662
P10,693,186
P12,063,390
P 700,753
P 270,477
P 390,399
P 474,951
P 587,656
P 717,804
P 700,753
P971,230
P1,361,629
P1,836,580
P2,424,236
P 971,230
P1,361,629
P1,836,580
P2,424,236
P3,142,040
Projected Cash Receipts
Sales Collection
Equity Contribution
P1,000,000
Total
P1,000,000
Pre-operating Expenses
P 37,905
Fixed Assets Acquisition
P 261,342
Less: Projected Cash
Disbursements
Total
Net Cash
Cash Balance, beg
Cash Balance, end
P 700,753
Table 31: Projected Cash Flow Statement
PROJECTED INCOME STATEMENT
For The Period of Five (5) Years
Dec. 2018 Dec. 2019 Dec. 2020
Dec. 2021
Dec. 2022
P7,756,250 P8,787,831 P9,956,613 P11,280,842 P12,781,194
Sales (Sch. I)
Less: Cost of Sales
Raw Materials Used (Sch. II)
Direct Labor (Sch. IV)
Manufacturing Overhead (Sch. V)
Total Manufacturing Cost
Add: Finished Goods, beg
Total Available for Sale
Less: Finished Goods, end
Total Cost of Sisig Made and
Sold
Gross Profit
Less: Operating Expenses
Administrative Salaries Expense
Sales Commission
Taxes and Licenses
Depreciation Expense (Sch. VI)
Amortization of Pre-operating Exp.
Miscellaneous Expense
Total
Net Income from
Operation
P3,523,680 P3,992,329 P4,523,330
P527,592
P606,731
P697,740
P1,330,668 P1,418,796 P1,516,825
P5,381,940 P6,017,856 P6,737,895
P14,500
P16,675
P5,381,940 P6,032,356 P6,754,570
P14,500
P16,675
P19,176
P5,124,920
P802,401
P1,626,142
P7,553,463
P19,176
P7,572,639
P22,053
P5,806,517
P922,762
P1,748,336
P8,477,615
P22,053
P8,499,668
P25,361
P5,367,440 P6,015,681 P6,735,394
P7,550,587
P8,474,307
P2,388,810 P2,772,150 P3,221,219
P3,730,255
P4,306,887
P1,039,584 P1,195,522 P1,374,850
P387,813
P439,392
P497,831
P155,125
P175,757
P199,132
P51,016
P51,016
P51,016
P7,581
P7,581
P7,581
P235,090
P270,354
P310,907
P1,876,209 P2,139,620 P2,441,316
P1,581,077
P564,042
P225,617
P51,016
P7,581
P357,543
P2,786,876
P1,818,239
P639,060
P255,624
P51,016
P7,581
P411,174
P3,182,693
P943,380
P1,124,194
P512,602
P632,530
Table 32: Projected Income Statement
P779,903
PROJECTED BALANCE SHEET
For the Period of Five (5) Years
Pre-operating
Period
Dec. 2018
Dec. 2019
Dec. 2020
Dec. 2021
Dec. 2022
P700,753
P971,230
P1,361,629
P1,836,580
P2,424,236
P3,142,040
P14,500
P16,675
P19,176
P22,053
P25,361
P63,239
P88,808
P126,873
P165,334
P202,929
ASSETS
Current Assets:
Cash
Inventories
Finished
Goods
Raw
Materials
Total
Total Current Assets
P700,753
P77,739
P1,048,969
P105,483
P146,049
P187,387
P1,467,112 P1,982,629 P2,611,623
P228,290
P3,370,330
Building (deposit)
Equipment and Tools (net)
Furniture and Fixtures (net)
Office Supply
Total Properties and
Equipment
P26,000
P52,438
P167,650
P15,254
P23,400
P46,330
P150,885
P12,694
P20,800
P40,222
P134,120
P10,134
P18,200
P34,114
P117,355
P7,574
P15,600
P28,006
P100,590
P5,014
P14,100
P21,898
P83,825
P2,454
P261,342
P233,309
P205,276
P177,243
P149,210
P122,277
P37,905
P30,324
P22,743
P15,162
P7,581
P1,000,000
P1,312,602
Properties and
Equipments:
Other Asset:
Pre-operating Expenses
TOTAL ASSETS
P1,695,131 P2,175,034 P2,768,414
P3,492,607
LIABILITIES AND CAPITAL
Current Liabilities
Capital
Beginning, capital
Add: Net Income
Total
Less: Drawings
Ending, capital
TOTAL
LIABILITIES
AND CAPITAL
P1,000,000
P1,000,000
P512,602
P1,512,602
P200,000
P1,312,602
P1,312,602
P632,530
P1,945,131
P250,000
P1,695,131
P2,175,034
P943,380
P3,118,414
P350,000
P2,768,414
P2,768,414
P1,124,194
P3,892,607
P400,000
P3,492,607
P1,000,000
P1,312,602
P1,695,131 P2,175,034 P2,768,414
P3,492,607
Table 33: Projected Balance Sheet
P1,695,131
P779,903
P2,475,034
P300,000
P2,175,034
CHAPTER 7
CONCLUSION
The research paper analyzed the literature concerning restaurant feasibility study, and
then based on the guidance of the literature carefully analyzed the different aspects of starting up
a restaurant business, which are market area, site evaluation, technical aspects of the venture, and
finally financial statement. The research came to the following findings:
1.
The target markets of the proponents are the students and faculty members of the
three universities, De La Salle University, College of St. Benilde, and St.
Scholastica’s College. Since almost half of the estimated 100 million Filipinos are
below 18 (which make it youth-oriented) and a large proportion of restaurant
consumers are between the ages of 16-24, it is highly beneficial for the proponents to
choose those target markets.
2.
The business will be in partnership wherein the proponents will closely manage and
supervise the operation for the assurance of quality product. They will divide the
tasks at hand so work will be done simultaneously. Profits will also be divided
equally.
3.
Based from the projected income statement, the project will earn P 465,920.00 on its
first year of operation and a rate of return on sales of 8%. The return on investment
is 1.08 or 1.08% and the cash payback period is .42 year or five months. The total
project cost is P 767,476.00.
The following recommendations are presented in the context of the firm’s commitment to
enhance its competitiveness in the industry. The intent is to enable the business to compete more
effectively in the local and domestic markets.
1.
Human Resource Development
-incentives in the form of improved salary and benefits, and employer
contributions
-adequate investment in HRD programs, participation in training strategies
-promote continuing education to enhance the skills of professionals and
technical workers to make them more competitive
2.
Information Technology Application
-adopt the use of information technology in marketing, advertising and
promotion
-conduct of training (i.e. computer-based training)
-waste management
3.
Strategies to Increase Market Share
-substantial discounts (given a period of time, the restaurant will give
coupons for special discounts to the customers)
-improved food quality
-quicker service
Bibliography
Arcilla-Serapio, Maria Perpetua. Fundamentals of Research and Thesis Writing. MaxCor
Publishing Inc.
Habaradas R.B., Tullao Jr. T.S. Pathways to Entrepreneurship. Quezon City: Phoenix Publishing
House, Inc. 2017.
Halt Jr. G.B. Douch Jr. J.C., Stiles A.R., Fesnak R. Intellectual Property and Financing
Strategies for Technology Startups. 2017, XV, 256 p.4 illus. Hardcover
Leuterio, Florida C. Technology and Home Economics. Manila: GMS Publishing Co., 1990.
Appendix B
COMPUTATION OF PROJECTED DEMAND
Year
Population
of DLSU
(a)
Population
of CSB
(b)
Population of
St. Scholastica
(c)
Total
Population
(d=a+b+c)
Estimated no. Of
Sisig Lover
(e=50% x d)
Demanded
Quantity (daily)
(f=e/4)
Demanded Quantity
(annual)
(g=f x 365)
2018
11,107
9,250
5,360
25,717
12,859
3,215
1,173,338
2019
11,218
9,343
5,414
25,974
12,987
3,247
1,185,072
2020
11,442
9,529
5,522
26,494
13,247
3,312
1,208,773
2021
11,786
9,815
5,688
27,288
13,644
3,411
1,245,036
2022
12,257
10,208
5,915
28,380
14,190
3,548
1,294,838
Appendix A