PABURRITO

A business concept
presented to
The Faculty of the Senior High School
Integrated School
De La Salle University

In Partial Fulfilment of the

Requirements for
PRACTICAL RESEARCH 2

Submitted by:
ABM 12F
Group Members

1) Aggabao, Jose Gabriel D. 4) Lumaque, Danica Louise T.

2) Celestial, Czarlyna Louise M. 5) Ravanzo, Spine H.
3) Gayapa, Audrie Chan B.

TABLE OF CONTENTS
EXECUTIVE SUMMARY

A. Venture History……………………………………………………………....……………6
B. Venture Description…………………………………………………………....………….6
C. Venture Organization……………………………………………………....………...........6
D. Venture Market ……………………...………………………………….…………...........7
E. Venture Operations…………………...……………………………………..…………….7
F. Venture Financing…………………....…………………………………………...……….8
I. MARKET RESEARCH
A. INTRODUCTION
i. Statement of the Problem………………………………………………………………..9
ii. Purpose of the Study……………………………………………………………............9
iii. Significance of the Study……………………………………………………………....9
iv. Theoretical Perspective…………...…………………………………………………..10

v. Research
Method………………………………………………………………………10
vi. Definition of Key Terms…………………………………………...…………………10
vii. Limitations of the Study……………………………………………………………..10
viii. Summary…………………………………………………………………………….10
B. LITERATURE REVIEW
i. Review of Related Literature…………………………………………………………..11
ii. Theoretical Construct………………………………………………………………….14
iii. Summary…………………………………………………………………...…………14
C. RESEARCH METHODOLOGY
i. Setting…………………………………………………………………...……….…….14
ii. Population……………………………………………………………………………..15
iii. Data Sources………………………………………………………….…….…..…….15
iv. Ethical Considerations…………………...………………………………….………..15
v. Research Design……………………………...……………………………………….15
vi. Interview and Instrument Protocol……………………………………….……..…....16

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 vii. Data Analysis Strategy……………………………………………………..….....….16
viii. Summary……………………………………………………………………...…….17

D. RESULTS………………………………………………………………………………...1
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i. FGD Data Findings………………………………………………………………....….17
ii. Conjoint Analysis……………………………………………………………...……...20
E. CONCLUSION…………………………………………………………………………...23
II. MANAGEMENT AND ORGANIZATION
i. Company Name…………………………………………………….…...……….…….24
ii. Company Mission-Vision……………………………………………………………..24
iii. Management Team……..…………………………………………….…….…..…….24
iv. Compensation and Ownership………...………………………………….…....……..25
v. Board of Directors/Advisory Council……………….…………………….……..…....25
vi. Infrastructure……………………………………....………………………..….....….25
vii. Contracts and Franchise Agreements………………………………….……....…….25
viii. Organization Chart………………………....………………………………....…….26
III. PRODUCTS AND SERVICES
i. Purpose of the Product/Service…………………………………….…...……….….….27
ii. Unique Features………………………………………………………………...……..27
iii. Stage of Development……..……………………………………….…….…….…….28
iv. Future Research and Development……………………………………….…....……..28
v. Trademarks, Patents, Copyrights, Licenses, Royalties………………….……….…....28
vi. Product/Service Limitations and Liability……....………………………..….........….29
vii. Related Products/Services and Spin-Offs………………………….……....………...29
viii. Production Process ………………………....……………………………....……....29
ix. Facilities, Materials and Equipment…………………...…………………....………..29
x. Suppliers……………...……………….………………....…………………………....30

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 xi. Production
Cost………………………....………………………………....………….30
xii. Environmental Factors……………………....………………………………....…….30
xiii. Labor Requirements…………………....………………………………....………...31
xiv. Government Approvals…………………....……………….………………...……...31
IV. INDUSTRY PROFILE
i. Current Size…………………………………………………….….…...……….….….32
ii.Growth Potential………………………………………………………………...……..32
iii. Geographic Locations……..………………………………….…….…….…….…….32
iv. Industry Trends……………………………………….…....……………………..…..32
v. Seasonality Factor………………….……….………………………………………....33
vi. Profit Characteristics……....………………………..…..........................................….33
vii. Distribution Channels………………………….……....………………………….....33
viii. Basis of Competition ……………………....……………………………....……….33
ix.Competition Profile………………...…………………....………………………….....33
x. Customer Profile...……………….………………....………………………………....34
xi. Target Market Profile……………....………………………………....……………....34
xii. Pricing Profile……………………....………………………………....……………..34
xiii. Gross Margin on Products/Services……………………………....………...………34
xiv. Break-Even
Analysis…………....……………….………………...……………..….34
xv. Market Penetration…………....……………….………………...……………….......34
xvi. Sales Representatives…………....……………….………………...………………..35
xvii. Direct-Sales Force…………....……………….………………...………………….35
xviii. Advertising and Promotions…………....……………….………………...……….35
xix.Packaging and Labeling………....……………….………………...………………...35

xx. Service and

Warranties………....……………….………………...………………….36

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 xxi. Trade
Shows………....……………….………………...…………………………....36
xxii. Future Markets………....……………….………………...………………………...36
V. OPERATING AND CONTROL SYSTEMS
A. Administrative Policies, Procedures and Controls……………………………………….37
i. Receiving Orders…....………………………………………….….…...……….….….37
ii.Billing the Customers…………………………………………………………...……..37
iii. Paying the Suppliers..……..………………………………….…….…….…….…….37
iv. Collecting the Accounts Receivable....……………….…....……………………..…..38
v. Reporting to Management………….……….………………………………………....38
vi. Staff Development…,..…....………………………..…..........................................….38
vii. Inventory Control…..………………………….……....………………………….....38
viii. Handling Warranties and Return…...……....……………………………....……….38
ix.Monitoring the Company Budgets...…………………....………………………….....39
x. Security Systems...……...……….………………....………………………………....39
B. Documentations and Paper Flow…………………………………………………………39
C. Planning Chart…………………………………………………………………………....39
i. Product/Service Development…....………………………………….....……….….….39
ii. Manufacturing…………………………………………………...……………...……..40
iii. Financial Requirements…..………………………………….…….…….…….……..41
iv. Marketing Flow Chart……………......……………….…....……………………..…..41
v. Market Penetration……...………….……….………………………………………....41
vi. Management and Infrastructure……...……………..…..........................................….41
D. Risk Analysis…………………………………………………………………………….42
VI. FINANCIAL PLAN
i. Sales Projections…....……………..………...……………………….....……….….….43
ii. Income Projections……………....……………………………...……………...……..43

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 iii. Cash Requirements…..…………………………..………….…….…….…….…….43
iv. Sources of Financing……………......……………….…....……………………..…..43
v. Attached Financial Projections...….……….………………………………………....44
VII. REFERENCES……………………………………………………………………………...48
VIII. APPENDIX………………………………………………………………………………...50

EXECUTIVE SUMMARY

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Venture History
The venture was first conceptualized on March 2017 by a group of individuals who share
the same ideas in making a business. Similar interests brought the group together in making the
said business, which would eventually be successful and would achieve the Mission and Vision
statements, which is: “To serve busy individuals on busy days who want to balance convenience
and health by giving them healthy, quality fast-food they can take on-the-go without worrying
about the price” to the consumers. The idea of solving a major problem common in the Philippines,
that is the incline of Filipinos to fast-food due to the fast-paced lifestyle, was the driving force of
the group that led them to execute this idea.

Venture Description
Paburrito ventures in the food industry, specifically in fast foods. Currently, the business
is in the introduction stage as it tries to enter and compete with the top fast food chains, such as
McDonalds and Jollibee. As a result, the products and services are continuously being developed
and innovated in order to provide total customer satisfaction and convenience.

Paburitto offers meal burritos that has various Filipino flavours as fillings, such as viands
like Sisig, Giniling, Chopseuy, and Adobo. These are made for busy workers or students who have
little to no time to eat a healthy meal. Paburrito offers services that produce burritos that make the
customers eat their meals on-the-go. Customers can choose from a variety of on-the-go meals that
consists of an equal proportion of our signature rice and a chosen viand that is conveniently
wrapped as a burrito. This product is what differentiates us to other fast foods. As it highly gives
importance to convenience, it can be compared to hamburgers that let people have a quick meal
and can make eating more of a mindless activity. Burritos can also accomplish this; however, it is
much healthier, more filling, and fitting for Filipino taste, since it contains rice and a viand.

Trademarks and intellectual property of the business such as logos or symbols will be
protected with copyrights.

Venture Organization
As a starting business, the legal structure of the company will be a general partnership for
an easy and less expensive start up. The partnership consists of the five writers of this paper, who
are Jose Gabriel Aggabao, Czarlyna Celestial, Audrie Gayapa, Danica Lumaque, and Spine
Ravanzo. This kind of structure is appropriate for the business since it gives us joint ownership,
equal right in the management, share of profit/loss, and the business owners do not have to pay
income tax.

In the first few months, operations will be done by the five owners to minimize the
expenses. The Chief Executive Officer is Danica Lumaque, since she is capable of making wise
decisions in the day-to-day management decisions and implementing all the short and long term

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plans for the business. The Chief Operating Officer is Spine Ravanzo because she knows how to
ensure a smooth operation of the daily process of producing the product. The Chief Finance Officer
is Gabo Aggabao to monitor the cash receipts and payments and investigate ways in reaching the
maximum potential of the business in profitability and business opportunities such as expansion.
The Vice President of Marketing is Czarlyna Celestial since she has the ingenuity to formulate the
business’s marketing strategy and has strong and persuasive communication skills. The Vice
President of Production is Audrie Gayapa because she is meticulous in planning and organising
the production schedules.

Venture Market
Paburrito was built for people who are in need of a convenient and on-the-go food. These
are the people who do not have time to stop and eat a whole meal. They are our target market and
the business aims to satisfy them with the varieties from the burritos. In order to excel in the
industry and in the market, the company must produce tactics, or marketing plans to be able to
attract and get more customers than the competitors; these are the fast food companies, like
Jollibee, Mcdonald’s, and alike. The only difference between Paburrito and the competitors is that
the viand that will be sold everyday are freshly cooked and healthy. Paburrito will also be having
kiosks to be more convenient and versatile to the market.

Venture Operations
The products and services of Paburrito is centered around a food item which is the burrito.
Development of the said food item in terms of the ingredients used and packaging is essential in
order to stay competitive in the market. Also, development of the services will not go unnoticed,
being able to serve swiftly and consistently is what defines the fast food industry. An amount of
Php 2,000 will be able to cover the cost of the initial development of the product. Experimentation
of ingredients will enable the researchers to hand-pick which ones will be best suitable to each
kind of burrito.

Marketing the venture will mainly be done on social media because of the different
opportunities it offers and the possible number of people it can reach. The owners will be able to
cut expenses while also being able to inform and attract more customers. Additionally, leaflets and
posters will be utilized which would cost around Php 1000.

In order to start operations an amount of around Php 10,000 will be needed for the initial
production of the burritos. The specified amount will also cover costs such as rent, utilities, and
miscellaneous expenses

Venture Financing
The starting capital of the business amounts to Php 10,000 altogether, which came from
the pooled funds of the partners, was distributed for its initial operations. The specified amount

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will also cover costs such as rent, utilities, and miscellaneous expenses. As the business grew, so
did the capital. The capital was used for expansion of the business with the help of loans from
banks. A loan of Php 1,000,000, with an interest of 8% and a term of 5 years will be acquired in
order to set up more stores in the busy places of various places such as Ayala Malls Solenad in
Laguna and Glorietta in Makati. This enabled rapid growth for the business to reach a capital of
Php 5,000,000.

CHAPTER 1
MARKET RESEARCH
A. INTRODUCTION
i. Statement of the Problem
Philippines, one of the developing countries in Asia, is projected to have an

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 expansion of cities and urban centers in the next 10 years. Urbanization means faster paced
lifestyles, and consumers’ time will become increasingly precious commodity. To cope,
consumers will look for products and services which provide convenience.

Highlights in the increasing patronage of convenience stores such as fast food

restaurants, with 29% of Filipino shoppers saying that they have visited convenience stores
in the past four weeks, up from just 8% in 2012 (Nielsen, 2015). The most common mission
for shoppers visiting convenience stores is buying a meal, snack or to fulfill a craving for
a particular food or beverage.

With the convenience-driven lifestyle of the people, the tendency to buy from fast
food restaurants are becoming high. However, there are health risks from eating fast food.
Regular eating in fast food restaurants can easily damage a person’s health. It can lead to a
variety of health problems such as weight gain, obesity, diabetes, cardiovascular
conditions, and all-cause mortality.

ii. Purpose of the Study

The purpose of this study is to review and analyze the feasibility of the idea of a
burrito fast food restaurant. This study is to know if the mentioned business would be
profitable in the industry being penetrated in. This will also be beneficial to those people
who plan to pursue their career in the food industry, helping them with determining cost,
managing the company and dividing the tasks, and knowing how to acquire money and
capital.

iii. Significance of the study

The significance of this study is to be able to give our readers, cooks, entrepreneurs
the sufficient knowledge about having a fast food chain, especially those that plan to open
up kiosks or stalls. This will give them an insight on how to handle this kind of business
and, at the same time, for them to be aware of the possible obstacles along the way. Factors
like the target market, costs, and the overall impact in the market of the business, will be
determined in the research for future studies that will be conducted.

iv. Theory of Theoretical Perspective

In this research, the Cognitive Theory will be used because it aims to understand
what drives the consumers or the target market to purchase the proposed product. The
researchers will apply it in planning the implementation of the business. The Identity
Theory falls under Cognitive theory, since it focuses on how people define themselves. It
questions the consumers choices, aspirations, concerns, and needs. Cognitive approach is
grounded in phenomenology which focuses on the first-person experience. Focus group

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 discussions exercises this phenomenology because it lets participants give accounts of their
experiences.

v. Research Method
The method used by the researchers to gather data is a focus group discussion,
wherein there are a chosen number of participants, a moderator guiding the discussion, and
an assistant moderator to take important notes. Focus group discussion was the chosen
method of the researchers because it easily measures opinions and inputs of participants
reliable enough to help determine whether the business idea is feasible. It can help
understand consumers’ perceptions, opinions, and behavior concerning Paburrito’s
products and services. It can also contribute to the product planning, since they can
generate ideas about the said product. Through focus group discussion, it will also be a
way to advertise and develop creative concepts and copy material.

vi. Definition of Key Terms

- Burrito - a Mexican dish consisting of a tortilla rolled around a filling, typically of
beans or ground or shredded beef
- Viand - an item of food or ulam

vii. Limitations of the Study

The limitations of this study is that the researchers asked busy individuals to
participate in a focus group discussion. The researchers failed to acquire inputs from a
wider range of individuals or market. Moreso, they failed to canvas for highly accurate cost
assumptions.

viii. Summary
Consumers will look for products and services which provide convenience. With
the convenience-driven lifestyle of the people, the tendency to buy from fast food
restaurants are becoming high. This study was performed to review and analyze the
feasibility of the idea of a burrito fast food chain to know if the mentioned business would
be profitable. The method used by the researchers to gather data is a focus group discussion,
wherein there are a few number of participants reliable enough to help with the study. The
limitations of the study includes focus group consisted of only six busy individuals, when
it should have involved more participants from a wider demographic. No thorough
canvassing was made to accurately determine the cost of production. Despite these
limitations, it was still successful and got enough information to continue.

B. LITERATURE REVIEW
In this chapter, it will be presenting the following: food consumption of busy
individuals, effects of skipping meals, importance of not skipping a meal, negative effects

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 of fast food, importance of a balanced diet, history of burritos and advantages of eating
burritos.

i. Review of Related Literature

In a nutritional study by researchers at Cornell University, half of the 50
participants consisting of working parents routinely resorted to unhealthy eating options
because of their work circumstances.

According to Devine (2006), the work schedule of parents were a primary obstacle
to better nutritional habits. Most of the parents couldn’t sit down with their families to eat
a meal that was prepared at home. These included skipping meals altogether, eating at
work, eating in the car, ordering take-out on the way home from work, choosing easy and
quick-fix meals to serve or overeating after a missed meal. Low-income wage earners in
the study admitted to skipping meals or not eating at home because of time constraints and
for financial reasons - some choose not to leave work and give up wages for a lunch break.

Long and irregular work hours are a primary cause of unhealthy eating habits.
People often resort to vending machines or fast-food chains, which often contain no
nutritional value, as compared to meals cooked at home.

In an article for livestrong.com, Clark (2015) states that the ideal amount of calorie
intake throughout the day is a 2000-calorie diet. It is enough to keep you energized and
for you to avoid overeating. Often heard, breakfast is the most important meal of the day.
Eating a healthy, balanced breakfast is ideal to jump-start your day. The body fasts for
more or less eight hours while sleeping.

Skipping meals have various negative effects on the body. According to Beal
(2016), there are 5 effects of skipping meals. First is the negative impact on one’s
metabolism: fueling the human body regularly supports metabolism throughout the day.
Second is it can lead to overeating or excessive snacking. Third is that it can increase stress.
When meals are skipped, the body releases adrenaline and other hormones to help give
energy. Fourth is skipping meals can lower blood sugar. It delays insulin response, which
can lead to diabetes. Lastly, it can cause an individual to gain weight. The body will
respond by holding on to food consumed causing weight gain.

Cutting back on meals mean cutting back adequate amounts of the vitamins and
minerals the body could take. The body’s cells are hard-wired for survival. According to
the National Institute of Health, skipping a meal has shown to make an individual feel
hungrier when the next meal comes.

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 According to a blog called healthgate, fast food is an affordable and convenient
way busy people resort to when on the run. However, regularly eating fast food can
seriously damage one’s health. Coupled with low nutritional value, high fat, high calorie,
and high sodium content of these food can lead to a variety of health problems. With
statistical associations to weight gain, obesity, diabetes, cardiovascular conditions and all-
cause mortality, regularly eating fast food could be dangerous.

A nutritious and well-balanced diet is the foundation of good health. Healthy eating
includes consuming high-quality proteins, carbohydrates, heart-healthy fats, vitamins,
minerals and water in the foods you take in. These nutrients are required to maintain cells,
tissues and organs to function correctly. Eating in this manner helps maintain the body’s
everyday functions, promotes optimal body weight and can assist in disease prevention.

According to Upton (2014), Burritos are one of the most popular Tex-Mex items
on the menu. There are quite a few stories about how the burrito name came to be, although,
not enough proof or evidences were recorded. Burrito means “little donkey” in Spanish.
One of the most popular stories is that a man named Juan Mendez from Chihuahua, Mexico
used a donkey to carry around his supplies for his food cart. To keep the food warm, he
would wrap it up in a big homemade flour tortilla.

Burrito made an appearance during the 1900s, right around the time of the Mexican
Revolution. This food item got popular due to its convenience and easy preparation. Thus,
the theory is that the concoction got its name because it was sold out of a donkey cart.

The term burrito was popular in Guanajuato, a state in central Mexico. The idea
was said most likely originated in Guanajuato. It has evolved a great deal since it was first
created. A mix of meat, cheese, and tomato has turned into a meal on-the-go with rice,
beans, meat, cheese, vegetables, and sauces wrapped up in a tortilla.

The first mention of a burrito on a U.S. menu was in the 1930s at the El Cholo
Spanish Cafe in Los Angeles, though it is most likely that the burrito has been making
rounds in the states before then. Once the U.S. got hold of the burrito, it started to cross
cultural boundaries.

According to a study by Mrunmayi Deo (2010), burritos are a great source of

vitamins A and C. They are high on calcium, and can be consumed on alternate days as
breakfast. It is also a source of iron, but high on sodium. In conclusion, burritos are a
healthy option, as long as they’re baked and not fried.

Based on a research conducted by Barra (2013), there are four factors on Filipino

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 buying behavior. One of those factors being convenience, it implies that the proposed
product will have an advantage as compared to food that are non-convenient. The data was
gathered through a media briefing. Other factors include: Filipinos want to be healthy,
clean and beautiful.

According to a study conducted by Nielsen (2015), the urbanization of cities lead

to faster paced lifestyles, meaning consumers’ time will become an increasingly precious
commodity. To catch up, consumers will look for services that are more convenient. 29%
of Filipino shoppers say that they have visited convenience stores in the past four weeks.
The most common mission for shoppers visiting convenience stores is buying a meal or
snack to fulfill a craving for a particular food or beverage item.

Based on the preliminary results of the 2012 Census of Philippine and Industry
(CPBI) that was conducted nationwide, restaurants and mobile food service activities
garnered the highest number of establishments. Restaurants and mobile food service
activities generate the highest employment and pay the highest compensation.

In a recent study on the pattern of consumption for food away from home or FAFH
of Filipino households conducted by Rufino (2015), it has been concluded that it has been
increasing monotonically over the years, reaching 89.61% of all households in 2012.

According to a Global Analysis Report in 2014, due to the increasing workforce

participation, as well as a population of time-pressed, urban consumers eagerly seeking
convenient meal options, have supported growth in Philippine’s foodservice market. Fast
food establishments remain the key subsector and are expected to continue registering
strong sales growth, due largely to the wide product offering, convenience, and
affordability they can provide customers.

With the information collected from previous literature, the proponents could
assume that fast food is a hit, or rather a necessity for busy people, hence, making the
business plausible based on the demand.

ii. Theoretical Construct

Cognitive Theory is the theory that is going to be used in this feasibility study. One
theory that could support how Cognitive Theory will help the research is the Identity
Theory. It is focused on how people define themselves. It is interested on the aspirations,
needs, and demands of the consumers. This theory helps with the business’s market
segmentation, eventually knowing what market it will venture on and what that market
needs.

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iii. Summary
In a nutritional study by researchers at Cornell University, half of the 50
participants consisting of working parents routinely resorted to unhealthy eating options
because of their work circumstances. People often resort to vending machines or fast-food
chains, which often contain no nutritional value, as compared to meals cooked at home.
Burritos became popular due to its convenience and easy preparation and are also a
healthier option.

Restaurants and mobile food service activities generate the highest employment and
pay the highest compensation due largely to the wide product offering, convenience, and
providing customers economically. To sum it all up, when a consumer has a positive
behavior towards the products, they will consider purchasing from the business.

C. RESEARCH METHODOLOGY
Focus group discussion or FGD is the method the researchers chose to gather data.
This focus group helped determine the feasibility of the business idea Paburrito. The
researchers gathered a group of six busy individuals, including both students and working
people. Since the target market are those who are too busy to sit down for a meal, this focus
group discussion will produce reliable data to continue this venture.

i. Setting
The focus group discussion was conducted through a group chat in Facebook
Messenger. Researchers decided to conduct the FGD wherein easy to operate, accessible
and convenient for the participants since the target market of the business and the chosen
participants are busy people.

ii. Population
The size of the population was determined by the ideal amount of people needed to
assess the feasibility of the business idea and for a focus group discussion, which is six.
Meanwhile, the participants in the FGD was determined by the target market of the
business, which is for busy, on-the-go individuals who are too occupied to be able to eat
properly and let alone cook their own food. The researchers chose both students with
extracurricular activities and working individuals.

iii. Data Sources

The data will be coming from the FGD or Focus Group Discussion that was
conducted by the moderator and an assistant moderator. FGD will include participants that
has different work habits, such as working people and students. Aside from the data that
will be gathered through the FGD, the researchers applied PESTLE and Porter’s Five
Forces analysis to find out external factors, which could determine the surrounding factors

14
 that could affect the business and identify effective strategy making.

iv. Ethical Considerations

To conduct the focus group discussion properly, the welfare, security, and privacy
of our participants were considered. Possible participants are selected and contacted to ask
for their consent in partaking in the focus group discussion, once they have agreed; the
time and date of the discussion will be given to them . The researchers made sure that the
questions were appropriate for the topic and were to serve its purpose, for collecting data
that will check the feasibility of the business and to help the business idea improve. Only
information relevant to the study was disclosed in order to protect the privacy of the
participants.

v. Research Design
The entire research study was conducted through a step by step process that started
with gathering more data and insights about the business idea we have created. That first
step is to conduct a focus group discussion with the chosen number of participants. Before
conducting the focus group discussion, the preparation of the questionnaires was made.
The next step is to invite the chosen participants fitted to the criteria or target market of the
product at a specific time, date, and place that the discussion will occur. In this study, the
chosen place is in Facebook Messenger through a group chat for convenience. When
participants are all set to be part of the discussion, they will be added to a group chat in
Facebook Messenger. The next step is to conduct the FGD. With all the information they
have gathered from the FGD, the researchers are now equipped to start the research paper.
This step is where all the gathered information are collected, organized, and divided into
four sections: the (a) Executive Summary, (b) Market Research, (c) References, and (d)
Appendix. Particular tasks are assigned to each researcher to make sure that everyone will
have a fair share in the study. The collected related literature review in the previous step
are applied in the business concept paper. In the making of the business concept paper,
summarization and analyzation of the results of the FGD are illustrated. Execution of the
PESTLE and Porter’s Five Forces Analysis will then be done to test the business idea’s
competency and to identify effective strategy making. The group also made use of conjoint
analysis to further identify the requirement of the market.

vi. Interview Instrument and Protocol

The survey will be conducted through a Focus Group Discussion to ask the
participants about how will the business idea be feasible. A list of questionnaires were
prepared which was analyzed by the researchers and approved by the researcher’s mentor
Mr. Reymund Gonowon. The logic behind the questions prepared was to determine if our
business idea will be marketable to our target market, the busy people. These questions
requires the participants to collaborate about their insights on what are the strengths,

15
 weaknesses, threats, and improvements our business idea has. The researchers expects
open-ended responses from the participants so the participants could answer with no
limitations or boundaries.

Our discussion happened in a group chat in Facebook Messenger whose members

are only the participants and the moderator. The researchers believes that having only the
moderator and the participants in the group chat will make the participants feel the privacy
of the information they will share during the discussion. In this way, the participants will
not have the tendency to be conscious on what they are going to share with the other
members of the discussion.

vii. Data Analysis Strategy

After the focus group discussion, the responses of the participants were listed down
and summarized. Responses were ordered by its corresponding question and only
important points were included in the summarization. With the summarization, possible
threats and weaknesses were identified and will be considered. Of course, the feasibility of
the business idea was also tested by the focus group discussion questions and was given
positive feedback by the respondents because of its uniqueness. With the data, the business
idea can be improved upon in order to overcome the identified weaknesses and maintain
its strengths.

viii. Summary
The chapter has discussed about how the research will be carried out in order to test
the feasibility of the business. Data will be gathered through an online focus group
discussion using Facebook Messenger, ethics will still be applied as if it is a regular
interview. Busy individuals were chosen as participants which was determined by the target
market of the business. Six individuals, students with extracurricular activities and working
individuals, will be chosen to represent the population. The data that will be gathered will
then be summarized in order to identify the weaknesses and strengths of the business idea.

D. RESULTS
i. FGD Data Findings
In our Focus Group Discussion happened on March 22, 2017, at 8:30 to 9:30pm
through a group chat in Facebook Messenger, one of the researchers Czarlyna Celestial
served as the moderator of the discussion with the help of Danica Lumaque as the assistant
moderator. Six people fitted in our criteria or target market, the busy people, were asked to
be a part of it. Among the six participants, three of them are Grade 11 student leaders and
athletes of De La Salle University Integrated School, namely Ms. Geallan Dizon, Ms. Ricci
Grapilon and Mr. Miguel Savadera. The other three are working people, namely Mrs.

16
Nancy Gayapa, a Finance Manager, Mr. Laurence Montañez, a technical and sales, and
Mrs. Jenalyn Lumaque, an Operations Manager. In terms of their gender, four of them are
female, namely Ms. Geallan Dizon, Ms. Ricci Grapilon, Mrs. Jenalyn Lumaque and Mrs.
Nancy Gayapa while the remaining two of are male, namely Mr. Laurence Montañez and
Mr. Miguel Savadera.

The participants are known personally by the researchers. As a result, the

researchers were able to analyze the answers in a deeper depth based on their identity and
experiences in life. The participants were asked a list of questionnaires which requires them
to share insights about the proposed business idea and collaborate with the other
participants. The following points are the summarization of the participant’s answer and
are grouped according to the theme; the factual information about the participants, their
preferences and opinions, suggestions and threats.

The factual information about the participants

● They are all very occupied with their time.
● Some of them can’t eat the complete 3 important meals of the day during work days.
● All of them eat in fast food restaurants.

Their preferences and opinions

● Ms. Geallan Dizon, known as always having no parents at home, and Mr. Laurence
Montañez, known as an employee who works away from his real home, prefer cooking
on their own but during work days, buying outside for their meals are their only choice.
● They say that fast food restaurants help them save time during their workdays since
their service is fast and convenient. Having that said, it still satisfies their wallet
because it’s cheap.
● They all agree that fast food restaurants is a big factor in managing their schedule.
● When asked if they wish there is an on-the-go meal which is healthier than other
processed fast food meals, they all said yes.
● Participants were asked if they would opt for more expensive fast food if it means being
healthier compared to other fast food, 4 of them agreed, and 1 said most probably, and
said depends on how expensive.
● When the business concept of Meal Burrito was introduced, 4 of them said it is a good
idea.
● Having a price range of 100-120, Mrs. Jenalyn Lumaque thinks it’s not that expensive
compared to other fast food. Ms. Ricci Grapilon agreed.
● When asked if they think our proposed business concept is feasible, they agreed it
would be feasible since there are not much burrito fast food restaurants in the
Philippines.
● When asked if they think our proposed business concept will be marketable, they all

17
 agreed since it is affordable, convenient, good on-the-go food, and it’s all in one or a
complete meal on-the-go.
● The moderator Czarlyna Celestial asked if they would buy our Meal Burrito. Gladly,
everyone said yes.

Suggestions for improvement

● Mr. Laurence Montañez suggested that parking space is a must for busy people
travelling on the road like him.
● Ms. Grapilon shared her insight that we should focus on our preparation time for the
food since waiting can be a dilemma for busy people.
● Mrs. Gayapa advised that we should trim down our price since 120 is expensive for
ordinary employees.
● Ms. Dizon recommended to have combo meals as one of our menus. She also
recommended having 120 pesos as the price of the burrito with drinks would be a great
idea.
● Mrs. Lumaque suggested that we should have a variety.
● Ms. Dizon proposed that we should conduct a survey in the potential places we are
eyeing to put up our business to know the occupation of the employees and know if
their budget is suitable to our price range.
● Mr. Savadera reminded us that we should make sure that one serving is enough to
satisfy the appetite of a tired employee.
● When the participants were asked for some suggestions on how we would be able to
come close to their favorite burrito, Mr. Savadera said he prefers a burrito that has an
equal proportion of rice and meat while Ms. Ricci Grapilon suggested to have larger
servings.
● Ms. Dizon said she stopped eating rice so she hopes we could offer a burrito full of
vegetables.
● Mrs. Gayapa suggested a brilliant idea of offering Filipino burritos that offers Filipino
favorite dishes such as tapa.
● Ms. Grapilon warned us to scout our competitors very well while Ms. Dizon advised
us to know our market very well too. Mrs. Gayapa said that we should just have a very
good location.
● Mr.s Montañez suggested that we should make it available in convenience stores such
as 7-eleven, mini stop, and other stores.

Possible Threats
● When asked what they think are the possible threats of Meal burrito, Mr. Montañez said
“sawa factor” and everyone agreed.
● Mr. Montañez reminded us that the existing popular fast food restaurant KFC also offers
a burrito.

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 ii. Conjoint Analysis
Through a survey asking the preference of profiles from 20 participants, a conjoint analysis
was conducted. 30 different product profiles and 20 participants netted 600 outputs which was then
used for the analysis through Microsoft Excel. See table 2 in appendix.

Referring to the regression statistics, see tables 3 and 4 in appendix., the results show that
31.65% of the variation in Ranking is explained by the independent variables. The Significance of
the test is 2.21, meaning that not all independent variables, which is the ranking of the attributes,
have a coefficient of 0. All attributes, as seen in the P-value, are a significant predictor since their
values are less than 5%.

-11.315 x Small + -5.95 x Medium + -3.86667 x Adobo + -2.06667 x Sisig + -1.54167 x Giniling
+ -1.31667 x Chopseuy + -0.32667 X Dine In + 23.17667(Intercept)
Using the given formula, we have arrived with the product preference of each profile, see
table 5. Since we asked our respondents in the survey to rank the profiles from 1 being the most
preferred and 30 being the least, this would mean that the product preference closest to 1 is the
most preferred, which is profile 1.

E. CONCLUSION
A focus group discussion and survey questionnaire were utilized in order to gather
data on the business concept, the former giving qualitative data while the latter giving
quantitative data. Results from the focus group discussion netted a positive outlook on the

19
 business. Four out of six of the participants said that the business concept was a good idea.
And all of them agreed that it will be marketable. They also gave out suggestions to make
the business better which we will highly consider since the participants themselves are part
of our target market. In addition, the survey questionnaire through the use of google forms
gave us data on the preference of product profiles of twenty grade 12 students. With the
data, a conjoint analysis was conducted, giving us insight on which specific elements were
most preferred by the respondents which is profile 1, the small, adobo, and dine-in.

CHAPTER 2
MANAGEMENT AND ORGANIZATION

i. Company Name

The business name “Paburrito” is inspired from the Filipino word “paborito” which means
favorite in Tagalog. It aims to Paburrito is located at 21st Street in Bonifacio Global City.
Paburrito’s logo is simply the company name and a pixel art picture of a burrito. The colors are
made that way to attract customers’ eyes using colors, but at the same time, remain minimalistic
and not over the top.

ii. Company Mission-Vision

The business Paburrito, aims to serve busy people on busy days who want to balance
convenience and health by giving them healthy, quality fast-food they can take on-the-go without
worrying about the price. Paburrito aims to satisfy both people — customers, employees, other
companies — and the planet.

The company envisions itself to be successful; opening up kiosks and restaurants nation-
wide in various busy areas in order to accommodate busy customers to fully attain its mission.
Paburrito aims to not only cater to the needs of busy individuals, but also people in dire need. The

20
company seeks to help out in charities.

iii. Management Team

According to Business Dictionary, an entrepreneur is someone who exercises initiative by
organizing a venture to take benefit of an opportunity and, as the decision maker, decides what,
how, and how much of a good or service will be produced. The important entrepreneurs worth
noting are Jose Gabriel Aggabao, Czarlyna Celestial, Audrie Gayapa, Danica Lumaque, and Spine
Ravanzo. The business’s accountant is Jose Gabriel Aggabao. He is in charge of the books and
taking note of the transactions going in and out the business. He makes monthly financial
statements and balance sheets, collects receivables, and managing the cash. The business’s
marketing manager, on the other hand, is Czarlyna Celestial. She is in charge of promoting and
selling the product. The marketing manager also is the one in charge of bettering customer
satisfaction by meeting their needs and wants through product innovation. The purchases manager
of the business is Audrie Gayapa. She is in charge of the supplies, equipment, and inventory of the
business. She handles the transactions between the business and the supplier. The quality control,
safety, and environment manager is Danica Lumaque. She is in charge of the quality control of the
products going in and out of the business. The quality control, safety, and environment manager
also is the one to train new employees in different fields of the business. Lastly, the operations
manager is Spine Ravanzo. The operations manager has the heaviest responsibility out of all since
she is the leader of the operations. The operations manager also handles the interaction with the
clients, lenders, and partners.

iv. Compensation and Ownership

The total level of compensation awarded to members of the Board of Directors, including
pension contributions, benefits in kind and all other aspects of compensation are not computed and
distributed yet. However, the share ownership is distributed to all the main people involved in the
business like Jose Aggabao, Czarlyna Celestial, Audrie Gayapa, Danica Lumaque, and Spine
Ravanzo

v. Board of Directors/Advisory Council

The CEO or Chief Executive Officer is Danica Lumaque. The COO or Chief Operating
Officer is Spine Ravanzo. The CFO or Chief Finance Officer is Jose Gabriel Aggabao. The Vice
President of Marketing is Czarlyna Celestial. The Vice President of Production is Audrie Gayapa.

vi. Infrastructure
The business’s outside advisors will be Ms. Maya Magiliman as the accountant, Ms. Jayel
Jumagdao as the lawyer, and Ms. Windie Odoño. These outside advisors will have the average
level of the compensation package since the business will only need an accountant at the end of
the year, a lawyer when needed in legal services, and a consultant a few times.

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vii. Contracts and Franchise Agreements
When a group is interested in franchising Paburrito, both parties will have their own
benefits. Paburrito is easy to avail for franchise since interested groups can contact the business
with the use of Social Media. It would also be less of a hassle to gain profit compared to starting
a similar business from scratch, along with having a probability to gain profit if formulas such as
low cost supplies and good marketing techniques are met.

Though this may have benefits to the franchisee, there are requirements that need to be
considered before contacting the business. First, the franchisee must be sure to invest in this
franchise and is one of their most preferred business compared to other potential businesses. The
franchisee must also be aware of the operations and how the franchise works, which could be
observed in different branches of Paburrito. They should also read the Terms and Conditions and
the Franchise Agreements to understand what this certain franchise should sell. Along with the
given contracts, they should also know if the terms of Paburrito are compatible with the laws of
where the franchise will be placed. Lastly, the franchise should also be placed where it suits best
for business operations.

Franchise Agreements involve in the different conditions the franchisee should follow in
franchising a business. In Paburrito, the franchise agreements revolve in the list and quantity of
products to be sold, the cleanliness of the kiosks, the fees and expenses to be paid, the services
offered, and the intellectual property.

The list of products to be sold in Paburrito will highly be focused on the Filipino Flavors,
such as Adobo, Sisig, Giniling, and Chopsuey. The quantity of the products will be around 50-
200, which will be replenished weekly. The different tools to be used in the kiosk should always
be cleaned before and after use. The kiosk itself should also be clean and appealing to the
customers. The fees and expenses will be first shouldered to the franchisee, and will be paid by
the business itself at the end of the week along with the report of the business’s progress. The
services also should be first agreed by the business itself before the different franchises could apply
these services. The intellectual property should also be shared to no one else but to Paburrito. If
these rules are not followed, then Paburrito has the right to take away the franchise from the
franchisee.

viii. Organization Chart

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 Danica
Lumaque

Czarlyna Jose Gabriel Spine Audrie

Celestial Aggabao Ravanzo Gayapa

CHAPTER 3
PRODUCTS AND SERVICES

i. Purpose of the Product/Service

Paburrito aims to serve fast food in the form of a burrito. Compared to other fast foods, the
burrito that will be offered is much more healthy and reminiscent of Filipino dishes. This provides
convenience because of the way a burrito is wrapped and packed and also provides comfort
because of what the burrito contains. With the said benefits, they could give less attention to eating
and give more attention to the more important things they need to do while still being able to
consume a whole meal in a rather easy fashion.

ii. Unique Features

Paburrito has products with factors that could grab the attention of the target market. These
factors could be compared to the same product of potential competitors, and would result more
positive attributes to Paburrito more than the other competitors in the market.

Starting off with the quality, Paburrito’s products have a variety of fillings to choose, such
as Adobo, Sisig, Ginilig, and Chopsuey. These are also Filipino themed, which could be rarely
found in potential competitors. These competitors may also have Filipino fillings, though this may
be focused on fried viands. Army Navy, one of the potential competitors, as an example, has
fillings such as Longganisa and Adobo Flakes. These viands are fried in oil, and some customers
are not in favor of a burrito that is too oily. In Paburrito’s case, the viands are not deep fried in oil,
with Sisig as an exception. These burritos are considered healthy for the consumers since it has
sauces and it has a little amount of oil when cooked.

23
 Paburrito’s products also have a generous amount of rice and its filling wrapped on a
toasted tortilla, which would make the customers feel full whenever they have finished consuming
the product. Compared to KFC, another potential competition, the size of the burritos are small
and thin, which would make the customers think they not satisfied with the product. In Paburrito,
the size would vary, but the small size would be bigger than the ones in KFC, and would have
enough rice and burritos to fully satisfy the consumers.

The cost of Paburrito’s products would range from PHP 100-150. These burritos are
affordable for the desired target market, to which consumers can save PHP 50-100 when they
purchase Paburrito’s products instead of the potential competitors such as Army Navy or Silantro.

In terms of the design of the packaging, Paburrito is taking a simplistic design, yet it would
be convenient for the consumers. Since Paburrito will heavily focus on the convenience of the
product rather than the design, the business decided to have a simplistic yet elegant design rather
than having a colorful and extravagant packaging. In comparison to Army Navy, the packaging of
the burrito has a simplistic design, yet the packaging only consists of an Aluminum Foil, it would
be inconvenient with the customers since it might rip off and the burrito will fall. In Paburrito’s
packaging, the burrito would be wrapped in aluminum foil and is then placed on a cardboard like
package to which can be torn and the burrito can be placed back to the packaging for convenience
purposes.

iii. Stage of Development

When Paburrito started its operations, there was only one product. Since this product was
effective and sold well to the consumers who passed by the area, the business decided to add more
to the list of products, which were resulted to the viands Sisig, Giniling, and Chopsuey. Eventually
the business will be adding more products in the future to further have a more varied menu that
could possibly widen the market and increase the sales of the business.

Based on the list of products and the operation of the business, Paburrito is currently at the
introduction stage, since the products are still not at its peak in terms of selling. The number of
products is limited that consumers may want a viand that is not available in the menu, which could
lead to a huge loss in the business.

Since the business is at the introduction stage, it could have further developments to
improve the production and selling of the products. To resolve the given problems, the business
should add more products in the menu. In this case, the burritos should have products that vary
from meat to vegetables. In that way, customers would have more options to choose from and it
could attract new customers from it.

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 iv. Future Research and Development
In order to keep up with the fast changing society, the business would change the viands
that will be served every now and then, so that consumers/ buyers would not be fed up with the
meals that will be served everyday. Surveys would be done again to be able to know which type
of food would be suitable to replace the old ones. In terms of the market place however, expanding
the business is inevitable, by then the business would probably have 5-6 branches in different areas
already, ready to serve and satisfy the customers.

v. Trademarks, Patents, Copyrights, Licenses, Royalties

The main copyrights that have been obtained are the logos, packaging, and of course, the
brand/business name. It is hard to establish license or royalty agreements for our product, since
the food industry is very flexible and influential within each other. Food is a not so complex
concept that all restaurants have similarities with the products they sell. Simply put, no future
agreements are planned to be executed by the business.

vi. Product/Service Limitations and Liability

A fast food restaurant’s target markets are mainly the working class and those who want a
quick meal. This would mean that the main consumers of fast food are those who are in a hurry,
which in case not everyone is always in a hurry and Since Paburrito is a fast food restaurant it is
affected by the said limitation. Lastly, in order to quickly serve the customers, there is a possibility
that the quality of food served will not be consistent.

vii. Related Products/Services and Spin-Offs

Paburrito’s edge, as compared to other restaurants that sell on-the-go food, is that it offers
products that are flexible to fit the wants of the consumers and not just the needs. It offers burritos
that are inspired by famous Filipino dishes. The uniqueness of the products offered by Paburrito
is what’s going to make the venture stand out, hence, gaining a wider market. The Philippines is
getting more and more commercialized, making more busy people who need food that aren’t
prepared by them while it can still be able to sustain a healthy diet. We grabbed this opportunity
to create a business we foresaw to be helpful and relatable. As of now, burritos are the only
products the business is selling, but we’re not closing our doors on expanding our menu.

viii. Production Process

The production process of the product of Paburrito is quite simple. Raw materials would
be obtained from the suppliers, such as the meat, vegetables, and pita bread. These raw materials
will be transported to the main branch, in which they will be transformed into ready-to-cook viands
to be exported to each branch of Paburrito. These ready-to-cook viands will only be heated and
prepared at the other smaller branches to be served fresh directly to the customers. The costs will
include the purchasing of the raw materials/ingredients, transportation (rent for the trucks used to
export), and rent for main branch. A couple of subcontractors will also be hired, such as drivers

25
for the transportation, which will also be a part of the cost for their salary. Since this is a start up
business, most of the production process will be held internally instead of subcontracted out to
lessen production costs.

ix. Facilities, Materials and Equipment

A production area within the main branch will include all things that will be needed in
order to prepare burritos such as cookwares, ingredients, and packaging items. The production area
will be divided into three smaller areas, which are cooking, assembly, and packaging. The cooking
area is where the viands will be mass produced through the use of various cookware such as large
cooking pots which should enable the said activity. The viands coming from the cooking area will
be brought to the assembly area in order to be put together into a burrito. Lastly, the packaging
area is where the burritos will be wrapped and packed to be delivered to the various kiosks which
will sell the product.

x. Suppliers
The major raw supplier would be the wet market, since the meals would be served fresh
daily, the researchers would need fresh ingredients everyday. For the packaging and labeling, the
business decided to hire packaging enterprises, like Unlipack Packaging in the Philippines. It
would save time and would be sure that the packaging is of good quality. If ever these main
suppliers won’t be able to provide the necessary goods needed, the backup suppliers would be
supermarkets, bulk orders. Since bulk orders would be bought, the price of the goods would be
cheaper.

xi. Production Cost

The researchers did a trial production by purchasing the ingredients required for the
burritos and recorded how much of a particular ingredients is needed for a specific burrito. Through
the trial production, the researchers were able to find out the cost of production of the burritos. The
cost will be at around Php 65 to 115 depending on what kind of burrito. The reason for this is
because of the difference in ingredients per each viand in the burrito, such as the giniling burrito
would cost more compared to the adobo burrito because it requires more ingredients which are
more expensive compared to the latter.

xii. Environmental Factors

The environment can make a great impact on the business in terms of the product and the
operations. There may be positive impacts to the business, but most likely there will be negative
impacts compared to the positive.

The climate and weather of the location can greatly affect the employees and also the
products. If the climate in the area is humid or hot, there is a tendency that employees will have a
hard time executing their full effort from the heat. As for the products, the supplies of the raw

26
ingredients might lessen due to the heat and would make the crops wither and animals die from
dehydration. This would greatly affect the production of the burritos and would increase its price
in order to achieve profit.

The availability of the raw ingredients in the certain environment will greatly affect the
product. If there is a limited amount of resources, Paburrito will result to either purchase
ingredients from another supplier that could be farther from their area, or going to the supermarket
and get the raw ingredients. Once these decisions are made, then the freshness of the ingredients
might decrease, since receiving the ingredients from a supplier from a far place might take time,
and the ingredients from the supermarket might be in the shelves for a long time. This will greatly
affect the quality of the product and will definitely lose customers.

In order to solve these problems or improve them, Paburrito must first assess the area and
ensure that the environment must be fitting to the product that will be sold. As these problems are
cited, Paburrito should try to avoid and prepare net losses if it is inevitable given the circumstances.

Another solution is to provide facilities that would satisfy not only the customers, but also
the employees. If the weather is hot and dry, Paburrito should place air conditioners and fans to
make consumers feel comfortable and will make employees work to their full potential. To address
the availability of raw ingredients, a solution for this problem is to lessen the production. If ever
the stocks run out, operations would close for a day or two to a week to replenish supplies. This
would be better than finding another supplier or going to a supermarket since that would cover up
bigger expenses that could lead to a net loss.

xiii. Labor Requirements

Our ideal number of laborers or employees are six in a store and one in a kiosk. Four of
them would be for cooking which requires cooking skills and ingenuity. For the two, they would
be for packaging and in the cashier. Cashiers would require a fast pace in working and at least a
good skill in basic mathematics. A kiosk will only need one laborer because it is small enough to
be handled by a single person, also there is no cooking required for the kiosks since the burritos
will be delivered to the said kiosk. The laborers are required to have a Health Certificate to ensure
that they don’t have any severe sickness that can be contagious to his/her co-worker or to the food
he/she is producing, which is crucial for the business because Paburrito needs to establish and
maintain its quality. According to the Philippines’ labor code, laborers are required to have a Social
Security System or SSS to ensure to ensure their retirement pension and a Pag-Ibig fund for
housing loan. These two requirements will also be accomplished for the laborers of the business.

xiv. Government Approvals

In order to start operations, a number of requirements must be fulfilled namely registration
of the business name and registration of the partnership in the Securities and Exchange

27
Commission (SEC), registration for taxes in the Bureau of Internal Revenue (BIR), Barangay or
District Permit, and Mayor's Permit. As required by law, registration of the business to SSS,
PhilHealth, and Pag-Ibig is also needed for the welfare of the employees. Each municipality will
at least have one store. These stores will need to acquire the Barangay or District Permit, Mayor's
Permit and other permits/clearances individually.

CHAPTER 4
INDUSTRY PROFILE

i. Current Size
Paburrito is a business in the food industry that produces burritos of Filipino-
themed fillings. As stated, the vision and mission of Paburrito will be, “To serve busy
individuals on busy days who want to balance convenience and health by giving them
healthy, quality fast-food they can take on-the-go without worrying about the price”, along
with the goal to satisfy a consumer with the product. Paburrito also would aim in gaining
profit, a growing revenue, along with a ability to pay all debts in time. The business will
focus on customers who are busy to the point they do not have the time to make their own
meals nor regularly eat three times a day, specifically the working class and students. The
business will start the operations as a kiosk in different parts of Manila, preferably in
Makati.

ii. Growth Potential

Paburrito is a stable industry, since the products will sell well to the consumers.
Though, this may also be considered as a growth industry because of the potential fillings
that Paburrito can add into the menu, along with the number of audience that Paburrito can
turn into potential consumers. Paburrito does not want to stay in a stagnant industry, which
will eventually turn into a declining industry, but wants to keep on growing so it could be
into a more successful business.

iii. Geographic Locations

Paburrito will be located in industrialized areas, specifically the business sector
areas and in malls. The business aims to have a place located in Bonifacio Global City and
the malls of Makati City. Since the price of the products are not cheap compared to fast
food chains, Paburrito decides to locate it in an area where individuals and families from
the middle to high class. These requirements are met for the desired places, since Bonifacio
Global City and Makati City are considered as crowded places for leisure, work, and
education.

iv. Industry Trends

The burritos will range from PHP 100-150, which includes regular sized drinks.

28
 The business will sell their products in different kiosks or kiosks in malls. One way to
promote the products is the use of Social Media. Paburrito will publish pages in Facebook,
Twitter, Instagram, and a separate website. The business would also use billboards and
signs, along with posters and flyers as handouts.

v. Seasonality Factor
Paburrito will have a soft opening in the two shops located in Bonifacio Global City
and Makati, which would have promos and discounts, such as having an upgrade in their
drinks when a customer purchases a burrito or having a free burrito when one purchases
five or more. It will also have promotions when there are working and non-working
holidays. Paburrito will release fillings related to the Holiday, along with discounts and
promos that could also reel in customers in the food business. An example of a Holiday
related filling would be Ham with the Pineapple sauce during the season of Christmas,
along with add-ons such as Queso de Bola.

vi. Profit Characteristics

Based on the benchmark conducted by the group in Bonifacio Global City, there
are 3 stores that sell similar product. Store A sells their burrito for PHP 97. Store B sells
their burrito for PHP 200. Store C sells their burrito for PHP 300. The pricing strategy that
Paburrito is applying is penetration so that demand is first heightened through low prices,
and then increased when market is already wide.

vii. Distribution Channels

To be able enter the market effectively, the business must use distribution channels.
There are about five different channels of distribution but only two are viable for the
business. The first one is the direct channel, this consists of the producer and the consumers
only. This would mean that as soon as the burrito is produced it can then be sold to the
customers already. The second one uses a retailer as an intermediary, retailers will buy
stock and then resell it to the consumers. Examples of the said retailers are 7-Eleven and
cinema food kiosks in malls.

viii. Basis of Competition

In the fast food industry, according to WebMD, three of the main reasons for the
popularity of fast foods is the price, convenience, and speed of service. Existing
competition, such as McDonalds, will be of course a hindrance to the growth of the
business, but the difference of foods/products offered may give us an edge. Our product,
being a burrito, offers Superior convenience because of its compactness and size.

ix. Competition Profile

Our competitors are well established and well known, such as McDonalds, Jollibee,

29
 KFC, and mostly known for their quickness of service and their signature chicken dishes.
Our main advantage against our competitors is the superior convenience and speed of
service because of our product.

x. Customer Profile
Our intended customers will be those who are busy and who live in urban areas,
mainly those who work and go to school. According to our Focus Group Discussion, which
had samples ranging from Senior High School to working fathers/mothers, they had a
positive reaction to our proposal and had even suggested ways to improve our service and
product.

xi. Target Market Profile

The target market would be people who need on-the-go food, those who go to work
in the morning and don’t have time to eat breakfast at home. That will keep them full but
convenient at the same time. The working age population will range from eighteen to sixty-
four years old.

xii. Pricing Profile

Paburrito has different prices for small, medium, and large sized burritos. See table
1 in the appendix below to see indicated prices for each size.

xiii. Gross Margin on Products/Services

As stated in chapter 3, the production cost would be Php 65-115 while the selling
price is at Php 100-150. This nets an average of Php 35 profit or 28% gross margin for
each burrito that will be sold.

xiv. Break-Even Analysis

Since the gross margin is Php 35 and the fixed cost is estimated to be Php 8,420 per
month, a sum of Php 101,040 for the year, the business will need to sell approximately 241
units per month, and a sum of 2,892 burritos for the year in order to cover all the variable
and fixed costs of the business.

xv. Market Penetration

The distribution channels that the business will utilize are the two stated above,
which are the direct and the usage of a retailer as an intermediary. These channels are
chosen because the viability of a fast food restaurant will be invalidated if any more middle
men is used since the goal of a fast food restaurant is to serve as quickly as possible. Once
the product is produced and delivered to respective stores and kiosks it will then be directly
sold and served to the customers.

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xvi. Sales Representatives
The sales representative will be used as an approach for selling the product/service
to the end user by working with customers to find out what they want with the information
collected by the sales representative. He/she will also look for connections (clients,
referrals, directory, etc.) to better sales. In the company Paburrito, the sales representative
is Czarlyna Celestial since she has strong and persuasive communication skills.

xvii. Direct-Sales Force

The Direct-Sales Force will be the ones who decides on the selling and marketing
strategies of the products in the market. Since the market constantly changes, the business
should analyze the trends and the potential consumers in order for the Direct-Sales to
identify the appropriate marketing strategies.

The Sales Force will be the ones who will apply the marketing strategies from the
Direct Sales such as promoting the product in the market at the kiosks of Paburrito. The
Sales Force will also handle the relationships between the customers, so that the business
will gain loyal customers for profit.

xviii. Advertising and Promotions

The main priority is promoting and advertising through social media such as
Facebook, Instagram, and Twitter. Paburrito will also be using posters and brochures to
promote its products. The commercial that showcases the features of the product will also
be broadcasted on television, posted on the social media stated, and also played in the stores
with a small TV at the counter.

xix. Packaging and Labeling

Our packaging will be composed of cylindrical-shaped cardboard and it is designed
with a minimalist theme of neutral colors such as beige. Our logo will also be printed in
the cardboard. The types of flavors will have a different color assigned to it that will be in
a designed sticker where it will be put in the package once the customer has ordered. Each
burrito will be wrapped in an aluminum foil to keep the burrito warm.

xx. Service and Warranties

Since Paburrito offers food products, they don’t have warranties because the
business guarantees that the products have fresh ingredients to ensure the quality of the
food.

xxi. Trade Shows

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 The owners envision Paburrito to be in kiosks or small stores in the middle of busy
streets. Our potential places are Bonifacio Global City and Makati because there are a lot
of busy working people and busy students in the place that are evident. Being exposed in
food bazaars and food expo is also a great trade show for the business to advertise and
educate the consumers about Paburrito.

xxii. Future Markets

The owners believe that Paburrito could not only be saleable to the busy people,
but also to the people who usually go to movies. Our burritos could also be convenient and
filling for the movie goers in case their movie was scheduled during lunch or dinner time.
Basically, Paburrito is fit for everyone who wants convenience in their life.

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 CHAPTER 5
OPERATING AND CONTROL SYSTEMS

A. ADMINISTRATIVE POLICIES, PROCEDURES AND CONTROLS

i. Receiving Orders
Starting from the staff, they should have a strict training in terms of recording transactions,
knowing the number of supplies whether it will lose stock, attending to the customer’s needs, and
being alert and attentive in operations. Though, the employees must be very strict in maintaining
the supplies and keeping books, since it may bring a huge problem when the staff misses a point
in the books or miscounted the supplies. The business’s employees will also follow the
Accountant’s Code of Professional Ethics such as Integrity, Objectivity, and many more.

In terms of the order of products, the staff must follow a set of rules in order to have a
smooth operation with no problems. Beforehand, the number of supplies should be counted and
checked, whether there are some that may be not at the best condition, or the packaging is less than
the possible number of burritos to be produced.

First, the staff will receive orders from the customer and must check the order thoroughly
before processing it. Then, the staff will record the transaction in the book along with details such
as the date, the name of order, the size, and many more. Then the product will be made by the staff
and will be given to the customer once it is done. Along with the product, the receipt is given with
the change, if there is change from the payment. At the end of the day before the kiosk closes, the
staff will double check on the books and the supplies, which will be taken note and reported to the
officials when a problem arises.

ii. Billing the Customers

The business will be following the Republic Act No. 7394: Consumer Act of the
Philippines. This law includes: pricing of products accordingly, providing receipts to customers as
an evidence of purchase, and indication of price of product. The business will be following
Department Administrative Order No. 6 Series of 1999, which states that businesses should revise
its fees and charges at just and reasonable rates to cover the full const of services rendered, in the
pricing of goods. The business also will apply the standard 12% VAT in the Philippines for each
transaction made by the customers.

iii. Paying the Suppliers

In paying the suppliers, the business will be following Republic Act 9184: Government
Procurement Reform Act, which regulates the payment or transactions that happen between
suppliers. For paying the suppliers, the administration will ensure that all transactions will be
recorded, and that all orders made are given by the suppliers. The subcontractor hired in future
operations will be in charge of the payments that are to be given to the suppliers.

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 iv. Collecting the Accounts Receivable
The business does not collect Accounts Receivable from its suppliers nor the customers.
Since the business only accepts orders within the store or kiosk, it does not accept bulk orders for
special occasions or deliveries. The business does not collect any money aside from the payments
of the customers when they purchase their products. These will also not be applicable to the
business since it is a food business, and it usually does a cash only basis instead of taking it in
account.

v. Reporting to Management
In the day-to-day operations of the business, concerns are inevitable to rise. In most of the
business organizations, the concerns must be reported to the next higher position than the reporter.
These concerns are mostly experienced by the employees who encounter the customers first hand
and operate the operation. These employees must report it to the head of their department, the head
then will try to solve the concern first and if it's too huge, the head department must report it to the
CEO or President.

vi. Staff Development

The staff must undergo a training where activities and programs help staff members learn
their responsibilities and develop specific skills and knowledge that is required for their role in the
operation to improve their performance. These trainings will be done before the staff becomes an
official member or when the staff is in need of development.

vii. Inventory Control

To be able to control the inventory, first is to ensure that the staff also understands the
importance of accurate inventory control and make them understand the impact of their mistakes
towards the business itself. Every item that comes in and out must be recorded all the time, tasks
must be delegated to different employees but will only be put in one sheet to save time and so it
won’t be lost. Checking of these items must be at least twice a day before opening the kiosk and
before closing it.

viii. Handling Warranties and Returns

As a food business, it promises to have fresh and great quality products. However, if the
customer was not satisfied with the product, returns can only be made within 1 hour from the time
of purchase. We will not refund or exchange the food without the original package or not less than
75% of the food left.

ix. Monitoring the Company Budgets

In monitoring the business budgets, only 1-2 employees will be assigned to the the financial
area of the business, so that there wouldn’t be any blaming done. Every week, a deposit of the total

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income in the bank will be done so that no large amount of cash will be on-hand, for safekeeping.
Also when buying new equipments and supplies, estimation will be done and an assessment
whether the budget will be enough. The business would be reviewing budgets quarterly, monthly,
or even weekly and by including in these reviews, the reports on changes in business conditions
will alert managers so that new tactics may be done, if the business is to meet the targets for the
year

x. Security Systems
The purpose of a security system is to define the policies and procedures for initiating and
maintaining a safe and sound business environment. A regular and continuous assessment of the
business’s security policies and procedures, its staff force, overall vulnerabilities, and actions is
really what matters when it comes to security. Physically monitoring what happens in and around
the kiosk will help notice suspicious behavior before it becomes a problem. Also reminding
employees to stay observant both while working and when arriving and leaving. Specially that the
business’ physical place is only a kiosk. It can be easily tricked when there’s a lot of customers.
In case that happens, the employees must be trained how to handle a situation so that panic will
not occur and the situation be handled well.

B. DOCUMENTS AND PAPER FLOW

Since kiosks will be the business’s only means of selling, it will be easier to keep track of
everything that goes around the business. Transactions with the customers will be held by the sales
front, since they will be the ones talking and interacting with the customer. When it comes to the
financing however, these two will connect using the business documents that will be provided such
as: Sales invoices, Receipts, Debit or Credit notes. After a certain period of time, employees will
have to report to the manager, and in case any problems or anything must be decided on, the
operations and finance managers will be the ones to bring it up to the rest of the group and will
then decide what action to take as a whole.

C. PLANNING CHART

i. Product/Service Development
The products will be ready to be marketed once the business has enough capital or money
to pay fixed costs and unpaid debts. In cases of any financial problem that is connected to the
business, the capital or owners can be able to pay these withholding debts and costs to avoid cases
such as bankruptcy or turning unpaid debts into a business scandal.

When it comes to the ingredients, the products will be ready to be marketed when the
business has a confirmed supplier that would be able to continuously provide fresh ingredients to
the business. When there are events that could affect the production of ingredients such as natural
disasters or something similar, the supplier would also have a negative effect on this event. This

35
will lessen the production of the products and eventually lessen the sales of the business, which
could possibly lead to a downfall. In such situations, the suppliers should be able to still provide
the business with these ingredients in order to avoid disruption of the operations. If business is
connected with a lot of suppliers but are inconsistent in providing the ingredients, then the business
will have more expenses which could mean a lesser income.

Designs of the packaging should also be prepared ahead of the production of the product
itself. Since the burritos are supposed to be cooked on the day itself, which guaranteed freshness,
the quantity of the package should be equal or more than the burritos to avoid cases like having a
shortage or absence of the burrito packages.

Along with the packaging, the list of products should also be prepared beforehand. A final
list of products should be confirmed by the officials in order to decide on what to sell from each
branch. This will help cut off a few expenses and determine what to purchase from the suppliers.

ii. Manufacturing
Everyday, the production of the burritos will always start at 6 am, wherein the sellers will
have an ample time to fix up the kiosk and start cooking the burritos. When the sellers arrive at 6
am, they will be given an hour to prepare the kiosk, which would involve in cleaning the area and
preparing the ingredients. Once these ingredients are prepared, they will be given 2-3 hours
dedicated in cooking the viands. Once the viands are cooked, the seller will set aside the viands
and heat them whenever a customer purchases the certain filling. Afterwards, the burrito will be
assembled and will be given to the customers.

The raw ingredients of the product will be replenished every 2 weeks to the different
branches. In order to receive the raw ingredients ahead of time, the business must contact the
supplier and inform them of replenishing the products so that the supplier will be prepared to
harvest the products. Depending on the operations, the week may be shortened to a week or less
if the supplies run low.

The packaging and the brochures will be produced monthly. These will be made in a large
quantity, ranging from 500-1000 packages and brochures that will be delivered to the respective
kiosks in Bonifacio Global City and in Makati malls. These are produced monthly since
packagings and brochures will not rot compared to the raw ingredients that need to be used
immediately.

iii. Financial Requirements

During the planning stage, the business must have their money prepared when they have
decided on the suppliers and businesses that the business has availed to. These money will be taken
from the capital, or may serve as a loan. Money should be prepared in this stage so that the business
could cover up most of the expenses have a lesser amount of debt instead of paying for the services
at a later time, which may lead to problems.

36
 During the operations, the business will collect their money from the kiosks at the middle
of the month. The money collected will serve as means to pay the outstanding debts, payment of
suppliers and the service of businesses that Paburrito avails. Once the money collected isn’t
enough, the business will result to either take from the capital or have a loan in the bank.

iv. Marketing Flowchart

Advertisements of the products will start once the business begins their operations in the
branches. Handouts such as flyers or brochures will be given to passing customers. A video that
promotes the product will be played at the kiosk, which could also take in the interests of the
customers. Posters will also be placed on advertisement walls on the road close to Bonifacio Global
City and the Makati malls, which would also start when the business starts their operations on the
branches.

The advertising mediums are printed by a printing service close to the headquarters. The
printing service must accept printing in a large quantity so that Paburrito will avail to the services
of the said printing service. This will be printed monthly ranging from 500-1000 copies of
brochures, while posters will range from 50-100 copies. Once the mediums have arrived at the
headquarters, the officials will distribute them to the different branches and the sellers would hand
it out.

v. Market Penetration
The action of market penetration will be done at the end of the year. These actions will
depend on the number of sales and the customers purchasing from the business. If the sales are
decreasing and has the potential to increase, market penetration is the appropriate action. If the
sales and the number of customers are increasing, then it is not the appropriate time to do market
penetration.

vi. Management and Infrastructure

The additional management team will be hired after the first 3 years of operations in order
for the original management to fully know the industry that the venture is in. The long process is
also to find trustworthy enough employees to be assigned a role or position that has such a big
responsibility and contribution in the business. The order of the hiring would not be important as
the aim is to widen the management team at close time intervals.

In regarding the use of infrastructure, it will be used after 2 years of operation. This is to
build capital, if ever the projected income for the second year is met.

D. RISK ANALYSIS
The main potential problem that the venture might face is the income not meeting the cost
of sales, making it a net loss instead of a profit. This is a common problem that is faced by start up
businesses, especially in their first year of operations. Another problem that the venture might face

37
is the dissatisfaction of some consumers regarding the products being sold, giving negative
feedbacks that may affect the image of the business. A risk that the business will be facing is the
presence of already well known and well established competitions.

CHAPTER 6
FINANCIAL PLAN

i. Sales Projections
The sales projection for Paburrito is Php 30,125 for 2018, Php 42,250 for 2019, and Php
84,500 for 2020, respectively. The information to project financials is based on a question-and-
answer site named Quora, wherein multiple businessmen gave out insights based on personal
experiences, which in this case, insights on the average sales/revenue of start up restaurants. The

38
projections are reasonable because the business will be stationed in a busy location, wherein people
come and go all the time. The business will also widen its market by creating multiple branches
throughout Luzon islands, Philippines.

ii. Income Projections

The net income projections for the next three years, 2018, 2019, 2020 come as: Php 15,
Php 3,210, and Php 14,140 respectively. The business is expecting that there will be a break-even
experienced by the business after the first year of operations, since it is only a start-up business in
a crowded industry, wherein there are a lot of competitions. This may be the case for the first year,
however, the business itself is projected to be profitable in the upcoming years.

iii. Cash Requirements

The estimated cash requirement for the first year of operations is Php 10,000. The starting
capital will be enough to be able to match up the needed assets in the first operating year.

iv. Sources of Financing

The business plans to loan a certain amount of money, specifically Php 1,000,000, with an
interest of 8% and a term of five years in order to expand and serve in various places such as Ayala
Malls Solenad in Laguna and Glorietta in Makati. This is to contribute to a projected rapid growth
for the business to reach a capital of Php 5,000,000.

v. Attached Financial Projections

● Cash Flow for Three Years

39
● Income Statement for Three Years

40
● Balance Sheet for Three Years

41
 ● Ratio Analysis

Current Ratio
2018 2019 2020

Php 4,635 / Php 2,000 = 2.3175 Php 8,465 / Php 1,000 = 8.465 Php 21,125 / Php 2,000 = 10.5625

Net Profit Margin

2018 2019 2020

Php 15 / Php 30,125 = 0.00049793 Php 3,210 / Php 42,250 = 0.07597633 Php 14,140 / Php 84,500 = 0.16733728

42
Asset Turnover
2018 2019 2020

Php 30,125 / Php 12,015 = 2.50728256 Php 42,250 / Php 14,225 = 2.97062095 Php 84,500 / Php 29,365 = 2.87757534

Return on Assets
2018 2019 2020

Php 15 / Php 12,015 = 0.00124844 Php 3,210 / Php 14,225 = 0.22565905 Php 14,140 / Php 29,365 = 0.48152563

Return on Owner’s Equity

2018 2019 2020

Php 15 / Php 10,015 = 0.00149775 Php 3,210 / Php 13,225 = 0.24272212 Php 14,140 / Php 27,365 = 0.51671844

Debt to Total Assets Ratio

2018 2019 2020

Php 2,000 / Php 12,015 = 0.16645859 Php 1,000 / Php 14,225 = 0.07029877 Php 2,000 / Php 29,365 = 0.6810829

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cognitive-theory-2296989

APPENDIX

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Packaging of Paburrito’s product

Draft of kiosk/stall of Paburrito

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 Table 1: Price Menu
Filipino meals

Small PHP 100.00

Medium PHP 125.00

Large PHP 150.00

Table 2: Product Profiles

Table 3: Encoded Product Profiles without dummy variables

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Table 4: Summary of Regression Results

Table 5: Product Preference

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63