Mariano Marcos State UniversityCollege of Business Economics and Accountancy

Batac City, Ilocos Norte

(In partial fulfillment of the requirement of the course in ProEl123,2nd semester, S.Y. 2009-2010)

AQUACEAN PURE DRINKING WATER

(A BUSINESS PLAN)

Prepared by:Hazel Anne AbutSheryl AgullanaGerald DomingoMary Ann Lista

Ma Sheryl D. MarzanMae Ann L. Salviejo

Submitted to:Dr. Leah Ballesteros

March 2010

INTRODUCTION

The water refilling

station that is

centered in providing

safe and clean water

for consumption at

low…

low…

prices…

Purified Drinking Water

Phone: 771-3214

CP No.:09191234567

E-mail:

www.aquacean.com

Brgy. 19 San Lorenzo

San Nicolas, Ilocos

Norte

Health is the major priority of every person because it is hard and expensive to be brought

to the hospital once you get sick. Because of this, most people see to it that what they usually

take in is safe and clean. Health is a priority, as the saying goes, “Health is Wealth.”

Purified water was intended for the safety of the people and this is safe for the most

sensitive stomach. This type of water is good enough to prevent intake contamination to anyone

who has weak fighting cells.

In relation to this, most customers are possessing safety assurance in every product they

purchase, especially to the products which indeed to be take in such as water. Water is necessary

for the very survival of human beings, as it to ensure the smooth functioning of body systems. In

fact, 2/3 of our body weight is water. Drinking plenty of water helps fight against flu and

ailments, regulates your body temperature and raises your metabolism.

BUSINESS OPPORTUNITES

The Municipality of San Nicolas as its name denotes is a town where cooperation and

unity is a way of life. It is considered a rapidly growing center of trade, finance, health,

researches and education. It is also known as the home of eminent men and women who have

significant contribution in the development and welfare of our country and fellowmen.

This section discusses the business opportunities of food delicacies and crafts, and

service business.

1. FOOD DELICACIES AND CRAFTS

Opportunities:

Pottery

Street Food Selling

Dress Making/Sewing

Homemade Foods

Meat Processing

Furniture Making

Food Chains/Eatery

2. SERVICE BUSINESS

Opportunities:

Water Refilling Station

Computer Shops/Internet Café

Photo Studio And Framing

Grocery Stores

Videoke Bars

Shopping Centers

Jewelry Shops

Pawnshops

Hardware Store

Cell Phone Repair

Spa And Beauty Salon

Laundry Shop

Merchandise

RTW

Auto Repair Shop

Auto Parts Shop

Table 1. Screening of Business Idea Screening

Business opportunities

Marketability

(30%)

Profitability

(35%)

Desirability

(10%)

Demand

(20%)

Possibility

(5%)

Total

100%

Rank

Water Refilling Station

Food chain/eatery

Pottery

90

85

70

95

92

80

75

72

60

85

80

60

65

70

80

88%

84.40%

72%

1

2

3

The criteria for screening businesses are the following:

Marketability

It is the acceptability of the business to the market.

Profitability

It is how the business will measure its profit.

Desirability

It is the willingness of the owner to establish the business.

Demand

It is the level of desire or need that exists for a particular business.

Possibility

It is the potential for successful future development.

PART II

EXECUTIVE SUMMARY

A. Name of the firm: AGUACEAN Purified Water Refilling Station

B. Location: Brgy.16, San Marcos, San Nicolas, Ilocos Norte (along the national highway)

C. Type/Nature of business: Service/Sole Proprietorship

D. Proponents: Mary Ann Lista Ma. Sheryl Marzan

Sheryl Agullana Mae Ann Salviejo Hazel Ann Abut Gerald Domingo

E. Brief Description of the project

AQUACEAN is a business that is centered in providing safe and clean purified water for

consumption. The target markets of the business are the households, food establishments,

schools and nearby towns of San Nicolas. Strategies to trigger competitors product itself is not

only made purified but also contains vitamins (vitamin B and C) and minerals (calcium and

sodium potassium) that are helpful in fighting bacteria. These practices are some of the processes

distinct from the competitors. AQUACEAN can be also accurate in organizing their equipments

and maintaining its buildings physical appearance from the day it is establishes up to its growth.

And they can be efficient delivering the service on time.

F. Highlights of the Plan

Marketing Aspect

This section includes the target market of the business, demand and supply, competitive

position of the business such as the product selling price, competitiveness of the quality product,

methods of transportation and existing rates, channels of distribution, and general trade practices,

the proposed marketing program such as the product, price, and promotional activities, and the

projected sales.

Management Aspect

This section presents the classification of the business. It is classified as a single

proprietorship. Water refilling station is a simple and can be manage by your own. The

proponent is also the manager of the business.

Production Aspect

This section presents the production process, including the plant layout and location. The

business will be situated at the residence of the owner. It will have to provide 3 tricycle and 2

pick-up vans for the delivery service and machines such as multimedia sediment filter, ion

exchange, activated carbon filter, reverse osmosis membrane, post carbon filter, ultraviolet lamp

and the ozone generator. The total projected cost that maybe incurred has a total of ₱1,054,383

that will be the used in the operation of the business.

Financial Aspect

The financial statement in the financial portion of this business plan is presented with this

order. Income Statement, Projected Cash Flow, the Projected Balance Sheet, Return on

Investment. The net income of AQUACEAN in its first year operation will be ₱36,842. Its

projected cash flow could reach as high as ₱1,066,496.

Social Desirability

This section presents the contributions of water refilling station to the economy such as

provide employment, improve quality of life and provide additional taxes, and the

entrepreneurial level such as income generation and self-fulfillment

CHAPTER I

MARKETING PLAN

Target Market

A. Households from San Nicolas, other nearby towns like Batac, Laoag City, Sarrat and

owners of food establishments and schools from the said towns would much benefited and

qualified to avail of the service.

B. The demand of water refilling station is highly increasing due to rapidly growing

population of the locality. It is needed that almost all households are now drinking purified water

as to satisfy their thirst. Thus it implies that the demand for water, specifically purified drinking

water is increasing more than to every household.

Market Segment

Households Food Business Establishments

Schools

1. SAN NICOLAS 20,215 250 (estimated) 35

2. BATAC 47,610 300 (estimated) 72

3. LAOAG 19,976 700(estimated) 105

4. SARRAT 4,881 50 (estimated) 29

C. SUPPLIERS/COMPETITORS

SUPPLIERS/COMPETITORS

ADDRESS STRENGHTS WEAKNESSES

1. AQUA 2000

2. AMIEL’S

3. WATER 4 LIFE

4. AQUA

Brgy. 3 San Idelfonso

Brgy. 11 Sa Fernando

Brgy. 22 San Guillermo

Brgy. 1 San Fancisco

Accessibility within the town proper

Unlimited area for delivery

Dress code

Location

Location

Small processing area

Lack of employee

Lazy employee

Small no. of delivery vehicles

Lack of promotions

physical appearance

D. COMPETITIVE POSITION

1. Selling Price

The family size (5L) costs 25 pesos per container with free delivery in San Nicolas area

and 30 pesos for nearby town, then only 20 pesos for walk-in customers. Medium size (4L) costs

manufacturer

distributor

distributor

retailer

distributor

distributor

retailer

customer

15 pesos. While small sizes such as 500ml cost 5 pesos and 300ml cost 3 pesos.

2. Competitiveness of the quality product

Bacteriological quality

Physical quality

Chemical quality

Biological quality

3. Methods of transportation and existing rate

The business will provide at least five vehicles. Two pick-up vans for delivery

service outside San Nicolas and three tricycles for delivery service along the location

area.

4. Channels of distribution

Through the use of telecommunications such as Cell phones and telephones are

merely used for channels of distribution. In addition, the firm may also distribute the

product through having outlets in some sari-sari store.

Figure 1. Channels of Distribution

5. General trade practices

Competitors are now at peak in San Nicolas for business like water refilling

station. Certain practices from different water refilling station are in common, like the

selling price if family size cost to 25 pesos with free delivery and if it is directly acquire

in the business it only cost 20 pesos.

E. PROPOSED MARKETING PROGRAM

1. Description of Proposed Product

a. For tangible products

The product AQUACEAN purified drinking water is a product need by people as

one of their basic necessities in life. The product offered in the market made safety and

healthy as the process of purifying is being implemented. It goes through the process if

distillation, deionization or term as dematerializing the water.

The product is categorized into different sizes to cater the customer according to

what they prefer. The interesting part of the product is not only made purified or distilled

but it contains vitamins (Vitamin B, Vitamin C) and minerals (Calcium, Sodium,

Potassium, and other) helpful in fighting bacteria. These practices are some of the

processes distinct from competitors.

b. Packaging

The name of the product is AQUACEAN Purified Drinking Water located at

Brgy. 16 San Marcos San Nicolas, Ilocos Norte. The product consists of a quality plastic

bottle which is not hazardous, and tested and approved by BFAD use material for its

package. It has also label which emphasize the information about the product including

its benefits, the manufacturer, product name and logo, and cover tightly with sealed

plastic for protection.

2. Description of Proposed Target Market

a. Geographical location-Ilocos Norte

b. Age-all ages

c. Sex-both

3. Proposed Prices

Product Unit Unit Selling PriceFamily Size ( 5L)Medium Size (4L)Small Size

500mL 300mL

Pc.Pc.

Pc.Pc.

2515

53

4. Proposed promotional activities

The business will be providing flyers, stickers, keychain designed like a mini bottle. On the

grand opening of the business, the first 20 customers will get free t-shirt upon purchasing of 3-5

galloon family size. Every customer will also receive a loyalty card given by the company

wherein customers must purchase ten times in order to get one family size for free.

CHAPTER II

ORGANIZATION AND MANAGEMENT PLAN

The Management of the Business:

The business is classified as a single proprietorship. It will be operated by Ms.

Mary Ann Lista. Water refilling station is a simple and can be manage by your own. The

proponent is also the manager of the business. The owner is responsible in taking all the

risk, overall in charge in managing the business, sustains the capital requirement of the

business and gives appropriate salary for the employees. The owner must be a graduate of

Commerce and have attended different seminars in managing a business regarding health

and safety implementation of water refilling station.

The management is composed of marketing manager who is responsible in promotional

activities of the business, finance manager who is in charge of bookkeeping and making financial

statement, production manager who looks after the production of the products and needed

materials and equipment to be used, the technical assistant who is responsible in maintaining and

running the machine, the refillers who accept and refills containers of customers and the

deliveryman who transport refilled containers.

Figure 2. The Management Structure of the Business

2. Management Job Description

GENERAL MANAGER/OWNERMARY ANN LISTA

MARKETINGMA. SHERYL MARZAN

DISTRIBUTOR1San Nicolas

DISTRIBUTOR2Batac

DISTRIBUTOR3

Laoag

DISTRIBUTOR4

Sarrat

FINANCESHERYL AGULLANA

PRODUCTIONMAE ANN SALVIEJO

REFILLER1HAZEL ABUT

REFILLER2

REFILLER3

TECHNICAL ASSISTANT

GERALD DOMINGO

Name Position Job DescriptionMary Ann Lista Owner and the General

Manager Responsible in taking all the risk Overall in charge in managing the business Sustains the capital requirement of the

business Gives appropriate salary of the employees

Sheryl Agullana Finance Manager In charge of bookkeeping. Makes financial statement of the business

operations.

Ma. Sheryl Marzan Marketing Manager In charge in the promotional activities of the business

Gerald Domingo Technical Assistant Maintains and runs the machine responsible in looking after the operations

and repot as to production In-charge in reporting the materials to be

purchased for the production in the coming days.

Mae Ann Salviejo Production Manager Business planner of what the outcome and prices of the product

Responsible in the conceptualization, design, creation and innovation of the products to be served to customers.

Look after the production of the products and needed materials and equipments to be used in the identification of the needed skills and labor, and how much will the business cost.

Hazel Abut Refiller Accepts and refills containers of customers

Others Driver/Delivery Man Transport refilled containers to customer’s home

PERSONNEL and WORKFORCE

Personnel in this business are highly qualified based on their wide experiences in the

same field of the job. They are highly equipped with good education and are nurtured by their

experiences. They are all aware of their own tasks and the owner properly delegated the needed

activities on the operations of the business. Personnel are dedicated, friendly and well trained.

A. PROJECTED TIME TABLEActivities Wk1 Wk

2Wk3 Wk4 Wk5 Wk6 Wk7 Wk8 Wk9 Wk10 Wk11 Wk12 Wk13 Wk14 Wk1

5Wk16

Planning and preparation of the financial statement and business planLook for supplier or seller of equipments (list the price and ask for feasibility study to know how much the cost needed)Analyzing and studying the total cost (negotiating with the supplier)Choosing the right equipmentBuilding improvementGo to the DTI for the business name and registrationApplying for business permitGo to BIR for your official ReceiptsBuy other supplies like water containers, seals, heat gun, etc.Start doing your store’s signage and sticker labelsInstallation of equipments

Hiring of employees

Dry-run

Water Testing

CHAPTER III

PRODUCTION PLAN

Product Specification

The AQUACEAN is a water refilling station that conforms to the national standard for

drinking water. The business primarily provides clean and safe purified water.

Purified is a water that has virtually all of its impurities as well as minerals and

electrolytes stripped through distillation (boiling the water and re-condensing the steam into

clean a container), leaving all contaminants behind. Purified water is good clean water;

unfortunately all the minerals and electrolytes are also all stripped out. Purified water tends to be

slightly acidic moving your body to a less healthy state.

Based on some studies comparing mineral water purified water and it results to minerals’

leaches out are of the unusable, ionic form and we want these to leave the body rather than be

deposited and cause disease. While purified water does not leach out significant amounts of

biologically available minerals because these are quickly taken up the body on an as needed

basis. If they are present in excess then they are filtered through the kidneys and this is exactly

what needs to happen with all things which are in excess in the circulation. Purified water

cleanses the body through promoting healthy kidney function.

PRODUCTION PROCESS

The main processes in a water refilling station are dictated by raw water quality. the

typical steps are filtration (several stages), softening, and disinfection.

Acquiring of raw materials from the well.

Removing sediments such as rust, sand and particles that are invisible to naked eye.

Replacing hard minerals with safe minerals.

Removing all organic chemical herbicide, pesticide, offensive odor and bad taste.

improving the taste of water.

Ensuring that the water is free from disease-causing micro-organisms.

Inhibits the growth of the product tank and prolongs the shelf life of water.

Ready for bottling

Water refilling.

PLANT LOCATION

WASTE DISPOSAL

TOILET

MACHINE 1STORE

ROOM

TABLE WASHING

AND

CLEANING

REFILLING AREA

OFFICE

PARKING SPACE

FOR THE PICK-UP

VAN

PARKING SPACE FOR PERSONNEL

AND MANAGEMENT

PARKING SPACE FOR

THE TRICYCLES

MACHINE 2

(ENCLOSED WATER PURIFICATION ROOM)

25 sq.m

25 sq.m

School

BUS. ESTABLISHMENTS

COCKPIT ARENA

AQUACEANBUS. ESTABLISHMENT

BUS. ESTABLISHMENT

PLANT LAYOUT

Church

PARK

MUNICIPALITY OF SAN NICOLAS

BUS. ESTABLISHMENT

A. Machine and Equipments

Machine Cost Description/Specification and Suppliers

Multi-media sediment filter P35,000 Removing sediments such as rust, sand and particles that are invisible to naked eye; employs a total of 5 filters.

Ion Exchanger P25,000 Replaces hard minerals with soft minerals.

Activated Carbon Filter P25,000 Removes all organic chemical herbicide, pesticide, offensive odor and bad taste.

Reverse Osmosis Membrane P100,000 The heart system and the most expensive unit; Removes inorganic minerals, bacteria and viruses while retaining its oxygen content. Since the filter size is very small at less than 0.05 micrometer, the product water could have total dissolved solids (TDS) of less than 10ppm. The filtration process rejects about 50 percent of raw water volume.

Post-Carbon Filter P20,000 Improves the taste of water.Ultraviolet Lamp P20,000 Ensures that the water is free

from disease-causing micro-organisms.

Ozone Generator P25,000 Inhibits the growth of the product tank and prolongs the shelf life of water.

B. RAW MATERIALS

Raw Materials Quantity Cost per Unit AmountBottlesGallonsPaperSealedHeat gun

1,5008001,000503

2.901331002,000

4,35010,4003,0005,0006,000

Total 28,750

TOTAL PROJECT COST

Factory Overhead

Factory Overhead January February March AprilAmortization of building improvementsDepreciation of materials and toolsDepreciation of furniture and fixtureDepreciation of office equipments

600750290150

600750290150

600750290150

600750290150

Total factory overhead 1,740 1,740 1,740 1,740

Fix Asset Book Value Useful life Depreciation(Monthly)

Expense(Annual)

EquipmentFurniture

845,0005,650

104

7,041117

84,5001,412

Total 7,158 85,912

Salaries of Employees

Position Monthly Salary Annual SalaryFinance ManagerMarketing ManagerProduction ManagerTechnical ManagerRefillers (3)Delivery Man (5)

6,0006,0006,0006,0003,0003,000

72,00072,00072,00072,000108,000180,000

Total P 30,000.00 P 576,000.00

C.OFFICE SUPPLIERS

Supplies Monthly Cost Annual CostBall penBoard MarkerBulletin BoardSales BookSales InvoiceOfficial ReceiptsJournal

503012020202020

6003601440240240240240

Total ₱ 380.00 ₱ 3,360.00

D. UTILITIES

Utility Monthly Cost Annual CostElectric billWaterTelephoneCell phone load

5,0003501,0001,000

60,0004,20012,0003,600

Total 6,350 79,800

E. PERMITS AND LICENSES

Pre-Operating Activities CostMayor’s Permit 100Zoning clearance 200Garbage disposal fee 2,500Fire safety clearance 100Fire code fee 50Tax Clearance 50Occupation Tax 150Governor’s permit fee 200Business Registration Certificate 100Community Tax Certificate 73Brgy. Clearance 50

Total ₱5,373.00

Total of Project Cost Item

Building Improvement 100,000

Plant and equipment Equipment 815,000Furniture & fixtures 5,650Office Supplies 3,360 824,010

Pre-operating CostPermit & Licenses 5,373Freight Expense 1,500 6,873

Working CapitalPackaging 28,750Advertising Expense 1,500Salaries 30,000Telephone 1,500 61,750

Cash 61,750

Total Project Cost ₱1,054,383

Source of fundEquity ₱704,383Debt ₱350,000

The proprietor will invest Php 704,383 cash to establish the business. Loans from

bank will be amounting to Php 350,000 could help finance the business for further

development and enhancement. The loan payable to DBP has an interest of 5%. The

business will be located at the residence of the owner in order to minimize the expenses

of building own establishment building. It is a good start to keep the capital liquidating.

CHAPTER IV

FINANCIAL FEASIBILITY

INCOME STATEMENT

Gross sale P 1,811,770.00Expenses

Pre-operatingFiles and Licenses 5,373Building and Improvement 100,000Equipment 815,000Freight Expense 1,500Furniture and fixture 5,650Office Supplies 3,360 P 930,883.00

Operating Expense Electricity/Water 62,345 Maintenance and Repair 2,000 Salaries Expense 360,000 Advertising Expense 7,500 Telephone Bill/Cell phone load 17,000 Packaging materials 240,560 P 689,405.00

Other Expenses Depreciation Expense 85,912 Interest Expense 17,500 P103, 412.00

Income before tax 88,070Income Tax Expense (88,070*32) 28,182Net Income 59,888

BALANCE SHEETFor the year 2010

ASSET

Cash 1,066,496Raw/Packaging Mat. 5,000Office Supplies 1,000Furniture and Fixtures 4,000Equipment 422,612 Total Assets ₱1,499,108

LIABILITIES

Loan 350,000Income Tax Payable 17,337Interest Expense Payable 17,500 Total Liabilities ₱384,837

CAPITAL

Capital beginning 1,054,383Add: Net Income 59,888 Total Capital ₱1,114,271

TOTAL LIABILITIES AND CAPITAL ₱1,499,108

Return of Investment

ROI= Net Income/ Capital*100

= 47,987/ 1,054,383*100 = 0.0458*100

= 4.58

Payback period

The business could reimburse its debt from the Development Bank of the Philippines on its second year of operation and the business assures for its full payment and all the liabilities will be settled.

Break-even Sale

AQUACEAN could attain its break-even sale at first year of operation.

TOTAL CASH FLOW

Cash Balance, Beg. 1,079,468

Add: Cash InflowsEquity Contribution 1,054,383

Cash Sale 1,687,020

Total Cash Provided 3,820,871

Less: Cash Outflows 1,686,820

Cash Balance, ending 2,134,051

PROJECTED SALE

PRODUCT U USPJAN FEB MAR APR MAY JUN JUL AUG SEPT OCT NOV DEC TOTAL

QTY AMT QTY AMT QTY AMT QTY AMT QTY AMT QTY AMT QTY AMT QTY AMT QTY AMT QTY AMT QTY AMT QTY AMT TOTAL

Fam. size (5gal)

gal 25 50 37500 70 52500 80 60000 100 75000 90 67500 60 45000 50 37500 50 37500 50 37500 50 37500 50 37500 50 37500 558,750

Med. size (4gal)

gal 15 100 45000 130 58000 125 56250 150 67500 130 58500 120 54000 110 49500 105 47250 100 45000 100 45000 95 42750 95 42750 621,000

Small size (500mL)

Bot. 5 150 22500 155 23250 170 25500 180 27000 175 26250 165 24270 160 24000 150 22500 150 22500 150 22500 100 15000 100 15000 270,270

Small size (300mL)

Bot. 3 200 18000 230 20100 240 21600 250 22500 250 22500 240 21600 230 20700 200 18000 200 18000 200 18000 200 18000 200 18000 237,000

Total 500 123,000 565 153,850 615 163,350 680 192,000 645 174,750 585 144,870 550 131,700 505 248,250 500 123,000 500 123,000 445 113,250 445 113,250 1,687,020

The month that has the highest sale is the month of March, April, and May, because these months are the summer season. On the other hand, the months that have the least

income is the month of August, September, October, November, December and January because these months are the rainy season. The gross sale for annual sale is Php. 1,811,770

CHAPTER V

SOCIAL DESIRABILITY AND CONTRIBUTION TO THE ECONOMY

The business contributes the following to the economy:

Provide employment

AQUACEAN will hire additional employee to do the operation of the

business. This will provide job opportunities to the unemployed and allowing them

also to enhance their skills and knowledge related to the job.

Improve Quality of life

AQUACEAN purified drinking water caters the best quality product that

satisfy their needs and to develop ways to improve quality of life.

Provides additional taxes to the economy

AQUACEAN provides taxes to the economy to which the business will pay

tax to strengthen the economy.

Entrepreneur’s level:

Income generation

The main goal of having a business is to gain profit.

Self-fulfillment

This project will develop the entrepreneur’s intense desire to innovate, build

and to meet his goals through making this project.