The Finale
Alas, we have come to the last phase of our business journey: our final pitching.
Unlike the previous venture proposal, we have now come to realize the cruciality of marking our products with reasonable and profitable prices to come to a point where all our expenses would become worth the sacrifice. During this time, we hypothesized that increasing our markup percentage would yield sufficient sales for us to continue with our business for the next few years.
To test this hypothesis, we took the initiative to draft a profit chart and we saw that we would eventually become “lugi” after a few years if we pursue with only 30% markup on our food items. In fact, we would not gain anything considering the production and administrative expenses we shall be incurring during the first venture, and will only begin gaining a little profit on the fourth year of our operation. And this, we figured, will not be able to sustain our business, considering we will be in constant need of supplies of fresh ingredients daily to cook our food combos.
Considering this dilemma, we came up with two options to choose from: either to increase the markup we were imposing on our unit products or increase the number of unit products to be sold while ensuring we use the least possible prices we could find of still-good-quality materials and ingredients of our products.
Upon deliberating and solving for the potential profit, however, we found that increasing the number of unit products would yield us profit at a longer period of time (1.5 years shy of our first operation). Similar to the previous issue, we realized that this would not be able to sustain us, and thus, have opted for the other remaining option: to increase the markup on our products.
At first, we were concerned that the prices may turn out a little too high for our student-customers; upon calculating, however, we found that they are still affordable and competitive in the market, for one complete meal in a bowl that costs P49.00 in our store would equate to roughly only one viand in our direct competitors.
It is for this reason that we rose to a 70% markup which will help us earn adequately, all while maintaining the affordability to our customers at only P49.00, P59.00, and P79.00 price per food combo, respectively. These prices with the markups, multiplied with the minimum allocated number of units to be prepared per day (50 pieces per food combo), would yield us a profit of approximately P49,000 during the first month of operation, contributing to a total of P800,000 gross profit for the first year, and our first million within five years of operation.
From this experience, we have realized that inasmuch as we want to help give the best food at the lowest possible price to our customers, particularly the students, to help them manage their expenses while studying at Central Mindanao University, we must also consider the practicality that falls on our side. After all, business is not the same as charity and sometimes, helping other people does not necessarily mean only considering their benefits but also ours, so we could sustain our forces and be able to help more customers who need saving both from business and hunger.















