Chapter 5 - Writing Business Plan - Production Plan

2. The Production/Operations Plan
Outlines how your business will be run and how your product or service will be
produced.
A. Production Process
A.1. Recipes
A.2. Sources of Raw Materials
B. Flow Chart of Manufacturing Processes with Emphasis on Identification of
Critical Control Points
C. Sanitation Standard Operating Procedures (SSOP)
D. Production Schedule
E. Processing tools and equipment
E.1. Materials Requirement
E.2. Property, Plant and Equipment
F. Plant/Location Map
G. Plant Layout/Floor Plan
H. Labor Required
I. Production Cost
J. Project Cost
3

3. Production
Process
Recipes(Ingredients)/Raw materials and Sources
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4. 4
NAME OF THE PRODUCT: PUTO
NO. INGREDIENTS QUANTITY BRAND/SOURCE
1
2
3
4
5
PROCEDURES:
1.
2.

5. Flow Chart of Manufacturing
Processes with Emphasis on
Identification of Critical Control
Points
Determine the different steps involved in the
preparation of the products and identify their
Critical Control Points.
5

6. The following tables
are examples in
manufacturing
strawberry preserve.
6
Receiving and Visual Inspection of Raw
Materials
*CCP: Fruits should be red in color, small to
medium in size and free from rots
<picture>
Washing
*CCP: Use potable running water <picture>
Weighing
*CCP: Use calibrated weighing scale
<picture>
Cooking
*CCP: Cook until consistency forms a sheet <picture>
Packing
*CCP: Pack hot in sterilized jars
<picture>
Washing
*CCP: No signs of sugar spillage <picture>
Labelling
*CCP: Even installation and well pasted
<picture>
Storing
*CCP: Store in a cool, dry and dark place
<picture>

7. 7

8. Sanitation Standard
Operating
Procedures (SSOP)
Describe the SSOP in the working area,
equipment, personnel and pest control
program.
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9. The following is just an example of SSOP
in a strawberry production area.
9
Working Area
a. Before and after operation wipe all area surfaces including the gas stove stand
with rags soaked in chlorine solution.
b. After operation check if wastes are properly segregated (biodegradable from
non-biodegradable).
c. Dispose wastes regularly.
d. Clean the surrounding premises at least once a week.
Equipment
a. Wipe off any spilled jams on the stove every after use.
b. Wipe and dry weighing scale every after use.
c. Wash and dry basins and all utensils every after use.

10. 10
Personnel
a. Use a complete uniform: white gown, hair net, facial mask and closed shoes.
b. Observe personal hygiene requirements: clean and short fingernails, no
jewelries worn at work, proper hand washing before and after handling foods.
Pest Control Program
a. Occasional spraying of corners and under the table with insect spray whenever
there are signs of pests present like ants, cockroaches, flies and mosquitoes.
The following is just an example of SSOP in a
strawberry production area.

11. Production Schedule
How many are you going to produce/deliver for the FOUR months
Business Plan Implementation?
Place an introduction specifying the days of
operation in a week, in a month and the number of
hours of operation per day.
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12. 12
Product
Units to be
Produced
Production Cost/Unit
Total
Production
Cost
Selling
Price/Unit
Total
Selling
Price
Gross Margin
Product
1
<units> <price> <total> <price> <totat> <tsp - tpc>
Product 2 <units> <price> <total> <price> <totat> <tsp - tpc>
Product 3 <units> <price> <total> <price> <totat> <tsp - tpc>
Product 4 <units> <price> <total> <price> <totat> <tsp - tpc>

13. 13

14. Production Cost = 403.29
14
QTY UNIT G/ML INGREDIENT PRICE PERQUANTITY PRICEPERG/ML ESTIMATEDCOST
500 g 500 Flank steak/tenderloin cut 450 1000 0.45 225.00
1/2 tsp 3 baking soda 45 227 0.20 0.59
2 tbsp 30 oil 60 500 0.12 3.60
1/2 cup 112.5 pineapple juice 50 1000 0.05 5.63
1/4 tsp 2 salt 50 1000 0.05 0.10
1 tbsp 15 vinegar 15 200 0.08 1.13
2 tbsp 30 soy sauce 15 200 0.08 2.25
4 tsp 20 liquid seasoning 75 280 0.27 5.36
5 tbsp 25 brown sugar 75 1000 0.08 1.88
5 cloves 50 garlic 60 1000 0.06 3.00
1 tsp 5 ground black pepper 10 250 0.04 0.20
248.73
49.75
298.47
ADD: Labor Cost 48.13
59.69
ADD: 20%Over-head cost
(385/8=total x no. of hours to cook the recipe)
BEEFTAPA
YIELD: 500g
SUB-TOTAL:
ADD: 20%Contingency
TOTALRAWFOODCOST

15. Plant, Property,
and Equipment
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16. 16
● Direct materials are materials used in producing the
product. These materials are then combined and are a part
of the final output. It can be easily measured per output and
varies depending on the amount of product produced.
(Example: Strawberry, Flour, Sugar, Bottles, etc)
• Manufacturing Overhead Cost/Indirect materials are those
that are not part of the conversion process, but give
continuous support in the production. These materials will
not become a part of the final output. (Example: Gas,
Disposable tools, etc)

17. 17
Materials Specifications Qty.
Cost/ Unit Total Cost Source/ Supplier
Direct Materials
1.
2.
Indirect Materials
1.
2.
A. MATERIALS REQUIREMENTS
Product 1: _________________________________

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19. 19
B. Processing Tools and Equipment
A. Production and Office Equipment List
Picture Item Description Units Price Total
Total Production Equipment
B. Tools and Implements/Kitchen Tools/Cooking Tools
Picture Item Description Units Price Total
Total Production Equipment

20. 20

21. 21
C. Furniture and Fixtures List
Picture Item Description Units Price Total
Total Furnitures and Fixtures

22. 22
Item Quantity Unit Cost Total Cost
Apron
Pot holder
Hair net
etc
Total Cost
Item Quantity Unit Cost Total Cost
Ballpen
Official receipt
Voucher
etc
Total Cost
D. Production Supplies
E. Office Supplies

23. 23
F. Cleaning Supplies
Item Quantity Unit Cost Total Cost
Dustpan
Broom
Cleaning towels
etc
Total Cost

24. Plant, Property,
and Equipment
• Plant/Location Map
• Where will you locate your plant? Draw location identifying some point of reference or
you may use the Google Map to show location of the production area and marketing
area. Indicate in the map where the site is specifically located. Give reasons for choosing
choosing the location.
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25. 25

26. Plant, Property,
and Equipment
•Plant Layout
• Show layout of the production area and/or marketing area. What will
be the arrangement of machines, equipment, materials, etc. Indicate
the floor area of the plant. Draw the plant layout
26

27. 27

28. Labor Required
• How many people will you need? What will be
their responsibilities and how much will you
pay them? Where will they come from?
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29. 29
POSITION JOB
SPECIFICATION
JOB
DESCRIPTION
SALARY
Cook
Clerk

30. Production Cost
• These are costs that are incurred to create a product that is intended
for sale to customers. Product costs include Direct material, Direct
Labor and Manufacturing overhead.
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A. Direct Material are the costs of raw materials or parts
that go directly into producing products.
B. Direct labor costs are the wages, benefits,
and insurance that are paid to employees who are
directly involved in manufacturing and producing the
goods .
C. Manufacturing overhead costs also include some
indirect costs:
C.1 Indirect materials: Indirect materials are
materials that are used in the production process
but that are not directly traceable to the product.
c. 2Indirect labor: Indirect labor is the labor
of those who are not directly involved in the
production of the products.

32. Production Cost = 403.29
32
QTY UNIT G/ML INGREDIENT PRICE PERQUANTITY PRICEPERG/ML ESTIMATEDCOST
500 g 500 Flank steak/tenderloin cut 450 1000 0.45 225.00
1/2 tsp 3 baking soda 45 227 0.20 0.59
2 tbsp 30 oil 60 500 0.12 3.60
1/2 cup 112.5 pineapple juice 50 1000 0.05 5.63
1/4 tsp 2 salt 50 1000 0.05 0.10
1 tbsp 15 vinegar 15 200 0.08 1.13
2 tbsp 30 soy sauce 15 200 0.08 2.25
4 tsp 20 liquid seasoning 75 280 0.27 5.36
5 tbsp 25 brown sugar 75 1000 0.08 1.88
5 cloves 50 garlic 60 1000 0.06 3.00
1 tsp 5 ground black pepper 10 250 0.04 0.20
248.73
49.75
298.47
ADD: Labor Cost 48.13
59.69
ADD: 20%Over-head cost
(385/8=total x no. of hours to cook the recipe)
BEEFTAPA
YIELD: 500g
SUB-TOTAL:
ADD: 20%Contingency
TOTALRAWFOODCOST

33. 33

34. 34
RAW AND
PACKAGING
MATERIALS
QUANTITY UOM PURCHASE
COST
(PRICE/YIEL
D)
COST PER
g/mL/pc.
TOTAL COST
A. DIRECT
MATERIALS
RED BEANS 50 GRAMS 50/600 g 0.08 0.08
TOTAL
B. INDIRECT
10 PCS. 165/100 pcs 1.65 1.65
TOTAL

35. Project Cost
• This refers to the amount of fund or capital for the entire project or
business.
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36. 36
Business Activities Costs
Business Plan Preparation
Registration and license for business
Purchase of Inventory
Purchase of Property, Plant and
Equipment
Recruitment costs
Lease improvements
Others
Total Project Cost

37. 37