EXECUTIVE SUMMARY A. MANAGEMENT ASPECT Save on Surplus (S.O.S), Dumaguete City is a franchised store under Dumaguete St.

Louis Trading Enterprises which is a sole proprietorship owned by Mrs. Linda A. Monterola. The business establishment has four (4) regular employees always present during the daily business operations: one (1) manager who also acts as the cashier and bookkeeper, one (1) sales person who is also the officer in-charge of the product inventory, one (1) technician who handles the repairs of computers and other electronic products, and one (1) security guard who is outsourced from an agency. The business also avails the services of an accountant and a management consultant at certain times of the year.

B. MARKETING ASPECT Here in Dumaguete, the identified direct competitors of Save on Surplus are RMJ Store located at corner V. Locsin St. & Real St., and Alymae Surplus with two stores located at Pulantubig and Perdices St. Indirect competitors of the business include Octagon. CDr King, DGtech, POS marketing and Appliance Centrum. Save on Surplus has adopted various marketing strategies that help attract its customers and somehow counter the threat of the competitors. It makes use of radio advertisements, tarpaulins, posters and flyers. Also, with its satisfying service and trusted high quality products, SOS got loyal customers and had spread through word-ofmouth.

C. TECHNICAL ASPECT Save on Surplus (S.O.S) is located at Dr. #7 Plaza Milagros Bldg., Sta. Rosa St., Dumaguete City, across Dumaguete Cathedral Credit Cooperative (DCCCO), operating nine (9) hours from Monday to Saturday. The products sold at Save On Surplus include kitchenware, electronic gadgets, steel and wooden cabinets and drawers, and computer set, spare parts and accessories which are mostly coming from Australia delivered to Save On Surplus, Main branch and then distributed to the other outlets/ franchises. It is a favorable location for retail business because it is just a walking distance from the public market making it very accessible to the public. It also has its parking area for their customers vehicles. The retail store area of Save on Surplus is 90m2 or 6m x 15m. It is big enough to accommodate all the products displayed and keep other stocks.

D. FINANCIAL ASPECT The initial investment needed to start this business venture was Php 1,000,000 which was the personal money/ savings of Mrs. Linda Avenido-Monterola. And it only took her a year from the start of operations to recover the amount she had invested. The revenue of the business comes from the sales of their product and from the service fees they charge on the repairs.

E. LEGAL ASPECT To avoid legal conflicts and protect the interests of the business, its employees and of its customers, the establishment submits to the conditions and provisions

mandated by law. Save On Surplus has complied all requirements from the very start of the business and has regularly secured and renewed all the necessary permits and clearances needed to continue its business operations.

F. SOCIO-ECONOMIC ASPECT The City of Dumaguete continually enjoys benefits from this establishment. Aside from tax, Save On Surplus has given people the opportunity to work for them thus minimizing the unemployment rate of the city. Thus, giving the workers the chance to earn and improve their livelihood. Its business transactions also fuels economic activities which leads to economic growth and development for individuals and the society as a whole.

INTRODUCTION The City of Dumaguete is the capital, the seat of government and the economic hub of the Philippine province of Negros Oriental. Located on the plains of the south-eastern coast of Negros Island, the city has a relatively small land area with a total of only 34.26 km 2 divided into thirty (30) barangays. It is one of the most populated areas in the province as it is popularly known as a City of Gentle People and a University town. Serving as a natural border to the neighboring provinces of Cebu, Bohol and Siquijor, the city continues to attract a considerable number of people particularly students, local and foreign tourists, and businessmen. Access and transportation of goods and services from nearby provinces is also made convenient through the citys own airport and several piers. With these people from neighboring provinces flooding the city, entrepreneurs have put up businesses to cater to the publics needs and wants. Thus, work opportunities and employment have also accelerated due to the existence of these business establishments. With the advancement of technology in different areas of human life such as health, work, communication and others, electronic gadgets and computers have become indispensable tools of peoples daily activities and work. Todays technology also does not only offer us easy to use equipment but with low cost as well. Thus, Save on Surplus, Inc. has become one of Philippines leading franchisor for retail stores for imported surplus products from the U.S.A. and Australia, with 34 outlets nationwide and growing offering a wide variety of products at affordable prices. Here in Dumaguete City, there are only few surplus retail stores that sell imported products. Considering the demand for this wide variety of products by diversified market, the conduct of this development study will help Save On Surplus, Dumaguete improve and gain a

competitive advantage among its rivals or competitors through encouraging effectiveness and efficiency in the carrying out of its operations and the management as a whole.

OBJECTIVES This development study on Save on Surplus aims: 1. To develop and further enhance the business operation and activities of the business, emphasizing on its different important aspects such as the management, marketing, technical and financial aspects; 2. To evaluate and assess the establishments socio-economic influence as well as look over the compliance and completeness of its legal requirements; 3. To address the establishments existing problems through well-thought remedies and solutions; and 4. To determine and recommend other alternative courses of actions necessary for the progress of the business establishment.

SCOPE AND LIMITATION OF THE STUDY The scope of this development study on Save On Surplus covers the different key aspects --- management, marketing, financial, technical, socio-economic and legal aspects of the business establishment. This study is also limited only to the information disclosed to us by the manager of Save On Surplus, Dumaguete and the observations on daily operations gathered by the members of the group during certain hours of the day. All major, relevant, and confidential information gathered and provided for by the manager are used solely for the purpose of this development study.

SIGNIFICANCE OF THE STUDY The primary purpose of conducting this development study on Save On Surplus, with almost ten (10) years of operation, is to improve its usual course of business undertakings and to ensure effective and efficient use of the opportunities that the establishment has. It will also increase the rate of success of the business by giving recommendations of the necessary aspect of the business that needs to be improved and developed.

METHODOLOGY a. Description of the Sources of Data The sources of data used for the study include information directly given or asked from the manager and the employees, and those information gathered from the groups observations. During operational hours when the employees and the manager are not busy and there are no customers yet to be entertained, some members of the group would ask random questions about the business. There were also times when the group would respectfully inquire about certain and confidential things about the operation of the business. The rest of the information is just based on the observations gathered by the group from its daily duty in the store.

b. Data Gathering Procedure Important data needed in the study such as the history of the business, the nature of the operation, its policies, and some information of its financial, technical, and legal aspects were acquired from the manager. Others were gathered through random interviews of the employees. While, some data were just acquired by merely observing the daily operations of Save On Surplus.

PROJECT SUMMARY Name of Establishment: Enterprises Location: Dr. #7 Plaza Milagros Bldg., Sta. Rosa St., Dumaguete City Owner: Manager: Mrs. Linda A. Monterola Miss Jennifer Q. Sayson Save on Surplus (S.O.S)/ Dumaguete St. Louis Trading

Store Hours: Monday-Saturday: 10:00AM 7:00PM

A. NAME OF THE ESTABLISHMENT The business establishment chosen by the group for a development study is Save On Surplus, Dumaguete which is a franchise business of Dumaguete St. Louis Trading Enterprises. The business name already connotes that it is into selling affordable surplus products particularly computer parts, accessories and other electronic and home appliances.

B. NAME OF THE PROPRIETOR The proprietor of Dumaguete St. Louis Trading Enterprises owning Save On Surplus (S.O.S), Dumaguete is Mrs. Linda Avenido Monterola.

C. LOCATION Save On Surplus (S.O.S) is located at Dr. #7 Plaza Milagros Bldg., Sta. Rosa St. across Dumaguete Cathedral Credit Cooperative. The business establishment is very accessible to the public and also has parking spaces available for its customers.

D. DESCRIPTIVE DEFINITION OF THE ESTABLISHMENT Save on Surplus, Inc. is the Philippines leading franchisor for retail stores for imported surplus products from the U.S.A. and Australia, with 34 outlets nationwide and growing. Save On Surplus has been the countrys neighborhood imported surplus retailer for the last 11 years. Here in Dumaguete, Save on Surplus (S.O.S) is a franchised business under the sole proprietorship Dumaguete St. Louis Trading Enterprises.

E. HIGHLIGHTS OF THE ESTABLISHMENT HISTORY OF THE BUSINESS Seeing the potential and profitability of the retailing industry, Mrs. Linda A. Monterola decided to franchise Save On Surplus (S.O.S) on June 2003. She is married and shes from Bohol. But she is currently working for SPC Power Corporation in Cebu. She started with Php 1,000,000 as her initial investment. The operations turned very well that she was able to recover her initial investment after just a year. Currently, SOS is operating at a sustainable level.

NATURE OF THE INDUSTRY Retailing industry plays a very significant role and contribution towards the development of the Philippine economy. With the Philippines growing population of nearly 100 million and expanding middle class, and consumer-driven market, it presents significant opportunities for retailing of products and services. The Philippines is also one of the worlds largest English speaking markets, heightening the ease of marketing

and doing business. Its culture somehow influenced by the West makes the market open to imported brands and concepts. Thus, Surplus retail stores of computers, electronics, home appliances, furniture, power tools and other general merchandise is a profitable business venture.

I.

MANAGEMENT ASPECT A. PLANNING Planning is a preliminary step and a systematic activity which determines when, how and who is going to perform a specific job. It is a detailed program regarding future courses of action that take into consideration available & prospective human and physical resources of the organization so as to get effective coordination, contribution & perfect adjustment. It is the basic management function involving formulation of one or more detailed plans to achieve optimum balance of needs or demands with the available resources. Upon the start of the business, Save On Surplus, Dumaguete has set its long-term as well as its short-term objectives.

Short-term objectives To attract new customers and increase sales To find additional new suppliers who are reliable and who offer a wide variety of new products To reduce if not eliminate stock out of products and increase customer satisfaction

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Long-term objectives To gain profit and sustain the business operations To increase loyal customers who patronize their products and services To be the leading surplus retail store in Dumaguete City providing affordable quality products from abroad.

B. ORGANIZING a. Employee Hiring Save On Surplus (S.O.S)/ Dumaguete St. Louis Trading Enterprise adopts the usual way of hiring its employees. Applicants are required to submit to the manager their application letter, resume, SSS, and police clearance. When there are more applicants vying for just one job, the manager also takes time to interview the applicants and chooses the best one.

b. Organizational Chart Owner

Manager/Cashier/Bookkeeper

Accountant

Management Consultant

Salesperson/ Inventory Officer

Technician

Security Guard

The organizational chart of Dumaguete St. Louis Trading Enterprises owning Save On Surplus (S.O.S), Dumaguete consists of the owner, the manager, with two

11

regular employees --- salesperson who also acts as the inventory officer-in-charge, and the technician and an outsourced security guard. The business also avails the services of a management consultant and an accountant at certain points of its operational term.

c. Employees Profile and Job Description Manager/Cashier/Bookkeeper: Miss Jennifer Q. Sayson The manager is the one who handles the operations of the business and is the person responsible for supervising and managing the business. She can also make decisions regarding certain aspects in the business under the conditions and terms and upon approval of the owner. As a manager, she also does the filing of documents for the BIR, SSS, PhilHealth and utility bills. She does the recording of employees daily time record, absenteeism, and the payroll. As a cashier, she receives payments and hands out change upon the sale of a product. She also decides on the last prices of the stores products based on certain price limits set by the owner. She also does the monthly financial statement of the business. She also reports business matters and affairs to the management consultant on a periodic basis.

Technician: Mr. Ponchio K. Elnar The technician is responsible in handling desktop repair, Central Processing Units (CPUs), printers and other electronic products may it be a unit under warranty or any other products not originally bought from the store.

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Salesperson/ Inventory Officer-in-Charge: Mr. Hermelito C. Avenido The salesperson is in-charge of selling out units and does the checking of the incoming and outgoing units. He checks the inventory and reports it to the manager. He is also the one who opens and closes the store. Aside from that, he also maintains the cleanliness of the business establishment.

Security Guard: The security guard is responsible in keeping the business establishment, its contents, employees and the customers safe and secure from harmful elements. He also keeps daily time records of the employees to back up the records of the manager. He also assists some customers and helps the salesperson in assembling and carrying heavy products.

Management Consultant: Mrs. Olympia A. Serna The management consultant of Save On Surplus is also the sister of the owner. She visits the business establishment every other month and stays for a day or two to be able to check on the records and important documents. She looks over the operations to see whether the business is doing well or not.

Accountant: Mr. Elmar C. Caluscusan The accountant of Save On Surplus is the one who prepares the annual financial statements and reports. He is also the one who prepares the documents necessary for

13

filing and paying the taxes of the business. His services are only availed usually at the end of the year.

d. Cashiering System Since the manager also acts as the cashier, she receives payments and hands out change upon the sale of a product. She also decides on the last/ discounted prices of the stores products based on certain price limits set by the owner. However, the researchers observed that there are times when customers are made to wait for the manager for them to pay for their chosen product. There were also a few instances when the salesperson was the one who receives the money/ payment of customers when the manager/cashier has not arrived at the workplace yet.

e. Purchasing/Ordering System As soon as customers walk inside the store, displayed products welcome them. Some goes directly to the product they are looking for while some roams around checking on other products that interests them. The salesperson assists them and answers their questions and inquiries about the product. The customers may also request some products to be tested. When the customer decides on what to buy, the customer gets the product and pays to the manager/cashier. The salesperson prepares/wraps the product sold and hands it out to the customer. Customers also walk in the store directly asking the salesperson for the availability of certain products. The salesperson then leads them to the products they are

14

looking for. However, there are instances when the products they are looking for are out of stock. For service customers, they go directly to the repair station of the technician bringing with them the unit or product they wanted to be fixed. They have the option to leave the product or wait until it is fixed. Since there are no enough chairs to accommodate all those who choose to wait for their unit to be repaired, some customers look around the store checking on other products.

f. Employee Schedule NAME Sayson, Jennifer Q. Avenido, Hermelito C. Elnar, Ponchio K. Anecito Manager Salesperson Technician Security guard Monday Saturday 10:00 AM - 7:00 PM 9:00 AM - 7:00 PM 10:00 AM - 7:00 PM 9:00 AM - 7:00 PM

Since the salesperson, Mr. Avenido, is the one who opens and closes the store everyday, he reports to work at 9:00AM to open and clean the store. The security guard also reports at 9:00AM. The manager and the technician come to work at 10:00AM. However, the researchers observed that sometimes, customers come before 10:00 AM to buy some products or to have some units repaired. And since the technician and the manager report at 10:00AM, the customers are made to wait.

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C. STAFFING The managerial function of staffing involves manning the organization structure through proper and effective selection, appraisal and development of the personnel to fill the roles assigned to them. It pertains to recruitment, selection, development and compensation of the right people for the right job. Save On Surplus, Dumaguete adopts the usual way of hiring employees. Applicants were required to submit their application letter, resume, SSS, and police clearance. When there are more applicants vying for just one job, the manager also takes time to interview the applicants and chooses the best one. The employees are well compensated based on their job performance and attendance. Aside from their monthly salaries, employees also receive benefits such as PhilHealth, SSS, and Pag-ibig. Employees also receive their 13th month pay. These motivate the employees of Save On Surplus to really do their job well. Aside from these, the friendly and light environment of the workplace creates an atmosphere favorable to the employees enabling them to work productively with ease. However, more improvements in the establishments layout could also be done for greater efficiency in work.

D. DIRECTING Directing refers to the process in which the managers instruct, guide and oversee the performance of the workers to achieve predetermined goals. It initiates action and is said to be consisting of human factors. It basically includes all those activities which are designed to encourage the subordinates to work effectively and efficiently. Directing is

16

the function of guiding, inspiring, overseeing and instructing people towards accomplishment of organizational goals. In Save On Surplus, its short and long-term objectives serve as guide for the employees to perform their jobs accordingly. Policies and regulations are also imposed to direct employee behavior positively towards these objectives. Here are the rules and policies of Save on Surplus (S.O.S)/ Dumaguete St. Louis Trading Enterprises: 1. The business establishment closes at 7pm. 2. No work, no pay policy (benefits such as SSS, PhilHealth, 13th month pay and Pag-Ibig are granted) 3. The business is close on holidays. 4. Cleanliness and orderliness should be observed always 5. Employees should come on time 6. Lost and Defective units must be reported to the manager 7. Checking and reporting monthly inventory is a must

E. CONTROLLING Controlling is a systematic exercise that ensures effective and efficient utilization of organizational resources so as to achieve the planned goals. It is a process of checking actual performance against the standards or plans with a view to ensure adequate progress and also recording such experience as is gained as a contribution to possible future needs. It measures deviation of actual from standard performance, discovers the causes of such deviations and helps in taking corrective actions.

17

Employees actions and activities of Save on Surplus are restricted to certain limitations by their rules and policies. These enable the management to control and give reinforcements for the employees behavior. Since the manager has only three employees to supervise, control over the business isnt a burden.

II.

MARKETING ASPECT

A. Marketing Research Evaluation Save on Surplus does not conduct a marketing research. Nevertheless, this is how the group sizes-up the store in the marketing research aspect. Strengths The enterprise is strategically located near the Public Market where a lot of prospective buyers come and go. The store offers variety of office machineries, kitchen equipment and accessories affordable prices. Through almost ten years of existence, it has loyal customers that avail their products and services. The business has received awards and recognitions from institutions and organizations.

Weaknesses Does not ask customers to assess the stores performance. There is indefinite restocking schedules and opportunity losses due to stock out of some products Poor visual merchandising

18

The firewall covers the business establishment from one side/ view making it less visible for the customers.

Opportunities Increasing market due to the existence of schools, business establishments, and other institutions Peoples increasing interest in buying imported surplus products due to affordable prices

Threats Price wars with competitors Existing and New competitors in home market Fast advancement of technology

B. MARKET FACTOR Market Description Save On Surplus caters to customers from all walks of life who are in need or are looking for cheaper imported surplus products. It customers is mostly composed of professionals, and students, and married couples or housewives.

Product and Service Description Though the word surplus is often associated with reconditioned, second-hand products, Save on Surplus also sells brand new products such as those computer spare parts,

19

and home and kitchen appliances, which are actually excess or the difference when supply is greater than demand. It is also the thought that these products, although surplus, are imported from USA and Australia that attracts customers to buy and patronize. The products sold at Save On Surplus include surplus computers, computer parts and accessories, electronics, home appliances, furniture, power tools and other general merchandise imported from USA and Australia. The services offered by the establishment are repairs of desktops, CPUs, printers, and other electronic home appliances. Some of these repairs are charged under the products warranty while other service customers also have products, not originally bought from the store, fixed. The minimum service charge of the Save On Surplus is P350 per product or unit fixed.

Demand-Supply Analysis Supply and demand is one of the most fundamental concepts of economics and backbone of a market economy. And as Dumaguete City becomes one of the fast growing cities in the country, people must keep up with its fast progress. Technology addresses the needs and wants of people and eases their way of life through efficiency of work. Considering the fact that there are only a few retailing stores here in Dumaguete City that offer surplus products from Australia and USA at very affordable prices, Save On Surplus is really a profitable business venture.

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Competitors Save On Surplus, Dumaguete has identified its direct and indirect competitors in the city. Direct competitors include RMJ and Alymae Surplus while indirect competitors identified were Octagon. CDr King, DGtech, Unitop, POS marketing and Appliance Centrum. Direct Competitors: RMJ RMJ is a surplus retail store that specializes in selling surplus televisions. It has two branches located at Corner V. Locsin and the other at Real St., Dumaguete City. One competitive advantage of Save On Surplus over RMJ is that, SOS grants discounts while prices at RMJ are fixed. Alymae Surplus Another surplus retail store identified as a direct competitor of Save On Surplus is Alymae Surplus. It also sells different surplus items from abroad and has two branches here in Dumaguete: Pulantubig and Perdices branches. The strategic location of Save On Surplus is its major competitive advantage over Alymae.

Indirect Competitors: Octagon Octagon is a chain of retail stores in the Philippines selling IT products. Its branch here in Dumaguete is located at Plaza Milagros Building, Sta. Rosa St.

21

Cdr king Cdr King is one of the top media & technology providers in the Philippines. It has several branches one of which is located at Level 2, Robinsons Dumaguete.

Other indirect competitors of Save on Surplus identified include Dgtech, Pos Marketing, Unitop and Appliance Centrum which are situated in the downtown area.

C. PRODUCT PRICING In every business, in order to gain profit, there must be a pricing strategy. Its up to the management if how many percent would be raised in the cost of the product. Price, another key component of the marketing mix, refers to the amount of money charged for a product or service. The selected price, if too high or even too low will affect how well the product sells. Save On Surplus has also a pricing strategy: The Unit cost added by the minimum marked up rate of 3 % of its unit cost is equivalent to the minimum selling price of the product. There is also another strategy more favorable to the customers. Aside from having a very affordable price, the management offers LAY AWAY promos on selected trusted customers good for three months. In this, a loyal consumer can make reservation to whatever product he/ she would like to avail soon; the store accepts payments in instalment and if fully paid, that particular loyal customers can have and enjoy the product.

D. SALES MANAGEMENT SOS Dumaguete has only 3 regular employees: the manager, the salesman and the technician. Aside from these people, the store has also a security guard outsourced from a

22

certain agency. Since the owner is in Bohol, the trusted manager is the one in charge in the everyday operation of the store. The customer upon entering the door is free to roam around the room to look at the display products then the salesman would directly approach him/her. But if there are many of them, the technician and the guard can entertain their questions. This type of service aims to give the customers freedom to compare prices and quality of goods sold. However, majority of their products do not bear price tags. In addition, their products price tags are not that durable and can hardly be seen. The manager, in her table, is the one who receives and issues the receipts. The manager can also give discounts to loyal customers. The manager being the cashier and the bookkeeper at the same time is in breach of internal control. Standard protocol calls for two individuals acting as a cashier and another as the bookkeeper to maintain check and balance and to avoid future conflicts and financial problems/ discrepancies.

E. PRODUCT MANAGEMENT Marketing is everything sellers do to place their product or service in the hands of potential customers. When marketing a product or service, the 4 Ps are the things that need to be considered. However, marketing isnt just about promoting the service, it is also about creating, communicating and delivering value to customers and managing customer relationships.

Products & Services A product is what the company has to offer, whether it is something tangible, or a service. It is anything that can be offered to satisfy a market's want or need. It is about designing the product concept to fit with the customers needs and desires. Save on Surplus

23

(S.O.S) offers an extensive range of imported surplus products such as computers, computer parts and accessories, audio/video electronics, household appliances, furniture and novelty items at a very affordable price.

Price In every business, in order to gain profit, there must be a pricing strategy. Its up to the management if how many percent would be raised in the cost of the product. Price, another key component of the marketing mix, refers to the amount of money charged for a product or service. The selected price, if too high or even too low will affect how well the product sells. Save On Surplus has also a pricing strategy: The Unit cost added by the minimum mark up rate of 3 % of the unit cost is equivalent to the cheapest selling price of the product.

Place Place refers to how a product gets to the people who will buy it. It is often called the distribution strategy and this basically talks about distribution. Save n Surplus is located at Door #7 Plaza Milagros Building, Sta. Rosa St., Dumaguete City. It is a strategic location especially that it is located just a walking distance from the public market area. It also promotes convenience to customers who own vehicles because the business establishment has parking spaces available.

Product and Name Promotion Promotion represents all of the ways a company communicates with a customer. The important thing with promotion is to be communicating the benefits of the restaurant to the

24

right people. Just like any other business establishments, Save on Surplus Dumaguete branch market their products with the use of radio advertisements, tarpaulins, posters, flyers, and word of mouth.

Radio Advertisements Save On Surplus has a contract with Energy FM 96.7 to air their advertisement. Their advertisement includes the playing of the Save On Surplus jingle.

Tarpaulins Tarpaulins also Save on Surplus makes use of tarpaulins that are posted in the front glass of their store. They usually have their tarpaulins printed at Ziplink with the size 2ft x 4ft for more or less P250.

Posters With the use of its own office computer, printer, and resources, SOS uses construction papers printed with their promos for the season. this cost them more or less P25.

Flyers Flyers are also given to anyone who enters the store or disseminated at the downtown area by the employees themselves. Some flyers are supplied by SOS Manila branch. Posters, flyers & tarpaulins are made seasonal like Christmas time, Graduation and etc. Their budget for marketing their products depends.

Word-of-mouth

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The most effective way of promoting products is through the so called word-ofmouth. For how many years, SOS got loyal customers that are satisfied and considered their products trusted and tested with high quality.

E. MARKETING STRATEGIES Aside from having imported surplus products at very affordable prices and credit terms/ lay away that is appealing to the customers, Save on Surplus Dumaguete also uses promotion as a vital marketing strategy. The business promotes and advertises their products in different ways through the use of radio advertisements, tarpaulins, posters, flyers, and word of mouth. It even has its own jingle that attracts and encourages people to patronize their products and services. Save On Surplus also makes sure that the quality of the products and services they provide meets and satisfies customer expectations. Another strategy used by Save On Surplus is advertising in radio through a jingle.

III.

TECHNICAL ASPECT A. PRODUCT/SERVICE Products sold at Save On Surplus include branded surplus computers, computer parts and accessories, electronics, home appliances, furniture, power tools and other general merchandise imported from USA and Australia. The most saleable products of the store are computer sets, home and electronic appliances. They also sell gardening and farming tools. Though the word surplus is often associated with reconditioned, second-hand products, Save on Surplus also sells brand new products such as those computer spare parts, and home and kitchen appliances, which are actually excess or the difference when supply

26

is greater than demand. It is also the thought that these products, although surplus, are imported from USA and Australia that attracts customers to buy and patronize. The services offered by the establishment are repairs of desktops, CPUs, printers, and other electronic home appliances. Some of these repairs are charged under the products warranty while other service customers also have products, not originally bought from the store, fixed. The minimum service charge of the Save On Surplus is P350 per product or unit fixed depending on the degree of the damage of the product.

Suppliers Save On Surplus Dumaguete has four suppliers namely HMR Philippines Inc., PC Park Inc., Empyrean Computers and Star Apple.

HMR Philippines Inc. HMR Philippines is one Philippines leading provider of surplus items including computers, audio visual, hardware, furniture, household and office appliances and more. It has five retail branches: Mandaluyong, Araneta Center, East Service Road, Novaliches and Sta. Rosa, Laguna with each showroom carrying a wide array of novelty items and dependable technical services for computers and other electronic equipment.

PC Park Inc. PC PARK has its humble beginnings as wholesaler of second hand computers such as desktops, laptops, computer components and peripherals since 2004. After complying the Optical Media Board requirements for importing, the company started its importation which

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meant continuous supply of its main products and now trying to add items from other country mainly from Japan for its printer, TVs and LCDs. The Company has been known for its longer warranty, good quality of products and service, and will continue to bring items from abroad both information technology and electronic products.

Empyrean Computer Center The Company is the Philippine distributor of quality tested products such as Intex Technologies, KTC Panel Displays, Datace CD/DVD-Rs, PQI, Planet Networking and Communication, Zebex POS, Kingston Technologies, Huawei Mobile WiFi, AFOX

Graphics Cards and Tommade Case. Empyrean Computer Center aims to forge strong business partnerships with Dealers and Distributors nationwide to provide Filipinos with the latest technologies for business and entertainment. We recognize that growth in our Dealer partners business equals growth for our business as well.

Star Apple Computer Corporation Star Apple Computer Corporation is another provider of surplus and retail computer and electronic products. It is located at U3B Makati Cinema Square, Pasong Tamo, Makati, Metro Manila. Currently, Save On Surplus is still looking for more reliable suppliers who can address all their needs immediately and who would supply them on a regular basis. This is because of the growing customer demand of certain items and units.

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B. STORE LOCATION AND LAYOUT The retail store of Save on Surplus is situated in Dumaguete City, Negros Oriental. It is a favorable location for retail business because it is just a walking distance from the public market making it very accessible to the public. It also has its parking area for their customers vehicles. The retail store area of Save on Surplus is 90m2 or 6m x 15m. It is big enough to accommodate all the products displayed and keep other stocks. However, changes in the stores layout would increase and maximize the use of space making it more appealing to the customers. This is the exterior front view of Save On Surplus Dumaguete:

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This

is

the

current

floor

plan

of

Save

On

Surplus,

Dumaguete.

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Other pictures of the interior and exterior view of the store and picture of its contents shall be attached at the appendices section of this paper.

C. UTILITIES, STORAGE AND COMFORT ROOMS For Save On Surplus to be able to operate well daily, electricity, clean water supply and telephone/ landline connection is really necessary. The retail store also has four (4) storage rooms where other stocks of the displayed products are kept, and maintained to avoid damages. A comfort room is also available for the use of the employees and customers. But the only thing is that, the customers have to pass through the storage area before they reach the CR, and since the building somehow needs repainting and a little renovation, the stock room could be eyesore to the customers. Air-conditioning units are also placed near the entrance and another at the other end near the table of the manager. These keep the temperature favourable for customers. These are stockroom pictures of Save On Surplus:

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These are the stock rooms of Save On Surplus.

This is the path to the stockrooms and the comfort room. It is not covered so it is eye sore to the customers.

D. CLEANLINESS AND WASTE DISPOSAL A successful retailing business requires that a distinct and consistent image be created in the customers mind that permeates all product and service offerings. Visual merchandising can help create that positive customer image that leads to successful sales. It not only communicates the stores image, but also reinforces the stores advertising efforts and encourages impulse buying by the customer. Visual merchandising is a major factor often overlooked in the success or failure of a retail store. It is second only to effective customer relations. Visual merchandising can be defined as everything the customer sees, both exterior and interior, that creates a positive image of a business and results in attention, interest, desire and action on the part of the

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customer. A story can be told that communicates to the prospective customer what the store is all about. It includes the dramatic presentation of merchandise as well as other important, subtle features that create the stores overall atmosphere. Eighty percent (80%) of our impressions are created by sight; that is why one picture is worth a thousand words. Each customer has a mental image of a store and its merchandise. A store should have an inviting appearance that makes the customer feel comfortable and yet eager to buy. Some businesses maintain a minimum number of staff to reduce costs, which means it is even more important for the merchandise to sell itself. Greater effort must be spent on merchandise displays that make it easier for the customer to find and purchase the items they want or need. The basic objective for visual merchandising is a desire to attract customers to a place of business in order to sell the merchandise. Visual merchandising is offered to the customer through exterior and interior presentation. Each should be coordinated with the other using the stores overall theme. Creating and maintaining a stores visual merchandising plan, however, is not a simple task. It is necessary to continually determine what the customer sees. This evaluation from the customers perspective should start on the exterior and work completely through the interior of the store. The salesperson of Save On Surplus maintains the cleanliness of the retail store. As soon as he opens the store everyday at 9:00 in the morning, he then starts sweeping and mopping the floor. He arranges the displayed products and wipes off dust on them. He sweeps the floor when necessary. But on rainy days, we observed that the floors easily get

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dirty because there are no rags placed for the customers to wipe off the mud on their footwears. So the salesperson gets to clean the floor more often on rainy days. Trash bins are placed in the stores to observe cleanliness and orderliness of the business establishment. But, there is no proper segregation of waste. They throw their garbage whenever the garbage collector comes in the afternoon around 6 pm.

IV.

FINANCIAL ASPECT A. MODE OF FINANCING Mrs. Linda Avenido-Monterola started the franchised retail business of Save On Surplus on June 2003 with a total initial investment of 1,000,000.00. Included in this is the franchise fee, the working capital and other expenses incurred in starting the business. The entire amount of 1,000,000.00 was solely from the personal savings of the owner.

B. CASH FLOW MANAGEMENT The cash inflow of Save on Surplus comes from its daily operations. Its daily revenue comes from the sales of its product and a portion comes from its repair services. Based on their income statement for the year ended December 31, 2011 and 2010, Save On Surplus has average monthly sales of 192,640 and 188,626 respectively. The usual expenses in the operation of the retail business include the employees salaries and wages, the stores rent to the building space, royalty fee, electricity and water, meals and transportation, telephone, SSS and PhilHealth, PagIbig, marketing levy, licence fee agreement, repairs and maintenance, professional

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services, supplies, taxes and licences, 13th month pay of the employees, insurance and miscellaneous expenses. Deducting the costs of goods sold and their operating expenses, the business had a total net income from operations of 66,541.87 and 41,626.40 at the end of the respective years.

C. INVENTORY Inventory refers to the raw materials, work-in-process goods and completely finished goods that are considered to be the portion of a business's assets that are ready or will be ready for sale. Inventory represents one of the most important assets that most businesses possess, because the turnover of inventory represents one of the primary sources of revenue generation and subsequent earnings for the company's

shareholders/owners. Inventory control plays a very important role in the business. Possessing a high amount of inventory for long periods of time is not usually good for

a business because of carrying costs: inventory storage, obsolescence and spoilage costs. However, possessing too little inventory isn't good either, because of the stockout cost losing out on potential sales and potential market share as well. In Save On Surplus, First In- First Out (FIFO) is the valuation technique used by Save On Surplus. The first products that were received were the first to be displayed and disposed/ sold to customers while those received later were stocked and kept. This implies that at the end of a certain period, the ending inventory is composed of those products with a higher value.

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Inventory management is one of the problems observed by the group. Save On Surplus has a lot of out of stock products that customers often look out for. While some of the products which are not so saleable have a lot of stock. This results in high stockout cost, opportunity loss, and high carrying cost of those stocked products. Here is the categorized list of products/ inventory of Save on Surplus:

Categorized Product List of Save on Surplus

Brand new Adaptors Juicer Air compressors Kettle Antenna Knife Blank CD Lamp Blender Measuring tape Bread maker Memory cards Cables Microwave oven Casing Oven Chairs Pancake maker Cleaners Pie makers Connectors Pizza makers Converters Players Cords Rice cooker Deep fryer Salt and pepper mills Diskettes Speakers Fairy floss makers Sprayer Fan Steam cleaner Fan guard Steam press Food maker Study tables Food processor Toaster Food steamer Vacuum cleaner Garden light Vault Garden tools Webcam Headset Wire Ink

Secondhand & reconditioned Battery Boards Body board Cabinet Cards Chopper Con-air CPUs DVD ROM Hard disk Keyboards Ladder Laminator Laptop Modem Monitors Mouse Power supply Starting pulley Table Television

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D. COMPENSATION OF THE EMPLOYEES In determining the wages and salaries of the employees, the business must comply with necessary requirements given by the Department of Labor and Employment (DOLE). The Labor Code of the Philippines also discusses on the proper treatment of employees. Part of the business policy of Save On Surplus is No work, no pay. Aside from each employees monthly salary, each also receives the standard benefits set by law such as the PhilHealth, SSS, Pag-Ibig, and 13th month pay.

PhilHealth Benefits It is a health care insurance program wherein members regularly contribute to the program and can later make use of his/her contributions if he/she might be in need of a financial assistance regarding health issues. This program covers the following: 1.) Employed Members those who are employed in the government and private

sector. 2.) Individually paying Member are those who are self-employed, overseas Filipino

workers, professionals in private practice. 3.) Non- paying Members Retirees and pensioners of the GSIS and SSS; members

who have reached the retirement age and have paid at least 120 monthly contributions. Optional Retirees are not yet entitled to lifetime coverage until they reach the age of retirement which is 60 years old. 4.) Indigent Members under the indigent component of the NHIP

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The Social Security Program The social security program provides a package of benefits in the event of death, disability, sickness, maternity and old age as long as he/she has paid at least three monthly contributions within 12-month period immediately before the semester of sickness. Basically, the Social Security System (SSS) provides for a replacement of income lost on account of the aforementioned contingencies.

Service Incentive Leave (SIL) If the employees have been working in the business for at least one (1) year, whether service is continuous or broken, the employer needs to pay them Service Incentive Leave (SIL) equivalent to five days. The SIL may be used for sick and vacation leave purposes. If the SIL is not used up within the year, the employer may commute or pay its money equivalent at the end of the year. If the employees are already enjoying these benefit like when they are already given a vacation leave of at least five days, the employer need not to grant SIL to its employees. The managerial employees and field personnel also do not need to acquire SIL and if the employees of an organization has less than ten employees.

13th Month Pay All employers are required to pay their rank and file employees regardless of the nature of their employment and irrespective of the method by which their wages are paid, provided that they worked for at least one (1) month during a calendar year. The

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first one half (1/2) of the required 13th month pay may be made before the opening of the regular school year and the other half not later than December 24 of every year. The "basic salary" includes all remunerations or earnings paid for services rendered. It does not include allowances and monetary benefits which are not considered part of the regular or basic salary, such as the cash equivalent of unused vacation and sick leave credits, overtime, premium, night differential and holiday pay, and cost-of-living allowances. According to the manager of Save On Surplus, its employees only receive SSS, PhilHealth, Pag-Ibig and 13th Month pay as benefits aside from their monthly salary.

E. MAJOR EXPENSES The major expenses in the operation of the retail business include the employees salaries and wages, the stores rent to the building space, royalty fee, electricity and water, meals and transportation, telephone, SSS and PhilHealth, PagIbig, marketing levy, licence fee agreement, repairs and maintenance, professional services, supplies, taxes and licences, 13th month pay of the employees, insurance and miscellaneous expenses.

Average Monthly Expenditure For the Years 2010 and 2011 Operating Expenses Average Monthly Expense 2011 2010 22,128.61 20,089.29 5,094.28 2,101.65 12,520.83 19,642.86 892.86 3,058.75 1,423.62

Salaries and Wages Rent Royalty Fee Electricity and Water Meals and Transportation

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Telephone SSS and PhilHealth Pag-ibig Marketing Levy License Fee Agreement Repairs and Maintenance Professional Services Fees Supplies Taxes and Licenses 13th Month Pay Insurance Miscellaneous Expense Average Monthly Total Expense 1,060.45 1,595.20 380.00 1,488.10 83.33 420.83 275.00 3,613.83 1,527.39 435.61 107.50 60,401.06 1,052.82 1,354.17 410.00 223.22 415.18 250.00 4,627.92 1,552.37 388.94 127.00 47,940.53

Looking at the breakdown of the average monthly expenditure for the years 2010 and 2011, it is evident that Rent, Salaries and Wages comprise the largest portion of the expenses. The items with the least average expense are supplies, miscellaneous, repairs and maintenance.

F. FINANCIAL ANALYSIS The Income Statements for the year ended December 31, 2010 and 2011 is shown as follows:
2011 SALES Less: Cost of Goods Sold Inventory, Beginning Net Purchases Freight In Total Goods available for Sale Less: Inventory, Ending Cost of Sales GROSS PROFIT OPERATING EXPENSES Salaries and Wages Rent 2,311,683.15 629,063.50 1,421,702.89 125,178.65 2,175,945.04 655,616.47 1,520,328.57 791,354.58 2010 2,263,522.30 766,407.11 1,398,702.53 110,563.45 2,275,673.09 629,063.50 1,646,609.59 616,912.71

265,543.30 241,071.42

150,250.00 235,714.32

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Royalty Fee Electricity and Water Meals and Transportation Telephone SSS and PhilHealth Pag-ibig Marketing Levy License Fee Agreement Repairs and Maintenance Professional Services Fees Supplies Taxes and Licenses 13th Month Pay Insurance Miscellaneous Expense Total Operating Expenses NET INCOME FROM OPERATIONS 61,131.36 25,219.81 12,725.39 19,142.40 4,560.00 17,857.14 1,000.00 5,050.00 3,300.00 43,365.92 18,328.62 5,227.35 1,290.00 724,812.71 66,541.87 10,714.28 36,705.00 17,083.48 12,633.80 16,250.00 4,920.00 2,678.58 4,982.14 3,000.00 55,535.00 18,628.43 4,667.28 1,524.00 575,286.31 41,626.40

Annual sales of the Save On Surplus for the year 2010 and 2011 reached P2,263,522.30 and P2,311,683.15. This is composed of the revenue from the sale of the products and service charge from fixing and repairing computer and electronic units. Revenue from the charges of the services offered by the business is only 4% of the total revenue, according to the manager. Comparing the Income Statements for the year ended December 31, 2010 and 2011, the researchers could say that the net income from operations has increased by 37.44% from the previous year. Although this is enough to sustain the business operations, greater net income could be achieved through efficiency in work and some other improvements in the different aspects of the business. According to the manager, during the earlier years, they used to reach a daily quota of P40,000. But due to often stock outs of some products, daily sales have dramatically decreased. If this problem on stock outs could be addressed well, then it would result to increased sales and customer satisfaction.

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A complete set of financial statements and reports for the years 2010 and 2011 are attached to the appendices section of this paper.

Financial Statement Analysis Liquidity Ratios Liquidity refers to managements ability to satisfy its short -term liabilities and obligations as they come due. It reflects the ability of the business to meet its short-term obligation using assets that are most readily convertible to cash. The more liquid the business, the more likely it will be able to pay its employees, suppliers, and holders of its short-term loans payable. The current ratio is one of the most commonly cited financial ratios, which measures the liquidity of a business calculated by dividing the firms current assets by its current liabilities.

Current Assets Current Ratio = Current Liabilities

Increased in current ratio indicates that the establishment has greater capability to satisfy its current obligation every year. The quick ratio is similar to the current ratio except that it excludes inventory, which is the least liquid current asset. It only includes those assets that are cash or near cash (called quick assets). Thus, quick ratio is a more conservative measurement of liquidity than the current ratio. Quick ratio is calculated by dividing a firms current assets minus inventory by its current liabilities.

42 Current Assets - Inventory Quick Ratio = Current Liabilities

Solvency Ratios Solvency refers to managements ability to pay all its debts, current and noncurrent. Both the management and the long-term creditors are interested in the solvency status of a business. Debt to assets ratio shows the percentage of total assets financed by using external or debt funds. It is expressed as:
Total Liabilities Debt to Assets Ratio = Total Assets

Equity ratio measures the portion of equity in a business capital structure using the following formula:
Equity Equity Ratio = Total Assets

Profitability Ratio Return on assets (or ROA for short) tells an investor how much profit the project generated for each Php 1 in assets. Throughout the years ROA ratio will be positive. Return on Equity (ROE) is a measure of the operating efficiency, computed using the formula:
Net Profit ROE = Total Equity

Net Profit Margin A ratio of profitability calculated as net income divided by revenues, or net

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profits divided by sales. It measures how much out of every Peso of sales a company actually keeps in earnings. A higher profit margin indicates a more profitable entity that has better control over its costs compared to its competitors.

Financial Ratios
2011 2010

TEST ON PROFITABILITY RETURN ON INVESTMENT Income Investment

66,541.87 1,000,000.00 0.07

41,626.40 1,000,000.00 0.04

RETURN ON SALES Income Net Sales

66,541.87 2,311,683.15 0.03

41,626.40 2,263,522.30 0.02

GROSS PROFIT RATIO Gross Profit Net Sales

791,354.58 2,311,683.15 0.34

616,912.71 2,263,522.30 0.27

RETURN ON EQUITY Net Income Average Equity TEST ON LIQUIDITY CURRENT RATIO: Current Assets Current Liabilities

66,541.87 288,308.35 0.23

41,626.40 255,037.42 0.16

920,268.02 499,805.06 1.84

809,313.50 455,392.00 1.78

QUICK RATIO: Quick Assets

920,268.02

809,313.50

44 Current Liabilities 499,805.06 1.84 455,392.00 1.78

INVENTORY TURNOVER: Cost of Goods Sold Average Inventory TEST ON SOLVENCY EQUITY RATIO Owners' Equity Total Assets

1,520,328.57 288,308.35

1,646,609.59 255,037.42

576,616.70 1,076,421.76 0.54

510,074.83 965,467.24 0.53

V.

LEGAL ASPECT A. UPON THE START OF THE BUSINESS 1. Mayors Permit The proprietor filed and application form that she acquired from the City Administrators Office located at the Dumaguete City Hall. She also submitted certain documents and other certificates first before the permit was issued.

2. DTI The proprietor was required to register the business and product name under the terms and conditions of the Department of Trade and Industries. Certain fees were paid necessary during the registration process.

3. Barangay Clearance

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A clearance from the barangay on which the retail center is situated was required. This was given upon request from the owner of the establishment in connection with her application for Mayors Permit.

4. Tax Clearance During the acquisition of the tax clearance, the proprietor paid for its verification. Community Tax Certificate was then issued after the payment and approval of the application and Tax clearance was provided.

5. Pest Control Clearance Pest Control Clearance ensuring that the establishment is free of any pest or vermin threatening the daily operations and its quality of the establishment was necessary. This was issued by the City Health Office.

6. PhilHealth This is a mandate by the government requiring all employers to register their employees to the said insurance company. This is to ensure sustainable health assistance and accessibility of quality health will be assigned a PhilHealth number. The employee were also required to pass certain documents to support their application and for further updating of their profile.

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7. Zoning Permit The Zoning Office located at the City Hall issued the clearance by stamping and affixing a signature at the back of the Business Permit. But prior to this, the office required a sketch of the business location/layout.

8. Social Security System (SSS) As mandated by the government, employers of the private sectors are required to register as well as their employees. The same with PhilHealth, the proprietor provided the necessary documents to support their application and further updating of its profile.

9. Fire Department Certificate To acquire this certificate, certain requisites such as the Application for Business Permit, receipts of payment made in the City Treasurers Office, City Health Office, ENRO, Zoning Office, annual inspection from the City Engineers Office are necessary for completion. After all requirements are processed and approved this certificate will be issued at the Fire Department Office. An ocular inspection was conducted by the City Fire Marshal under a mission order which will also require a payment for the fire code. Total fees were computed by the City Finance office and the City Fire Marshall affixed its signature and the certification was released. After having complied all the necessary permits and documents as mandated for Mayors Permit, a Certificate was issued by the City Administration Office in the Permit Section.

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10. Insurance Insurance, in its essence, is a contract of indemnity or replacement. By this, it means that insurance provides compensation or reimbursement for actual damage sustained by the insured. The Principle of Indemnity is that principle by which an insured is compensated for losses sustained and is placed, as much as possible, in the same financial position as he had immediately before the misfortune. In the final analysis, indemnity can be viewed as security against loss. However, in case of loss against which the policy has been made, the insured shall be indemnified, but shall never be fully indemnified, i.e., recover more than the amount of his pecuniary loss. Save on Surplus availed a standard insurance against fire and lightning of the store and its contents.

B. FOR THE CONTINUATION OF THE BUSINESS Annually, Save On Surplus complies and submits to Dumaguete City governments conditions and renews the necessary permits, certificates and documents required by law necessary to continue its business operations.

VI.

SOCIO-ECONOMIC ASPECT In general, establishing a business benefits not only the proprietor by gaining profit but also the socio-economic aspects of individuals and the society by employment and others. It is expected to improve the standard living of the owner and its workers.

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Providing employment will alleviate the living condition of these individuals, as well as the economic condition of the society.

Social Benefit of the Project The most important benefit that Save On Surplus provides the society is a practical way of spending and managing ones finance. The proposed business venture promotes practicality of general public in terms of investing their money on affordable and reliable products. The business also addresses the increasing need and demand of affordable and imported surplus products of the public.

Economic Benefit of the Project Dumaguete City having a fast growing economy, encourages a lot of economic activities. Save on Surplus has positive effects to the economy of the local government through collection of taxes and fees. This generates employment and job opportunities to residents who are currently looking for jobs. Employment equated to workers receiving their income spurs spending for more goods and services. This translates to more revenues for the local government in terms of fees and taxes. More revenues will mean more funds to finance the development programs and projects of the city that can benefit its citizens. Certainly, Save On Surplus has a positive contribution to the citys economic development. It benefits the local government and the residents in general.

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SUMMARY OF SALIENT FINDINGS Management Aspect A security guard from another store comes and charges his cellphone there. The security guard leaves his post and also assists and entertains customers. Whenever the manager is not around, the other employees just leave the store. The salesman and the technician are free to open the cash box whenever there are sales made if the manager is not around. Non-SOS customers sometimes use the parking spaces for SOS customers. Whenever new stocks are delivered, the first thing the manager do is recheck and make a physical count while the other employees, including the security guard, remove the prices on in it and assemble the product, if necessary. Employees do not store their food well. One time the smell of food diffused inside the store. It was like customers are in a carenderia than an appliance-gadget store. Personal things of employees are placed anywhere like the water jug, sunglasses, tweezers and cellphone on the display area. The manager came in late for 45 minutes. According to one of the employees that she is always late during Saturdays. They do not keep Petty cash. The manager brings the money. When making receipts, they write the item code then the amount in numbers. Afterward, they stamp 'PAID' on it and signs it, and then he or she then lets the customer sign. The security guard sometimes sleeps on duty. He pretends that he is awake by wearing his sunglasses on.

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The group found out that the security guard makes use of the cabinets that are for sale to keep his belongings. This is wrong because oftentimes, customers would open the drawers and see his things.

The establishment does not have enough chairs for the customers and the employees. They make use of a CPU as one of the chairs.

The security guard also sits on the monitors. One time the members on duty heard some cracking sound. Most likely, some of those monitors are destroyed already.

There is an improvement on the way the employees greet and treat the customers. Before, they don't really mind and just let them roam around the store but now, they greet them politely and attend to their needs immediately.

One employee charges his phone in an area where it is visible for customers. In their 9 years, they indeed have a number of loyal customers already and one of it is the owner of the Amigo Subdivision.

The employees are free to use either the television or the radio if they want to. Whenever there are no customers, the security guard and the other employees leave their posts and stay outside.

During business hours, the technician takes a nap. One problem is they do not have a substitute technician whenever the technician is not around. Just like one instance when one customer brought him to Mabinay for the installation of the LCD TV that he bought in the store. It was good thing that no customer came for repair.

Inside the establishment is kept clean while outside of it, there are biscuit wrappers scattered.

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The technician indeed provides good services since one client who is a foreigner came and said that his friend recommended the establishment.

Vehicles are not properly parked. Some of those vehicles are not even owned by SOS clients.

Whenever customers come in the store, the salesman and the security guard entertain them instantly unlike in the previous weeks.

Only the salesman has a uniform

Marketing Aspect They made new price tags but it was still not visually appealing. Despite the fact that parked vehicles cover the establishment, at least its signage is large and visible enough for passers-by. Customers and employees are free to try on the products. The technician indeed provides good services since one client who is a foreigner came and said that his friend recommended the establishment. In their 9 years, they indeed have a number of loyal customers already and one of it is the owner of the Amigo Subdivision.

Technical Aspect Whenever, big vehicles are parked, the establishment signage cannot be seen. Some products do not have price tags. While those with price tags were presented in a way that do not catch the attention of the customers. There is blood on the parking area since the parking boy had an attack of his epilepsy. They didnt even rinse it with water.

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The place is not well-arranged. Hence, it is not visually-appealing for customers. The temperature inside the establishment is good. However, when the manager turns the air-conditioning units off, there is a foul odor inside which is bad for customers.

When the extension wire is not in use, it is not kept well organized. A water jug was placed on one of the display shelves for three weeks. There is a blade on one of the display shelves and this could be dangerous for customers who bring their children with them. Some products do not have price tags. Things like nail-cutter, coins are scattered on one of the dividers of the display shelf. There is a rat in the stock room. The personal things of the security guard are scattered like his water jug on the display shelf and his bag inside the for sale cabinets.

Inside the establishment is kept clean and organized already. Also, prices are already on the products.

Motorcycles are not properly parked. Customers sometimes have a hard time parking their vehicles.

Financial Aspect According to the sales journal that the manager showed, they have an average sale per month of Php 100,000.00. She said that this is lower than the previous years.

Legal Aspect The establishment complied with the No Smoking Policy as they placed its poster outside. Save On Surplus has complied and submitted to the requirements set by the law in

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operating a business . CONCLUSION Though Save On Surplus, Dumaguete still is able to generate a substantial income enough to sustain its business operations, the researchers believe that by improving certain points in the different aspects of the business, Save On Surplus would be able to double or even triple their profit just like during its earlier years. Nevertheless, this retail business is really of very profitable since the market for retail surplus products is really big and demand for imported surplus products is increasing. The accessibility of the location, affordability of the products and services offered by the business establishment also serve as its competitive advantage over the competitors. However, there is still a big need for them to develop and improve the cleanliness, layout and product organization of the establishment. Inventory management also needs immediate and deliberate attention for it greatly affects the performance and profits of the business. Also, the policies should be strictly implemented by the management that the employees should follow. Disciplinary actions such as the practice of negative reinforcements must also be determined in case of policy deviation by any employee.

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RECOMMENDATIONS With the information and observations gathered, presented, and problems identified the researchers would like to present the following recommendations for the development of Save On Surplus, Dumaguete City.

MANAGEMENT ASPECT The researchers recommended alternative courses of actions for the management aspect are categorized for the long-term and short-term run of the business and should be addressed immediately for the benefit of the business. The policies and rules should be STRICTLY implemented, and enforced by the management. Although the relationship of the owner and the manager is built on mutual trust, the researchers see the need to hire a cashier/bookkeeper for security and control purposes. The researchers also recommend that both the technician and the salesman should wear a uniform and a nametag to be easily identified by the customers. Employees should strictly observe punctuality and measures on tardiness should be made to enforce and correct employee behaviour. Non-employees or outsiders should be strictly prohibited from entering and making use of the establishments amenities which are intended for customers and employees only. Employees should never leave their post without permission or valid reason. Employees should be very observant of the establishments cleanliness and orderliness. Employees personal things should be kept in a place like a locker.

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Employees should act in accordance with their job description. Only the cashier should receive the payments from product sales and service charges and should be the only person who is authorized to handle cash and guard the cashbox.

Eating meals or snacks should be done only on one section or place of the business establishment to avoid damages to products and maintain order.

MARKETING ASPECT Aside from playing the Save On Surplus jingle on the radio, the researchers suggest that the advertisement should also mention very briefly the products and services that the business establishment offers and also the current promos, if there are any.

TECHNICAL ASPECT STORE LAYOUT The store should be renovated and repainted in order to improve its interior and exterior structure applying the principles of visual merchandising.

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This is the suggested exterior view of the business establishment. It is quite simple but pleasing to the eyes of the public. It is attractive and it encourages customers to enter and look at the stores products. Only two colors of paints are to be used: orange and violet.

Switch to a more effective and energy-saving lighting system

Using modern energy-saving lighting system is a great way to revolutionize the commercial establishment without compromising the quality of the light it disperses efficiently on different areas.

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Provide lockers for employees personal things

Providing lockers is necessary for the employees to keep their personal things rather than be seen scattered anywhere the establishment being eyesores to the customers. The more the personal things, the bigger lockers are needed.

Make use of sturdy rolling shelves and platforms for easy rearrangement of product displays

The current shelves of Save on Surplus are not sturdy and dont have wheels making it hard for the employees to rearrange. These suggested rolling shelves have rubber stoppers attached to the wheels to maintain stability and safety. These stoppers are just adjusted when the shelves need to be rolled or moved.

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Provide nametags and sets of uniform for the technician, salesman, and the cashier for identification.

NAME
Salesperson

NAME
Technician

NAME
Cashier
Place a doormat/s on the doorstep to maintain store cleanliness especially on rainy days.

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Maximize store space through a new store layout. Provide a section or place solely intended for employees to take their meals and snacks.