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Entrepreneurship Day Report

Accounting (Universiti AIMST)

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PRODUCT DESCRIPTION

Tea egg or Chinese herbal egg is a traditional Chinese savory delicacy

typically sold as snack or refreshment. It is basically a pre-cooked hard-boiled
egg which boiled again in a broth mixture of tea leaves, herbal spices and soy
sauce. The shell of the egg is often cracked in order to allow the broth mixture to
penetrate and seep into the egg for steeper taste and to create marble like
patterns on the surface of the egg white for better appeal. Tea egg or Chinese
herbal egg is commonly sold by the food vendors in various eatery streets or
night markets, it is usually cooked in a clay pot or metal bowl over a heat source,
mostly known and recognized by its aromatic fragrant.

Many consider the benefits of having tea egg or Chinese herbal egg are
for the improvement of blood circulation due to the anti-oxidant present in the tea
leaves, regulates the digestive systems by the traditional Chinese herbs and star
anise used, and also for a provision of sufficient protein supplements from the
egg white. Traditional recipes of tea eggs often include the use of soy sauce,
black tea leaves, star anise, ground cinnamon, fennel seeds, black pepper and
cloves. Due to its taste versatility, it can be served in either cold or warm; cold to
preserve its taste and gives off a refreshing sensation when consumed, warm to
maintain its savory flavour and nourishing temperature during consumption.

Tea eggs or Chinese herbal eggs are usually vastly available in the
Chinese herbal shops, but however are selling at albeit higher price. Therefore,
grasping the opportunity and advance of cost we have in our hand, we have
decided to purchase the materials and ingredients needed for the product and
produce it on our own. Which of course, most of the equipment and cooking
utensils are brought in from our own home. Furthermore, we were able to get
most of the ingredients in the night market where the price is negotiable and
discountable based on the amount of bulk purchase.

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Budget Product Costing

Items/ Ingredients Price (RM)

120 eggs (RM 0.40 each) 48.00
Herbs (2 packs) 3.00
Soya Sauces (1 bottle) 3.20
Caramel Soy Sauce (1 bottle) 4.00
Salt (1 small pack) 1.00
Crystal Sugar (1 small pack) 1.00
Herbal eggs bag ( 2 packs) 13.00
Total 73.20

Estimated P&L by using Budget Product Costing

RM
Revenue (120 eggs * RM 1.50) 180.00
Food Cost 73.20
Facilities Management (10%) 18.00
*Decoration (RM10.00+ RM2.50) 12.50
Profit 76.30
Profit (%) [ {RM76.30/ RM180.00}* 100] 42.39%

*Notes:

 Decoration:
- RM 10.00 is for advertising purpose (eg: Manila card, aluminum foil,
glue, and crayon).
** We are roughly estimated on it because all of these items are
already have from some of group member. We no need to purchase it.
However, we still need to roughly estimate the costing. Thus, we
estimated it around RM 10.00 because those manila cards are not
expensive, it just cost us RM 1 or RM 1.50 per pieces which we
survey from the stationary shop. While those glue, crayon, and
aluminum foil is just use a little to deco on the manila card. For those
usage, we have estimated it around RM8.50 to RM9.00.

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- RM 2.50 is for decorate our product.

** We plan to use plastic bag to pack our product. The market price is
get from related shops.

Actual Product Costing

Items/ Ingredients Price (RM)

120 eggs (RM 0.30 each) 36.00
Herbs (RM2.60 x 2 packs) 5.20
Soya Sauces ( 1 bottle) 3.20
Caramel Soy Sauce (1 bottle) Sponsored
Salt (1 small pack) Sponsored
Crystal Sugar (RM3.40 x 2 packs) 6.80
Herbal eggs bag (RM6.50 x 2 packs) 13.00
Total 64.20

Based on the lecturer’s guideline, we found that our profit percentage was
under the benchmark (44% and above). Therefore, we have discussed to cut
down the food cost instead of increase our profit percentage.

After discussed with group mates, we found that the best solution to cut
down our food cost was to find sponsors for our event. We have been used one
week time to find our sponsors. Finally, we are able to manage it due to the
amount we want to use on the event was not in large amount. Therefore, it is still
easy for us to find the sponsors. After one week hard work, we are able to get
our sponsors on caramel soy sauce and salt.

Besides, we also tried to negotiate with several grocery shops to get

cheaper price for the other ingredients. At the end, we are able to negotiate the
eggs’ price and herbs’ price. Hence, overall we are successfully to cut down our
food cost in a huge amount. We are able to save in total RM 9.00 compare with
budget product costing.

Actual P&L Statement by using Actual Product Costing:

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RM
Revenue (120 eggs* RM1.50) 180.00
Food Cost 64.20
Facilities Management (10%) 18.00
Decoration (RM14.30+ RM2.50) 16.80
Profit 81.00
Profit (%) [ {RM81.00/ RM180.00}* 100] 45%

In the nutshell, we manage to get into the “profitable zone”, which above
the benchmark of 44% in profits. We are able to earn extra in 2.61% of profits
compared to our budgeted sales.

On the actual selling day, our group managed to sell off our eggs in 3
hours. However, lecturer wanted us to continue selling until 2 pm because it is
too early to end the activities in this event. Therefore, we decided to continue
selling herbal eggs after group discussion. We managed to sell off our herbal
eggs for three times. The first time was 90 herbal eggs, sell off in 3 hours. While
second times, we have brought in 20 extra eggs to cook and sell it in
approximately 45 minutes. After that, we have brought in another 10 eggs again
and sold it to our reserved customers.

Following is the details of P& L statement on the Entrepreneurship Day:

First time selling:

RM
Revenue (90 eggs* RM1.50) 135.00
Food Cost (Ingredient Cost: RM28.20 + 55.20
Eggs Cost: RM27.00)
Facilities Management (10%) 13.50
Decoration (RM14.30+ RM2.50) 16.80

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Profit 49.50
Profit (%) [ {RM49.50/ RM135.00}* 100] 36.67%

Second times selling:

RM
*Revenue [ (90 eggs+ 20 eggs)* 165.00
RM1.50 ]
*Food Cost (Ingredient Cost: RM28.20 61.20
+ Eggs Cost I : RM27.00 + Eggs Cost
II: RM6.00)
*Facilities Management (10%) 16.50
Decoration (RM14.30+ RM2.50) 16.80
Profit 70.50
Profit (%) [ {RM70.50/ RM165.00}* 100] 42.73%

*Notes:

- Revenue was increased due to add on 20 eggs to continue selling.

- Food cost was increased in RM9.80 due to purchase another 20 eggs for
second round selling. Each eggs cost RM0.30 as brought in from pre-purchased
stock.
- Facilities Management cost following increased due to increase in the amount
of revenue.

Third times selling: (The Actual and Final P&L Statement)

RM
*Revenue [ (90 eggs+ 20 eggs+ 10 eggs)* 180.00
RM1.50 ]
*Food Cost (Ingredient Cost: RM28.20 + Eggs 64.20
Cost I : RM27.00 + Eggs Cost II: RM6.00 +
Eggs Cost III: RM3.00)
*Facilities Management (10%) 18.00

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Decoration (RM14.30+ RM2.50) 16.80

Profit 81.00
Profit (%) [ {RM81.00/ RM180.00}* 100] 45%

*Notes:

- Revenue was increased due to add on 10 eggs for continue selling.

- Facilities Management cost following increased due to increase in the amount
of revenue.

In the conclusion, third batch selling’s P&L was our final actual P&L
statement on the Entrepreneurship Day. Our profit percentage has increased
2.27% after second and third batch selling due to the economy of scale induced
the by extra selling, rendering the food cost per unit to go down. We have
brought in the extra 30 eggs from our pre-purchased backup stock. Hence, the
extra food cost will only be added from the egg cost, but the cost of the ingredient
remained to be the same.

Guest Comments Analysis

Analyzing the guests feedbacks are important so that a business organization

knows where they are standing and how is the reaction of public towards their
product. The feedbacks from the customer are taken down and analyzed by
observation method and face to face communication as we did not provide
comment cards for the customers. By communicating with our customers we are
able to understand what are their likes and dislikes about our product that we
offered.

We have made a breakdown into categories based on the guest comments such
as:

 Product

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- Most of our customers commented that our product taste and smells
really great.

 Price
- We receive no complaints about the price as many of our guest feels
that it is reasonable & affordable as it only cost RM1.50 per Herbal
Egg.

 Service
- Fast service was given as we prepared 3 pots of Herbal Eggs and
there were 5 staffs handling the packaging and transaction.

 Availability
- After 3 hours on the start of the business, our product was sold out and
some of the guests came to purchase it. They had to wait for a while
for us to restock our product.

Summary of Feedbacks

Positive Negative
The smell of the Herbal Egg attracts Better packaging could have been used
the customers to drop by at our stall. and we did not provide enough plastic
bags for consumer who bought more.
Most consumers came back to Our packaging does not have a
purchase more as they find it tasty. precaution sign where it says “Caution
its Hot”.
The product was really affordable and Some customers do not like the smell
it gives the consumer opportunity to and the feature of the egg.
purchase more than one.
The service was fast and efficient as Most of our customer that is interested

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the guest does not have to wait for is Chinese and Foreigners standards a
some time to get their product. bit apprehensive of trying. We could not
get a bigger target market.
We provide a unique product where it We should have provided plastic
is not available in other stalls in the spoons for the customers.
campus.
Our marketing strategy is very effective Preparation of product should be
and persuasive where we approach more in quantity since after 12pm
the consumer and to let them know guest have to wait for us since our
what we are selling and how much.
product was sold out.

By getting Feedbacks from customers, it can help us to uncover our flaws such
as whether the quality is the problem or the price is too high. By monitoring our
customers on the day of event we noticed that most of the consumers are
satisfied with what we have to offer.

Variance Report between budgeted and actual P&L:

Budget P&L Actual P&L (RM) Variance

(RM)
Revenue 135.00 180.00 45.00 (Favorable)
Food Cost 73.20 64.20 (9.00) (Favorable)
*Facilities Management (10%) 13.50 18.00 Increase 4.50
Decoration 16.80 16.80 0
Profit 76.30 81.00 4.70 (Favorable)
Profit (%) 42.39% 45% 2.61% (Favorable)

*Notes:

- According to our variance report between budgeted and actual P&L, it

obviously shown our event was completed in successfully. We managed to
increase in our revenue and profits in quite a large amount. Majority figures in

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this report were under favorable status. Lastly, it considers as our event and
product selling on that day was going pretty well.

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CONCLUSION

In summary, our business on the entrepreneurship day was a success.

Our products are able to be sold off at a rapid pace and we were out of stock
prior to the conclusion of the event. The main reason that we chose tea eggs or
Chinese herbal eggs as our primary selling product is due to its low cost and
simple preparation procedures. Most of the materials and ingredients we can
obtain from regular supermarkets and street markets with discounted prices on
bulk purchase, we can mark up the selling price of the product to significantly
increase our profit margin. Furthermore, we have considered the aromatic
fragrant of the tea eggs or Chinese herbal eggs to be one of our primary strength
to compete with other groups in terms of sensational marketing.

Tea eggs or Chinese herbal eggs were well received among students from
China and other Asia regions. In order to gain the mass reception and public
awareness, we used the location of our stall to our advantage, in which we chose
the first stall closest to the staircase and the shuttle bus entrance. The selling
location gave us the upper hand of reaching out to our potential customers earlier
than other groups, therefore providing us the opportunity to introduce our product
and close the sales prior to any subsequent competitors. As also increase the
public awareness of our product, we have also come up with quirky and catchy
slogans to promote our product in different languages.

Although initial we were hesitant and doubtful of our sales forecast and
revenue projection, we had also purchased and prepared extra raw eggs in case
of the scenario takes a positive turn. At the first selling we were only offering 90
tea eggs for sale in order to be cautious and not to incur extra food cost that the
revenue unable to cover, however the situation favors and the 90 eggs were sold
out. In the second selling we brought the extra 20 eggs we pre-purchased to
continue the sales, but were also sold out. In the last selling, we emptied our final
stock of 10 eggs to make a final profit. Overall, we were able to make the total
gross profit of 45% from the revenue of our selling price.

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