Category: Sample Feasibility Study

A Feasibility Study of Establishing a McDonald Branch along Nicanor Reyes Street, Sampaloc, Manila

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Establishing McDonald Restaurant Feasibility Study

1.    General Objectives

1.1    Description of the Business Project

The proposed business will need a three-storey building in a 2,000 square-meter lot with a parking space at the rear.  The customers will drive in the left entrance greeted by the water-sprinkled Indian trees partly shielding the establishment from the fumes coming from the busy street.  Embraced by the multi-colored lights, the trees will set the cosmopolitan setting to a rustic atmosphere.  The M insignia appearing to be cradled by the trees from a distance will outshine the multi-colored lights below stressing the romantic surrounding.  The building will be constructed to hide the stockroom complementing the architectural masterpiece.  The smoothly cemented exit passing through the well-manicured lawn will draw sighs of satisfaction from the customers.

The state of the art tables, chairs and utensils will enhance the customers feeling that they are in a five-star hotel.  Very affordable, the food will enthrall every customer to come and savor the food over the widely spaced tables on the immaculately marbled floor.  The electronically flushing system of the restrooms will motivate the customers to force their friends and relatives to frequent this new McDonald Branch at the heart of the university belt.

1.2    Project Time Table

All minor detail considered, the project will start serving the ten thousand targeted daily customers within five months.  The contractors will complete the fence and the framework of the building in the first month.  They will finish the walls and the floors in the second month. They will install the electrical and the air conditioning units in the third month  After the first and second layer coating, they will complete the final painting in the fourth month and finally they will landscape and plant balled-trees in the fifth month.  As the project will be in progress, the company will buy the facilities to be used.

1.3    Management of the Business

With three managers alternately scheduled on an eight-hour duty to man the 130 crew in the 24-hour service, the business will surely satisfy the customers, propelling profit to soar.

The personnel will make a customer feel that he is the only one served amidst the queuing multitude.  The high wage given by the company and, likewise, the humane treatment of the superiors will inspire the crew to render machine-precise service.

2.    Product and Market Aspects

2.1 Market Outcome

A variety of expensive fireworks commence the business to attract the children, students, parents and professionals.  This opening blast will have been advertised a month before.  The initial big crowd from the different districts of the city will keep growing to actualize the management’s vision that this McDonald Branch will be the most profitable among the food chains that mushroom in the metropolis.

2.2 Market and Selling Price

The customers can order from a variety of choices in the counter staffed with beautiful and handsome ever-smiling crew.  The waiters will serve the orders in the well-crafted, smoke-free dining areas with both oriental and western motifs to fit their number and their tastes.  These areas will enhance customer-privacy as the customers enjoy eating while talking about the gossips of the town, or as they engage in a highly intellectual calisthenics about a hot political issue.  The area will also conduce lovers to cement their relationship with their soul-penetrating interlocked gazes that only lovers could fathom, as they savor their food.

mcdo food

3.    Technical Aspect

3.1    Location Factor

Situated at the corner of R. Papa and Dr. Nicanor Reyes streets at the heart of the University belt, this food center will surely draw customers from the cross-section of society.  The following factors will back-up the company’s foresight:

3.1.1    Topography

The 2,000 square-meter lot does not need labeling because the area is already flat.  Although the place lies in the lowest part of Manila, Mayor Atienza’s Buhayin ang Maynila program has eradicated the perennial floods that residents of the area suffer from.  No matter how strong the typhoon will be, the rains will not flood the area.  The customers will not be drawn away from enjoying the services of McDonald.

3.1.2    Cost of Land

The fertile business venture will cheapen the current Php 20,000 per square meter piece of land.  The forty million peso worth of property will double after only three years of operation.

3.1.3    Security

The place will be very safe.  Secretly installed cameras will monitor every move to ensure the security of the customers. Four security guards simultaneously assigned to the area will guarantee the safety of the clients.  This will be backed up the policemen assigned at the outpost nearby.

3.2     Size and Layout of the Building

To maximize the 40 x 50 meter land area, the engineers will erect the 20 x 50 meter land area, the engineers will erect 20 x 30 meter proposed three storey building, leaving five meters at both sides and 18 meters fronting the street.  Only two meters will be left at the back of the building  This will ventilate the establishment.

3.3    Equipment

The San Jose Builders will construct the building.  This construction company will use modern building equipment like a cement mixer, caterpillar, automatic digging drill, and other state-of-the-art construction materials.

4.    Project Cost

4.1 The Land and the Building

This project will cost about Php 43,500,000 which is roughly broken into the following:

Cost of 2,000 meter lot – Php 40,000,000
Cost of the 3-storey building – Php 3,000,000
Accessories and equipment – Php 500,000
Total Cost – Php 43,500,000

The 40 million pesos worth of land is the biggest of the capital investment but it is worth it because unlike the other expenses, the land value will appreciate through the years.  The contract with the San Jose Builders for the proposed three-storey building is Php 3,000,000.  This includes materials and labor.  With the five-month paying scheme, McDonald will pay Php600,000 every month until the last month.  The food center will need Php500,000 for the imported accessories like tables, chairs and other needs.

4.2    Franchise

The food center will pay the current Php1,000,000 McDonald franchise.

4.3    Sources of Financing

The proprietor will put in Php3,500,000  The remaining Php40,000,000 will be borrowed from the bank

5.    Business Operation

5.1  Revenues

With 50 thousand monthly net income target from about five thousand daily customers, the proposed branch projects the following net income by month and years:

First month – Php 1,500,000
First year – Php 18,000,000
Second year – Php 36,000,000
Third year – Php 54,000,000
Fourth year – Php 72,500,000

After four years of operation, this venture will have gained Php 11,500,000 as shown in the following computations:

Net income in four years – Php 72,500,000
Minus the sum of investments – Php 61,000,000
Difference – Php 11,500,000

Loaned money from the bank – Php 42,500,000
Interest of loaned money – Php 17,000,000
Franchise – Php 1,000,000
Maintenance – Php 500,000

Total – Php 61,000,000

5.2 Accessories and Equipments

Being of high quality, the accessories will still be usable after four years.  However,  Php 500,000 pesos is allotted for maintenance and replacements of damaged property,

Summary

The figures above prove how financially rewarding this business venture is.  Because food is a necessity, a venture like this guarantees 99% success  This is especially so if the location is the University belt like McDonald N. Reyes.

(This feasibility study was taken from Technical Writing Revised Edition by Corazon C Obnamia, et al)

A Project Feasibility Study on the Manufacture of an Ergonomically Designed School Backpack

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Proposed Location: Paniqui Productivity Center, McArthur Highway, Samput, Paniqui, Tarlac

Proponents: Russel D. Garcia, Kathleen E. Gonzales, Lara Joy T. Martinez, Jonelyn F. Mendoza, Emmaloida H. Tabag

Degree: Bachelor of Science in Industrial Engineering

School: College of Engineering, Tarlac State University

Date: March 2003

Brief Description of the Project

The project proposes to manufacture an ergonomically designed school backpack, branded as “Pack ‘Em All”  It is a backpack aimed at helping elementary students to correct posture and reduce stress on back and shoulder while carrying loaded backpack.  The bag has properties unique from other bag presently available.  The aluminum places at the back portion of the bag but it is not visibly seen and will serve as the back support.  The aluminum is contoured to fit the shape of the back.  This will trigger the back straightening of the user.  This will prevent the user from slouching and eventually develop a good posture.  It has a wider sling to have a greater support.  It has a waist support to sustain the lower part of the torso.  It has more space inside to cater to students who bring lots of school materials.  The bag is ergonomically designed for the ease and comfort to prevent backaches, shoulder pain and abnormal curve of the spine, thus creating a good relationship between the bag and the user.

Summary of the Findings

A.    Management Aspect

The product shall be pre-operated eight (8) months before the start of the operation.  Partnership shall be the type of business organization, and shall be composed of five (5) partners.  The organizational set up shall be in a line function.  The business shall have an initial capital of Php 625,000 and Php350,000.  The business shall be loaned from DBP.

The General Manager shall be the head of the organization.  Under him is the Plant Manager who shall be responsible on the production area, and has the overall control on the company personnel, marketing of the product and even the allocation of budget for the company.  Along with him is a Secretary.  Under the Plant Supervisor is the Human Resource Personnel; under him are the Utility Man/Driver, Security Guard, and Janitor/Messenger.  Next is the Quality Control, under him is the Sewer, Machine Operator, Packager and Stockman.  Next is the Marketing and Sales Personnel, under him is the Purchaser  Finally, the Finance Personnel, next to him is the Accountant, who shall be classified as retainer, because he shall render service only once every end of the month.  The required personnel shall come from nearby places of the plant and within Tarlac.  As soon as the business normally operates, all benefits are to be given to all employees.  The company shall hire additional workers after six (6) years of operation, based on the forecasted increase of plant capacity.  They are to be paid at a minimum starting salary and shall also increase to 10% annually.

B.    Marketing Aspect

The proposed product is based on the idea that elementary students have a hard time in carrying their things from school and that in the latter of their lives, they may experience back disorders if not properly taught.  The demand of the supply shall be based the total number of students from Grade IV-VI, and the supply shall be based on the existing competitors in malls.  A market share of and 43.2% is available for the product.  Pack ‘Em All’ is the brand name of the product and is priced using Full cost pricing at the market at an amount of Php 682.75 inclusive of Value Added Tax.

C.    Technical Aspect

The bag is created for enhancing desirable human values such as increased comfort and improved quality of life.  The product will provide lumbar binder fitted to the body waist, which will offer some trunk support through elevation on intra abdominal pressure and will serve to remind us of proper posture.  It will also provide back support for the spine.  This support is made up of 0.4 cm thick and 2.5 cm wide flat-bar aluminum material.  Its height varies in three different sizes, 12, 14 and 16 inches.  This is based on the length of spine from Thoracic level 3 (T3) to lumbar Region five (L5) of our target market.

The manufacturing process is based on the usual process done by any bag manufacturing in the province, which is by the use of high-speed electrical sewing machine. The molding process of the aluminum back support is done by a hydraulic press.  The whole production operation is estimated to have a standard time of 353.2455 minutes, including pattern making.  But in case of mass production, this process will be eliminated and the total production time will be 104.8455 minutes or 1.75 hours.

The plant size or plant capacity is measures based on the machine used.  The plant will have the capacity of 10,080 units/day.  The production schedule will be 10% of the average market share every year to provide safety stocks in case any increase in demand arises.

The plant is located at Paniqui Productivity Center, Brgy, Samput, Paniqui, Tarlac.  This building is divided into two parts.  The first part has already been leased and the proponents will lease the southern part  The building has a floor of 630 sq.m  and has a monthly rental of Php 20.00 per square meter.  It is a 4 1/2 drive from our suppliers and 30 minute away from our target market.  It is along McArthur Highway, which makes it accessible to public transportation.  Paniqui is known for its sewing business, so laborers with that particular skill will not be a problem.  Nearby towns could also provide manpower for the plant.  The water requirements will only be minimum and will be supplied by the Paniqui Water District.  The power consumption will be generated from the Tarlac Electric Corporation (TARELCO).  The plant will not provide toxic wastes.  Only excess fabrics will the wastes, and these will be sold to some backyard manufacturing that produce tokens and small purse for different occasions.

D.    Financial Aspect

The current ratio or working capital ratio is one of the fundamental measurements of a company’s liquidity.  This measurement is computed by dividing the total current assets by the total current liabilities.

For JR. JEK PARTNERS, the profit margin on sales means that for the year 2002, they generated 6.66% of net sales.  The decrease in the second year results from the inability of the plant to shoulder the expenses incurred in the production.  But in the succeeding years the company recovers with the increase in the profit margin.

Another way of testing the profitability of the business is through the use of rate of return wherein it measures the rate of return to the partner’s equity of  JR JEK PARTNERS are 28.9%, 17.26%, 37.32%, 67.96% and 99.95% for the first, second, third, fourth, and fifth, respectively ensure that the business is profitable.

With all other factors remaining constant, an increase in the partner’s equity will decrease in return of equity.

For as long as the return of equity is greater than zero (0), the firm precisely earns income or, on the hand, breaks even.  Shortly stated, the firm operates in a favorable performance.  Thus, the project is financially feasible.

E.    Social Desirability Aspect

The business enterprise is deemed to serve as a great contribution to the government’s effort in raising revenues for its functions.  These shall be in the forms of income tax, permits, licenses, and other fees.  The society will benefit as a whole because of its ergonomically design at the customers comfort.  Its design will help not to worry about their child’s posture when they grow old.  The introduction of the bag in the market will pave the way of the competitors to lower their prices in order to maintain its competitiveness.  The unemployment rate in the country will get low because this will provide jobs for the families.  In this light, the manufacturing of the bag will attain its desirability and acceptance.

Project Feasibility on the Production of a Shoe Insole Deodorizer

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Title:
Project Feasibility Study on the Production of a Shoe Insole Deodorizer using Activated Carbon and Baking Soda

Proposed Location:
Brgy Anupul, Bamban, Tarlac

Proponents:
Eda S. Castro
Ferdinand D. Constantino
Jane M. Delos Santos
Gian Carlo R. Sotelo
Divine Grace B. Tuazon

Degree:
Bachelor of Science in Industrial Engineering

School:
Tarlac State University

Date:
March 2003

Brief Description of the Project

This project proposes to produce a shoe insole deodorizer using activated carbon and baking soda as the active ingredients.  The product shall be branded as “POWER SOLE”.  It is a flat insole type deodorizer that can neutralize the odor and absorbs moisture on foot caused by sweating.  It can also serve as a shoe pad for loosed shoes.  The product has five (5) sizes (5,6,7,8 and 9) to cater different foot sizes it has also a suggested life span o one (1) month, but this will depend on the lifestyle of the person using it.

Summary of Findings:

1.    Management Aspects

The Power Sole Enterprises shall be a pre-operate for 12 months before its normal operations.  The enterprise shall be a partnership type of business organization.  The business shall employ its personnel, which shall be headed solely by the plant manager who shall supervise the production, administrative/finance, and marketing officers.  Under these officers are the production laborers, warehouse man, product inspector, accounting clerk, security guards and driver respectively.  All personnel shall come from the province of Tarlac.  Giving importance to the nearby towns where there are skilled workers in relation to this kind of work.  The compensation of the personnel shall be based on the existing labor code.  The enterprise shall pay Php 1,291,584.00 for its salaries/wages during the first year of operation.  Benefits such as SSS, EC and PhilHealth shall be given to the employees.  Every year of operation, the enterprise will hire one (1) additional production to meet the increasing demand of the product.

2.    Marketing Aspect

The marketability or salability of the proposed product is anticipated, since this project entails comfort, easy and convenient to use compared to existing foot deodorizer.  The demand of the product shall be based on the past demand of foot deodorant products consumed by each household population of Tarlac City’s urban barangays, and the supply shall be based on the number of foot deodorant purchased from several distributors/suppliers.  The market share of this product is 42.05% of the average yearly demand from 2003-2207, which is equivalent to 178,546 pairs of shoe insole deodorizer but considering the result of the survey conducted by the researchers, the researcher had decided to increase the average capacity of the plant from 178,546 to 1800,000 for the first year of operation.  The proposed selling of the product shall be Php 16.50 which is inclusive of value added tax (VAT).  The project will sell the proposed product in cash discount basis.  And limited its retail price to 20% increase from the set factory price to the retailer (distributor) to achieve the pricing objective of meeting the existing price competition in the market.  The Product shall be introduced and promoted through posters, billboards, banners and radio ads.

The proposed product shall be packed in a vacuum-sealed transparent plastic packaging material with a descriptive label, which contains features and specification of the product, and finally the packaged products are placed in a carbon box for protection in the storage and delivery.  The outer surface of the box is printed with the product name, the description or specifications, and the name and address of the manufacturer  The product shall bear the brand name “POWER SOLE”, which signifies the characteristic and nature of the product.

3.    Technical Aspect

The proposed product is a shoe insole deodorizer using activated carbon and baking soda.  The activated carbon is part of the product because it can absorb odors and volatile organic compounds.  We also have to add the treatment of the foam and cumbelli to help activated carbon to help activated carbon to neutralize the odor.  In this study, we conducted laboratory tests to determine the volatile content of activated carbon before and after used.  We found out in testing activated carbon, with the use of a gravimetric oven, that when it is not treated, only 3.423% of moisture will be absorbed by the carbon and 45.181% was absorbed by the carbon a exposed naked on the humid environment  When the researchers treated the carbon, they did not absorb moisture of 43.5  In conclusion, before the manufacture of the product, see to it that it was treated  An odor test was also conducted to determine the effectiveness and lifespan of the product.  Based on the test, the suggested lifespan of the product is one month.

The manufacturing process is a continuous processing wherein the workers must meet the target output per day.  The capacity depends on the expected market share of 42.05%, which us 278,546 pairs of shoe insole deodorizer  But the researchers decided to product 180,000 pairs in the year of operation due to the consideration of the result conducted by the researchers for the willingness of the respondents to try and buy the proposed product.

The plant will be producing an average of 180,000 pairs a year, that is 15,.000 pairs a month or 750 pairs a day.  Some nearby hardware and electronic suppliers supply machineries and equipment.  But other equipment will be purchased in Manila.  The plant shall be located at Brgy. Anupul, Bamban, Tarlac, the productivity center of the town.  It is located at the back of the Municipal Hall building which is 100 km. from Manila.  The transportation is so easy because it is along the highway.  The availability of manpower will never be a problem; customers will be assured of economical and fast delivery of the products due to the project proximity to the raw materials, suppliers, and to its target market.  The hiring of labor forces will not be a problem since the plant requires a minimal number of employees.  The Tarlac II Electric shall supply electricity and water requirements of the plant.  The productivity center has an area of 1,260 sq.m. half of the area will only be occupied.  The enterprises shall pay the monthly rentals of Php 20.00 per sq.m for the 630 sq.m floor area or at Php 12,600.00 monthly with escalation rate, payable within the first week of each month.

The waste material will be in the form of scraps, which will serve as another source of income for the enterprise.  The proposed project is environment friendly because it will not affect the nature during or after producing it.

4.    Financial Aspect

The financial needs of the project shall be sourced from the partners’ equity.  Each of the five (5) partners shall contribute an initial amount of Php 150,000.00 in cash which is Php 750,000.00 the said amount is estimated to be used in all expenses to be incurred during the pre-operating period and during the first half of the year of normal operations.  All purchases shall be on cash basis and sales are on cash discount basis with term payment of 5/15 net 30.  the projects liquidity ratios are computed to be 6:1, 8:1, 10:1, 12:1, and 15:1, on the first, second, third, fourth and fifth years, respectively, which shows that the project can liquidate its total current liabilities very satisfactorily.  The rates of return on investment for the first five years of normal operations are 16.32%, 30.81% and 39.35% respectively.

5.    Social Desirability Aspect

The project is aimed at helping individuals who have an unpleasant odor and foot moisture.  The business enterprise shall give a great contribution to the government because of the money paid in the form of taxes.  These taxes can be paid in different forms.  Through the introduction of this business, consumers will be given more choices for the same effect.  The producers of the raw materials can increase its profitability.  The competing products can also lower their process because of increased competitors.  Also there will be a decrease of unemployment by giving jobs to individuals when they will be hired, which will improve their lives and the society as a whole.

Summary of Conclusion for Feasibility Study of Snack Stand

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Marketing Aspects

1.    The Snack stand will be very much positive in offering a lot of services to satisfy customers needs, accept suggestion and criticisms to improve our business
2.    Snack stand will utilize with honesty and credibility thru our products and services.
3.    Snack stand will be always “open-minded” to those other competitors and will seek only the best.

Technical Aspect

1.    The final location of the business will be at the Common Terminal, Balanga City, Bataan.
2.    Raw materials will be obtained during its freshness and nearness to the source which is Elizabeth Supermarket in Balanga City itself.
3.    The management will provide cleanliness of the stall, especially the food for satisfaction of customers.

Management Aspect

1.    The best organizational structure to adopt in the same manner communication will be facilitated from the top to bottom and from the bottom to the top.
2.    The democratic atmosphere will always prevail in the business to ensure hormones interpersonal relationship between management and personnel.
3.    The Snack stand will develop the service activity to satisfy the need of the customer.

Socio-Economic Aspect

1.    The Snack stand will be very much responsible in promoting environmental, clean air act and proper waste disposal.
2.    Taxes assured for the city government.
3.    The partner’s will make sure of the observance and God-fearing to all of them.

Financial Aspect

1.    The amount of fifty thousand pesos (Php50,000.00) is substantially enough to put up the proposed project Snack stand.
2.    Based on the projections as depicted by the financial statements, the proposed project is a kind of lucrative undertaking.
3.    The proponent of the project will be responsible in producing the capital requirement.

Prepared by:  Arde Reyes

Management Aspect Feasibility Study for Snack Stand

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The central idea of management is to make every action or decision help achieve a careful chosen goal.

The word management is also used to mean the group of persons called executives who perform management activities.

Objectives

1.    To keep the subordinates be alert to what is expected to them.
2.    To know the duties and responsibilities of each member and personnel.
3.    To know different strategies to be able to achieve the company’s goal.

Description of Activities

1.    DTI Permit Application

The business name of GF Snack Stand should be register with the Department of Trade and Industry.  It would take only four days to five days before the permit is receive.  If there as no other name of its type.

Three (3) different name should be apply so when one is approved, so they can use other applied business name (see appendix)

2.    Rental Space

The project business will be located at Bataan terminal at 2nd floor Ibayo, Balanga City, Bataan.  The application will only about three to four weeks before it is approved.

3.    Mayor’s Permit

The Mayor’s Permit application will acquire the submission of the following:

a.    SSS Clearance Permit
b.    Sanitary Permit
c.    DTI
4.    TAN (Tax Account Number)

The project business will be registered at the Bureau of Internal Revenue District Office No. (1020) located at Capitol drive, San Jose, Balanga City.  The following forms should be accomplished with necessary attachments.

BIR FORM No.  Attachment Required, Mayor’s Permit and DTI Permit

5.    Buying of machineries and equipment

Involves the acquisition of the necessary machinery and equipment in the food snack as mentioned in technical aspect.

6.    Promotion

Includes advertising and personal selling partnership in a variety of promotional activities to inform customer about products and service and to encourage them to buy.

7.    Start of Operation

After securing all the necessary permits and other needed materials.  The said will be now ready to operate.

C. Organizational Structure

Through GF Snack Stand is just a simple business, the organization structure will have a simple flow.  It is not as complicated as big ventures.

Over – All manager / Cashier
Cook 1, Cook 2
Utility Man 1, Utility Man 2

D. Personnel Structure

The GF Snack Stand is required to have the members of personnel and service crew.

Staff – Over all Manager – 1
Cashier – 1
Cook – 2
Utility Man – 2

E. Duties and Responsibities

1.    Over-all Manager / Cashier
–    Supervise the overall operation of the business
–    Computer the total amount of the purchased item
–    Assist the customers

2.    Cook 1
–    Prepares the necessary ingredients
–    Cooks the items/products

3.    Cook 2
–    Prepares the necessary ingredients
–    Cooks the item/products

4.    Utility Man 1
–    In charge of cleaning the workplace
–    Delivers items within the vicinity
–    In charge of buying raw materials from suppliers
–    In charge of the inventory

5.    Utility Man 2
–    In charge of cleaning the workplace
–    Delivers items within the vicinity
–    In charge of buying raw materials from the suppliers
–    In charge of the inventory

Excerpt from Management Project by Arde R. Reyes

Business Feasibility Study – Snack Stand

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A. Name and Address of the Business

The GF Snack Stand (Good Food Snack Stand) is proposed to be located at the 2nd floor of the Bataan Common Terminal, Ibayo, Balanga City, Bataan.

B.    Nature  Business

The GF Snack Stand offers a wide variety of snacks and beverages.  It caters the need of the persons in transit and others who are waiting for their ride home in the said common terminal.  It also provide hip and soothing music to those who are weary from work and school.

The menu mainly consists of chicken, ham, ham and egg and hotdog sandwiches, fishballs, kikiam, squidballs, french fries and juices such as gulaman and pineapple juice.

The said snack stand is open Mondays through Sundays from 7:00 AM to 7:00 PM.

Management Aspect

1.    What are the roles and responsibilities of each personnel?
2.    What are the different strategies were going to use in order to cope up with the competition?
3.    How can we cope up with the competition?

Financial Aspect

1.    How much will be the total cost of the project?
2.    How much is the contribution of each member?
3.    How much profit were going to earn this kind of project?

Socio-Economic Aspect

1.    How can the business contribute to the reduction of unemployment?
2.    How can the business contribute to the community?
3.    How can the business contribute to the economy?

Excerpt from Management Project by Arde R. Reyes

Sugar Mill Feasibility Study

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Name of the Enterprise

This proposed sugar mill shall be called as Sweet Sugar Incorporated, obviously sugar is sweet and sweet is sugar. That’s why it shall be called as Sweet Sugar Incorporated.

Sweet Sugar Incorporated shall have its own plant located in Sitio Maguindong, Luakan, Dinalupihan, Bataan.

The site was chosen because its strategic location, where the supplies of public and private services are adequate and labor supply and raw materials are readily available.

Sources of Raw Materials

The plant shall have its own sugarcane plantation near the mill and the plantation shall be adequate in land area that will produce the needed raw material for sugar.

Availability of Transportation

The plant site is strategically located in Sitio Maguindong, Luakan, Dinalupihan, Bataan where transportation is not a problem. The plant is readily accessible to the workers. The finished sugar can be readily delivered to the market.

Project Long Range Objective

The Sweet Sugar Incorporated shall stick to its obligation and responsibility to its consumers of providing and producing the highest quality of sugar. No toxic materials shall be used or if there is, it should be properly disposed. It also respond to the needs of the barangay where it is located in order to help its progress.

The Sweet Sugar Incorporated shall be the number one product and supplier of high-grade sugar throughout Luzon and its neighboring provinces, and if expansion is needed, it shall be done without overlooking its primary objectives.

Mode of Financing

Financing shall come from the shares of the stockholders/owners of the Sweet Sugar Incorporated. If ever the shares can’t cover up the expenses of constructing the plant before its operation, the Sweet Sugar Incorporated shall apply for loans which will give the maximum output for the plant.

When business is already in operation, its liabilities and loans shall be paid from the sugar revenue

Market Study

As Bataan is situated geographically near the center of the Philippines, the finished product can be easily transported to the neighboring provinces in the country. Manila, the leading distribution center in the Philippines will be recipient of greater bulk of the product.

Analysis of Market Demand and Supply

Sugar is one of the primary commodities of the people, thus it is very important to have big supply that will cover up the big demand for sugar. The establishment of this sugar mill will greatly help our fellow Filipinos and most of all, our economy. This sugar mill will increase the sugar supply in the market, thus lessening our importation of sugar which is more expensive in cost.

Market and Marketing Strategy

Vigorous effort should be expanded to secure a market before a commitment is made to build a sugar mill if it would be most desirable to have the financial participation of one or more major users who can guarantee the purchase of substantial portion for the procedure production. During the past years, several overtures were made in this direction which revealed the opportunities existing.

Scale and Volume

The receiving of raw materials supply condition market potential and engineering should be considered. It would have production line which represent 769,434 tons per unit day. The output of the plant will depend on the production conditions.

Sugar Marketing Operation

The structure of general framework of market situation is already been said of the manner in which selling, shipping, financing and all other commercial aspect of marketing are out inside the general framework. These function rarely been described except by and for the specialist concerned with them. They are the essential link, however, providing the customers with that they want and the sugar industry with their income.

The successful selling of the product ultimately determine the prosperity of every one in industry if it is not sold successfully all the efforts of the farmers, millers and readiness with their employees and the most of business which supply and service them will suffer. The final customers are their most important millions of housewives buying sweets or soft drinks not only 4 lbs. of sugar and tin of golden syrup but also the tin of jam.

Market Distribution

Pricing

Pricing should follow the established market prices and practices which in turn are determined by the forces of demand and supply, however because of uncertainty of sugar during the start up period, some prices concessions should be made in order to break into market. A suggestion that is to 20% reduction from established market prices be affected on the first year output.

Consumer Surveys

Everyone is using sugar everyday, but assumed of sugar feeds are centrally as possible within the area of cane fields, as this will facilitate the transportation of cane with less rolling stock and other fixed charges for their department. Moreover, easy cane supply, so necessary for a economical grinding, will secure to the factory.

The direction of the prevailing wind and its accessibility to the factory and dwelling should be ascertained to avoid dust, ashes, smoke and odor of refuse going in wrong direction.

Healthy surroundings are paramount importance to the employees. Standing and deterioration water must not be allowed near the factory.

Technical Study

Services Offered:

The proposed plant site at Sitio Maguindong, Luakan, Dinalupihan, Bataan offers a plentiful supplies of water and power. The site offers adequate supply of water for growing sugarcane, and power for the production of sugar. It also offers adequate supply of laborers, which is considered more important than all the other factors, especially when skilled and unskilled laborers are required.

Labor

Skills required

The company will hire Filipino larorers in sugar cane manufacturing. Laborers near the company site and more preferable to the employees to insure promptness and can do overtime work when needed Another important reason is that people from nearest place can easily transport with their convenience since the company is small, the working force will be required from town itself or its vicinity. The company on the other hand will give assurance to the workers like a good working condition, facilities for a conductive maintenance of their health incentives and many other benefits required by the labor code, plus benefits given by the company itself.

The Project Site

Sitio Maguindong, Luakan, Dinalupihan, Bataan was chosen the best region of all sugar plantation in the Philippines due to its abundant supply of labor will not be difficult to achieve as most barrio folk are quite hardworking and industrious. Another reason is because of availability of raw materials and have favorable conditions. The plant would be erected near the national highway which will enable the transportation of finished product to the opposite provinces of course, sugar central will increase their yearly supply of sugar production thus helping the sugar industry.

The determination where sugar cane factory is to be located is purely an agricultural one. So far, it is referred t the tract of land which has to be adequate for growing sugar cane fr a period of years and the location where climate condition and rainfall are much that successful crops to be expected.

As Bataan is situated geographically near the center of the Philippines, the finished product can be easily transported to the neighboring provinces.

Waste Disposal

The various waste materials produced by industries maybe classified generally as solids, gaseous or liquid. Solid waste are directly related to a loud pollution gas liquid to air and water pollution, although all of them have combined and interrelated effects on pollution.

Methods of Waste Disposal

1. Eliminate of source. The first approach to a waste disposal problem requires a careful attention of the source of pollutants.
2. Recovery of waste products. Before deciding how to discard waste materials, the engineer should always think for recycle, reuse or for sale.
3. Regulate how to fit dilution
4. Divert waste to other points
5. Waste treatment. – A very expensive process the recent encountered by the major cities of the world due to smog problem and the question as due to how to dispose gaseous waste, electrostatic precipitators, aggrometrators, washers and many other kind of equipment have been used to remove atmospheric contaminants.

Disposal of solid waste materials on land is always a complicated problem, incineration and burying are possible solution and the best is by recycling.

A judicious plant design eliminates a potential hazardous operations should be separated from various plant facilities and sufficient protection is made, possible sources of fire by eliminating all the unnecessary ignition sources such as flame, spark or heated material, welding, smoking, static electricity and the spontaneous combustion of waste materials.

Chemicals can cause dangerous burns and accidents are bound to occur rotating sections of equipments should be amply protected to prevent accidents.

Management Study

For Pre-operating Period:

During the pre-operating period, the stockholders are responsible to deal with some government and private agencies to secure the necessary document and deal in financing institution for financial needs of the project. These persons are the one to negotiate for the constructor. The supplier of the materials and by the hired construction firm and the supervision will be integrated with the said contract. Consultant shall be hired also to ensure the safety of the plant and to supervise the installation of the equipment.

For Operating Period:

During the operating period, the stockholders handled the key position in the company. The business is organized and incorporate with their respective holdings:

Board of Directors

– Chairman of the Board
– Member
– Member
– Member
– Maintenance and Material Director
– Company Accountant
– Sales Director
– Production Director

The company sees to it that hired accountant and supervision directors are all licensed by the professional Regulation Commission (PRC) in their respective professions. All these persons should have at least an experience in their respective jobs.

The company accountant is responsible for the books and the preparation of the company book of accounts. He also prepares the payroll and he examines the financial status of the company.

The sales director will assists the selling and finding markets for the products.

The production director is responsible for the production in order to insure for good productivity and minimize production or manufacturing costs.

The maintenance and materials director is responsible for the safety programs and maintenance of the plant. He should set the guidelines and train workers about safety and accidents and be able to continue the flow of the product even machine breakdown occurs, which are hindrance to the company’s re-productivity programs.

Financial Study

Major Assumption

An industry like sugar mill requires a big capital. The stockholders shall provide the needed capital for the establishment of the whole business. Funds shall be given for the purchases of the necessary equipments and necessary materials for the construction of the building and for the purchase of land.

In case that there is no sufficient fund, the company shall apply for loan in the bank which gives the lowest interest. During operation, the company shall pay its obligation out its revenues.

Equipment cost less than P40,000,000.00. Building construction (payment for the labors included) costs more than P20,000,000.00. Land (for the plant site and sugar cane plantation costs P20,000,000.00. The stockholders shall produce a budget of not less than P80,000,000.00.

Socio-economic Study

Taxes and Restricting Law

Bataan offers the lowest tax rate for industries like sugar production, and the best of Bataan is, they offer, provide government subsidy and help to the industries located in its territory.

Provincial and town legislation are also important. The sweet sugar laws are more stringent in Bataan.

Sweet Sugar Incorporated will help boost the economic status of Dinalupihan, Bataan because it will provide a great number of jobs for the unemployed folks in the area, thus, giving them more opportunities in life.

Sweet Sugar Incorporated shall pay all its tax obligations on time.

This is a partial study of Engr. Eric Lanosa.

Some Things to Consider in Establishing a Food Business

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Due to economic crisis, it is hard to decide which business should be started.  In order to minimize the risk, a thorough study must be undertaken.

Food business is very rewarding since man can give up almost everything except food. Men have to eat in order to live. But of course, you will also to be considered the location, security, market, management, facility, and financial to certain that the business could be carried out profitably.  Examples of food business are restaurant, canteen, fast food, bars, coffee shop and many more.

Location

Location is one of the important things to consider when planning any business. Choose the best place to establish a food business. The location should be accessible to your prospective customer.  As much as possible, it should be located near colleges, municipal, church, hospital, public and private offices and residences.

Security

Safeness of your business should also be considered. The business is secure if it is located around several establishments.

Market

Know the population of your place in order to know if there are enough people who will patronize your food business. Also, observe your competitors to be able to assume the demands. Food offers must be affordable to the people who live on your community.

Facilities

Find out the facilities to be used in your business such as the tables, chairs, cooking utensils, etc.

Management

Identify the personnel to be hired.

Financial

Estimate the total capital requirements.  Forecast the monthly income and expenses of your food business in order to know the potential profits. Consider also the sources of financing.

Waste Management

Proper disposal of waste should be implemented. What will be the waste disposal method to be adopted.

Example / Sample of a Feasibility Study

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Feasibility Study of Establishing Cindy’s Fast Food Branch Along Plaza of Balanga, Bataan

1. General Objectives

1.1. Description of the Business Project

The proposed business will need a two-storey building in a 2,000 square-meter lot with a parking space at the rear. The customer will drive in the left entrance greeted by the water-sprinkled Indian trees partly shielding the establishment from the fumes coming from the busy street. Embraced by the multi-colored lights, the trees will set the cosmopolitan setting to a rustic atmosphere. The building will be constructed to hide the stockroom complementing the architectural masterpiece. The smoothly cemented exit passing through the well-manicured lawn will draw sights of satisfaction from the customers.

The state-of-the-art tables, chairs and utensils will enhance the customers feeling that they are in a five-star hotel. Very affordable, the food will enthrall every customer to come and savor the food over the widely spaced tables on the immaculately marbled floor. The electronically flushing system of the restrooms will motivate the customers to force their friends and relatives to frequent this new Cindy’s Branch at the heart of the Balanga.

1.2. Project Time Table

All minor details considered, the project will start serving the five thousand targeted daily customers within five months. The contractors will complete the fence and the framework of the building in the first month. They will finish the walls and the floors in the second month. They will install the electrical and the air conditioning units in the third month. After the first and second layer coating, they will complete the final painting in the fourth month and finally they will landscape and plant balled-trees in the fifth month. As the project will be in progress, the company will busy the facilities to be used.

1.3. Management of the Business

With three managers alternately scheduled on the eight hour duty to man the 95crew in the 24 hour service, the business will surely satisfy the customers, propelling profit to soar.

The personnel will make a customer feel that he is the only one served amidst the queuing multitude. The high wage given by the company and, likewise, the humane treatment of the superiors will inspire the crew to render machine-precise service.

2. Product and Market Aspects

2.1 Market Outcome

A variety of expensive fireworks commence the business to attract the children, students, parents, and professionals. This opening blast will have been advertised a month before. The initial big crowd from the different districts of the province will keep growing to actualize the management’s vision that this Cindy Branch will be the most profitable among the food chains in the City.

2.2 Market and Selling Price

The customers can order from a variety of choices in the counter staffed with beautiful and handsome ever-smiling crew. The waiters will serve the orders in the well-crafted, smoke free dining areas with both oriental and western motifs to fit their number and their tastes. These areas will enhance customer privacy as the customers enjoy eating while talking about the gossips of the town, or as they engage in a highly intellectual calisthenics about a hot political issue. The area will also conduce lovers to cement their relationship with their soul-penetrating interlocked gazes that only lovers could fathom, as they savor their food.

3. Technical Aspect

3.1 Location Factor

At the center of Balanga Plaza, this food center will surely draw customers from the cross-section of society. The following factors will back-up the company’s foresight:

3.1.1 Topography

The 2,000 square-meter lot does not need labeling because the area is already flat and it is located in high location. No matter how strong the typhoon will be, the rains will not flood the area. The customers will not be drawn away from enjoying the services of Cindys.

3.1.2 Cost of Land

The fertile business venture will cheapen the current P20,000 per square meter piece of land. The forty five million peso worth of property will double after only three years of operation.

3.1.3 Security

The place will be safe. Secretly installed cameras will monitor every move to ensure the security of the customers. Four security guards simultaneously assigned to the area will guarantee the safety of the clients. This will be backed up by policemen assigned at the outpost nearby.

3.2 Size and Layout of the Building

To maximize the 40 x 50 meter land area, the engineers will erect the 20 x 30 meter proposed two storey building, leaving five meters at both sides and 18 meters fronting the street. Only two meters will be left at the back of the building. This will ventilate the establishment.

3.3 Equipment

The Bataan Builders will construct the building. This construction company will use modern building equipment like a cement mixer, caterpillar, automatic digging drill, and other state of the art construction materials.

4. Project Cost

4.1 The Land and the Building

This project will cost about P 45,000,000.00 which is roughly broken into the following:

Cost of 2,000 meter lot – P 40,000,000.00
Cost of 2 storey building – P 4,000,000.00
Accessories and Equipments – P 1,000,000.00

Total Cost – P 45,000,000.00

The 45 million pesos worth of land is the biggest of the capital investment but it is worth it because unlike the other expenses, the land value will appreciate through the years. The contract with the Bataan Builders for the proposed two-storey building is P 4,000,000. This includes materials and labor. With the five-month paying scheme, Cindy will pay P 800,000 every month until the last month. The food center will need P 1,000,000 for the imported accessories like tables, chairs and other needs.

4.2 Franchise

The food center will pay the current P 1,000,000 Cindy franchise.

4.3 Sources of Financing

The proprietor will put in P 5,000,000. The remaining P 40,000,000 will be borrowed from the bank.

5. Business Operation

5.1 Revenues

With 50 thousand monthly net income target from about five thousand daily customers, the proposed branch projects the following net income by month and years:

First month – P 1,500,000.00
First year – P 18,000,000.00
Second year – P 36,000,000.00
Third year – P 54,000,000.00
Fourth year – P 72,000,000.00

After four years of operation, this venture will have gained P 11,000,000 as shown in the following computations:

Net income in four years – P 72,000,000.00
Minus the sum of investments – P 61,000,000.00
Difference – P 11,000,000.00

Loaned money from the bank – P 42,500,000.00
Interest of loaned money – P 17,000,000.00
Franchise – P 1,000,000.00
Maintenance – P 500,000.00
Total – P 61,000,000.00

5.2 Accessories and Equipments

Being of high quality, the accessories will still be usable after four years. However, P 500,000 pesos is allotted for maintenance and replacements of damaged property.

Summary

The figures above prove how financially rewarding this business venture. Because food is a necessity, a venture like this guarantees 99% success. This is especially so if the location is the Plaza like Cindys Plaza.

* The feasibility study is a result of the proposed Establishment Cindy’s Fast Food.