Feasibility-travel agency

8/10/2019 Feasibility-travel agency

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Safe and Sound Travel

AgencyFeasibility Study


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The Business Profile

Name of business: Safe and Sound Travel Agency Business logo:

Location of the business: Araneta Center, Cubao, Quezon Ci

Project rationale:


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Market Study

Service Description Offers ticketing on international and domestic airline compa

passport processing, and visa assistance.

The service is directed to bringing together the airline compand the prospective client for the benefit of all parties.

Target market is market is would be travellers who are:o Traveling with a group;

o Not sure where to go;

o Traveling internationally.


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Market Study

Year Population

Market

Acceptability

Rate

Frequency of

Availing

Annually

Annual Dem

2010

919,169

34%

1

312,5172011 934,795 34% 1 317,830

2012 950,686 34% 1 323,233

2013 966,848 34% 1 328,728

2014 983,284 34% 1 334,317

Demand Situation Historical Demand


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Market Study

To compute for the estimated projected demand, leastmethod was used. The formula for the least square method is shown

Least Square Method:

Formula : Yc = a + Yi -1

a = (Yn-Yc)/(N-1)

Where:

Yc = initial value (1st year)

Yn = final value (last year)

N = number of years

Yi = value for the year past


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Market Study

Demand Situation Projected Demand

Year A Yi-1 Yc

2015 5,450 334,317 339,767

2016

5,450

339,767

345,217

2017

5,450

345,217

350,667

2018 5,450 350,667 356,117

2019 5,450 356,117 361,567


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Market Study

Supply Situation Historical Supply

Year Demand Situation Rate Annual Su

2010

312,517 92%

287,516

2011 317,830 92% 292,404

2012 323,233 92% 297,374

2013 328,728 92% 302,430

2014 334,317 92% 307,572


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Market Study

Supply Situation Projected Supply

Year DemandSupply Situation

RateAnnual Sup

2015 339,767 92% 312,585

2016

345,217

92%

317,599

2017 350,667 92% 322,614

2018 356,117 92% 327,628

2019 361,567 92% 332,642


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Market Study

Market Share Analysis

Market Share for Five Years

Year PopulationAnnual

Demand

Annual

Supply

Demand

Gap

Target

Percentage

Target A

Market

2015 1,000,000 339,767 312,586 27,181 7% 1,90

2016

1,017,000

345,217

317,600

27,617 7.7 %

2,12

2017 1,034,289 350,667 322,614 28,053 8.47% 2,37

2018 1,051,872 356,117 327,628 28,489 9.32% 265

2019 1,069,753 361,567 332,642 28,925 10.25% 296


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Market Study

Demand-Supply Situation

Demand-Supply Gap for Five Years

Year Population Annual Demand Annual Supply Demand

2015

1,000,000

339,767 312,586

27,18

2016 1,017,000 345,217 317,600 27,61

2017 1,034,289 350,667 322612 28,053

2018

1,051,872 356,117 327,62828,48

2019 1,069,753 361,567 332,64228,925


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Market Study

Appropriate Marketing Program or Strategy

Product-provide services with affordable prices; accredited by theDepartment of Tourism.

Price

Domestic Ticketing: P300 commission per ticket

International Ticketing: P800 commission per ticket

Passport Processing: P300 regular; P500 rush Visa assistance- P500

Place- Within Araneta Center, Cubao, Quezon City

Promotion-Ribbon Cutting, flyers, promotional posters, tarpaulinand the like.


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Technical Study

Service Process Operations

The business must submit a letter of application to the airline companthey are dealing with.

The business can now be able to get the tickets that will be issued depon the reservation and the quantity of customers.

Instead of going to an airline company to apply for an agent, the businjust have to fax it.

For reservation purposes, the client can transact through phones or ththe computer rather than going to the agency.


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Technical Study

Automated Reservation The airlines have developed computer software system called Compu

Reservation System (CRS).

This software provides instant information of flights schedules, class fservice and pricing in addition to hotel accommodations and other ser


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Technical Study

Machinery and Equipment Requirements

Office Equipment- Computer, Printer, Fax Machine, etc.

Furniture and Fixtures- Office Table, Couch, Shelf, ReservatCounter, etc


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Total Cost

Equipment and Supplies Quantity Unit Cost Total Cost Yearly Depreciatio

Office Equipment

Computer 4 19,000.00 76,000.00 13,680.00

Computer Software 1 50,000.00 50,000.00 9,000.00

Printer

1

6,800.00

6,800.00

1,224.00

Fax Machine 1 11,800.00 11,800 2,124

Television 1 33,000.00 33,000.00 5940.00

Air Conditioner 3 8,000.00 24,000.00 4,320.00

Water Dispenser 1 5,000.00 5,000.00 900.00

Furniture and Fixtures

Office Table 2 5,100.00 10,200.00 1,836.00

Clerical Chair 3 1,600.00 4,800.00 864.00

Customers chair 2 1,100.00 2,200.00 396.00

Couch 2 12,900.00 25,800.00 4,644.00

Shelf 2 11,200.00 22,400.00 4,032.00

Reservation Counter 1 10,000.00 10,000.00 1,800.00

Center Table 1 13,400.00 13,400.00 2,412.00

Table 1 24,600.00 24,600.00 4,428.00

Mini Vault 1 5,000.00 5,000.00 900.00

Total 325,000.00 58,500.00


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Technical Study

Office Layout


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Technical Study

Utility Requirements

Electricity-for purposes of estimating expenses, we separatecost into a variable component and a fixed component.

Water-consumption-is less than 10 cubic meters per month

Telecommunication-PLDT Subscription Plan, Postpaid-Glo

Postpaid-Smart


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Projected Utilities Expense

Utilities

2015

2016

2017

2018

2

Electrical Fixed P62,375 P63,622 P64,895 P66,192 P6

Water

2,272

2,295

2,318

2,341

2

Telecommunications

37,164

37,164

37,164

37,164

3

Annual Utilities

Expense

P106,011

P107,281

P108,576

P109,897

P1

Technical Study


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Technical Study

Project CostCosts Amoun

Leasehold Improvements

Materials

Labor

Overhead

200,000.00

150,000.00

80,000.00 P43

Office Equipment 20

Furniture and Fixtures 11

Office Supplies 1

Initial Operating Expense

Business Registration

Prepaid Rent (2 months)

Marketing and Advertising

Hiring and Training

Total

20,365.00

77,600.00

45,000.00

5,000.00

14

Total Initial Cost P91

Cash Reserved for Operations 10

Total Project Cost P1,01


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Management and Legal Study

PARTNERS

MANAGER

RESERVATIONOFFICER

ACCOUNTANT LIAISON

Organizational Chart


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Job Specification and Functions

Manager-Plans, directs and coordinates the operations business. Duties and responsibilities is generalized sformulating business policies, managing daily operationplanning and implementing strategic management in opfinancial, marketing, human resource and administrative asp

Liaison Officer-Establishes and maintains mutual undersand cooperation as between the company and other enwhom the company transacts with.

Accountant-In-charge of the general accounting functions preparations of reports that are vital to the business.


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On-call Computer Technician-A skilled professional who cquality technical support. Responsible for maintenacomputers.

On-call Electrician-Responsible for any electrical problemsthe office.

On-call Janitor-Responsible for the cleanliness and orderl

the office.


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Company Rules and Policies

Personnel Policies

The management will set qualification for the different job position.

Every applicant should undergo screening, examination, and interview.

After careful selection, those who have been hired will undergo training aorientation.

Generally, employee are allowed and paid only for 8 hours of work. Employees are required to work on their respective schedule hour.

A one-hour break shall be given between the working hours.

In case of absent employee/s, the manager will take the duties and respon

The officers and employees will be paid every 15thand 30thof the month.

The cut-off for the computation of payroll is on the 10th and 25thday of the


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Service Policies

The store will be opened at 8:00 am and will be close at 4:00 pm.

Cleanliness inside the company should be maintained.

All information critical to the operation of the business are adequatelyprotected and secured.

Collection Policies

The payments made by the customers are non-refundable for theunconsumed/unused tickets.

Credits are not allowed.


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Financial Policies Loans will be acquired if the company needs additional cash either for op

expense or purchase of additional equipment.

Payment of interest will be made at the end of each month. It assumed thaper annum rate of 12% is the interest rate and the principal is payable in o

Equipment Policies Equipment that is not working will be subject to repair immediately

New equipment will be acquired 6 months before the old asset/s are obso

fully-depreciated. New equipment will be acquired when the old equipment are damaged o

be repaired.

Old equipment will be disposed when the equipment is obsolete or fully-depreciated.

Old equipment will be disposed when the equipment is damaged and canrepaired.


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Legal and Taxation Aspects]

The business will comply with all the necessary legal requirewith an estimate cost of P20,365.00.

The business will pay an income tax according to the provisNIRC (30% regular corporate income tax).

The business is also required to pay a value-added tax of 12%gross receipts and must file the return not later than the 25thfollowing the end of each month or 20thday following the eneach quarter.


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Financial Study

Schedule 2015 2016 2017 2018

Commission Income 5.1 1,179,669 1,318,451 1,473,192 1,645,697

Service Income 5.2 361,664 404,212 451,652 504,539

Total Income 5.3 1,541,333 1,722,663 1,924,845 2,150,236

Operating Expenses

Salary Expense 6.1 839,600 839,600 839,600 839,600

Rent Expense 7 465,600 465,600 465,600 465,600

Depreciation Expense 9.4 144,500 144,500 144,500 144,500

Office Supplies Expense 10.2 12,046 11,195 11,364 11,589

Utilities Expense 11.5 106,011 107,281 108,576 109,897

Advertising Expense 12.2 45,000 45,900 46,818 47,754

Permit and Licenses 13.2 20,365 1,100 1,100 1,100

Miscellaneous Expense 14 70,000 65,000 65,000 65,000

Interest Expense 16 60,000 60,000 60,000 60,000

Net Income (221,788) (17,513) 182,286 405,196

Income Tax Expense (Benefit) 17 (88,715) (7,005) 72,914 162,078

Net Income after Taxes (133,073) (10,508) 109,372 243,117

SAFE AND SOUND TRAVEL AGENCYComparative Statement of Comprehensive Income

For the Periods Ended, December 31, 20XX

SAFE AND SOUND TRAVEL AGENCY


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Abariso,Capital

Cruz, CapitalDalangin,

CapitalEspiritu,Capital

Fernandez,Capital

Mateo, C

Capital, 01/01/15 200,000 200,000 200,000 200,000 200,000 2

Net Income, 2015 (22,179) (22,179) (22,179) (22,179) (22,179) (

Capital, 01/01/16 177,821 177,821 177,821 177,821 177,821 1

Net Income, 2016 (1,751) (1,751) (1,751) (1,751) (1,751)

Capital, 01/01/17 176,070 176,070 176,070 176,070 176,070 1

Net Income, 2017 18,229 18,229 18,229 18,229 18,229

Capital, 01/01/18 194,298 194,298 194,298 194,298 194,298 1

Net Income, 2018 40,520 40,520 40,520 40,520 40,520

Capital, 01/01/19 234,818 234,818 234,818 234,818 234,818 2

Net Income, 2019 65,388 65,388 65,388 65,388 65,388

Capital, 31/12/19 300,206 300,206 300,206 300,206 300,206 3

SAFE AND SOUND TRAVEL AGENCYComparative Statement of Partners EquityFor the Periods Ended, December 31, 20XX



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2015 2016 2017 2018

Cash flow from Operating Activities

Gross Receipts 1,541,333 1,722,663 1,924,845 2,15Salary Paid (750,359) (750,359) (750,359) (750

Rent Paid (465,600) (465,600) (465,600) (465Office Supplies Paid (12,680) (11,150) (11,373) (11

Utilities Paid (106,011) (107,281) (108,576) (109Advertising Paid (45,000) (45,900) (46,818) (47Permit and Licences Paid (20,365) (1,100) (1,100) (1

Miscellaneous Paid (70,000) (65,000) (65,000) (65Advances to Lessor (77,600) - - SSS Contribution Paid - (17,440) (17,440) (17

PhilHealth Contribution Paid - (6,600) (6,600) (6Pag-IBIG Contribution Paid - (3,600) (3,600) (3Withholding Tax Paid - (61,601) (61,601) (61

Income Tax Paid - - - (22

Cash flow from Investing Activities

Purchase of Equipment (206,600) - - Purchase of Furniture and Fixtures (118,400) - -

Purchase of Leasehold Improvements (430,000) - -

Cash Flow from Financing Activities

Original Investment 1,200,000 - - Issuance of Notes payable 500,000 - - Interest Paid (60,000) (60,000) (60,000) (60

Net Cash Flow 878,718 127,032 326,777 52

Cash Balance, beg - 878,718 1,005,750 1,33

Cash Balance, end 878,718 1,005,750 1,332,527 1,85

SAFE AND SOUND TRAVEL AGENCYComparative Statement of Cash Flows

For the Periods Ended, December 31, 20XX



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SAFE AND SOUND TRAVEL AGENCYComparative Statement of Financial PositionFor the Periods Ended, December 31, 20XX

Schedule 2015 2016 2017 2018 Assets

Current AssetsCash CF 878,718 1,005,750 1,332,527 1,85Office Supplies 10.2 634 589 598

Noncurrent AssetsAdvances to Lessor 8.0 77,600 77,600 77,600 7Equipment, net 9.1 169,412 132,224 95,036 5Furniture and Fixtures, net 9.2 97,088 75,776 54,464 3Leasehold Improvements, net 9.3 344,000 258,000 172,000 8Income Tax Benefit 17 88,715 95,721 22,806

Total Assets 1,656,168 1,645,660 1,755,031 2,11

Liabilities

Current LiabilitiesSSS Contribution Payable 6.3 17,440 17,440 17,440 1PhilHealth Contribution Payable 6.4 6,600 6,600 6,600 Pag-IBIG Contribution Payable 6.5 3,600 3,600 3,600 Withholding Tax Payable 6.6 61,601 61,601 61,601 6Income Tax Payable - - - 11


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Schedule 2015 2016 2017 2018

Noncurrent Liabilities

Notes Payable 15 500,000 500,000 500,000 50

Total Liabilities 589,241 589,241 589,241 70

Shareholder's Equity

Abariso, Capital 177,821 176,070 194,298 23

Cruz, Capital 177,821 176,070 194,298 23

Dalangin, Capital 177,821 176,070 194,298 23

Espiritu, Capital 177,821 176,070 194,298 23

Fernandez, Capital 177,821 176,070 194,298 23

Mateo, Capital 177,821 176,070 194,298 23

Total Shareholer's Equity 1,066,927 1,056,419 1,165,791 1,40

Total Liabilities and Shareholder's Equity 1,656,168 1,645,660 1,755,031 2,11


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Financial Study

2015 2016 2017 20

Liquidity Ratio

A.Working Capital= Current Assets-Current Liabilities 790111.68 917098.60 1243884.70 16

B. Current Asset Ratio=Current Assets/Current Liabilities 9.85 11.28 14.94

C. Acid Test Ratio=Quick Assets/Current Liabilities 9.85 11.27 14.93

Profitability Ratio

A. Net Profit Margin = Net Income / Sales -9% -1% 6%

B. Return on Investment = Net Income / Capital -12% -1% 9%

C. Return on Asset = Net Income / Total Assets -8% -1% 6%

Asset Management Ratio

Total Assets Turnover = Sales / Total Assets 0.93 1.05 1.10

Debt Management Ratio

A. Debt Ratio = Total Liabilities / Total Assets 0.36 0.36 0.34

B. Debt/ Equity Ratio = Total Liabilities / Total Owners Equity 0.55 0.56 0.51

Financial Evaluation Measures


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Financial Study

Payback Period: YearRemaining amount ofinvestment to recover

1 1,015,645 2 136,927 3 9,895

Payback Period: 2.03 year

Net Present Value: Required Rate of Return (assumption)Year Cash Flows

1 878,718

2 127,0323 326,7774 526,8785 681,905

NPV= 699,644.72

Profitability Index: 1.69

Capital Budgeting Evaluation Measures


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Socio-Economic Study

Provide opportunities for competent and qualified job seeke

unemployed individuals.

Will help generate income for the government through paymtaxes.

Will help our countrymen by promoting tourism within thecountry.

Coordinates with various organizations and groups that aimprotect natural resources.

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