Feasibilty Study DONE !

ICCT COLLEGES FOUNDATION INC.

The Computer Shop(We Speak Geek and English to)

AFeasibility Study

Presented toThe Faculty of the Engineering


In Partial Fulfillmentof the Requirements for the Degree

BACHELOR OF SCIENCE INCOMPUTER ENGINEERING

Bombalez, NathanielBonifacio, Raven A.

Ng, RlQuibo, Christine

Surigao, Lorenz AndreuTortogo, Henry

-

April 2011

BACHELOR OF SCIENCE IN COMPUTER ENGINEERING


Table of ContentsPage

I. Introduction 1

What is the name of the firm? 1Where is the location of head office and plant site? 1Give a brief description of the project 1Give the summary of findings and conclusions regarding the ff.

Market feasibility 2Technical feasibility 3Financial feasibility 3

II. General information 4

Management of the Project 4How shall the project be managed during the pre-operating period? 4How shall the project be managed during the operating period? 5What skills and corresponding numbers of labor are required? 7

III. Economic Aspects9

Market Study 9Demand 9Supply 10Competitive Position 11



i

IV. Technical Feasibility 12

Services 12Machinery 12 Plant Location 13 Utilities 14 Waste Disposal 15

V. Financial Feasibility 16

Total Project Cost 16 Initial Capital Requirements 17Gross Sale 17 Financial Statements 23 Financial Analysis 24

VI. Evaluation and Conclusion 30

VII. Recommendation 32



I. Introduction

What is the name of the firm?

The Computer Shop

Where is the location of head office and plant site?

We chose the location, at V.V. Soliven Ave., Cainta, Rizal, beside Sta. Lucia East Grand Mall. It’s about 40 square meters. It is the ideal place to establish an internet café because it is accessible to public because it’s along the highway and our target market is mostly students, near to schools like ICCT Colleges Foundation Inc., It’s an urbanized area were accessibility, competency and we study niche/market, as our main objective while choosing this site. In accessibility, the location is just along the highway, and it’s near to malls such as, Lucia East Grand Mall, Q-Plaza, and Pure gold, and schools such as ICCT Colleges, AMA, and ACLC and people just strolling along the way and or passengers of utility vehicle can easily see the Internet Café. In competency and study of niche/market, the proposed location is a commercial place, so the prospective customer’s is almost everybody.

Give a brief description of the project.

The business will be renting a space along hi-way near to malls, and schools, were our target customers are mainly students and nearby neighborhood especially those people whose relatives or loved ones are at abroad and find it very convenient communicating with them through chat and email. The two hundred (200) meter radius requirements as provided in the existing Zoning Code and other applicable rules and regulations wherein computer shops and other similar establishments and places



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of amusements should be put up or constructed at least two hundred (200) meters away from the church, schools, hospitals, and other government offices shall be strictly complied with.

We agreed that the shop should be well ventilated (air condition) to make our customer comfortable, good music is well provided, the PC’s is all well organized and arrange properly according to their rows for the convenience of our customer. Each computer has their own games, internet and surfing to be chosen by our customer, what they want and need is mainly our concerns.

Give the summary of findings and conclusions regarding the ff.

Market feasibility-In marketing aspect, promoting business will use different strategies and

techniques to attract probable customers and offer promo’s to attract customer like Computer to rent for cheap 40 for every 3 hours Membership- (the customers will be given a card to be stamped

every visit and if they got 25 stamped there every 2 hours is 20% discounted)

Contest for gamers (the winner will be free on their rental charge & to be held every Saturday from 3:00 to 5:00 pm only.)

- We create some marketing strategies like; we will print a thousand little half or quarter page fliers printed with the total cost of Php 908.00 (500 pcs. on the small fliers that cost of Php. 220.50 while the second fliers is also 500 pcs. with the cost of Php. 687.50), a month before our opening and we will distribute the fliers, mailboxes or gate. If we get a lot of text and e-mail we know we already have a market.



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Technical feasibility- In technical aspect it identifies whether the services rendered could be

the highest possible quality level with minimum cost. In this aspect we will discuss the equipment and other computer application we use in the business. We purchase equipment as packages in order to lessen our expense. Hardware and Software is our much focus aspects. We did researching on how much the Hardware and software will cost us, through net surfing. The internet connection we used is Package plan of DSL Bayantel amounting P9,799.00 with capacity for 20 computers and have a speed of 2 Mbps.

- In Hardware our target number of PC is 15 (monitor-flatscreen, keyboard, PS2 mouse and processor, webcam),The Internet connection is a package of Bayantel DSL connected (cables) with the speed of 2mbps amounting 9,799.00, 3 in 1Printer, Scanner & Photocopier. In Software, we will installing original Operating System of Ms Office Professional 2007 likes MS Word, Excel, Power point, Access, Desktop Publishing and installing the popular on line games such World of warcraft , CounterStrike, Battle Realms, Dance Audition, Auto Jam, and we will be installing Norton 360 version 3.0 premium for our anti-virus and anti-spyware. We offer other service to customers likes printing in black and white, DVD/CD burning, photocopying, scanners, and payphone.

Financial feasibility- Financial aspect conform the detailed computation of every financial

needs of the business to determine and evaluate the project requirements, possible sources, capital financing and also the limitation of the business such as terms and condition. Capital is the most important asset in the business; it must be available at least cost when it is needed and the most important aspect among others. It admits how the business is made possible and determines the profitability of the business.



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II. General information

Management of the Project

a.) How shall the project be managed during the pre-operating period?

Location- Picking a good spot and we’ll hit us a gold mine.Competition- Most business-minded people think of competition as a race to

charge the lowest prices in order to win customers. While it’s good for the customers, exceeding the lower boundaries can drive you and your competitors to bankruptcy. One cannot expect to recover a Php500, 000 investments if hourly rentals go down to as low as Php10. It goes without saying that in this industry, there are no customer loyalty; just cheaper rentals.

Software Licensing-it’s really important to have an original operating system, because

pirated OS can eventually damage the system.

Expected ROI- investing money in a business is a risk in our case the well tabulated if

financial statement is our major concern.

Café opens at 7:00 am until 10:00 pm. Ahead of other competitors, this will lead us of being known. Our goal is to give the needs of the students and others in an early manner of time. It will also include the completion all legal requirements before the operation of business.

In operational procedure we keep in minds all the legal aspects of establishing a business such as Business permit & the following requirements are:

LEGAL REQUIREMENTSRegistration with BIRRegistration of business name with DTI Barangay Clearance and Business PermitMayors Permit



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b.)How shall the project be managed during the operating period?

Partnership – is an organization where two or more person binds themselves to contribute

money, property, or industry into a common fund with the intention of dividing profits among themselves.

Unit Management Personnel

Time to be Devoted to the Project and Duties

Qualifications Compensation

Manager Once a week Owner OwnerAccountant 3:00 and 10:00 at-least 12units in

accountancyP1500 a month

Cashier 7am to 3pm3pm to 10pm

at-least high school graduate

P15 per hour

Computer Technician

in case of computer malfunctions

computer literate P400 twice a month

Benefits of partnership type of business we are establishing:

Partnership is relatively easy to establish; however times should be invested in developing the partnership agreement, in our case there’s no problem about it because we are mostly friends and we are devoted to make our business progress.With more than one owner, the ability to raise funds- Debt vs. Equity maybe increased.

Enhanced Capital Availability Two or more people will be providing and searching for capital. In addition,

funding sources are more likely to entertain financing request because of the broader capital base. The profit from the business flow directly to the business though the partners personal tax return.

Higher Quality Employees Partnerships tend to attract better employees because of the possibility of

becoming a principal in the firm.



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Easy formProcedures and expenses are minimized.The business usually benefit from partners who have complementary skills.Better decision- making capability. Two heads are better than one.

Managerial flexibilityGenerally, important decisions can be quickly, although not as fast in a sole

proprietorship.

Limited government interference Like sole proprietorship are normally free of extensive governmental scrutiny.

Organizational Chart



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Manpower - Manpower requirements are very important to any business in order for them to have an intelligent and accurate people who will manipulate inside the firm. Requirements will serve as basis on personal and general background of an employee enable for the company to know the capacity of their skills and ability to do work to the assign for them.

- Business owner will be in charge in human resource. The personnel to man Internet cafe will be the industrial partner who works by shift, 8 hours a day, the first shift is from 7:00 am to 3:00 pm while the second shift is from 2:00 pm to 10:00 pm. A walk in technician will be called in case of computers malfunctions and he will visit the shop twice a month.

Labor Skills Required

Number of Labor Required

Function Qualifications Compensation

Manager 1

- Establishes store policies and procedure for strict implementation. - Execute final decisions on all matters pertaining to the operation and the management functions of the business - Audit individual computers to check for proper system. - Visit the shop alternate everyday

Owner Owner

Accountant 1

- Check the book of accounts and financial statement in daily basis - Handles license renewals, facilities preparation and payment of annual tax generated by the business.- Visit the shop every

College Graduate at-lest 12units in accountancy

P1500 a month



other day.

Cashier 2

- Accept payment - Maintains inventory of supplies in the shop- To assist customers in their needs- Maintain cleanliness and orderliness.- Help conserve Utilities consumption- Logging the customers hours consumed

High School Graduate

P15 per hour

Computer Technician 1

- In charge in computer maintenance - Provide information and/ or technical aspect.

Computer Literate and College Graduate

P400 twice a month



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III. Economic Aspects

Market Study

Demand

Year Past Annual Domestic DemandFor Computer Shops

2003 22.52004 24.02005 272006 28.052007 30.252008 32.52009 34.52010 38.252011 40.52012 42.5

- were our target customers are mainly students and nearby neighborhood especially those people whose relatives or loved ones are at abroad and find it very convenient communicating with them through chat and email.

YearProjected Annual Domestic

Demand For Computer Shops2013 432014 452015 502016 532017 55

- because of the modern technology, we assume that every year we have a greater and huge competitor .



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Supply

YearPast Annual Domestic Supply

for Pentium 4 PC2003 P25,0002004 P24,5002005 P23,0002006 P22,5002007 P22,0002008 P21,5002009 P21,0002010 P20,0002011 P20,5002012 P19,500

- Pentium 4 is a PC which is commonly used in Computer Shop now a days, because of its cheap price, easy to use, and easy to handle

Year Projected Annual Domestic Supply for Pentium 4 PC

2013 P19,0002014 P15,0002015 P14,0002016 P13,0002017 P11,000

- If we add a unit(PC) to our shop, we dramatically chose the Pentium 4, because of its cheap price. However, the Pentium 4 had been lower the price for consecutive years because of the modern technology



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Competitive Position

Services It’s the factor that affect mostly ones business because through services

customer will decide if they are satisfied or not.

Price It is one of the considerations of the customer that enhance them to rent computers. If the price is lower they will rent.

Our services are the following:Amount

Internet/ Games Php. 15.00 / hourPrinting black and white- Php. 3.00 (short) Php. 4.00 (long)Colored (depends on the size of the color) Php. 10.00 (minimum) ex. LogosPhotocopying Php. 1.00 (short) Php. 1.25 (long)Scanning Php. 10.00CD burnings Php. 35.00 (max. 17 songs)

Other services: Payphones Php. 5.00 / every 3 min.



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IV. Technical Feasibility

Services AmountInternet/ Games Php. 15.00 / hourPrinting black and white- Php. 3.00 (short) Php. 4.00 (long)Colored Php. 10.00 (minimum) ex. LogosPhotocopying Php. 1.00 (short) Php. 1.25 (long)Scanning Php. 10.00CD burnings Php. 35.00 (max. 17 songs)Payphones Php. 5.00 / every 3 min.

Machinery

List of HardwareBrand name Amount

Package PC’s Pentium 4 Php. 19,500.003 in 1 PSC HP Office jet 2610 Print/Scan/Copy Php. 14,500.00

Computer application software AmountOS MS Office 2007 Php. 19,200.00

Game software:Warcraft (dota) Php. 1,450.00Counter Strikes Php. 350.00Battle Realms Php. 720.00Dance Audition Php. 1,968.00Autojam Php. 1,968.00Anti-virus and anti spy ware Php. 10,800.00



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Plant Location



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Utilities

LIST OF SUPPLIES

The materials needed for the operation of the business

Bond Paper - 150.00 (500pcs./rim)CD w/ Case - 13.00/setBallpen - 48.00/box of 12pcs.Stapler - 100.00Stapler Wire - 30.00HP 96 Black Ink - 800.00HP 97 Tri-Color - 850.00Record Book - 25.00Fire Extinguisher 10lbs. (Danwell) - 3,950.00

Other EquipmentAir-condition (Condura) 14,500.00

Furniture & Fixture Quantity Unit Price Total Price

Computer Table 14 1,300.00 18,200.00 Table for Server 1 1,500.00 1,500.00Monoblock Chair 15 249.75 4,995.00Tool Chair 5 89.00 445.00Cabinet 1 1,000.00 1,000.00

Total 26,140.00

Additional Expense

Quantity Unit Price AmountPad Lock 2 1,800.00 3,600.00



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Waste Disposal

The proper disposal of the garbage is very important. Since our business is a computer café we usually used bond paper, so it is not hard for us to think how it will be disposed. To maintain the cleanliness inside the café there are trash basket at one corner.

Cleaning Materials

Broom 60.00 ( replace every 6 months)Dust Pan Plastic 45.00 Trash Basket 100.00Feather Dust 50.00 (25.00/ pc.)Mop 250.00Powder Soap 20.00 ( 6pcs. Good for 2 mos.) Air Freshener 175.00 ( replace every 2 months)

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V. Financial Feasibility

Project Cost

- As a part of the business, it’s more concerned is in financing and

financial feasibility that perform activities. The total project cost we will able to

determine how much money consumed from the start.

Total Project Composed of the following:

o Legal Requirements

o Equipments

o Furniture and Fixture

o Prepaid Supplies

o Prepaid Rent

o Computer Application Software & Game Software

o Other Expense

o Working Capital

The cash flow it indicates the total cost before the operation. For the prepaid supplies and prepaid rent it will covered for one year. The improvement is composed of paint and labor, which is the cost for labor is 800.00(400.00 each person).It also include the payment of purchases such as Equipment, software, furniture and fixture and signage. Payment for legal requirements, marketing and other expense which other expense composed of padlock and cleaning materials.



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PRE OPERATION PROJECTED CASH FLOWAS OF April 2012

Total Investment 700,000.00

Cash outflow from operationsPayment for Legal Requirement 11,014.00Payment for Equipment 328,250.00Payment for Other Equipment 2,000.00Payment for Furniture and Fixture 26,140.00Payment for Supplies 89,819.00Payment for Prepaid Rent 120,000.00Payment for Computer Application Software 19,200.00Payment for Games Software 6,456.00Payment for Anti-Virus Software 10,800.00Payment for Signage 4,000.00Improvement Expense 1,800.00Marketing Expense 12,405.35Pre-Operation Expense 5,335.00Cash available as of April 2012 62,780.65

PROJECTED GROSS SALES-The table shows the total sales of the business from the year 2012-2016. For

every service that offered to the customers has their own specific price. With a service such as Internet/Game, it is multiply the service fee with the total minimum hours of operation in one day, then multiply it to the unit consumption day to get the total sales for the whole year. For the other services like printing, scanning, CD burning and typing job, just multiply the service fee to the total unit of consumption to get total sales for the whole year. To get the total sales for one year, add the total sales for revenue and the sales for other income. We estimated 80% of unit consumption for 1 day out of 15 hours of operation



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GROOS SALES 2012

SERVICESERVICE

FEEHOUR

UNIT TOTAL/DAY

YEAR

(365 /317days)

INTERNET/GAMES P15.00 12 12 2,160.00 788,400.00

PRINTING B & W P3.00 12 150pcs. 450.00 164,250.00PRINTING COLORED

Text P10.00 12 10 pcs. 100.00 36,500.00

picture (small) P15.00 12 5pcs. 75.00 27,375.00

picture (medium) P20.00 12 5pcs. 100.00 36,500.00

picture (large) P25.00 12 2pcs. 50.00 18,250.00

SCANNING P10.00 12 5 pcs. 50.00 18,250.00

CD-BURNING P35.00 12 6 pcs. 210.00 76,650.00

OTHER INCOME

PHOTO COPYING P1.00 12 60pcs. 60.00 19,020.00

PAYPHONE 5/3mins. 12 17times 85.00 31,025.00TOTAL GROSS

SALES 1,216,220.00



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GROSS SALES 2013

SERVICESERVICE

FEEHOUR UNIT TOTAL YEAR

INTERNET/GAMES P15.00 12 13 2,340.00 854,100.00PRINTING B & W P3.00 12 155pcs. 465.00 169,725.00

PRINTING COLORED

Text P10.00 12 12pcs. 120.00 43,800.00picture (small) P15.00 12 7pcs. 105.00 38,325.00

picture (medium) P20.00 12 7pcs. 140.00 51,100.00picture (large) P25.00 12 3pcs. 75.00 27,375.00SCANNING P10.00 12 7pcs. 70.00 25,550.00

CD-BURNING P35.00 12 8 pcs. 280.00 102,200.00OTHER INCOME PHOTO COPYING P1.00 12 65pcs. 65.00 20,605.00


SALES 1,363,805.00

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GR0SS SALES 2014

SERVICE SERVICE FEE HOUR

UNIT

TOTA

YEAR

INTERNET/GAMES P15.00 12 14 2,520.00 919,800.00

PRINTING B & W P3.00 160 pcs. 480.00 175,200.00

PRINTING COLORED P10.00

Text P10.00 12 15pcs 150.00 54,750.00picture (small) P15.00 12 10pcs. 150.00 54,750.00

picture (medium) P20.00 12 10pcs. 200.00 73,000.00picture (large) P25.00 12 5pcs 125.00 45,625.00

SCANNING P10.00 10pcs. 100.00 36,500.00CD-BURNING P35.00 10 pcs. 350.00 127,750.00

OTHER INCOME PHOTO COPYING P1.00 70pcs. 70.00 22,190.00


SALES 1,540,590.00

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GR0SS SALES 2015


UNIT

TOTAL

YEAR

INTERNET/GAMES P15.00 12 15 2,700.00 985,500.00

PRINTING B & W P3.00 170 pcs. 510.00 186,150.00

PRINTING COLORED

Text P10.00 12 20pcs 200.00 73,000.00picture (small) P15.00 12 12pcs. 180.00 65,700.00

picture (medium) P20.00 12 12pcs. 240.00 87,600.00picture (large) P25.00 12 7pcs. 175.00 63,875.00

SCANNING P10.00 1213

pcs. 130.00 47,450.00CD-BURNING P35.00 12 13pcs. 455.00 166,075.00

OTHER INCOME PHOTO COPYING P1.00 12 75pcs. 75.00 23,775.00

PAY PHONEP5.00/ 3MINS. 12

17 times 85.00 31,025.00

TOTAL GROSS SALES 1,730,150.00

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GROSS SALES 2016


UNIT

TOTAL

YEAR

INTERNET/GAMES P15.00 12 17 3,060.00 1,116,900.00PRINTING B & W P3.00 12 175 pcs. 525.00 191,625.00

PRINTING COLORED

Text P10.00 12 25pcs. 250.00 91,250.00

picture (small) P15.00 12 15pcs. 225.00 82,125.0

0

picture (medium) P20.00 12 15pcs. 300.00 109,500.0

0

picture (large) P25.00 12 9pcs. 225.00 82,125.0

0SCANNING P10.00 12 15pcs. 150.00 54,750.00

CD-BURNING P35.00 12 15 pcs. 525.00 191,625.00OTHER INCOME

PHOTO COPYING P1.00 12 80pcs. 80.00 25,360.00

PAY PHONEP5.00/ 3MINS. 12 17times 85.00

31,025.00

TOTAL GROSS SALES 1,976,285.00

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Supplies Expense

2012 2013 2014 2015 2016

Bond Paper 25,112.00 26,864.00 29,200.00 32,266.00 34,894.00

(photocopy) 7,608.00 8,242.00 8,876.00 9,510.00 10,144.00CD Case & CD's 28,470.00 37,960.00 47,450.00 61,685.00

71,175.00

Staple Wire 60.00 60.00 90.00 120.00 150.00

Record Book 75.00 75.00 100.00 125.00 150.00

Ballpen 144.00 144.00 192.00 240.00 288.00

Ink 24,300.00 25,029.00 25,779.87 26,553.27 27,349.87

Stapler 100.00 100.00 100.00 100.00 100.00Fire Extinguisher 3,950.00 3,950.00 3,950.00 3,950.00 3,950.00

Total 89,819.00 102,424.00 115,737.87 134,549.27 148,200.87

Table shows the depreciation of equipment and furniture’s and fixture from the original price with the salvage value of 10% except the furniture and fixture. To compute the depreciation of equipment just multiplies in10% salvage value and the result will be

subtracted to the original price then divided in 5 years useful life. Same in other equipment, furniture and fixture but don’t have salvage value; it is immaterial if they

had a salvage value because it has a lower price.

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DEPRECIATION:EquipmentComputer Set(19950/5 years)

Cost Per Unit Useful Life Salvage Value (10%) Depreciated Cost

Book Value Per

Unit19,950 5 1,995.00 3,591.00 16,359.00

Year Quantity Net Value Total

Depreciation BookValue2012 15 299,250.00 53,865.00 245,385.002013 15 245,385.00 53,865.00 191,520.00

Additional Computer 1 19,950.00 3,591.00 16,359.00

2014 16 207,879.00 57,456.00 150,423.00Additional Computer 1 19,950.00 3,591.00 16,359.00



Aircon(7,000/5 years)

Cost Per Unit Useful LifeSalvage Value Depreciated Cost

Book Value Per

Unit14,500.00 5 1,450.00 2,610.00 11,890.00

Year Quantity Net Value Depreciated cost BookValue2012 1 14,500.00 2,610.00 11,890.002013 1 11,890.00 2,610.00 9,280.002014 1 9,280.00 2,610.00 6,670.002015 1 6,670.00 2,610.00 4,060.002016 1 4,060.00 2,610.00 1,450.00

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3 in 1(Scanner/



Photocopier/ Printer

(14,500.00/5years)

Cost Per Unit Useful LifeSalvage

Value(10%) Depreciated Cost

Book Value Per

Unit14,500.00 5 1,450.00 2,610.00 11,890.00

Year Quantity Net Value Depreciation BookValue2012 1 14,500.00 2,610.00 11,890.002013 1 11,890.00 2,610.00 9,280.002014 1 9,280.00 2,610.00 6,670.002015 1 6,670.00 2,610.00 4,060.002016 1 4,060.00 2,610.00 1,450.00

Furniture & FixtureMonoblock Chair

Cost Per Unit Useful Life Salvage ValueDepreciated

Cost

Book Value Per

Unit249.75 5 None 49.95 199.8

Year Quantity Net ValueDepreciated

Cost BookValue2012 20 4,995.00 999.00 3,996.002013 20 3,996.00 999.00 2,997.002014 20 2,997.00 999.00 1,998.002015 20 1,998.00 999.00 999.002016 20 999.00 999.00 0.00

Tool chair


Cost

Book Value Per

Unit89 5 None 17.80 71.20


Cost BookValue2012 5 445.00 89.00 356.002013 5 356.00 89.00 267.002014 5 267.00 89.00 178.002015 5 178.00 89.00 89.002016 5 89.00 89.00 0.00



Computer Table


Cost

Book Value Per

Unit1,300.00 5 None 260.00 1,040.00

Year Quantity Net Value Depreciation BookValue2012 14 18,200.00 3,640.00 14,560.002013 14 14,560.00 3,640.00 10,920.002014 14 10,920.00 3,640.00 7,280.002015 14 7,280.00 3,640.00 3,640.002016 14 3,640.00 3,640.00 0.00

Server Table

Cost Per Unit Useful LifeSalvage Value

Depreciated Cost

Book Value Per Unit

1,500.00 5 None 300.00


Cost BookValue

2012 1 1,500.00 300.00 1,200.002013 1 1,200.00 300.00 900.002014 1 900.00 300.00 600.002015 1 600.00 300.00 300.002016 1 300.00 300.00 0.00

Other Equipment


Cost

Book Value Per

Unit2,000.00 5 None 400.00 1,600.00

Year Quantity Net Value Depreciation BookValue2012 2 2,000.00 400.00 1,600.002013 2 1,600.00 400.00 1,200.002014 2 1,200.00 400.00 800.002015 2 800 400.00 400.002016 2 400 400.00 0.00

CabinetCost Per Unit Useful Life Salvage Value Depreciated Book



CostValue Per

Unit1,000.00 5 None 200.00 800.00

Year Quantity Net Value Depreciation BookValue2012 1 1,000.00 200.00 800.002013 1 800.00 200.00 600.002014 1 600.00 200.00 400.002015 1 400.00 200.00 200.002016 1 200.00 200.00 0.00

Signage


Cost

Book Value Per

Unit4,000.00 5 800.00 3,200.00

Year Quantity Net Value Depreciation BookValue2012 1 4,000.00 800.00 3,200.002013 1 3,200.00 800.00 2,400.002014 1 2,400.00 800.00 1,600.002015 1 1,600.00 800.00 800.002016 1 800.00 800.00 0.00

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Major Assumption

o The Initial capital will be Php 700,000.00.

o The projected financial statement will cover up to 5 yrs.

o Equipment will be depreciated for 5 yrs.

o Other Assets will also depreciated for 5 years

o Software will be amortize for 5 years

o Salaries will be increase 3% annually.

o Light expense will be increase 3% annually.

o Telephone bill/DSL increase 3% annually.

o Supplies will purchase annually.

o Additional equipment will purchase before the business year operate

o Division of net income is a bonus method (bonus after tax) to industrial

partner will be 40% and 60% to capitalist partner for the following years

within 5 years of operation.

o 60% of the net income is divided equally to the capitalist partner

o Drawings will be 2.5 % every month based on the net income which is 30 %

for the whole year.

There are some objectives and guidelines to be met:

o To make a safe, realistic and complete of operating revenues and costs.

o To determined the liquidity, profitability and soundness of its financial

position.

o To determined the accumulated capital financing from partners.

o To determined and ensure the necessary financial management of

business will have monetary resources whenever necessary.

o To make an accurate estimated total cost.

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Advertising and Marketing expense it will stated on the cash flow amounting P11,377.58 on the first year because it has an expense before the operation of the business. The computation of the expense are as follows

- for the membership card (100pcs. X 100.00) P10,000.00- stamp card for points (100pcs. X 10.00) P1,000.00- small tarpaulin 157.08- small fliers 220.50

P11,377.58 x 2 (twice a year) Advertising and Marketing Expense composed of membership card and stamp (11,000.00) tarpaulins,fliersTotal Cost 22,755.16 for the following year

● Cleaning material expense was 1,735.00 which covered one year of operation.

Brooms 120.00 Soap 120.00

Dust Pan 45.00Trash Can 100.00Feather Dust 50.00Mop 250.00

Air Freshener 1,050.00

The projected income statement, partners equity, balance sheet and cash flow it’s indicated what is the standard of the business will be.

The Financial Analysis its indicate on how many percent is the return of the Current

Assets and Investment. It also indicate the margin of safety of the business in order to

avoid the net loss.

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EVALUATION

SUMMARY AND CONCLUSION

Top 5 things to consider when putting up an Internet café

1. Capital- Planning is very important. The risks are high when going for this kind of

business so you should only allot the right amount of money needed. Be sure you won’t

be touching any of your family savings. Also, spare some money for your future

expenses, just to be safe.

2. Study your niche/market- See to it that there is a great demand for an Internet café in

your area. Obviously, the urbanized areas are the ones you would target, or as long as

the place is busy with people and they will have a need for the services you’re offering.

3. Location- If your area is situated near a school then that would be a big plus. Just

observe the law regarding how many meters away, your Internet café should be, from

any schools or colleges. Some are not following it but the law is the law. Commercial

zones within residential areas are also advisable.

4. Hardware, software and other utilities– Consider first what services you’re going to

offer. For example:

o If you would only provide Internet services such as web surfing, chatting, etc.,

then you could go for the low-end or the average specifications for your

computers. The Internet doesn’t demand much from your hardware. Just apply

for a relatively fast Internet connection (DSL, Broadband, Cable) with a high

bandwidth. Then install operating systems and other programs needed. Headsets

with microphones are often used when chatting.

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o If you would consider adding gaming then the best specs, as much as possible or

whichever the games require, should be your priority. There are the offline and

online games which require Internet connection. Your clients, especially the

gamers, are very demanding when it comes to the speed and reliability of both

your PCs and Internet connection. You would often hear complaints about

logging, hanging, or slow Internet connection. So make sure that your clients are

satisfied to avoid all of those. Buy the best performance PCs and avail a faster

Internet connection.

o There are other services that you may offer your customers. You could do

printing (b&w or colored), typing services, CD/DVD burning, some even have fax

machines or photocopiers.

5. Pricing and Promotions- Know how much you’ll charge for your services. Studying the

market will play a great role here. If the price is right then people will avail of your

services. Some owners often use pricing as a tool to have an edge over other

competitors

*Be sure to apply for the necessary documents needed if you want to start your own

Internet café, such as Barangay Clearance, Mayor’s Permit, DTI permit, etc. Just so your

business would be legalized.

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Recommendations

When starting a new business, there are many important decisions to make and

many rules and procedures that must be addressed. The number of task you need to

complete and the information you need to track down before you begin a business. The

followings are:

I. Basic needs to open a new business

○ Where to open your business- Deciding where to open and when to open

your new business is often one of the most difficult decisions a business

owner faces. These decisions may also be the most important ones because

the ultimate success of the business can hinge on where it’s located and

when it’s opened. To work through these decisions, choose one of the

following:

1. Choosing whether to lease space or from home.

2. Choosing the best geographic location for your business.

o Selecting a location - An important factor in selecting a location is that you

keep a long term perspective. Site selection can be a big investment.

Choosing the right site now can avoid the cost of relocation in the future.

Here are some factors that you should consider in making your site

decision:

1. Location of competitors.

2. Target market.

o Leasing space - A lease agreement is a contract between you and the

owner of the property. Since it’s a legal document, you should review it

before you sign it.

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o Marketing your product or services - How you will market your product

depends on your budget. Here are some suggestions:

1. Distribute fliers announcing your business.

2. Put a business sign.

3. Create several promotional gimmicks.

o Getting licenses and permits - Before your business start to operate all the

necessary legal requirements must be complied, to avoid problem in the

near future.

o Hiring employees - This is very important, hire people, who is trustworthy

and have knowledge at your business, consider relatives and those

recommended by friends.

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II. Starting a new business

○ Ownership Responsibilities- Probably the two most common reasons that a

business doesn’t succeed are that 1) the business is poorly managed because the

owner lacks the necessary skills and 2) the owner underestimates how much

money it will take to start the business. To begin the process of preparing

yourself, let’s take a look at:

1. Pros and Cons of owning a business:

PROS:

A. You have the chances to make a lot of money than you can make

working for someone else.

B. You’ll be your own boss and make the decisions that are crucial to

your business’ success or failure.

C. You may be the boss of other people.

D. You’ll have job security—no one can fire you.

E. You’ have the chance to put your ideas into practices.

F. You may participate in every aspect of running a business.

G. You’ll learn more about every aspect of a business and gain

experience in a variety of disciplines.

H. You’ll the chance to work directly with your customers.

CONS:

A. You may have to take a large financial risk.

B. You will probably have to work long hours and may have fewer

opportunities to take vacation.

C. You may end up spending a lot of your time attending to the details

of

running a business and less time in those things you really enjoy.

○ Goals Setting- For many people, it helps to translate their expectations and

desires into concrete terms by setting goals and these is a “Personal goals”-



unlike money, many of these factors can’t be quantified but are important

nevertheless. For many people, the chance to build something of their own,

according to their own vision, drives them to start a business. Typical reasons

that people choose to start a business include:

1. Freedom- owning your own business is a way to achieve personal

freedom on many levels.

2. Career change- Most people change jobs or even careers several times

during the course of their lives. Sometimes, it’s by choice; other times,

existing jobs simply disappear.

3. Professional growth- Some people believe their ideas are being ignored

or not being used properly in a corporate setting, and they want the

chance to do it the “ right” way.

III. How to get Exposure for my business

○ Exposure through Advertising and Promotions- Advertising and

promotions is bringing a service to the attention of potential and current

customers. The goals of the plan should depend very much on the overall

goals and strategies of the organizations. The plan usually includes what

target markets you want to reach, how much money is budgeted for this

effort.

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IV. Minimizing risk for my business

o Hiring family members - A family member will more willing to step into

your shoes when needed. For example, if you get tied up doing

something, a family member usually makes a reliable fill-in.

o Franchising - A good way to reduce your risk of failure is to purchase a

franchise because franchises typically have a higher success rate than

other types of small business.

o Know when to cut your losses - If you don’t decide the financial

commitment to your new business in advance, you may regret it in the

future.

o Financing assessment - Finding the money to start a new business is

almost always one of the most difficult hurdles new owners face. At this

point in the process of analyzing your business idea. You should have

examined both the results that you know how much it should cost and

how much you should be able to earn.

o Legal assessment - In making a legal assessment of your business idea, you

need to determine to what extent the operation of your business might

expose you to legal liability.

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