Feasibility Study-Laundry Services

2014 FSUU-Accontancy Program

Aparece,Marjorielou B. Cadorna,Vina O. Casinillo,Kissey Jen T. Gumban,Christine Grace A. Lorete,John Paul Niňo R.Mosende,Nerissa G.

[COPYRIGHT PROTECTED DOCUMENT] All right reserved. Merely for reference purposes, no part of this publication may be reproduced or copied and paste to other document same in nature .Feasibility Study Plagiarism is prohibited. 1

All Rights Reserved.| FSUU-Accontancy Program

Father Saturnino Urios University Accountancy Program

Feasibility Study “Lovebada Bango Laundry Shop”

Prepared by: Nerissa G. Mosende Kissey Jen T. Casinillo Christine Grace A. Gumban John Paul Niňo R. Lorete Marjorielou B. Aparece Vina O. Cadorna

Adviser: Mr. Daniel Nemeses C. Espina, CPA FSUU-Accontancy Program | All Rights Reserved.

2

TABLE OF CONTENTS

I.

II.

III.

IV.

Introduction a) Rationale b) Business Description c) Business Name d) Business Location e) Service Description Marketing Aspect a) Area Covered b) Target Market c) Competitors d) Market Need e) Demand Analysis f) Supply Analysis g) Laundry Services Offered h) Prices i) Income Projection j) Advertising and Promotion k) SWOT Analysis Technical Aspect a) Commercial Space for rent b) Space Layout c) Operating Procedure d) Filtration Process e) Operational Equipments f) Laundry Cleaning Products g) Supplies h) Costing Management Aspect a) Form of Ownership b) Business Culture c) Manpower Requirements d) Organizational Structure e) Job Description and Duties f) Segregation of Duties g) Management Style h) Motivating & Rewarding Employees

1 1 2 2 2 4 5 7 8 9 9 10 11 13 14 15 17 18 20 23 27 32 35 39 40 43 44 45 45 46 47 49

FSUU-Accontancy Program | All Rights Reserved.

3

V.

VI.

VII.

Financial Aspect a) Considerations b) Pre-Operating Expenses c) Projected Balance Sheet d) Projected Income Statement e) Projected Statement of Cash Flows f) Statements in Changes in Equity g) Return on Investment h) Payback Period Socio Economic Aspect a) Contribution to the Economy b) Contribution to the Government c) Contribution to the Society d) Environmental Impact Conclusion and Recommendation

50 51 52 53 55 56 56 56 57 57 57 58 59


4

CHAPTER 1 INTRODUCTION Rationale The fast change of trend from individualized laundry to commercial laundry services coincides with rapid technological change as well as the fast, changing and modern lifestyle of Filipinos. Laundry business is an easy and convenient business to start. It is not capital or management intensive. You can start this business right from home and grow from there. It is a very lucrative business, as not everyone that puts on clothes has the time to do the laundry. Based on the survey conducted the reasons why they go to the laundry shops instead of doing it to their own are because of tight schedule especially those students who have a lot of extracurricular activities in school, others says they don’t like washing their clothes because it is just a waste of time (laziness), and some boarding houses didn’t allowed washing clothes in consideration to the consumption of water. This is the reason why there is chance of making a lot of money because this people will definitely seek your services. Business Description Butuan City as a highly urbanized city in the Philippines emerged too many businesses nowadays. It can be seen that numerous schools and establishment are spotted around the area urging to look for convenience due to their busy time. And this gives a positive outlook for some businessmen who were just started in the industry to put their investment in certain businesses particularly the Laundry business in which the field is not that much penetrated.


5

Business Name The right name can make your company the talk of the town especially when it is unique and probably would catch their attention. Therefore, the proposed name of our business is “Love Vada Bango Laundry Shop” originated from the word “labada bango with love” that means we will wash clothes with love, passion and fragrance.

Fig. 1 Business Logo

Business Location The proposed business location is located at Lopez Jaena Extension, Barangay Tandang Sora, Butuan City. This location composes of schools like FSUU, SJIT and BCC; establishments; apartments and boarding houses. Service Description The Business concept of LOVEBADA BANGO is typically homogeneous to those other existing Laundry shops in the city. But certain things will make it stand and that includes its quality services, professionalism of its personnel towards its customers.


6

Quality Services - The quality services really matters in LOVEBADA BANGO Laundry. It is planned to provide services such as washing, pressing, ironing and folding customer’s clothes and garments. It will be using quality equipments and machineries that could greatly help and make the business exist. It shall offer affordable cleaning too, making sure that the output will reach its quality standard

Professionalism towards customers - Personnel of the shop will surely build professional customer relationship. Unlike the other personnel/workers that may just think business is easy as doing what is assigned to them and this normally getting payments from customers after doing/giving what the latter wants. More than that, it would be better to set your customers as part of the top priority. In addition, the team will take care of each customer item with great respect since personal things are engaged in the business.


7

Chapter II MARKETING ASPECT The marketing aspect will serve as the basis of the financial section through the projected demand. This includes the area covered, target market, proposed location, competitors, the demand and supply, demand and supply gap analysis, marketing program and SWOT analysis. Area Covered This is to identify a point or an area of study. Geographic target is in Butuan City primarily located at this Barangays Sikatuna, Humabon and Tandang Sora as a primary market. This is 3.5% of the overall barangays total of 86 that composes the city. This location composes of schools like FSUU, SJIT and BCC; establishments; apartments and boarding houses. Out from these components we will determine the population of those living in apartments and boarding houses where our target market is situated.

Fig. 2 Area covered Brgy. Humabon

Fig. 3 Area covered Brgy. Sikatuna FSUU-Accontancy Program | All Rights Reserved.

8

Fig. 4 Area covered Brgy. Tandang Sora

Area Covered Brgy. Humabon Brgy. Sikatuna Brgy. Tandang Sora Total

No. Apartments and Boarding houses 32

Total Population (actual data) 523

23 72 127

670 1,706 2,899

Fig. 5 Actual Population Notes: 1. The number of apartments and boarding houses were gathered from the list of registered business establishments as of June 2014 from City Hall Butuan City. 2. The Population is based from actual data which is gathered by the researchers while doing the survey and interview with the Caretakers/Owners. Target Market Our target market will determine from those living in apartments and boarding houses within the mentioned Barangays such as: FSUU-Accontancy Program | All Rights Reserved.

9

1. Young professionals 2. Students 3. Family This group of market will be described their need according to their lifestyle considering a number of potential influences on buying behavior including the attitudes, expectations and activities of consumers. In order to know the population demand for the proposed laundry business for that area in Lopez Jaena Extension, we used the “slovins” formula in determining the number of respondents for the survey questionnaires. We use the actual number of residents in apartments and boarding houses total 2,899(fig.5) and the margin of error would be 10%. Margin of error denotes the allowed probability of committing an error in selecting a small representative of the population. N = n / (1 + ne^2)

Therefore:

N = Number of samples n = Total population e = Margin of error

N =

N =

Barangay brgy. Humabon Brgy. Sikatuna Brgy. Tandang Sora

2899 (1+2899*.10*.10) 96.67 round of to 97

Number of population Distribution Ratio total Respondents Distribution of respondents 523 670 1706 2899

18.0% 23.1% 58.8% 100.0%

97 97 97

17 22 57 97

Fig. 6 Questionnaire Distributions Notes: 1. The number of population is based on Actual. 2. The ratio for distribution of respondents is based on the Specific population in a barangay over total target population and is multiplied to number of respondents.


10

Respondents Classifications 1%

21% students

78%

working other

Fig. 7 Respondents Classification Based on the survey, the graph shows that 78% are students, 21 % from working and others 1% coming from family section. Competitors We have gathered data of the list of the Laundry Shops registered as of June 2014 in Butuan City. Below are the lists: 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11.

ALL SEASON STEAM LAUNDRY – R. CALO ST. 5, Diego Silang LIM’S HOUSE OF LINEN – 12, Bancasi WASH ‘N DRI LAUNDRY SHOP – Dagohoy KITZ N’ CHARLS LAUNDRY – MONTILLA BLVD. DOOR 1-CINDERELLA ARCADE, Ong Yiu VIA’S LAUNDRY SHOP – 084 MONTILLA BLVD., New Society Village LAUNDRY KO - #162 J.C. AQUINO AVE., Bayanihan ECS LAUNDRY SHOPPE – 2, Libertad KRISSIE’S SO CLEAN, SO BRIGHT CLOTH CARE – J.C. AQUINO AVE., Lapu Lapu R & D BUBBLE WASH AND LAUNDRY – PRINCESS HOME ARCADE, Villa Kananga NRL LAUNDRY TIM – 327 CAPITOL DRIVE, Dagohoy KWIK KLEEN LAUNDRY SHOP – ZONE – 5 R CALO ST, Diego Silang


11

Fig. 8 Competitors location Notes: 



Among those shops listed above, highlighted is the nearest competitor which is 500 meters and 568.48 meters away from the area where the target market resides. The following competitors are not within our covered area from the mentioned barangays.

Market Need The survey says that the needs of the market are of the following factors enumerated below. Therefore this would be our basis to better achieve customer satisfaction and they will be able to continue availing the service.  Quality of cleanliness  Price  Timeliness and customer service


12

MARKET NEED 12% Quality of cleanliness

29%

59%

Price Timeliness

Fig. 9. Market Need

Area covered

Total Actual Population (a)

Brgy. Humabon Brgy. Sikatuna Brgy. Tandang Sora Total

523 670 1706 2899

Percentage of those Total Population who Estimated # of kls who are willing are willing to avail minimum per week (b) (axb) (d) 82% 82% 82%

429 549 1399 2377

3 3 3

projected demand (in kilo) 1287 1648 4197 7132

Fig. 10. Demand Analysis

Services

Working Hours per day

Machine Wash 8 hours Hand Wash Total No. of Loads

Estimated Cycle Time per load (hour) 2 hours 3 hours

Estimated No. of loads Capacity Per allowed per Load day (b)X 4 (a) machines 4 1

30 kg 5 kg

Load Capacity per day (axb=c)

Working days (d)

Loading Capacity Per week (cxd=e)Kilo

120 kg 5 kg

6 days 6 days

720 30 750

Fig. 11. Supply Analysis Demand

Supply

Demand and Supply Gap

7132

750

6382

Fig.12. Demand and Supply Gap Analysis FSUU-Accontancy Program | All Rights Reserved.

13

Note: 1. Demand Analysis (Fig.10), projected demand is the estimated kilo of clothes per week that needs to be catered by our services. 2. Supply analysis (Fig.11), Loading Capacity per week is the normal operating capacity that the Laundry shop can cater. 3. As seen in Fig.12, there will be a gap of 6382 (7132-750) kilos that will never be catered. Hence which is a good thing, since the demand for our services is higher than what we can give. Therefore the threats of competitors to rise up in the same area (sharing of market) won’t materially affect our sales projection. Laundry Services Offered The following are the list of the services to be offered based on the needs of the market: 1. Wash-Dry-Press 2. Wash-Dry-Fold 3. Hand washing

Services to Avail 7%

19%

Wash-dry-press wash-dry-fold Handwashing

74%

Fig. 13 Services to avail


14

How often do you do laundry? Thrice a week 3%

Twice a week 19%

Once a week 78%

Fig. 14 Prices Wash Dry Fold (Per Kilo)

Wash Dry Press (Per Kilo)

Handwashing (Per kilo)

Special Items (Per kilo)

P 23.00

P 65.00

Wash-Dry-fold P 60.00

Minimum of 3 kg

Without hanger P 65

Wash-Dry-Press P 65.00

Jeans/Maong - P 30 Bed Sheet/Towel - P 45 Comforter - P 65

Fig. 15 Prices How much the market is willing to spend for laundry service?

Wash-Dry-Fold 17% P23/kg 83%

P25/kg

Fig. 16 Wash-Dry-Fold FSUU-Accontancy Program | All Rights Reserved.

15

Notes: 

On the survey provided, 83% will go for cost of 23.00/min.3kls and only 17% will go for cost of 25.00/min.3kls.

Fig. 17 Wash-Dry-Press Note  On the survey provided, 72% will go for cost of 65.00/min.3kls and only 28% for the 70.00/min.3kls. This is in consideration as a student price.

Bring to Laundry Shop Yes 38% No 62%


16

Fig. 18

Fig. 19 Based on this survey 38% of the market says yes that they bring their clothes to the laundry shop, while the remaining 62% says no. Therefore, out of the 38% that says yes, 8% of them only bring 2 kilos and below, 21% brings 3 kilos, 34% brings 4 kilos and the remaining 37% brings 5 kilos and above. Income Projection SERVICE REVENUE PROJECTION

Wash-Dry-Fold Wash-Dry-Press (with hanger) Wash-Dry-Press (w/o hanger) Hand Washing (Wash-Dry-Fold) Hand Washing (Wash-Dry-Press) Special Items Jeans/Maong Bed Sheet/Towel Comforter TOTAL REVENUE

Estimated Kg. of Laundry per Week 300 72 73 25 25 85 85 85 750

Rate per Kg. ₱23.00 70 65 60 65 30 45 65

Total Sales No. of Weeks in per Week a Year 6,900.00 52 5,040.00 52 4,745.00 52 1,500.00 52 1,625.00 52 2,550.00 3,825.00 5,525.00

52 52 52

Total Sales in Year 1 ₱358,800.00 262,080.00 246,740.00 78,000.00 84,500.00 132,600.00 198,900.00 287,300.00 ₱1,648,920.00


17

Advertising and Promotion This refers to raising customer awareness of the services and creating services loyalty. 1. Leaflets and flyers – will be distributed upon the opening of the shop so that the market will be able to be informed that it is already available. The leaflets and flyers will be personally done by the owner of the shop which has a budgeted amount of P 3,000.00 Leaflets will include the following information: - Services offered - Price list - Company address and contact number - Business hours - Business slogan 2. Tarpaulin – to be placed in front of the shop. The cost would be P 2,500.00. It will include the following information: - Business name, address and contact number - Business logo - Business hours - Business slogan 3. Membership offering that will give customer discounts - to maintain the loyalty of the customer we will offer membership and there will be corresponding points to reach so they can avail the discount. To avail the discount Laundry Requirement Discount

Points 30 kls/mo. 40 kls/mo. 50kls/mo 3% 4% 5%

4. Bring a friend - a gift item will be given. 5. Pick Up and drop service – to increase more of the willingness of the customer to avail of the laundry service, we will offer pick up and drop service as it shows also in the survey that 45% would like to have this kind of extra service for the convenience of the customer. FSUU-Accontancy Program | All Rights Reserved.

18

Fig. 20 SWOT ANALYSIS I.

Strengths         

II.

Using machines with quality and brand High profitability because it is more accessible to market Quality output and faster service The location is on the main city nearest to the boarding houses, apartments and schools Location is just a walking distance Prices are relative, competitive and accords to what the customers want Does not need a large amount of capital Promotion strategies – social networking sites is very accessible as well Accessibility of the location

Weaknesses 

Lack of experience as this will be the first time to conquer the market in the said location


19



III.

Opportunities 

 

IV.

As the machines with brand and quality is expensive, maintenance will be quite expensive as well

Continuous development of the city with having new establishments for residential (apartments and boarding houses) Students, working professionals having lack of time in doing their own laundry Only two competitors nearest which is 500 meters and 568.48 meters away from location

Threats  

Price variations Future competition


20

Chapter III TECHNICAL ASPECT This chapter provides information that includes the structures and the floor plan, operating procedures/processes that are essential to the overall operation of the business, proposed equipment, machineries and supplies together with their descriptions and specifications.

Commercial Space for Rent The space will undergo some sort of renovation just to maximize the space intended for the business since the space is not that large enough to settle all the equipments or other furniture. The rent will be 2 months deposit and one month advance total 30,000.00 on first month and cost 10,000.00 pesos on a monthly basis onward provided by a lease contract for minimum of 1 year and renewable. Below shows the innovation cost for the space rented. Estimated Cost

Description of Jobs Fabrication and Installation of the following: Cabinets Counter tables Divisions Ironing Board Total Cost for Furnitures and Fixtures Leasehold Improvements Electrical works for the lights and connections to the machines including the materials and labor Painting including materials and labor Plumbing works for the installation of water connections to the machines and drainage system (septic tank) TOTAL

5,500.00 6,100.00 5,200.00 4,000.00 20,800.00

3,000.00 3,500.00 12,000.00 18,500.00

Fig. 21


21

Space Lay out

Fig. 22 The floor plan was designed intended to facilitate the work flow and show how the space looks like. FSUU-Accontancy Program | All Rights Reserved.

22

Image of the Actual Space

Fig. 23


23

Operating Procedure

Fig 24. Operating Procedure The above chart shows explained as below:

the

laundry

process.

Each

process

is

1. Tagging - the clothes are firstly tagged with a specific number, mentioned in the invoice given to customers. This procedure is used for identification of clothes once ready for collection for customers. 2. Sorting - After tagging the clothes are arranged in different sets. Some people will sort by color. Other sort by fabric type. 3. Pre-treatment of clothes – soaking in hot water. 4. Washing - The clothes are washed in washing machine using detergent washing powder and or bleach on white. 5. Drying - The clothes washed are transferred to dryers. (Note: one of the machine are automatic dry) 6. Packing - Once pressed, the clothes are properly hanged and covered in the plastic wrap and then tagged so that it can be easily identified. FSUU-Accontancy Program | All Rights Reserved.

24

Receiving and Tagging 1. Note the time that the items received. 2. Check the item against the laundry list. - Make sure the item received matched the item listed on the laundry list. 3. Tag each laundry items. 4. Check for damage and lost and found items. 5. Fill out in the separate logbook for lost and found items. - Record the time, date, name, description of the item 6. Place the item in a plastic bag and surrender it to the supervisor. 7. Record the laundry items according to company procedures. - Record the date, name of customer, time received, name of the attendant, signature and remarks. 8. Sort each item according to weight and color (heavy, white, colored and damaged) - Put damaged item to separate basket 9. Prioritize express items. Wash Dry Fold per 10 kilo wash load 

Thin Garments including clothing, bed sheets, curtains, and towels 1. 30 minutes washing time 2. 4 scoops of detergent soap and 1 cup of fabric softener 3. 25 to 30 minutes drying time 4. Quality checking of clothes 5. Approximately 30 mins for folding



Thick Garments such as blankets and comforters 1. 30 minutes washing time 2. 4 scoops of detergent soap and 1 cup of fabric softener 3. 30 minutes drying time 4. Quality checking of clothes 5. Approximately 1 hour for folding


25



Pressing Service 1. Inspection of clothes for pressing if the fabric allows pressing and specific temperature requirements 2. Segregation of clothes according to size and temperature requirement for pressing. 3. Pressing of clothes requiring high temperature and folding. 4. Pressing of clothes requiring medium to low heat temperature and folding. 5. Segregation of clothes according to tag, identifications and tagging for pick up



Hand Washing Process 1. Clothes are inspected for washing requirement symbol. 2. Clothes are initially soaked and rinse in lukewarm water to loosen up the fabric for easy cleaning. 3. Clothes are soaked in lukewarm water with detergent for about 8 minutes 4. Clothes are hand washed with bar soap and bleach (if needed) 5. Clothes are soaked and rinse in cold water for rinsing twice 6. On the third rinsing procedure, rinsing procedure, clothes would be soaked and rinse in cold water with fabric conditioner 7. Clothes are to be tumble dried in minimum time according to fabric requirement 8. Clothes are segregated and folded according to tag identification 9. Clothes are bagged for pick up

Removing Stain 1. Prepare the necessary materials. (gloves,cotton cloth, stain remover, laundry basket) 2. Lay the cotton cloth on your work area - cotton cloth absorbs the stain while it is being removed. 3. Turn the garments to its wrong side. 4. Lay the stained part of the garment on the cotton cloth. FSUU-Accontancy Program | All Rights Reserved.

26

5. Wear protective equipment - Gloves protect your hands from harsh effect of chemicals. 6. Apply stain remover and gently scrub the area. Apply more stain remover as necessary for stubborn stains; soak the garments for 5-15 mins. 7. Check if the stain has been removed. 8. Place the garment in a basket for laundry. Notes: 1. First come first serve basis for laundry service. 2. If in case customer will request for quick delivery additional charge of P 5.00.

Filtration Process – Environmental Impact

Step 1: The higher hole was inserted on the side of the washing waste pipe, and the lower hole is for the pipe to the canal.


27

Step 2: Vermin proof lid on the grey water filter box. It comes with a secure lid, so that will also deter vermin.

Step 3: Larger filter stones layer the base of the black box.


28

Step 4: Smaller filter stones were laid on top of the larger stone.

Step 5:

A couple of layers of shade cloth to hold the sand.


29

Step 6: A layer of clean sand.

Step 7: Test run


30

Operational Equipments Electrolux EWT904 - 9kg Top Load Washing Machine with T-Drive Washing Technology Price: 22,395.00 Quantity: 2 Life Expectancy: 5 years Body Type: Top-load washer Total Capacity Washing Capacity: 9kg Number of Wash Cycles: 11 Spin Speed: 850 rpm Dimensions: 67 x 107 x 68 cm Drum and Interior Finish: Stainless steel Eco-friendly Certification(s) 3 ticks(WELS) Eco-friendly Feature(s): Load Selector - Low Middle - High, Deep / Eco Rinse Material(s): Zinc-coated Body Screen Technology LED light Indicator and time display, Electronic Control Wash Cycle Modes: Regular Wash, Fast Wash, Colour, Delicates, Heavy Soil, Woollens Control Panel Programmes in single knob control Timers: Soak and delay end function Dispensers: Detergent, Bleach dispenser drawer Center Fabric Softener Holder

Supplier: Electrolux located at the Robinsons Appliances


31

Health Features: T-DRIVE washing technology: 35% cleaner washing performance: Anti-residue system Water Efficiency: 3 ticks(WELS) Water consumption: 8.80 L /kg Regular wash Noise Reduction: Stabilised Belt-driven System Indicators: LED Remaining Time Display Languages Supported (OSD/Menu) English Quick Menu Options Soaking Function- 45,30,15 min Rinse Function - Extra, Deep,Eco,Fast Power Supply: 220-240 V/50 Hz Warranty: 2 years warranty WM-2011/007953 7kg Sensor Dry Dryer with Iron Aid - EDS7051 Price: 18,995.00 Quantity: 2 Life Expectancy: 5 years Body Type: Front-load Dryer Total Capacity Drying Capacity: 7kg Number of Wash Cycles: 6 Spin Speed: No Stackable: Yes Dimensions: 600 x 845 x 620 Drum and Interior Finish: Stainless Steel Energy Consumption: Drying Per Cycle: 4.46 kWh Eco-friendly FSUU-Accontancy Program | All Rights Reserved.

32

Certification(s):ENERGY EFFICIENCY (MELS) - 1 ticks Eco-friendly Feature(s): Auto Sensing, Iron-aid function, Reverse Tumbling Technology Material(s): Galvanised Zinc-coated Body Screen Technology: LCD light Indicator and Electronic Control Wash Cycle Modes: Normal/Delicate/Airing/90mi n/60min/30min Height with Lid Open:Electronic Control Panel Timers: 3/6/9 hours Safety Features : Safety Cut-off, Door lock Indicators: Drying / Airing / End Languages Supported (OSD/Menu): English Power Supply: 220-240 V/50 Hz Packaging Weight: 32kg Included Accessories: Venting kit Warranty: 2 years warranty


33

4 CYLINDER 5 SPEED SUZUKI VAN TYPE WITH AIRCON - Used

Php 95,000.00 Life Expectancy: 5 years

Water Tank Storage in case there will be water disruption.

Php 10,000.00

2in1,blower and suction- 1/2hp, 200watts,20" x 20" Exhaust Fan Php 6,000.00

1 pc. Of 120kls. Weighing Scale

Php 3,500.00


34

1 pc. Of Calculator

Php 200.00

Water Hose 50ft

Php 1,500.00

2 pcs. Of Steam Flat Iron

Php 1,095.00 each

1 set of Dataworx Computer Package (Black)

Budget

Php 11,879.50


35

1 pc. of Plastic Container (for filtration process)

Php 739.75

1 sq.meter of Black Shade Cloth Php 100.00

Laundry Cleaning Products We choose to have a one supplier for our supplies to be use for the laundry process. Name of the Supplier Branch Access Website Alternative Supplier Address Access

PowerClean Chemicals KM 5 Buhangin Highway Corner Pag-asa St. Davao City Order Online http://www.powerclean.com.ph/ Villa Fidelina Ochoa Ave.cor.Lauraville Subd.,Brgy.Limaha, Butuan City Direct Buying


36

Supreme Power Detergent Description: High Density Power Detergent with supreme performance, 100% biodegradable active, antibacterial and optical brightener, no odor soaking, and no chalk. Ideal for Handwash and machine wash. 12 Sacks – 25 kg each Life Expectancy : 1 year Price: P 19,500.00 @ 1,625 per sack Fabric Softener Description: A concentrated liquid fabric softener that soften and leaves a fresh scent on fabrics, soluble in cold and hot water. With various scents suited to different personalities. 40 Gallons Life Expectancy : 1 year Price : P 7,600.00 @ 190 per gallon

Liquid Bleach Description: Mild, safe chlorine bleach for all purpose cleaning and disinfection. Contains sodium hypochlorite and releases 5-7 % available chlorine that will react with your fabric stain. Effective at low temperature, fast action and removes FSUU-Accontancy Program | All Rights Reserved.

37

stubborn stain. 40 Gallons Life Expectancy : 1 year Price : P 3,280.00 @ 82 per gallon Paint, Oil and Grease Remover Description: Is a fast acting liquid spot cleaner especially formulated to remove paint, oil and grease on fabric and other surfaces without affecting color and quality. This can also remove unwanted bubble gum on hard surfaces. 10 gallons Life Expectancy : 1 year Price : P 5,000.00 @ 500 per gallon Fabric Freshener Description: Is a water based scent especially formulated to eliminate undesirable odors and enhance the freshness of newly washed clothes. It comes in pleasant smelling dawny, comfort fashion and lavender scent 40 Gallons Life Expectancy : 1 year Price : P 10,000.00 @ 250 per gallon


38

Liquid Detergent Description: A concentrated liquid solution which has mild surfactant system effective for color fast

Supplies

2 pairs of Rubber Gloves Life Expectancy : 1 year Php 199.00 @ 99.50 each

10 pcs. Of Laundry Basket Life Expectancy:1 year Php 2,000.00 @ 200 each

3 pcs. Of Dipper Life Expectancy:1 year Php 90.00 @ 30.00 each


39

144 pcs x 10. Plastic Hangers Life Expectancy: 1 yr Php 4,000.00 @ 400.00 for 144

Face Mask Ear Loop (50 pcs/box) Disposable item Php 100.00

Big Plastic Basin - 5 Life Expectancy: 1 yr Php 2,250.00 @ 450.00 each

50 rolls Roll

of

Tagging

Paper

Life Expectancy: 1 year Php 9,000.00 @ 180.00 each


40

Ball Pens Life Expectancy:1 year Php 60.00 @ 5.00 each

40 pcs. Of Scotch Tape Life Expectancy: 1 year Php 500.00

@12.50each

Record Book- 300 Pages Life Expectancy: 1 year Php 100.00

10 pcs. For Order Slip

500

sheets

Life Expectancy: 1 year Php 1,687.50 @337.50 each


41

of

10 pcs. For Delivery Slip

500

sheets

of

Life Expectancy: 1 year Php 2,600.00

Plastics

Units

16x24 20x30

200 pcs. 100 pcs.

20x40 24x36 24x60 1 year

100 pcs. 100 pcs. 100 pcs. 1,770*2

Sando Bags 310.00 Large 165.00 Extra Large 285.00 Jumbo 390.00 620.00 3,540.00

Units 100 pcs. 100 pcs.

140.00 185.00

100 pcs.

330.00

655*2

1,310.00


42

Cost of Services COSTING PER 10 kg Process FOR WASHING MACHINE PROCESS ( WDF 8kg,WDP 2kg)*a Direct Material Detergent (250grams)*b Fabric Softener (1 cup)*c Fabric Freshener (1 cup)*d Liquid Bleach( 1 cup)*e Water (522L)*g Total Direct Material Cost DM Cost per Unit*f Direct Labor Wash-dry-fold DL allocation *h Wash-dry-press DL allocation*h Total Direct Labor Cost DL Cost per Unit*i Overhead-Electricity Consumption Machine Washing(30min) Machine 1 (.600kwh)*j Machine 2 (.600kwh)*j Tumble Dryer(30 min) Dryer1 (4.46kwh)*k Dryer2 (4.46kwh)*k Pressing (15 min) Flat Iron (1.258kwh)*l Total Overhead Cost Overhead Cost per unit

TOTAL COST

Php

Php Php Php Php 4.86 Php Php

16.25 11.88 15.63 5.13 2.54 48.88

Wash-dry-fold 8kg Php 13.00 Php 9.50 Php 12.50 Php 4.10 Php 2.03 Php 39.10 Php 4.89

Php Php Php

76.57 Php 89.33 165.90 Php Php

Php 7.9734 Php Php 7.9734 Php

Wash-dry-press 2kg Php 3.25 Php 2.38 Php 3.13 Php 1.03 Php 0.51 Php 9.78 Php 4.89

76.57 Php 76.57 Php 9.57 Php

89.33 89.33 11.17

2.39 Php 2.39 Php

1.91 Php 1.91 Php

0.48 0.48

Php 7.9734 Php Php 7.9734 Php

17.78 Php 17.78 Php

14.22 Php 14.22 Php

3.56 3.56

Php 7.9734 Php Php

2.51 40.35 Php Php

Php 32.28 Php 4.03 Php

2.51 10.58 1.32

Php

255.12 Php Php

147.95 Php 18.49 Php

109.68 54.84

Rate

Total Cost of Process Total Cost per Unit COSTING HANDWASHING

Total Cost

Direct Material Detergent (125grams)*m Fabric Softener (1/2cup)*n Fabric Freshener (1/2 cup)*o Liquid Bleach( 1/2cup)*p Water (391.5L)*q Total Direct Material DM Cost per Unit*r

4.86

Direct Labor Handwash-dry-fold *s total Direct Labor Direct Labor unit cost Overhead Tumble Dryer(15 min) Dryer1 (4.46kwh)*t Total Overhead Cost per unit

8.13 5.94 7.81 2.56 1.90 26.34 5.27

252.24 252.24 50.45

7.9734

Total Handwashing Cost Total Cost per unit


8.89 8.89 1.78 287.47 57.49

43

CHAPTER IV MANAGEMENT ASPECT This chapter provides information about the management aspect of the business. Basically, it shows the form of ownership which the business have. This includes how business will be managed, the control and supervision matters and even the start-up cost of the business. It will also provide you with information about the basic requirements and procedures in registering the business and the government agencies that the business is related to. The management aspect will determine the successful realization of the business. That’s why the study of the officers, key personnel and manpower requirements will be very important matter in this chapter. Business culture which includes the operating schedule and the day to day monitoring will also be part of this chapter. Form of Ownership I.

The business will be sole proprietorship. - Manage - Control - Supervise - Start Up cost A sole proprietorship is chosen since it is one of the least expensive business structures to begin. Only one person owns a sole proprietorship business, the legal requirements involve simply registering a business name and obtaining any relevant licenses or permits that relate to the specific type of business. Many sole proprietorship businesses have very low start-up costs as compared with other types of business structures. The start-up investment typically includes the basic costs for equipment, marketing and office utilities. However, the amount of the start-up costs may vary, depending on the specific type of business. FSUU-Accontancy Program | All Rights Reserved.

44

II.

Registration Essentially, a sole proprietor business legally comes into existence when the business owner registers the business name and obtains any relevant business licenses. Government agencies for registration  Department of Trade and Industry  Local Government Units where your business is located: a. Barangay b. Mayor’s Office  Bureau of Internal Revenue  Legally Required Registration of Employee Benefits Employers are legally required to provide certain benefits for employees. Employee benefits play an important role in the lives of employees as well as their families. For that reason, the benefits you offer can be a deciding factor for a potential employee’s decision to work at your business. Employee’s registration to the following: a. SSS b. PhilHealth c. Pag-ibig – HDMF Basic requirements and procedure in registering a Sole Proprietor Business 1. Register a business name at DTI 1) Come up with three business names 2) Search in the DTI’s website if there is an existing name similar to yours 3) If your business name is available, fill up business name (BN) Application Form 4) Submit your completed BN application form to DTI’s offices/branch


45

5) Wait for your DTI Certificate of Registration 2. Registration with Barangay 1) Go to the barangay where your business is located to secure and fill-up application form 2) Submit your completed application form together with the following:  Certificate of Business Registration from DTI  Two valid IDs  Proof of Address such as Contract of Lease 3) Claim Barangay Certificate of Business Registration 3. Register your business in the Mayor’s Office 1) Go to the municipal office where your business is located to secure and fill-up application form 2) Submit your completed application form together with the following  Certificate of Business Registration from DTI  Barangay Clearance Certificate  Two valid ID  Proof of Address such as Contract of Lease 4. Register in the Bureau of Internal Revenue (BIR) 1) Go to Regional District Office where your business is located 2) Fill-up the BIR Form 1901- Application for Registration (for Sole Proprietor) 3) Submit completed registration form together with the following  Certificate of Business Registration from DTI  Barangay Clearance Certificate  Mayor’s Business Permit  Proof of Address such as Contract of Lease FSUU-Accontancy Program | All Rights Reserved.

46

 Valid ID 4) Pay the registration form (BIR form 0605) 5) Register your book of accounts and receipts/invoices 6) Claim your Certificate of Registration (BIR Form 2303) Business Permit and Licenses Registration with DTI Registration with Barangay Business Permit in Mayor's Office Registration in BIR Total

Amount of Registration 215.00 100.00 5,027.00 500.00 5,842.00

Business Culture I.

II.

Operating hours from 9:00 am to 6:00 pm – Mondays to Saturdays Break time: 12:00 to 1:00 PM Day to day monitoring

The Inspector will monitor the employees’ attitude and performances, the laundry process, the consistency and ongoing coaching and giving instructions to them. -

Monitoring of sales Inventory Delivery and Pick-up

The pick-up and delivery will start at 9:00 am from Monday to Saturday. Our customers will contact us, since we are giving leaflets to them and posting tarpaulins in the area. The customer and the counter clerk will set-up the date of pick-up of laundry through telephone or cellphone, prior to the date of pick-up in order to manage the route in one way we can reduce the cost of gasoline. However, we will charge ₱5.00 for every pick-up and delivery. III.

Customer’s Account using Microsoft Excel


47

The customer’s account will be the basis to track their location during the pick-up and delivery service. It contains the customer’s name, address, contact number, number of returned garments with the payments and other information using the Microsoft Excel as our system. It is necessary to have a better customer communication such as, scheduling or canceling of bookings, automatic SMS, information about their account balances without invoice tickets during delivery and optimized customer search. Manpower requirements I.

Physical Requirements: -

II. -

Age must be 18-40 years old Workers without bending, crouching or walking restrictions. no skin allergies Skills, Interests and Qualities Must be graduate of Housekeeping NC II practical skills to operate and adjust machinery good attention to detail willingness to do repetitive work the ability to work methodically and follow instructions willingness to work flexibly good timekeeping skills Has the ability to count and measure accurately.


48

Organizational Structure

Route worker pick up,deliver,collect

Machine washers (2)

Inspector/Supervisor

Sorter tags and washer

Counter Clerk

Extractor Operator(2)

Manager Owner and Bookkeeper

extractor operator, Finishes clothes (fold and press ,iron)

Job Description & Duties I.

Machine washers Weigh laundry and place it in huge washing machines. Machine washers control the machine settings for each kind of material. This includes setting the proper temperature, washing speed and water and suds level and adding the right amount of bleaches and rinses. After the laundry is washed and rinsed,

II.

Counter clerk Received laundries from customers, give back clean laundry, scheduling the date of pick-up and delivery with the customers, and billing.

III. Bookkeeper Analyzing and recording the transaction and presenting the reports on time. III. Markers or sorters tag Mark the laundries so that they can be returned to the appropriate customer. They usually remove loose buttons and mark items that need to be mended. FSUU-Accontancy Program | All Rights Reserved.

49

IV.

Extractor operators Place it in extractors, which spin most of the water out of it. The laundry then goes to tumbler operators who put it in drying machines that tumble it dry. Some items, such as blankets and rugs, may be hung in heated rooms to dry.

V.

Inspector Check the finished laundry. If it needs rewashing or repressing, he sends it back to the proper department. He sends some pieces to menders, who do repairs by hand or machine. Assemblers collect all the items belonging to each customer. Finally, baggers or bundle wrappers place the laundry in bags or bundles and attach invoices, which indicate how much money the customer owes.

VI.

Finishers Fold and press the clean, dry laundry. When requested, they press. They also may just fold and stack. Other finishers work on shirts, ruffled curtains, blankets, or other items that require special pressing and finishing. To get professional results, they use forms designed for certain parts of clothing, such as shirt sleeves, shirt collars, or the bodies of skirts. They also use hand irons to finish certain items that cannot be done on the forms. The finished items are then folded or placed on hangers.

VII. Route workers Pick up laundries at customers' homes. Market new customers along their routes. They also deliver clean laundry, giving invoices and collect payments.

Segregation of Duties I.

II.

Single Duty •

Route Worker

•

Bookkeeper-Owner

Duties may be desegregated FSUU-Accontancy Program | All Rights Reserved.

50

•

Counter Clerk and the Inspector

• Markers or sorters tag and Machine washers (could be same person) • Extractor person)

operator

and

the

Finisher(could

be

same

Management Style I.

Hiring Process

The applicants are required to submit their resume on the position that they are interested to apply for. The management will immediately evaluate and sort those applicants. And whoever passed in the next stage will be informed by means of a message on mobile phones. Each of them will undergo a brief interview to personally determine if they are fit physically and mentally to the position they were applying for and not only that but also to evaluate if they really have the skill and ability to stay at the business. And those who successfully overcome the process shall submit their requirements for legal purpose employment. II.

Safe Working Environment

Safe working environment keeps the employees free from any hazards and it complies with the law providing safeties especially to the business operated. There are safety precautions that should be apply, employees are segregated based on their assigned jobs. They are required to wear gloves and mask during the laundry process to avoid from skin irritations. They are allowed to wear comfortable dress attire so that it would not be hard for them to move freely. Personal hygiene is appropriate to avoid disease or any illness, especially for chemicals that contains strong solution. There is specific baggage area for the employees where they can place their bags or things to it. Their things will be check by the assigned personnel or the owner before and after working hours to avoid thief or any misappropriation of assets. III. Training Training is essential for the success of a business. Laundry business requires training for its employees, especially it is FSUU-Accontancy Program | All Rights Reserved.

51

in need of due care, as clothes one the basic needs of every individual. Before being hired, employees will undergo some sort of trainings for laundry process to evaluate if they have the capabilities required for the position, and to ensure that they will know how to properly do their jobs to give the customer the satisfactions they are looking for. They will be evaluated as necessary to test their working knowledge and improvements. The PowerClean Chemicals Institute (PCLi) is our choice to be the supplier of our laundry chemicals and they also offer laundry seminar not only in Luzon but also to other regions in the Philippines. We chose them because the lectures are based from actual experience of running a laundry shop. They have wide coverage of topics which covers the Business Management such as Financial Aspect, Taxation, Marketing, Manpower, Machine and the like. They provide continuous assistance, demo of laundry chemicals and advice of laundry operations and management even after the seminar. The speakers are experts in Laundry Business in which they already trained more than 1,300 Laundry owners. Affordable price of ₱1,500 each person for early registrants of laundry shop session. They also continuously improve their training facility with free wifi access. The owner should understand his choice of employees and time invested to train them results in a direct reflection in his marketing efforts and money spent on those efforts. All of the owner’s best intentions to provide a clean, well equipped, multi-service, and attractive store to his customers will be wasted if there are any employees who do not provide to his customers the level of service, clean appearance, and customer friendly attitude they expect and his deserve for his investment. At all times, the owner should remind his employees that their top priority is their customer’s interests. From welcoming the customers to the shop, to keeping the machines, and floors clean, keeping bathrooms clean, and properly supplied, taking in Wash-Dry-and Fold and Pressing, peacefully resolving customer issues and complaints, and having that all important good attitude. Monitor also the employees closely and fix any employee problems immediately.


52

Motivating & Rewarding Employees 1. Recognize and appreciate about the good things employees do. They will do less negative and will strive to do more of the positive things the owner is recognizing. It is far easier to lead people to improved performances by thanking them when they do it right than giving them grief when they do it wrong. 2. Take a moment to celebrate like having a party. . It is too easy to get so caught up in the daily struggle that you never stop to recognize the good work you and your attendants do. 3. Praise and recognize the star performers. Some of your recognition budget should certainly go toward spotlighting role model performances and role model employees. This makes them feel good, encouraging them to stay on board and keep trying hard. And it gives everyone a bit of inspiration and a clearer idea of what you want employees to shoot for. 4. Recognize good effort, not just results. When employees have had a tough week, throw a mini-party for them. Bring in some pizza, a cheesecake or whatever inspires the owner and share it with the team. Or try writing a personal thank-you card for each attendant – perhaps picking out a different design for each and having some fun recognizing individuals in your selection. PAYROLL SCHEDULE (FIXED RATE) Personnel

No.

Min.Wage/

Working

Monthly

Day

Days

Gross Pay

DEDUCTIONS SSS Premium ER

Total

PhilHealth Premium EE

PAG-IBIG Premium

ER

EE

ER

Deductions

Net Monthly Pay

EE

Inspector/Supervisor

1

268.00

26

6,968.00

525.70

254.30

100.00

100.00

139.36

139.36

493.66

6,474.34

Route Worker

1

268.00

26

6,968.00

525.70

254.30

100.00

100.00

139.36

139.36

493.66

6,474.34

Exctractor Operator

2

268.00

26

6,968.00

525.70

254.30

100.00

100.00

139.36

139.36

493.66

12,948.68

Machine Washers

2

268.00

26

6,968.00

525.70

254.30

100.00

100.00

139.36

139.36

493.66

12,948.68

TOTAL TOTAL PER ANNUM

27,872.00

2,102.80

1,017.20

400.00

400.00

557.44

557.44

1,974.64

38,846.04

334,464.00

25,233.60

12,206.40

4,800.00

4,800.00

6,689.28

6,689.28

23,695.68

466,152.48

Employer's Contribution

36,722.88

Employee's Contribution Annual Withholding tax

23,695.68 -


53

CHAPTER V FINANCIAL ASPECT The purpose of this chapter is to project how much startup capital is needed, sources of capital, return on investments and other financial considerations. Considerations 1. The owner shall invest P 500,000.00 in the business as shown in the next page, which approximates the total preoperating expenses. 2. A service rendered is on cash basis. 3. The equipment and leasehold improvements are to be depreciated on a straight-line basis. 4. For simplicity, all employees are presumed to be single and that they have no dependents for purposes of computing the withholding tax. 5. Income tax is computed using the tabular tax rate for individuals provided by the National Internal Revenue Code. 6. There are no other current liabilities aside from the employee benefits and income tax since the entity pays its obligations before the end of the year. 7. Owner/Manager will withdraw instead of salary.


54

Pre - Operating Expenses Machines 9kg Top Load Washing Machine with T-Drive Washing Technology 7kg Sensor Dry Dryer with Iron Aid

89,580.00 75,980.00 165,560.00

Equipments Water Tank Exhaust fan Weighing Scale Steam Flat Iron Computer Set

10,000.00 6,000.00 3,500.00 1,095.00 11,879.50

32,474.50

Vehicle Multicab

150,000.00 11,500.00 18,500.00

Leasehold Improvements Furnitures and Fixtures Advertising Expenses Leaflets and flyers Tarpaulin

3,000.00 2,500.00

5,500.00

Gloves Laundry Basket Dipper Hangers Face Mask Plastic Basin Tagging paper Ballpens Scotch tape Record Book Calculator Water Hose Fire Extinguisher Order Slip Delivery Slip Plastic Bag 1 sq.meter of Black Shade Cloth Plastic Container (for filtration process) Sando Bags

199.00 2,000.00 90.00 4,000.00 100.00 2,250.00 9,000.00 60.00 500.00 150.00 200.00 1,500.00 1,600.00 1,687.50 2,600.00 3,540.00 100.00 739.75 1,310.00

31,626.25

Supplies, etc.

Cleaning Products Detergents Fabric Softener Fabric Freshener Liquid Bleach Paint Oil and Grease Remover Duties and Licenses Rent TOTAL

2 months advance 1 month deposit

19,500.00 7,600.00 10,000.00 3,280.00 5,000.00

45,380.00 5,842.00 30,000.00 496,382.75


55

Lovebada Bango PROJECTED FIVE YEAR COMPARATIVE BALANCE SHEET Year 1

Year 2

Year 3

Year 4

Year 5

ASSETS Current Assets Cash Supplies Inventories Total Current Assets

660,841.65 2,269.00

884,816.46 2,495.90

982,166.09 2,745.49

970,134.35 3,020.04

623,783.09 3,322.04

663,110.65

887,312.36

984,911.58

973,154.39

627,105.13

348,034.50

348,034.50

348,034.50

348,034.50

348,034.50

50,606.46

101,212.92

151,819.38

202,425.84

253,032.30

Non Current Assets Equipments Less: Accumulated Depreciation Leasehold Improvements

11,500.00

11,500.00

11,500.00

11,500.00

11,500.00

Less: Accumulated Depreciation

2,300.00

4,600.00

6,900.00

9,200.00

11,500.00

Furnitures and Fixtures Less: Accumulated Depreciation

18,500.00 3,700.00

18,500.00 7,400.00

18,500.00 11,100.00

18,500.00 14,800.00

18,500.00 18,500.00

PHP 321,428.04

PHP 264,821.58

PHP 208,215.12

PHP 151,608.66

PHP 95,002.20

PHP 984,538.69

PHP 1,152,133.94

PHP 1,193,126.70

PHP 1,124,763.05

PHP 722,107.33

Total Non Current Assets Total assets

LIABILITIES & OWNER'S EQUITY Current Liabilities Due to SSS

4,680.00

4,680.00

4,680.00

4,680.00

4,680.00

Due to Philhealth

1,200.00

1,200.00

1,200.00

1,200.00

1,200.00

Due to PAG-IBIG Income Tax Payable

1,672.32 178,435.64

1,672.32 232,529.88

1,672.32 286,127.25

1,672.32 345,084.35

1,672.32 410,577.16

Total Current Liabilities

PHP 185,987.96

PHP 240,082.20

PHP 293,679.57

PHP 352,636.67

PHP 418,129.48

0.00

0.00

0.00

0.00

0.00

PHP 185,987.96

PHP 240,082.20

PHP 293,679.57

PHP 352,636.67

PHP 418,129.48

798,550.73

912,051.73

899,447.14

772,126.38

303,977.85

PHP 984,538.69

PHP 1,152,133.94

PHP 1,193,126.70

PHP 1,124,763.05

PHP 722,107.33

Non Current Liabilities Loan Payable Total Liabilities Owner's Equity Capital Total Liabilities and Owner's Equity


56

Lovebada Bango PROJECTED FIVE YEAR COMPARATIVE INCOME STATEMENT Year 1

Year 2

Year 3

Year 4

Year 5

Service Revenues

PHP 1,648,920.00

PHP 1,813,812.00

PHP 1,995,193.20

PHP 2,194,712.52

PHP 2,414,183.77

Less: Discounts

49,467.60

54,414.36

59,855.80

65,841.38

72,425.51

PHP 1,599,452.40

PHP 1,759,397.64

PHP 1,935,337.40

PHP 2,128,871.14

PHP 2,341,758.26

392,968.15

399,548.25

404,517.36

409,983.38

415,996.00

PHP 1,206,484.25

PHP 1,359,849.39

PHP 1,530,820.04

PHP 1,718,887.76

PHP 1,925,762.25

167,232.00

167,232.00

167,232.00

167,232.00

167,232.00

35,213.31

35,213.31

35,213.31

35,213.31

35,213.31

2,300.00

2,300.00

2,300.00

2,300.00

2,300.00

Net Service Revenue Less: Cost of Services Gross Profit Less: Expenses Salaries & Wages Depreciation - Equipment Depreciation - Leasehold improvements Depreciation - Furnitures and Fixtures Rent Supplies Advertising

3,700.00

3,700.00

3,700.00

3,700.00

3,700.00

140,000.00

120,000.00

120,000.00

120,000.00

120,000.00

31,626.25

34,788.88

38,267.76

42,094.54

46,303.99

5,500.00

3,000.00

3,000.00

3,000.00

1,000.00

37,850.40

37,850.40

37,850.40

37,850.40

37,850.40

PhilHealth Contribution

7,200.00

7,200.00

7,200.00

7,200.00

7,200.00

PAG-IBIG Contribution

10,033.92

10,033.92

10,033.92

10,033.92

10,033.92

SSS contribution

Duties and Licenses

5,842.00

2,500.00

2,500.00

2,500.00

2,500.00

38,000.00

38,000.00

38,000.00

38,000.00

38,000.00

5,000.00

12,000.00

12,000.00

12,000.00

12,000.00

489,497.88

473,818.51

477,297.39

481,124.17

483,333.62

Income Before Tax

PHP 716,986.37

PHP 886,030.89

PHP 1,053,522.65

PHP 1,237,763.59

PHP 1,442,428.63

Income Tax (Tabular)

PHP 178,435.64

232,529.88

286,127.25

345,084.35

410,577.16

PHP 538,550.73

PHP 653,501.00

PHP 767,395.40

PHP 892,679.24

PHP 1,031,851.47

Utilities Repairs and Maintenance Total General and Administrative Exp

Income After Tax

Cost of Services Provided Year 1 0

Year 2 2,269.00

Year 3 2,495.90

Year 4 2,745.49

Year 5 3,020.04

Purchases Freight-in

45,380.00 2,269.00

49,918.00 2,495.90

54,909.80 2,745.49

60,400.78 3,020.04

66,440.86 3,322.04

Total Purchases Purchase Discounts Net Purchases

47,649.00 2,269.00 45,380.00

52,413.90 2,495.90 49,918.00

57,655.29 2,745.49 54,909.80

63,420.82 3,020.04 60,400.78

69,762.90 3,322.04 66,440.86

Cost of Inventoy Available for Use Less: Inventory, Dec

45,380.00 2,269.00

52,187.00 2,495.90

57,405.70 2,745.49

63,146.27 3,020.04

69,460.90 3,322.04

Cost of Inventoy Used

43,111.00

49,691.10

54,660.21

60,126.23

66,138.85

334,464.00 15,393.15

334,464.00 15,393.15

334,464.00 15,393.15

334,464.00 15,393.15

334,464.00 15,393.15

392,968.15

399,548.25

404,517.36

409,983.38

415,996.00

Inventory, Jan

Salaries of Direct Workers Total Depreciation of Direct Equipment TOTAL COST OF SERVICES


57

Breakdown of Utilities (Indirect) Consumption per day (Php)

Description 1. Gasoline 2. Telephone 3. Electricity 4. Water 5. Computer

100 0.191362 3.18936 0.486 10.04648

In One Year Total 312 31,200.00 312 59.70 312 995.08 312 151.63 312 3,134.50 35,540.92

Lovebada Bango Depreciation Table

Equipments Cost/Equipment/F urniture Quantity Total Acquisition Cost 9kg Top Load Washing Machine with TDrive Washing Technology 7kg Sensor Dry Dryer with Iron Aid Steam Flat Iron Direct Equipment - Overhead Multicab Water Tank Computer Package Weighing Scale Exhaust Fan Total Depreciation Equipments Furnitures and Fixtures Leasehold Improvements TOTAL

Scrap Value

Est. Useful Life Annual Dep'n

4 4 1

22,395.00 18,995.00 1,095.00

89,580.00 75,980.00 1,095.00

8,958.00 7,598.00 109.50

10 10 2

1 1 1 1 1

150,000.00 10,000.00 11,879.50 3,500.00 6,000.00

150,000.00 10,000.00 11,879.50 3,500.00 6,000.00 348,034.50

15,000.00 1,000.00 1,187.95 350.00 600.00

5 5 5 2 2

18,500.00 11,500.00

18,500.00 11,500.00 378,034.50

8,062.20 6,838.20 492.75 15,393.15 27,000.00 1,800.00 2,138.31 1,575.00 2,700.00 35,213.31

5 5


3,700.00 2,300.00 56,606.46

58

PROJECTED STATEMENT OF CASH FLOWS Year 1

Year 2

Year 3

Year 4

Year 5

Cash Provided/Used by Operating Activities Cash Receipts from Sales & Services

PHP 1,599,452.40

PHP 1,759,397.64

PHP 1,935,337.40

PHP 2,128,871.14

PHP 2,341,758.26

45,380.00

49,918.00

54,909.80

60,400.78

66,440.86

Payment of Advertising Fee

5,500.00

3,000.00

3,000.00

3,000.00

1,000.00

Payment of Utilities Expense

38,000.00

38,000.00

38,000.00

38,000.00

38,000.00

Payment of supplies

31,626.25

34,788.88

38,267.76

42,094.54

46,303.99

140,000.00

120,000.00

120,000.00

120,000.00

120,000.00

5,000.00

12,000.00

12,000.00

12,000.00

12,000.00

466,152.48

466,152.48

466,152.48

466,152.48

466,152.48

SSS, Philhealth & PAG-IBIG Premium (ER&EE share)

83,075.52

90,627.84

90,627.84

90,627.84

90,627.84

Payment of Duties and Licences

5,842.00

2,500.00

2,500.00

2,500.00

2,500.00

Purchase of Inventory

Payment of Rent Payment of Repairs and Maintenance Payment of Employee Salaries / Wages

Remittance of Withholding Tax

-

Payment of Income Tax

0.00

178,435.64

232,529.88

286,127.25

345,084.35

778,876.15

763,974.81

877,349.64

1,007,968.26

1,153,648.74

366,534.50

0.00

0.00

0.00

0.00

Payment for leasehold improvements

11,500.00

0.00

0.00

0.00

0.00

Net Cash Used in Investing Activities

378,034.50

0.00

0.00

0.00

0.00

Cash received as investment by owner

500,000.00

0.00

0.00

0.00

0.00

Payment for withdrawals by owner

240,000.00

540,000.00

780,000.00

1,020,000.00

1,500,000.00

Net Cash Provided by Financing Activities

260,000.00

-540,000.00

-780,000.00

-1,020,000.00

-1,500,000.00

Net Cash Inflow (Outflow)

660,841.65

223,974.81

97,349.64

-12,031.74

-346,351.26

PHP 660,841.65

884,816.46

982,166.09

970,134.35

PHP 884,816.46

PHP 982,166.09

PHP 970,134.35

PHP 623,783.09

Net Cash Provided by Operating Activities

-

-

-

-

Cash Provided/Used from Investing Activities Payment to acquire equipment

Cash Provided from Financing Activities

Add: Beginning Cash Balance Ending Cash Balance

PHP 660,841.65


59

Lovebada Bango PROJECTED STATEMENT OF CHANGES in OWNER'S EQUITY YEAR

Beginning Balance

1

2

3

4

5

A, Capital

A, Capital

A, Capital

A, Capital

A, Capital

PHP 798,550.73

PHP 912,051.73

PHP 899,447.14

PHP 772,126.38

PHP 0.00

Add: Investment

500,000.00

Net Income

538,550.73

653,501.00

767,395.40

892,679.24

1,031,851.47

PHP 1,038,550.73

PHP 1,452,051.73

PHP 1,679,447.14

PHP 1,792,126.38

PHP 1,803,977.85

240,000.00

540,000.00

780,000.00

1,020,000.00

1,500,000.00

PHP 798,550.73

PHP 912,051.73

PHP 899,447.14

PHP 772,126.38

PHP 303,977.85

Total Less: Withdrawals Ending Capital Balance

0.00

0.00

0.00

0.00

FINANCIAL STATEMENT ANALYSIS

Net Income Divided by: Average Investment ROI Percentage

Year 1 538,550.73 984,538.69 0.547

Return On Investment Year 2 653,501.00 1,068,336.31 0.612

Year 3 767,395.40 1,172,630.32 0.654

Year4 892,679.24 1,158,944.88 0.770

Year 5 1,031,851.47 923,435.19 1.117

Payback Period (Uneven Cash Flows) Net Operating Cash Cummulative Cash Year Flows Flows 1 778,876.15 778,876.15 2 763,974.81 1,542,850.96 3 877,349.64 2,420,200.59 4 1,007,968.26 3,428,168.85 5 1,153,648.74 4,581,817.59

Computation:

500,000.00 0.67

In 8 months


60

Chapter VI SOCIO ECONOMIC-STUDY AND ENVIRONMENTAL IMPACT This chapter in general provides information about the socio economic study of the business as well as its environmental impact. This will tackle the benefits that can be rendered to the customers, the owners and the staff and how to keep the environment safe from the chemicals that are main components of the laundry business. Socio-Economic The proposed laundry business, “Lovebada Bango” will bring satisfaction to customers, who are looking for a laundry shop that will cater good services of cleaning their clothes at a reasonable price. The business will help the customers or individuals to maximize their time for other work and serve comfort to the customers. Contribution to the Economy The proposed business will benefit the economy through providing employment to every individual especially within the resident covered by the study. This will give the hired employees and their families their source of income for their living needs. This business will support local workers. It will also promote the business and also contribute to the competition which will lower the price of the product but will maintain the quality of the products. Contribution to the Government As Filipino citizens, the business owners will pay their tax liabilities mandated by the law. Tax will help the government generate funds for the improvement of public service and government projects. Contribution to the Society Lovebada Bango business will keep this town marketable to attract more investors that will help the community for its improvements and modernization, which, in turn leads to money placed directly into the community. FSUU-Accontancy Program | All Rights Reserved.

61

Environmental Impact Environmental impact of cleaning agents is the consequences of chemicals contained in the products. We can't deny the fact that our environment is the first affected by what we are doing especially when it involves upgrading our works through the help of technology. Simple things like using a car as a means of transportation can contribute or rather give impact to our environment. Laundry business like Love Vada Bango, perhaps gives an impact to our environment. The machines that we used emit greenhouse gasses (CO2) that add effect to what we are experiencing nowadays, the "global warming". Another thing is the used of detergents and bleaches in washing garments. Although the place is not near the river in which fishes could die, detergents may still affect our environment. Like lots of fillers used in powder detergents are poured in drains causing wastage of useful products like common salt / washing soda and choking of drain / sewerage system. Components of detergents like sodium sulphate can wreak havoc on septic system. Synthetic detergents and our laundry practices are contributing to our ground level water pollution. The laundry business is aware of its harm to the environment from the chemical substance that will be used as stated above. Since the proposed business have to make sure that it will not cause any harm to the people and environment as well, it has to make sure to treat every water it throws. The water treatment will use filtration system for removal of contaminants by chemical and physical bonding. The proposed business will make this process cost friendly and more effective.


62

Chapter VII CONCLUSION AND RECOMMENDATION The market study determined the demand for service through research on the residents on the particular area from Brgy. Sikatuna, Tandang Sora and Humabon. The study conducted revealed the demand for the service and enabled to come up with an efficient marketing program that will support the viability of the business in its first stages of operation and expected to last in the long run. Generally, Lovebada Bango Laundry Shop is seen to be feasible upon studying its location, market demand and the factors affecting the market. It is recommended that an extensive study for other aspects of the business feasibility is conducted and the execution of the marketing program developed accords to what really satisfies the market.


63

Feasibility Study-Laundry Services

Recommend Documents