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Presented to the Faculty of Department of Accounting Education of UM Tagum College Tagum City In Partial Fulfillment of the Requirements For the course STRATEGIC BUSINESS ANALYSIS (ACC 223) By: ARCALES, EDSEL JOHN CALDITO, IAN RAY LASTIMADO, JONALYN NEPUMOCENO, SUNSHINE PADADA, MARY ROSE March 2021
Chapter 1 INTRODUCTION Objectives of the Study This feasibility study entitled “Paradis' Pisonet”, located in Fd. Rd. 2 Purok 7, Tibal-og, Sto. Tomas Davao del Norte aims to determine the profitability of engaging into Pisonet Business. Moreover, it is intended to know the cost and benefits, its viability and most importantly, to ascertain if it is favorable to pursue this business. Methodology The proponents conducted surveys and interviews to gather the data that is needed to reach the objectives of the study. The proponents selected respondents from Purok 7 in Barangay Tibal-og using the non-probability sampling called convenient sampling. Convenient sampling relies on the data collection from respondents who are conveniently available to participate in the study. Moreover, competitors are also interviewed to gather fact-based information and background of the business. The instruments used are attached to the Appendices Section. Scope and Limitations This feasibility study is primarily focused on the four (4) important aspects of business industry: Marketing, Management, Technical and Financial Aspect. Moreover, the analysis is only limited to the data gathered by the proponents of this study.
Chapter 3 MARKETING PLAN Description of the Service Paradis’ Pisonet is an internet café service that provides customers access to the internet through the use of a pisonet. A pisonet is an arcade version of a PC wherein customers only have to insert a coin in order to use the said arcade. For as low as ₱1.00, customers can surf the web, play online games, and attend online classes for 7 minutes. Location The Paradis’ Pisonet will be situated at Purok 7 Barangay Tibal-og, Sto. Tomas, Davao del Norte. The business will be renting a commercial space ______. The aforementioned area was chosen not just because of the population density in the neighborhood of 7-B, where the target market is concentrated, but also because the location is near a school and the public market. Market Area The area where the business will be located
PROPOSED BUSINESS LOCATION OF THE PARADIS’ PISONET
Projected Demand Table 3 shows the estimated demand for the next three (3) years. Demand, as shown in the previous table, is increasing on an average of 4.46% by the use of the moving average method. The projected demand for the year can be computed by the sum of the product of its base year and the average increase in demand, and base year. Table 3 Projected Demand Year Based Year (in Hours) Increase in Demand (4.46%) Projected Demand (in Hours) 1 236,429 10,545 246, 2 246,973 11,015 257, 3 257,988 11,506 269, Historical Supply The proponents of this study have identified just a single competitor throughout the area. Table 4 shows how much have they been supplying throughout the Purok for the past three (3) years. Table 4 Historical Supply Name of Competitor
(in hour)
(in hour)
(in hour) Competitor 1 30,576 34,944 39,
Projected Supply Using the average increase of 13% in supply for the past three (3) years, the researchers have estimated how much will the competitors’ supply for the next three (3) years. Table 5 shows the computed demand for the next three years. Table 5 Projected Supply Year Base Year Increase in Supply (13%) Projected Supply Year 1 39,312 5,111 44, Year 2 44,423 5,775 50, Year 3 50,197 6,526 56, Demand and Supply Analysis Demand-Supply Analysis is shown in the table below. Shortage or unsatisfied demand is the excess of a community’s demand over the providers ‘supply. Surplus, on the other hand, is the difference between the supply and demand. A community with a shortage of supply is an indication for new businesses to enter the industry. As shown below, for the next three (3) years, there is a shortage of supply. With that in mind, this would be an opportunity to open a pisonet shop within the said location.
Table 7 Market Share Year Shortage (Surplus) Market Share Supply Capacity Per Year Year 1 202,550 18% 36, Year 2 207,791 18% 37, Year 3 212,772 18% 38, Specific Supply of __ Projected Selling Price Sales Revenue 1 Sales Revenue 2 Sales Revenue 3 Summary of Sales Revenues
Marketing Strategy Promotional Measures and Marketing Promoting business will use different strategies and techniques to attract probable customers. These strategies will provide our customers a more enjoyable experience during their visit in Paradis’ Pisonet. To promote the business and attract the customers as well, the proponents decided to offer a free one (1) hour internet access every Sunday for the first five (5) customers during that day. This promotion is not limited to that day, but the entity also offers this promotion during some selected holidays like Christmas, New Year and Anniversary of the business. The said promotion is subject to change. Moreover, the business will distribute fliers at the target area, Purok 7-B Barangay Tibal-og, and even in the marketplace which is near the business location. A tarpaulin will also be placed outside the building and to some selected areas. The proponents believe that these promotional and marketing strategies are the best ways to make the business known throughout the neighborhood and to penetrate the target market. Pricing Strategy The business will use the pricing method since the market will base on the affordable price for the target market and the specific price that they can spend in the business. Promotional Budget Table __ shows the advertising expense that the proposed business will incur before the opening. Table__ Marketing Expense Particulars Quantity Unit Cost Total Cost (Php) Flyers 400 2 800 Tarpaulin 3 100 300 TOTAL 403 102 1,
Figure _. Business Process
Enter the Paradis’ Pisonet Straight into unoccupied unit Go to cashier’s desk for coin exchange
Straight into unoccupied unit
Business Hours Schedule The Paradis’ Pisonet will operate every Monday to Friday at 8:00 AM until 8:00 PM and 7:00 AM to 8:00 PM every weekend. The operating hours will be 12 hours per day during weekdays and 13 hours per day during weekend. Table __ Business Hours Schedule Days Opening Closing Operating Hours Monday 8:00 AM 8:00 PM 12 Tuesday 8:00 AM 8:00 PM 12 Wednesday 8:00 AM 8:00 PM 12 Thursday 8:00 AM 8:00 PM 12 Friday 8:00 AM 8:00 PM 12 Saturday 7:00 AM 8:00 PM 13 Sunday 7:00 AM 8:00 PM 13 Total Operating Hours per week 86 Hours Tools and Equipment The business will have eight (8) units of Pisonet. The Package PCs already included all the necessary accessories such as keyboard, mouse and headset. Moreover, the table __ shows tools and equipment to be utilized by the business during its operation as well their purchase cost, quantity and total amount.
Depreciation Table __ presents the depreciation for the tools and equipment, and furniture and fixtures for the three consecutive years of operations. The annual depreciation is computed using the straight-line method in which the cost is divided by its estimated useful life. Table __ Depreciation Assets Amount Estimated Useful Life Year 1 Year 2 Year 3 Aircon 1. HP Inverter ₱18,000.00 10 years ₱1,800.00 ₱1,800.00 ₱1,800. Fire Extinguishe r 1,200.00 5 years 240.00 240.00 240. Package PCs 160,000.00 8 years 20,000.00 20,000.00 20,000. Modem DSL 2,500.00 5 years 500.00 500.00 500. Table 1,000.00 5 years 200.00 200.00 200. Monoblock Chairs 4,500.00 5 years 900.00 900.00 900. TOTAL ₱ 187,200.
Future Capacity The target market of 54% is expected to meet in the first year of operation. Paradis’ Pisonet is projected to constantly meet the 18% market share of unsatisfied demand for three years from the start of operation. Labor Availability The Paradis’ Pisonet will open 7 days a week, Monday to Sunday at 8:00AM until 8:00PM. Hence, Paradis Pisonet requires two (2) shop attendants that will be involved in the business operations. As the business will open for 12 hours, the
proponents believed that it is convenient that the store attendants will have 6 hours duty shifting daily for smooth monitoring of the business. Labor Productivity Customers pay by dropping 1 peso on coin slot for the computer to operate. With this, the shop attendants need to make sure that the customer has more than enough stock of 1 peso coins and to ensure exact changes from 5 pesos, 10 pesos and paper bills to peso coins to avoid losses. The store attendant must be good in accommodating the customers and attentive in doing immediate response to customer's concerns and needs. Moreover, their ability to run with minimal supervision is a must to check every pisonet units if it is still operating in good condition and to make sure the business will reach high level of customer satisfaction. Manpower Requirements Table __ shows the salaries expense for the worker in first year business operation. Both of the attendants will receive the same rate as long as they will finish the required 6 hours of duty. The basic rate of ₱ 250.00 per day is based on the rates applied by similar pisonet businesses. Table __ Salaries Expense Position Number of Employees Basic rate per month Total Annual Cost Shop Attendant 2 ₱ 15,000.00 ₱ 180,000.
Business Permit and Licenses In operating a business, it is necessary to comply with the business permits and licenses imposed by the law. The table __ present the business permits and licenses and its respective amounts to be incurred by the business. Table__ Business Permit and Licenses Breakdown Particulars Amount Bureau of Internal Revenue (BIR) Certificate of Registration ₱ 500. Mayor’s Permit / Business Permit 1,620. Barangay Clearance 50. Purok Clearance 50. Inspection Fee 100. Fire Permit 250. Occupational Permit 810. TOTAL ₱ 2,570. Projected Business Permit and Licenses
Store Supplies The table below shows the shop supplies to be used by the business during the first year of its operation. Also presented here are the unit price, quantity and total for each supply. Table __ Store supplies Shop Supplies Unit Price Quantity Total Broom ₱30.00 2 ₱60. Dust Pan 50.00 1 50. Trash Bin 100.00 1 100. Mop 200.00 1 200. Feather Dust 100.00 1 100. Rags 5.00 5 25. Alcohol 300.00 / gallon 1 gallon 300. Powder Soap 40.00 / kilo 2 kilos 80. Air freshener 90.00 2 180. TOTAL ₱1,095.
