1

CHAPTER 1

Marketing Aspect

This chapter discusses the marketing aspect of the business. This will

cover the Service Description, Target Market, Demand and Supply analysis,

Competitor analysis, pricing structure, projected sales, marketing program/strategies

and the marketing/selling expenses.

Moreover, the business prosper, it requires time and effort. The proponent of

this business must have the desired creativity so as to be able to provide quality

service to the customers. The fulfillment of the needs and wants of its customers or

target market must be the key objective of the recommended business.

Service Description

In the current economic status of our country, we Filipinos prefer to be more

practical to our daily necessities and expenses. Since this era became a generation

wherein new trends of fashion styles are in, people also want to be in line with the

trend. In the society today no matter what is your haircut people commonly appreciate

your freedom of expression, no more stereotyping and less gender issues as long as

you’re happy with it. Since one of the most important parts of our body is hair that

reflects the personality especially for men because haircut is part of their necessities.

The Men’s
 2

Barberia offers the newest accommodating haircut service. For those people who

are always on rush and runs out of time to do their hairdo’s. It is a great opportunity

for us to give you a satisfying haircuts with freebies such as free shower before and

after and the business have a loyalty card wherein if the customer has already avail

more than five haircuts, he or she have free one haircut for his or her next haircut

session. The barbershop business is never been lost in the industry, and we all know

that our hairs are our crowning glory, especially for young people who want to look

great and never get out of style. Even in a small place you can build your own

barbershop. This kind of business can be established at home, near the school, or

even inside the mall. Even if you’re rushing to have your haircut it is guarantee that

our barbers will provide you the best hairstyle that you deserve in a reachable prize.

The main aim of this study/ business proposal is to provide a good customer

service and an affordable prize. The researchers are very aware that this kind of

business is trend in the growing industry of wellness and styles. But, with the growing

population of students in the universities and colleges, there would always be a place

for new ones. What makes our business proposal is unique, that we are not only

paying attention to the quality of output that we will provide to our customers but also

the kind of service they will receive throughout the whole interaction that will grant a

satisfying haircut.
 3

Target Market

A target market is the market a company wants to sell its products and

services to, and it includes a targeted sets of customers for whom it directs its

marketing efforts. Identifying the target market is an essential step in the development

of a marketing plan.

Area Coverage

The particular location chosen for the target market is near the Holy Cross of

Davao College, Sta. Ana Avenue, Davao City because the place is accessible and

near to an institution and at the same time the target consumer are nearby and can

easily avail the barbershop services. The respondents of the study are the students of

Holy Cross of Davao College and walk-ins. The researchers used survey

questionnaire to gather necessary information with regards on how customers avail

the barbershop services through certain reasons like haircut trend, affordability, the

preference on where the service were to be offered and Competitiveness.

Consumer/Customer

A survey of the service quality and efficiency are made to explore

perspectives by which customers evaluate those offered services. Using factor

analysis, consumer evaluation factors for services were derived and examined across

service categories like the willingness, demand and how much the potential customers

can afford it. To protect the reliability and credibility of data, information should be

gathered using accepted data collection techniques. It may be helpful to conduct an

assessment to
 4

understand what the services are rendered in a barbershop business and how much

potential consumers willing to avail the services offered for them. They will make

decisions about who will be surveyed, how data will be collected, the sources of data

that will be used, and the duration of the data collection, among other questions.

Demand and Supply Analysis

Supply and demand is perhaps one of the most fundamental concepts of

economics and it is the backbone of a market economy. Demand refers to how much

(quantity) of a product or service is desired by buyers. The quantity demanded is the

amount of a product people are willing to buy at a certain price; the relationship

between price and quantity demanded is known as the demand relationship. Supply

represents how much the market can offer. The quantity supplied refers to the amount

of a certain good producers are willing to supply when receiving a certain price.

Total Potential Demand

In determining the Potential Demand of Men’s Barberia, the business

proponents prepared survey questionnaires and conducted a survey to the Target

Market.
 5

Table 1. Total Potential Demand

No. of

Target Population Total Respondents Percentage Potential

Market Respondents who said Market

YES

HCDC 2375 250 218/250 87% 2066

Walk ins 150 50 35/50 70% 105

TOTAL 2525 300 253/300 2171 x 50%

=1085.50

person per

month

Among the prospective markets, there are exactly 2375 male students of

HCDC and 150 Walk ins. In determining the number of demands in our target market,

the business conducted a survey to have reliable information that we needed. The

proponents consider this survey as our basis in determining the demand. The business

surveyed the students from Holy Cross of Davao College, Inc. (HCDC) with a total of

300 respondents. Out of 300 respondents, 253 respondents will go to avail our goods.

The HCDC male students has a population of 2375 and 87% of it will be our potential

customer while the Walk ins has a population of 150 and 70% of it will be our potential

customers.
 6

Table 2. Total Potential Demand of Haircut.

Potential Total

Market times Demand

Potential Times of Number of % out
% out of 253
Market availing person who of Per
times
the wants to avail our 253 Month
Frequency of
service in service
buying
a month

1 206/253 81.42% 1085.50 x .81 x 879.25

1085.50 2 44/253 17.39% 1085.50 x .17 x 369.07

3 3/253 1.18% 1085.50 x .1 x 3 325.65

Total 100% 1573.97

The Table 2 shows the monthly projected customers of Haircut. The business

conducted survey to the students based from the survey, there are 253 out of 300

people who said that they want to avail the product. There are 81.42 % of the projected

customers who can avail the service once a month, 17.39 % of the customers that can

avail twice and the customers that can avail haircut thrice a week are 1.18 % resulting

to 1573.97 projected customers can avail per month.

 7

Table 3. Total Potential Demand of Shave.

Potential Total

Market times Demand

Potential Times of Number of % out
% out of 253
Market availing person who of Per
times
the wants to avail our 253 Month
Frequency of
service service
buying

1 71/253 28.06% 1085.50 x .28 x 303.94

1085.50 2 136/253 53.75% 1085.50 x .54 x 1172.34

3 46/253 18.18% 1085.50 x .18 x 586.17

Total 100% 2062.45

The Table 2 shows the monthly projected customers of Shave. The business

conducted survey to the students, there are 253 out of 300 people who said that they

want to avail the product. There are 28.06 % of the projected customers who can avail

the service once a month, 53.75 % of the customers that can avail twice and the

customers that can avail haircut thrice a week are 18.18 % resulting to 2062.45

projected customers’ can avail per month. After gathering for target market, the

business also examines the competitor supplies.

 8

Present Supplier/ Competition

Table 4. Haircut service in Present Supplier/Competition

COMPETITOR No. of Haircut from

competitors every month

Competitor A 280

Competitor B 330

Competitor C 230

Total 840

The business was located in an area where there are two competitors.

Competitor A produced 280 haircuts per month. Competitor B produced 330 haircuts

per month. While Competitor C produced 230 only per month.

Table 5. Shave service in Present Supplier/Competition

COMPETITOR No. of Shave from competitors every

month

Competitor A 356

Competitor B 445

Competitor C 0

Total 801
 9

Competitor A produced 356 shave per month. While competitor B produced

356 shave per month.

Table 6. Computation about GAP analysis

Services Demand Supply GAP

Haircut 1573.97 840 733.97

Shave 2062.45 801 1261.45

Total 3636.42 1641 1995.42

Based on Table 2, 3, 4 and 5 Men’s Barberia has 733.97 haircuts and 1261.45

shave from their potential customers.

Competitor Analysis

As a business beginner, the Men’s Barberia has to study the strength and

weakness of the competitors in order to create effective plan for a success and

profitable business. The Men’s Barberia must understand the potential competition to

make sure that the business will survive and grow in the mere future.
 10

Pricing Structure

Table 7. Pricing Structure

Name of Business Services Prices

Men’s Barberia Haircut Php 50

Shave Php 25

Competitor A Haircut Php 39.99

Shave Php 20

Competitor B Haircut Php 100

The proponents have carefully examined the pricing structure that the Men’s

Barberia will be implementing. The prices above are mostly based and compared from

their competitors pricing structure to make sure that it will be affordable for the

customers and is enough to cover the cost of services being provided and to give a

good amount of return in the future.

Projected Sales

In this area it defines the amount of company, expects to earn profit in the near

future. It is a prediction that it has a sales forecast. It helps the health of the company

whether the sale is downward or upward.

 11

Table 8. Computing Projected Sales Monthly

Services Prices of GAP Total

Services

Haircut 50.00 733.97 P 36,698.50

Shave 25.00 1261.45 31,536.25

Total Projected Monthly Sales P 68234.75

Table 6 shows the total projected monthly sales. The proposed price structure of the

services that the Men’s Barberia will provide is multiplied by the GAP. To get the

annual sales, monthly sales is multiplied by 12 months which will come up to the

total of P818, 817.

Marketing Program/ Strategies

Practices of Competitors

Practices of Competitors The competitors use different kinds of selling

techniques like advertising, giving flyers to people, and putting large posters outside

their stores in order to catch the attention of the customers. Some competitors even

used catchy songs or jingles just to promote their services. Lowering of prices and

giving discounted coupons are mostly the selling techniques of the competitors. Selling

techniques are very important because customers are easily attracted to those who

put efforts in attracting them and giving their needs. Having a nice place that is picture

worthy also catches the eyes of the customers. Employees who are good in sales
 12

talking and encouraging the customers to try their services are also one of the

strategies that the competitor has. Advertisement in niche print media has never go

out of style. Many competitors are still using print media advertisement because of the

fact that it is affordable and people who reads newspaper and magazines can see the

write ups about the services. Writing columns about the services can make the

competitors build an actual relationship between the audience and the customers the

access in building their trust.

Own Marketing Program/Strategies

The first marketing strategy that the researchers would be planning for their

business is that knowing who their customer is and knowing who would be the target

market is important because with that the researchers can easily know what are their

needs and what is the new trend that people are talking about. Next is on how to

promote the services to the customers. The researchers should be unique on how to

promote their services so that customers may see the differences that they have from

their competitors. By using a paid social media influencer in promoting the business is

a very effective tool of advertising since people nowadays are socially inclined on

having social media accounts. With advertising in social media they will get more

customers specifically the young ones who are easily get attracted on what's trend in

social media. Another is by giving flyers around the public places in order to introduce

their services, and also promos and good quality of services so that customers may

easily come and go to their place. Giving freebies such as free shower before and

after and the business have a loyalty card wherein if the customer has already avail

more than five haircuts, he or she have free one haircut for his or her next haircut

session. In today’s generation people value more on quality rather than quantity.
 13

Table 9. Advertising Expenses

Quantity/ Unit Item Description Price Total

5pcs Tarpaulin (5 X 6 ft.)@12 360 1800

1pc. Sound System 3000.00 3000.00

3 reams Flyers (500pcs./ream) 250.00 750.00

25 pcs. Balloons (12 inches) 50.00 50.00

Total Expenses 5,600.00

 14

CHAPTER 2

Technical Aspect

This chapter discuss about the process of production and activities of the store.

It states also the machinery and equipment used in production and other aspects

regarding bringing raw materials into finished product ready to trade. Location includes

lay out, location map, raw materials and utilities. It also includes product specification,

processing using the flow chart, the necessary technical requirements, government’s

requirements and the product processes, the step and procedure the duration, the list

of machinery, tools and equipment enumerated with their corresponding cost, the

service schedule, labor requirements and the waste disposal system.

Technical Requirements

In operating this kind of business, studying and adopting the best practices in

managing these sorts of services is the first thing to do. A barber shop is a hair salon

for men and boys where they offer cutting, dressing hair and shaving beards.Men’s

Barberia’s equipment is suitable for the services that business will offer. High quality

of machine just like sterilizer to properly clean the tools of the barber shop in order to

satisfy the cleanliness that the customer wants.

Maintaining the availability and stability of the services, the effectiveness of the

machines and equipment’s makes the business run long. Having knowledgeable, well

trained and has a good attitude staffs that are ready to help and give their best in

assisting the customers will make the business grow.

 15

Government Requirements

In establishing a business, we must follow the requirements of the government

to ensure that our business qualifies for business assistance and keeps it from being

fined or otherwise penalized for doing business without proper licensing and

registration.

Table 10. Government Requirements

It assess and collect all national internal revenue
BIR (Bureau of Internal Revenue)
taxes, fees and charges.

Is responsible for regulating the securities

industry. It supervises all registered business

SEC Certificate of Registration entities in the country investigate violations of

securities laws and impose sanctions, and make

policies with regard to the market in securities.

Is one of the requirements for every business or

company to operate in the Philippines. Local

Mayor’s Permit
Government Units (LGUs) can be cities or

municipalities.

Monthly contribution, employees will enjoy

insurance benefits such as sickness, maternity,

SSS (Social Security System)
disability, retirement, death and funeral and salary

loan.

PhilHealth reduces your expenses during

Phil Health confinement of selected health services.

 16

Service Operation Process

Step by Step Procedure

Figure 1. Step by Step Procedure

The Needed
The approach
START Assessment
(2-3 minutes)
(5 minutes)

Performing the
Other concerns
desired service
(5 minutes)
(15 minutes)

In this figure, it shows the step by step procedure on giving our services. The

first step is the approach. Greeting the customers with an open heart and big smiles

while saying “Good morning”, “Good afternoon” or “Good evening” should be the first

word that comes out from the mouth of the employees. Secondly is the needed

assessment. This step determines the desired wants of our customers. The customers

usually addressed what is their desired cut or style of hair. Next, is the performing or

execution of the desired services. Employees are ready to do the services that the

customers have given to them. Lastly, are the other concerns. In this step, the

customers might give further concerns about their hair.

 17

Duration per step per batch

The barber shop business only takes approximately 25 minutes total in performing the

service. It takes 2-3 minutes in approaching the customer by greeting them good

morning or good afternoon and also by opening the door for them. 5 minutes in asking

them what is their desired service. When performing the service, it takes 15 minutes

because the business provides showering of hair and styling it. Lastly, the other

concerns which takes 5 minutes because in this process the customer might give

further assessment with the service that they want. Assessing them in their concerns

is very important because in the business world the managers should accept the

concerns of the customers whether it is good or bad because through their concerns

the managers might use it to make the business grow.

Service Schedule

Table 11. Service Table

Business MEN’S BARBERIA

Opening time 9:00AM

Closing time 9:00PM

MONDAY-SUNDAY

The table above shows the service schedule of the business. This business

opens at 9 o’clock in the morning since it is near the school and lots of student is

required to cut their hair. From 9 in the morning the business will close at 9 o’clock in
 18

the evening which will make it open for 12 hours. The business will be open from

Monday to Sunday. This service schedule helps the customer to know what times that

this business will be available to everyone. Since it is open for 12 hours there is a

shifting of employees. There is a no lunch break policy in this business so shifting of

employee is a must and also students around the vicinity on has lunch as their vacant.

Labor Requirement

In this service, it consists of laborers who make the business run. They are very

important in this kind of business because through them they help to give the best

quality of service that the customers want.

Table 12. Labor Requirement

Cashier An employee who is responsible for handling cash registers

and takes in and out money from the store. Planning,

directing and overseeing the operations and fiscal health of a

business unit, division, department, or an operating unit

within an organization.

Manager/owner a person responsible for controlling or administering all or

part of a company or similar organization.

Barber An employee who cuts hair, especially men’s and shaves or

trims beard in a barber shop.

 19

Equipment Requirement

In performing the service, it requires equipment to start performing and this is

the basic equipment’s that the barber shop needs.

Table 13. Equipment Requirement

Particulars Unit Unit Cost Total Cost

Mirror 4 Php4,500.00 18,000.00

Electric Clipper 4 529.00 2,116.00

Scissors (set) 2 408.00 816.00

Straight Razor 4 196.00 784.00

Chair 4 3,059.00 12,236.00

Hair Comb (Set) 1 243.00 243.00

Cape 4 65.00 260.00

Hair Dryer 2 580.00 1,160.00

Sterilizer 1 3,016.00 3,016.00

Total Php 38,631.00

 20

Location

Figure 2. Store Location

Men’s Barberia is located at Lapu-Lapu Street, Davao City beside Julies

bakeshop. This particular location was chosen because it is near by the school and it

is accessible to the public and along downtown area in which people who passed by

can come and visits the store. It would be easier and comfortable for students who are

in need of the service because of the cheap price that the business has offered.
 21

Figure 3. Store Layout

MIRROR MIRROR MIRROR MIRROR

5m
WAITING AREA

STORAGE
CASHIER SHOWER
AREA

9m

The illustration of Men’s Barberia’s floor area is about 5 meters by 9 meters or

45 square feet. The floor plan contains figures explained by the legend below the

figure. Business owners need to consider many operational factors when building a

facility for maximum layout effectiveness. In the store layout above, it is simple yet it

makes the customers feel comfortable because of the big spaces in the store.
 22

Waste Disposal System

Human hair is considered a waste material in most parts of the world specifically

in the barber shop business. In order to eliminate waste, every time the barber finishes

cutting the hair of the customers the barbers would sweep the floors and put it in a

trash can where all of the waste are only hairs. Hair waste can be used as fertilizers.

The waste protein solutions produced in amino acid extracting units can also

be used as soil nutrient. Having clean environment makes the business attractive to

the customers.

Quality Control System

In a business, having a quality control is very important because it ensures that

the service of a company adheres to a defined set of quality criteria or meets the

requirements of the clients or the customers. There should be a specific standard of

services that a company should have. The employees should be well known to the job

that they are doing to properly execute their task. To avoid repetition of work, the

employees should ask the customers what would be the service that they actually

want. Whether good or bad the response of the customers towards the services that

the business has offered it is still very important because with that the company will

execute more effort in making their quality control better.

 23

CHAPTER 3

Organization and Management Aspect

Legal Form of Business

When you start a small business, you have choices to make. One of the

most important is which organization form to take and each have their positives and

negatives. So we chose to be a partnership in this business to improve our access to

capital and we as partners share in the profits and risks of the business. More capacity

is more invested people to spread out management duties and more expertise will

bring different experience and skills. We have knowledge about this particular

business as we formulate the plan and brainstorming until we met our needs and wants

as an owner of the business. We can share the responsibility of running our

business and this will allow us to make the most of our abilities rather than

splitting the management and taking an equal share of each business task and

more brains that can be picked for business ideas and for the solving of problems

that the business encounters. The business is fairly easy to manage, and decisions

can be made quickly without a lot of bureaucracy.

 24

Organizational Structure

Figure 4. Organizational Chart

Organizational Chart

Barber Owner

Barber hair stylist Barber Manager Barber Technician

The study came up to this kind of business because Barber shop are much

needed by students and employees especially nearby at the public places like schools,

offices and barangay. So the owners need to hire specific people in order to manage

and help the business well. The owner resides at the head of the organizational chart.

While specific day-to-day responsibilities vary based on the individual salon, the owner

primarily concerns herself with customer service, human resources and financial

details. The barber owners make hiring, marketing, property, inventory and design

decisions, while staying involved in staff licensing and business certification

requirements. The business first hired an operation manager in order to manage the

business well, to enhance the operational procedure, systems and principles in the areas

of information flow and management, business and ensure safe and efficient operations.

Then the business hired barber hair stylist to do the most important tasks in the

business, they are the one who cut, dress, groom, style and shave men’s and body

hair. And lastly, the Men’s Barberia hired barber technician to fix, check and repairs

on facility equipment and property structures.

 25

Qualifications of Officers

Table 14. Qualification of Officers

Position Qualification Responsibility Salary

-Can perform financial

management -Can run the business

-Capable of dealing and from hiring staff to

Php17,155/
Manager handling of customers arranging financing.
monthly
concerns and even to the -Reviewing sales reports
staffs and financials

-Male of Female 18 to 25 -Managers and supervises

years’ old the work of the partners

-At least a graduate of 4 and even to the staff’s

years business course and is performance

competent -Maintains quality service

-Has the ability to work under by strictly imposing the

pressure rules and regulations of the

Php12,180/
Cashier -Flexible in the work unit and business and enforce
monthly
with the shifting of time organizational standards

-Computer Literature -Will perform other

-Has good oral and written employees

communication skills -Assist in keeping the

-Capable of dealing and working area clean, tidy

handling of customers and hygienic at all the times

as the business operates

 26

concerns and even to the -Always adheres to the

staffs business policies and

-Honest and hardworking guidelines and business

-Preferably has a good vision and mission.

managerial skills

-Can perform barbering -performing pre-and post-

services, such as cutting, hair care activities

Barber Hair trimming, shampooing, and -Clean work stations and Php10,027/

Stylists styling hair, trimming beards, sweep floors. monthly

or giving shaves.
 27

Office Equipment

Table 15. Machineries and Equipment

Machineries and
Quantity Unit Cost Total
Equipment

Air- conditioning unit 1 13,499.00 13,499.00

Computer Set 2 9860.00 19,720.00

CCTV 3 5,400.00 16,200.00

TOTAL Php49,419.00

General Policies

Appearance and Contract - The business will require a proper

grooming

Tardiness - For every 15 minutes late, there

is a 1 hour deduction for

employee’s salary

Absences - For every 3 consecutive

absences with failure to give

notice will be subjected to proper

disciplinary action.

Benefits, Wages and Incentives - They will be receiving 13 month

pay and other benefits like SSS,

Philhealth, Pag-ibig, etc.

 28

Gantt chart Activities

Table 16. Gantt chart Activities

Months

Activities 1 2 3 4 5 6 7 8

Preparation of the Feasibility Study

Find Location

Permit Process

Renovate Building

Installation of Power and Water

Purchase Furniture

Placing and Arranging the Tables

and Computer Unit

Hire Employees

Training Employees

Launching of Business

These are the specific activities in our business which is to scout the location

first within one month at the same time we followed up the requirements complying

the business permits needed in our business and it took 2 months to complete those

requirements. After we spotted the perfect location we started to renovate the building

and it took 3 months to finish it. During the last month while the building is renovating,

we started finding and hiring employees to have their own positions once the building

is done.
 29

Chapter 4

Financial Aspect

This chapter discusses and presents how much start-up capital is needed,

sources of capital, projected financial statements, total project cost and other financial

considerations. This is area shows if the business is gaining an income or lost.

In addition, this also serves as a guide for the researchers to know the movement

of the transactions within five (5) years.

Total Project Cost

Table 17: Total Projected Cost

Projected Cost Cost (in peso) Total (in peso)

Capital Expenditures

Machines and Equipment 88,050

Furniture and Fixtures 9,450

Operating Expenditures 97,500

Registration, Permits & Licenses 25,000

Fees 12,000

Utilities Expenses 5,600

Advertising Expense 6,000

Rental Expenses 39,362

Salaries and Wages 87,962

Total Projected Cost Php185,462

 30

The table above shows the total projected costs needed to finance and

support the operation of the business. The salaries and wages are based on the

annual labor costs. Capital expenditures and pre-operating expenses are costs that

are acquired before the commencement of the business. While the operating

expenses are incurred during the operation of the business.

Sources of Financing

The Men’s Barberia source of financing will be coming from the investment

of the partners. The partners will invest PHP 250,000 each partner for the total of PHP

750,000.

Financial Assumptions

Men’s Barberia financial plans depends on assumptions which are based

annually. Being a starter in business, we recognized that the first and second year of

operation would not be easy considering that the business is new to the market but

with the strategies the business will employ, profit will nevertheless be probable

because of the uniqueness, affordability and quality of the service.

Cost fluctuates and never been constant. The business projected sales are

computed in a year, it assumed that revenue will increase 10% each year. All sales

transactions shall be on a cash basis and fixed assets will be depreciated using

straight-line method. Utilities expense is paid in cash. The utilities expense is assumed

to increase 3% in year 2 to year 5.

 31

Table 18: Projected Financial Position

Men's Barbaria
Projected financial position for the first 5 years
Year 1 Year 2 Year 3 Year 4 Year 5
Assets
Current Assets
Cash 738,373.00 893,115.80 1,110,735.96 1,397,705.18 1,761,147.83
Advance Rental 10,000.00 10,000.00 10,000.00 10,000.00 10,000.00
Total Current Assets 748,373.00 903,115.80 1,120,735.96 1,407,705.18 1,771,147.83
Non-current assets
Property and Equipment 78,000.00 58,500.00 39,000.00 19,500.00 -
Security Deposit 5,000.00 5,000.00 5,000.00 5,000.00 5,000.00
Total Non-Current Assets 83,000.00 63,500.00 44,000.00 24,500.00 5,000.00
Total Assets 831,373.00 966,615.80 1,164,735.96 1,432,205.18 1,776,147.83
Liabilities and Partners Capital
Current Liabilities
Provision for Income Tax 24,411.90 47,896.41 73,804.97 102,382.26 133,897.47
Total Current Liabilities 24,411.90 47,896.41 73,804.97 102,382.26 133,897.47
Non-Current Liabilities
Total Non-Current Liabilities - - - - -
Total Liabilities 24,411.90 47,896.41 73,804.97 102,382.26 133,897.47
Partners Equity
Partners Equity beg. 750,000.00 806,961.10 918,719.39 1,090,930.99 1,329,822.92
Net Income 56,961.10 111,758.29 172,211.60 238,891.93 312,427.44
Partners Equity Ending 806,961.10 918,719.39 1,090,930.99 1,329,822.92 1,642,250.36
TotalLiabilities & Partners Capital 831,373.00 966,615.80 1,164,735.96 1,432,205.18 1,776,147.83

The table above shows the comparative statement of financial position of the first

five years of the operation of Men’s Barbershop. This statement is used by users to valuate

actors such as liquidity, solvency and the need of the entity for additional financing.
 32

Table 19: Projected of Financial Performance

Men's Barbaria
Projected Income Staement for the first 5 years
Year 1 Year 2 Year 3 Year 4 Year 5
Revenue 818,817.00 900,698.70 990,768.57 1,089,845.43 1,198,829.97
Operating Expense
Depreciation 19,500.00 19,500.00 19,500.00 19,500.00 19,500.00
Rental 120,000.00 120,000.00 120,000.00 120,000.00 120,000.00
Utilities 120,000.00 123,600.00 127,308.00 131,127.24 135,061.06
Advertisment 5,600.00 5,600.00 5,600.00 5,600.00 5,600.00
Salaries & Wages 472,344.00 472,344.00 472,344.00 472,344.00 472,344.00
Total operating Expense 737,444.00 741,044.00 744,752.00 748,571.24 752,505.06

Net Income Before Tax 81,373.00 159,654.70 246,016.57 341,274.19 446,324.91

Income Tax 30% 24,411.90 47,896.41 73,804.97 102,382.26 133,897.47
Net Income After Tax 56,961.10 111,758.29 172,211.60 238,891.93 312,427.44

The projected income statement allows the Men’s Barberia to know if the

business is earning profit or accumulating losses the projected income statement and

it shows shows that there is an increase of 10% in the revenue each year and the

increase of 3% of the utilities. It only states that starting up a business cannot

guarantee an entity to accumulate much income.

 33

Table 20: Projected Cash Flows

Men's Barbaria
Projected Cash Flow for the first 5 years
Year 1 Year 2 Year 3 Year 4 Year 5
Operating Activities

Net income 56,961.10 111,758.29 172,211.60 238,891.93 312,427.44

Adjustment for depreciation 19,500.00 19,500.00 19,500.00 19,500.00 19,500.00
(Increase)decrease in advance rental - 10,000.00
(Increase)decrease security deposit - 5,000.00
Increas(decrease) in provition of income tax 24,411.90 23,484.51 25,908.56 28,577.29 31,515.21
Cash flow from operating activities 85,873.00 154,742.80 217,620.16 286,969.22 363,442.65

Investing activities
Purchase fix assets -97,500
Cash flow from investing activities -97,500
Financing Activities
Partners contribution 750,000.00
Cash flow from financing activities 750,000.00 - - - -
Net increase in cash 738,373.00 154,742.80 217,620.16 286,969.22 363,442.65
Beg. Balance 738,373.00 893,115.80 1,110,735.96 1,397,705.18
End. Balance 738,373.00 893,115.80 1,110,735.96 1,397,705.18 1,761,147.83

Cash flow statement provides necessary information as to how liquid is to meet

its currently maturing obligation or its capabilities to fund its daily operation and daily

expenses. The depreciation expense has to be added back for it is an expense that

don’t actually involve cash outflow, therefore the comprehensive income has to be

adjusted and reported in the cash flow statement as purely in cash basis.
 34

Financial Analysis

Financial analysis is the examination of a business from a variety of perspectives

in order to fully understand the greater financial situation and determine how best to

strengthen the business. A financial analysis looks at many aspects of a business from

its profitability and stability to its solvency and liquidity.

Table 21: Payback Period

Investment 750,000.00

Cash Inflow Year 1 738,373.00

Payback Period 1.02

1.02 or 1 year and 2 months

The payback period will show the capability of the business to return its

investment. This shows that it will take 1 year and 2months operation to recover the

investment of the business and after it is expected to continue yearly.

 35

Profitability Ratio

A profitability ratio is a measure of profitability, which is a way to measure a

company’s performance. Profitability is simply the capacity to make a profit, and a

profit is what is left over from income earned after you have deducted all costs and

expenses related to earning the income. The formula you are about to learn can be

used to judge a company’s performance and to its performance against other similarity

situated companies

Table 22: Return of Investment

Year 1 Year 2 Year 3 Year 4 Year 5

Net Income 56,961.10 111,758.29 172,211.60 238,891.93 312,427.44

Total Assets 831,373.00 966,615.80 1,164,735.96 1,432,205.18 1,776,147.83

7% 12% 15% 17% 18%

Men’s Barbaria generates 7% return of assets in year1. In year 2, it increases by

5%. It increases by 3% from year 3 percentage of 12% to 15% in the year 4 it increases

it by 1% in the year 5.
 36

Table 23: Gross profit Ratio

Year 1 Year 2 Year 3 Year 4 Year 5

Gross Profit

Ratio 81,373.00 159,654.70 246,016.57 341,274.19 446,324.91

Sales 818,817.00 900,698.70 990,768.57 1,089,845.43 1,198,829.97

10% 18% 25% 31% 37%

The gross profit ratio shows that the business is operating in a cost effective

manner, before selling and administrative expenses. It only makes sense that higher

ratios are more favorable. This is the pure profit from the gross revenues that can go

to paying operating expenses. With a percentage of 10% in year 1, this indicates that

we are stable for year 2 up to year 5 in providing our services to customers. With a

high ratio, it illustrates high percentage markup of the business to produce the service.
 37

Table 24: Net Income to Sales Ratio

Year 1 Year 2 Year 3 Year 4 Year 5

Net Income After tax 56,961.10 111,758.29 172,211.60 238,891.93 312,427.44

Revenue 818,817.00 900,698.70 990,768.57 1,089,845.43 1,198,829.97

7% 12% 17% 22% 26%

One of the best measures of the overall results of a firm, the ratio indicates that

performance over time is excellent for this kind of industry. A high gross profit to cover

operating expenses caused a high income which partly returned our investment. The

fact that the income is high, the business is capable of maintaining in the market

despite many factors such as competition.

 38

Liquidity Ratio

Liquidity refers to the ability of the business to pay its obligations in cash as they

mature. The focal point of this liquidity analysis is cash. It includes the ability of the

management to convert its current assets into cash in a quick stable and regular

manner.

Table 25: Current Ratio and Quick Ratio

Year 1 Year 2 Year 3 Year 4 Year 5

Current Assets 748,373.00 903,115.80 1,120,735.96 1,407,705.18 1,771,147.83

Current Liabilities 24,411.90 47,896.41 73,804.97 102,382.26 133,897.47

30.66 18.86 15.19 13.75 13.23

The ratios indicate the enough convertible assets to cash quickly. The five

year quick ratios are enough to recover from the cost incurred during the

implementation of the business. The current assets are much larger than the current

liability. This indicates that the current asset can meet the short term obligations of the

business. As shown above the increasing ratios show that the assets allocated well

and ensuring that they manage the business well.

 39

Solvency Ratio

Solvency ratio is one of the various ratios used to measure the ability of a

company to meet its long term debts. Moreover, the solvency ratio quantifies the size

of company’s after tax income, not counting non cash depreciation expense, as

contrasted to the total debt obligations of the firm. Also, it provides an assessment of

the likelihood of a company to continue congregating its debt obligation.

Table 26: Debt Total Asset Ratio

Year 1 Year 2 Year 3 Year 4 Year 5

Total Liabilities 24,411.90 47,896.41 73,804.97 102,382.26 133,897.47

Total Assets 831,373.00 966,615.80 1,164,735.96 1,432,205.18 1,776,147.83

3% 5% 6% 7% 8%

Since there are no other liabilities aside from legal obligation and other

expenses, the lower ratio indicates that the business has insignificant obligation to the

total assets it has. Investments are funded through the capital of the partners. This

means that most of assets are finance by the owners, and this means that the owners

does not rely on its outside financing. By this, the investors and creditors would not be

hesitant to borrow incurred assets to meets its maturing obligations.

 40

Table 27: Equity Total Asset Ratio

Year 1 Year 2 Year 3 Year 4 Year 5

Total Partners’ Equity 806,961.10 918,719.39 1,090,930.99 1,329,822.92 1,642,250.36

Total Assets 831,373.00 966,615.80 1,164,735.96 1,432,205.18 1,776,147.83

97% 95% 94% 93% 92%

The lower ratio indicates that the business is funded by the partnership in the

major operations. Acquisitions of assets are not from the debt it is either funded by the

partners or through the sales accumulated by the Men’s Barberia. The business has

enough cash to meet its current obligation and successful enough to pay a return on

their investment.
 41

Chapter 5

Socio-economic Aspect

This chapter discusses the significance of the study of the study to the

government and to the society. This business is just not for profit purpose but also it

improves the people’s welfare.

Customer

The proponents believe that the customers will benefit from this business is the

satisfaction to the services that the barber shop offered. In pampering oneself it always

starts from the head to toe, cutting of hair is the first step to pamper the customers.

With the cheap price that the business is offering customers can benefit well.

Community

Having a proper grooming of hair is very important to all of us because it is the

crown that we will never take off. The existence of the business will help the

community especially to the students studying nearby. Students who have a required

haircut will benefit more since the business is located near the school. The goal of the

business is to provide the needs of the students who are males particularly when it

comes to hair.

Employment

The success of the business is not measured to its profitability but also to the

difference you make in lives of the people. Building up a business is a great opportunity

to people who doesn’t have jobs. The business can benefit to the workers by the effort

and the work that they do in order to satisfy the customers and in return the business
 42

will give them the appropriate amount of salary with favorable benefits and bonuses

to help them in providing the needs of their family.

Environment

Having a clean and effective environment is a fundamental aspect of having

good business operations. In barber shop business the hair waste should be kept in a

bin and used that to make a fertilizer. Recycling products is very important; it reduces

the pollution and also reduces the need for raw materials so that the natural resources

can be preserved. Taking care of the environment is also beneficial to us humans for

us to have a healthy life.

Government

All businesses whether it is small or big have the responsibility to file and pay

taxes to the respective government agencies. Taxes paid by the business man and

woman will help the growth of the country’s economy. Government collects taxes in

order to give services to the people living in the country. Creating new projects such

as schools, hospitals, roads and etc. can help the people who are experiencing

poverty.
 43

APPENDIX A

The purpose of this study is to learn and know the demands of people of having this

business in the society and how it affects the people in the area of Sta. Ana Street

near Holy Cross of Davao College. This survey is conducted by Reyl Tablada, Edgar

Lataba Jr., and Archille Joy Ras students from the Holy Cross of Davao College

for their feasibility study.

We will fully appreciate your cooperation in answering the question

below.

___________________________________________________________________

___

Survey Questionnaire

Name (Optional): _________________________________________

Please check: [ ] Student [ ] Employee [ ] others

Gender : _______ Age:______

A.

Question Yes No

1. Do you think this barbershop

business will be in demand in the

community?

2. Is it helpful for students and

employees if a Barbershop Business

 44

will be built near their schools and

workplace?

3. Have you heard a Barbershop

business that offers a free hair wash

before and after?

4. Would you be interested in a Loyalty

Card Program where you get a free

haircut or shave after three haircuts?

B.

IF YOUR ANSWER IN THE FIRST PAGE ARE YES PLEASE CONTINUE

ANSWERING THE REMAINING QUESTIONS.

1. Where do you go to get your haircut most often?

A. Barber Shop C. Salon

B. Family Member/ Friend D. Others

 45

2. What keeps you going back to the same place?

A. Services C. Clean Environment

B. Professionalism D. Friendly accommodation

3. How often do you cut your hair?

A. Once a month C. Twice a month

B. Thrice a month D. Once in a two months

4. How often do you shave your beard?

A.Thrice a month C. Twice a month

B. Once a month D. Once in a two months

5. What would encourage you to choose another barber?

A. Cheaper Price C. Convenient location

B. Improve customer service D. Wi-Fi connection

 46

6. How much do you pay for your haircut?

A. 40-60 C. 70-90

B. 100-120 D. 150 above

7. How much do you pay for shaving your beard?

A. 15 C. 25

B. 20 D. 30
 47

APPENDIX B

SCHEDULES

Schedule 1: Machineries and Equipment

Particulars Unit Unit Cost Total Cost

Mirror 4 Php4,500.00 18,000.00

Electric Clipper 4 529.00 2,116.00

Scissors (set) 2 408.00 816.00

Straight Razor 4 196.00 784.00

Chair 4 3,059.00 12,236.00

Hair Comb (Set) 1 243.00 243.00

Cape 4 65.00 260.00

Hair Dryer 2 580.00 1,160.00

Sterilizer 1 3,016.00 3,016.00

Php38,631.00

Air- conditioning unit 1 13,499.00 13,499.00

Computer Set 2 9860.00 19,720.00

CCTV 3 5,400.00 16,200.00

49,419.00

TOTAL Php88,050
 48

Schedule 2: Pre-Operating Expense

Particulars Total Cost

Location Survey 6,000

Registration, Permits and Licenses Fees 15,000

Manpower: Hiring/Training 4,000

Total 25,000

Schedule 3: Advertising Expense

Quantity/ Unit Item Description Price Total

5pcs Tarpaulin (5 X 6 ft.)@12 360 1800

1pc. Sound System 3000.00 3000.00

3 reams Flyers (500pcs./ream) 250.00 750.00

25 pcs. Balloons (12 inches) 50.00 50.00

Total Expenses Php 5,600.00

 49

Schedule 4: Salaries and Wages

Position No. of Staff Monthly Annually

Cashier 1 12,180 12,180

Manager 1 17,155 17,155

Barber Hair Stylist 4 10,027 10,027

Total Php 39,362

 50

CURRICULUM VITAE

Name: Edgar Lataba Jr.

Age: 20 yrs. old

Birthdate: June 11, 1998

Address: #84 St. Joseph Street Dona Pilar Village

Civil Status: Single

Citizenship: Filipino

Religion: Roman Catholic

Email Address: gardolatabs@gmail.com

EDUCATIONAL BACKGROUND

TERTIARY Holy Cross of Davao College

Sta. Ana Davao City

SECONDARY Holy Cross College of Sasa Inc.

km. 7 Sasa Davao City

PRIMARY Dona Pilar Learning Center Inc.

km. 7 Sasa Davao City

 51

CURRICULUM VITAE

Name: Archille Joy Ras

Age: 20 yrs. old

Birthdate: January 24, 1999

Address: Suraya Homes Cabantian Davao City

Civil Status: Single

Citizenship: Filipino

Religion: Roman Catholic

Email Address:

EDUCATIONAL BACKGROUND

TERTIARY Holy Cross of Davao College

Sta. Ana Davao City

SECONDARY Davao National Highschool

f.Torres st. Davao City

PRIMARY Kapt. Tomas Monteverde Sr. Central Elementary School

Ponciano Bangoy Davao City

 52

CURRICULUM VITAE

Name: Reyl F. Tablada

Age: 21 yrs. old

Birthdate: October 02, 1997

Address: Icsama Village Km 12, Sasa, Davao City

Civil Status: Single

Citizenship: Filipino

Religion: Roman Catholic

Email Address: tabladareyl@yahoo.com

EDUCATIONAL BACKGROUND

TERTIARY Holy Cross of Davao College

Sta. Ana Davao City

SECONDARY Francisco Bangoy National Highschool

Sasa 10 Davao City

PRIMARY San Pedro Elementary School

San Pedro Panabo City