LUGAW Feasibility Study Example

MAPUA INSTITUTE OF TECHNOLOGY
SCHOOL OF LANGUAGES, HUMANITIES & SOCIAL SCIENCES
FEASIBILITY STUDY
3rd
QUARTER SY 2016 - 2017
IN PARTIAL FULFILLMENT OF THE REQUIREMENTS FOR THE COURSE SS12 GENERAL ECONOMICS &
TAXATION, SCHOOL OF LANGUAGES, HUMANITIES & SOCIAL SCIENCES
PREPARED BY:
FELICIA, BERLIN
RACCA, KRISTOFFER KEVIN
CASER, JOSEPH
LABASTIDA, JONREY
SALVA, NEIL
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I. Introduction
Name of the firm
WOW, LUGAW
Nature of the business/why you choose this
Our proposed business is a Home-based Business. We choose this kind of business

because Leche Flan has been one of Filipino’s favorite dessert, whether it’s summer or rainy
season or any occasions, Filipinos are always looking or making this delicious dessert.
Location of the business
The address of the business is on B4 L3 Phase 3 Saint Andrew Street Sacred Heart
Village Novaliches Quezon City.
Competition, are there similar businesses within the area?
None.
Marketing strategy, what will you do so that people will choose your product over the other?
MISSION
To provide sweet and delicious treat for every Filipino Family but in very affordable price.
VISION
To become the number one regarding desserts and establish the name worldwide.
SWOT ANALYSIS
STRENGTHS WEAKNESSES
The location has a very active neighborhood. Still a new business.
Very competitive price. Time to gain experience and build reputation.
Located near market area, subdivisions and newly Product have expiration date.
open restaurants.
Good Packaging.
OPPORTUNITIES THREATS
To establish a strong customer base in the area. Competitors in the market such as Goldilocks.
To be partners with the restaurants, schools and Customers preferring the high end brands.
other establishments for their desserts.
Sponsoring neighbor parties to market the The customers don’t want to try new if they
product. already established a good relationship with their
suppliers.
The location is developing into a food center for
the North.
MARKET SEGMENTATION
The market can be categorized into four main market segments for Sweet Treats. These are:
 Mothers (women in the family)
 Newly open restaurants
 Houses within the subdivision and the other (five) 5 subdivisions in the area
 People with sweet tooth
DEMAND FOR LECHE FLAN
There is always a constant demand for desserts in Filipino lives. They are in every celebration,
special meals and just normal sweet tooth cravings. The demand for food especially on desserts with a
good packaging is now on high demand because of Social Medias. There is always a high demand during
traditional celebrations such as Christmas Season, New Year, Easter and Birthdays.
CUSTOMER PROFILING
 Women
 Working or House wives
 21 – 60 years of age
 Married, engaged or in long-term relationship
COMPETETIVE ADVANTAGES
 Competitive pricing – matching or providing lower prices than competitors
 Quick delivery of the products to the customer
 Better quality customer service

 In a better location, easy to access
 Giving customers what they want, with product customisation
MARKETING OBJECTIVES
 Increase its sales over 12 months by 20%
 To build a stronger brand relationship with our customers
 To have well established brand image
 To have a regular establishment to offer products
 Building relationships with regular customers such as business customers is important to

ensure a continuous flow of sales and profits.
PRODUCTS
 Leche Flan
PLACE
 Operating from home
 No need to pay rent
PROMOTION
 Outdoor signage
 Flyers and business card distributed in the area
 Free taste
 Local publicity
 Social networking sites
II. PRODUCTION PROCESS
RAW MATERIALS (per week):
RAW MATERIALS NEEDED QTY COST/ DOZEN TOTAL COST

Egg 80 PHP 6.00 PHP 480.00
Condense Milk 3 PHP 39.00 PHP 117.00
Evaporated Milk 3 PHP 24.50 PHP 73.50
Granulated Sugar 1 PHP 49.00 PHP 49.00
Vanila extract 1 PHP 39.50 PHP 39.50
Aluminum Foil 5 PHP 23.00 PHP 115.00
Plastic Container 20 PHP 62.00 PHP 124.00
Llanera 50 PHP 12.00 PHP 600.00
TOTAL: PHP 1,597.50
MACHINERIES:
MACHINERIES NEEDED QTY COST TOTAL COST

Folding table 1 PHP 1,499.00 PHP 1,499.00
Hand Mixer 1 PHP 998.00 PHP 998.00
Stainless Steamer 1 PHP 1,400.00 PHP 1,400.00
Mixing Bowls 3 PHP 941.00/ Set PHP 941.00
Measuring Set Tools 1 PHP 358.00 PHP 358.00
Refrigerator 1 PHP 3,799.00 PHP 3,799.00
TOTAL COST: PHP
8,054.00
PRODUCTION PROCESS:
Buying
Ingredients
from Super
Put in the Market Seperate the
plastic yolk from the
containers egg white
Place the Yolk

Cool down and
in a big bowl
refrigerate
and beat them
Steam the Add

mold for 30 - condence
35 mins. milk
Cover the top Pour Fresh

using Aluminum Milk and
Foil Vanilla
Put the llanera

Pour the
with sugar on
mixture
the stove
Spread
caramel
UTILITIES
UTILITIES COST PER MONTH COST PER WEEK

Electricity PHP 711.49 PHP 177.87
Water PHP 200.00 PHP 50.00
Pone bill & Internet PHP 1,299.00 PHP 327.75
Gasoline (diesel) PHP 2,000.00 PHP 500.00
LPG PHP 600.00 PHP 85.70
TOTAL: PHP 4,810.49 / month PHP 1,202.62 / week
PERSONEL PLAN
PERSONEL DAILY MONTHLY WEEKLY
Owner / manager PHP 500.00 PHP 15,000.00 PHP 3,750.00
Assistant/ Delivery PHP 350.00 PHP 10,500.00 PHP 2,625.00
Guy
TOTAL PER MONTH: TOTAL PER YEAR:
PHP 25,500.00 PHP 6,375.00
PROMOTIONAL ACTIVITIES YEARLY COSTS
ACTIVITY QUANTITY / TIME TOTAL COST TOTAL COST

FRAME (PER WEEK)
Flyers 100 pieces PHP 1,000.00 PHP 250.00
Outdoor signage 1 piece PHP 450.00 PHP 112.50
Free Taste 6 Plastic container PHP250.00 PHP 375.00
TOTAL COST: PHP PHP 425.00 PER WEEK

1,700.00
III. Financial aspect
TOTAL FIXED COST
FIXED COST MONTHLY WEEKLY

UTILITIES PHP 4,810.49 PHP 1,202.62
MACHINERIES (DEPRECIATION) PHP 335.59 PHP 83.90
PROMOTIONAL PHP 1,700 PHP 425.00
TOTAL FIXED COST: PHP 6,846.08 PHP 1,711.52
TOTAL VARIABLE COST
VARIABLE COST MONTHLY WEEKLY

RAW MATERIALS PHP 6,390.00 PHP 1,597.50
EMPLOYEE SALARY PHP 25,500.00 PHP 6,375.00
TOTAL VARIABLE COST: PHP 31,890.00 PHP 7,972.50
TOTAL COST
COST MONTHLY WEEKLY

FIXED COST PHP 6,846.08 PHP 1,711.52
VARIABLE COST PHP 31,890.00 PHP 7,972.50
TOTAL COST: PHP 38,736.08 PHP 9,684.02
UNIT COST (WEEKLY)
TOTAL FIXED COST TOTAL VARIABLE COST UNITS UNIT COST

PRODUCED (TFC + TVC) / UP
(WEEKLY)
PHP 1,711.52 PHP 7,972.50 50 PHP 193.69
CONTRIBUTION MARGIN SALE
UNITS TOTAL UNIT SELLING PRICE UNIT CONTRIBUTIO

PRODUCE VARIABLE VARIABLE PER CONTRIBUTIO N MARGIN
D COST COST ARRANGEMEN N MARGIN RATIO
(WEEKLY) (WEEKLY) (TVC / UP) T (SP – UVC) (UCM / SP)
50 PHP 7,972.50 PHP 159.45 PHP 250 PHP 90.55 0.3622
REVENUE
SELLING PRICE PER UNITS SOLD DAILY REVENUE MONTHLY ANNUAL

ARRANGEMENT (WEEKLY) (SP X US/DAY) REVENUE REVENUE
(DR X 30 DAYS) (MR X 12 MOS.)
PHP 250.00 50 PHP 1,785.71 PHP 53,571.43 PHP 642,857.16
PROFIT
DAILY DAILY MONTHLY MONTHLY ANNUAL ANNUAL

REVENUE PROFIT REVENUE PROFIT REVENUE PROFIT
(DR - TC) (MR - TC) (AR - TC)
PHP 1,785.71 PHP 509.50 PHP 53,571.43 PHP 14,835.35 PHP 642,857.16 PHP
178,024.20
BREAK-EVEN SALE
TOTAL FIXED CONTRIBUTION BREAK EVEN BREAK PROFIT PROFIT

COST MARGIN SALES EVEN ADJUSTED ADJUSTED
(WEEKLY) RATIO (TFC / CMR) VOLUME BREAK-EVEN BREAK-EVEN
(TFC / SALE VOLUME
UCM) (TFC + minimum (TFC + minimum
weekly profit) / weekly profit) /
CMR UCM
PHP 1,711.52 0.3622 PHP 4,725.35 18 PHP 25,432.14 PHP 1,794.35
IV. CONCLUSION
NUMBER OF DAYS / MONTHS TO PAY FIXED & VARIABLE COST
TOTAL FIXED COSTS (WEEKLY) = PHP 1,711.52
TOTAL VARIABLE COSTS (WEEKLY) = PHP 7,972.50
TOTAL COST (WEEKLY) = PHP 9,684.02
DAILY REVENUE= PHP 1,785.71
NO. OF DAYS TO PAY FIXED COSTS= 1 DAY
NO. OF DAYS TO PAY VARIABLE COSTS= 5 DAYS
NO. OF DAYS TO PAY TOTAL COSTS= 6 DAYS
RETURN OF INVESTMENT
ROI= (PROFIT/ TOTAL COSTS) X 100
= (PHP 14,835.35/ PHP 38,736.08) X 100
ROI= 38.29%
PAYBACK PERIOD= TOTAL COSTS/ TOTAL REVENUE)
= PHP 38,736.08/ PHP 53,571.43
PAYBACK PERIOD= 0.72 OF A MONTH OR 22 DAYS.
CONCLUSION
Based on the data presented, Fantasy Flan, having a monthly investment of PHP 38,736.08, will
generate a total revenue of PHP 53,571.43 and a monthly profit of PHP 14,835.35. The return of the
investment is at 38.29% and the payback period shall be within 22 days. Hence, the proposed business is
feasible.
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MAPUA INSTITUTE OF TECHNOLOGY

SCHOOL OF LANGUAGES, HUMANITIES & SOCIAL SCIENCES

QUARTER SY 2016 - 2017

RACCA, KRISTOFFER KEVIN

Name of the firm

Nature of the business/why you choose this

Our proposed business is a Home-based Business. We choose this kind of business

Location of the business

Competition, are there similar businesses within the area?

Very competitive price. Time to gain experience and build reputation.

 Mothers (women in the family)

 Newly open restaurants

 People with sweet tooth

DEMAND FOR LECHE FLAN

 Working or House wives

 Married, engaged or in long-term relationship

 Competitive pricing – matching or providing lower prices than competitors

 Quick delivery of the products to the customer

 Better quality customer service

 Giving customers what they want, with product customisation

 Increase its sales over 12 months by 20%

 To build a stronger brand relationship with our customers

 To have well established brand image

 To have a regular establishment to offer products

 Building relationships with regular customers such as business customers is important to

II. PRODUCTION PROCESS

RAW MATERIALS (per week):

RAW MATERIALS NEEDED QTY COST/ DOZEN TOTAL COST

MACHINERIES NEEDED QTY COST TOTAL COST

Place the Yolk

Steam the Add

Cover the top Pour Fresh

Put the llanera

UTILITIES COST PER MONTH COST PER WEEK

PROMOTIONAL ACTIVITIES YEARLY COSTS

ACTIVITY QUANTITY / TIME TOTAL COST TOTAL COST

Flyers 100 pieces PHP 1,000.00 PHP 250.00

Outdoor signage 1 piece PHP 450.00 PHP 112.50

Free Taste 6 Plastic container PHP250.00 PHP 375.00

TOTAL COST: PHP PHP 425.00 PER WEEK

III. Financial aspect

TOTAL FIXED COST

FIXED COST MONTHLY WEEKLY

TOTAL VARIABLE COST

VARIABLE COST MONTHLY WEEKLY

COST MONTHLY WEEKLY

UNIT COST (WEEKLY)

TOTAL FIXED COST TOTAL VARIABLE COST UNITS UNIT COST

CONTRIBUTION MARGIN SALE

UNITS TOTAL UNIT SELLING PRICE UNIT CONTRIBUTIO

SELLING PRICE PER UNITS SOLD DAILY REVENUE MONTHLY ANNUAL

DAILY DAILY MONTHLY MONTHLY ANNUAL ANNUAL

TOTAL FIXED CONTRIBUTION BREAK EVEN BREAK PROFIT PROFIT

NUMBER OF DAYS / MONTHS TO PAY FIXED & VARIABLE COST

TOTAL VARIABLE COSTS (WEEKLY) = PHP 7,972.50

TOTAL COST (WEEKLY) = PHP 9,684.02

DAILY REVENUE= PHP 1,785.71

NO. OF DAYS TO PAY FIXED COSTS= 1 DAY

NO. OF DAYS TO PAY VARIABLE COSTS= 5 DAYS

NO. OF DAYS TO PAY TOTAL COSTS= 6 DAYS

ROI= (PROFIT/ TOTAL COSTS) X 100

= (PHP 14,835.35/ PHP 38,736.08) X 100