Republic of the Philippines

PHILIPPINE SCHOOL OF BUSINESS ADMINISTRATION – QUZON CITY

1029 Aurora Blvd, Quezon City

FEASIBILITY STUDY
FOR THE PROPOSED BUSINESS

The Laundry Lounge

Wash, Dry, and Fold Services

Prepared By

Bandrang, Alyanna
Cipriano, Jhoanna Laire
Galicia, Denzel Jaio
Mabuti, Mary Ann
Sanchez, Daniella
Sanchez, Marinel
Virata, Meh Lea John Rim

Professor

Dr. Emmie Alias, MBA

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Table of Contents

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CHAPTER ONE

ABSTRACT

Management feasibility is an assessment of a business project. Its purpose is to analyze

if the project meets certain criteria. A feasibility study is defined as an evaluation or
analysis of the potential impact of a proposed project or business. It is conducted to
assist decision makers in determining whether or not to implement a particular project
or business. It is based on extensive research, contains wide ranging data and has clear
supporting evidences. It is an investigating function which outlines and analyzes several
alternatives. Business feasibility holds significant credit in the success of business and
management as it gives. A feasibility study describes if something you want to do
actually CAN be done. What are the things needed to make it happen, can you get those
things, what will it cost, how much time will it take, what are the alternatives or back-up
plans. Just because you want to do something doesn’t mean you can do it. Even if other
people have done it in the past, you may not be able to pull it off. A feasibility study
gives you information to make a decision about going forward or not.

INTRODUCTION

This comprises the discussion why the study is conducted and why the group come up
with this project. This also shows the objectives of the study that the group’s aim to
draw findings and conclusion. This chapter includes how the team come up with the
company name, what inspires them to choose the proposed business and how can this
affect their business as a whole. The location of the business will also be included in this
chapter as well as the description of the project. This will be discussed in the summary
of the project part. Terms related in the study will be given emphasis and will be defined
on the definition of terms. This chapter determines the things that will only be confined
in this project and up to what extent. This will be discussed on the last part of the
chapter on the scope and limitation of the study.

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OBJECTIVE OF THE FEASIBILITY STUDY

A Feasibility Study is the stage of assessing whether a project is feasible or not. Thus, it
gives the viability of a business idea. Few of the objectives of Feasibility Study include:
1. To determine how successful your proposed action will be.
2. To understand the needs, habits and preferences of target market
3. To analyze the entity’s position in the competitive market.
4. To determine the financial needs of the business.
5. To provide quality information in order to assist in decision making.

Scope and Limitations of the Study

This study will be confined on the determination if the laundry shop business would be
viable in the market. The feasibility of the business as a whole will depend upon the
feasibility of the various aspects in the business existence. These aspects are marketing,
management, technical, financial and socio-economic aspects. The market study will be
comprised of marketing strategies and analysis of company’s possible market.

In the management study, the requirements for each individual on the management will
be discussed. The responsibilities of each personnel are indicated for building an
organized company. The legal requirements will include all the necessary permits that
must be accomplished by the company. The success of the company largely but not
solely depends on the top of the management. The technical study will be confined on
the services offered in the least possible cost and time. The service process will include 6
workers to work on the product. This chapter will also include waste disposal. The
financial study will be limited to 3-year projection. This will show the cost benefit
analysis of the business operation. An initial capitalization of P 1,000,000.00 will be
needed to cover the financial obligations.

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The financial assumptions will be based from accounting estimates. The liquidity and the
profitability of the business will depend on the company’s performance. The study is
limited to a 3-year projection. This feasibility deals with market, technical, management
and financial aspects limited to the data gathered.

DEFINITION OF TERMS

In order to provide a clearer perception of the terms used in this study, some major
variables and important terms are described and defined.

Balance Sheet. It is an accounting report of the assets, liabilities and capital of the
company (Valix and Peralta, 2009). In this study, it is the formal statement of the
financial condition of the company.

Brand. A name, term, design, symbol, or any other feature that identifies one seller's
good or service as distinct from those of other sellers. (McKenchie, 2003) With regards
to this study, this refers to the MAPLAI CO., unique logo and distinguishing name to
indicate that the company’s market value.

Business. It is a particular trade or profession (ENCARTA 2003). In this study, the term
business depicts trade. The business of the company is manufacturing of jewelry
organizer.

Capital. Means factor of production used to create goods or services that is not it
significantly consumed in the production process. In this study, capital means the
primary source of the business to keep the production as well as the business to
continue its operation.

Capitalization. It is the value of the entire property of the business (Webster’s 1999). In
this study, it is a term used to describe how the business raised its capital.

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Consumer. It is the one who uses up an article of an exchangeable value (Webster’s
1999). In this study it is used to depict person who are actually consuming or using the
jewelry organizer.
Demand. The amount of product the customer is willing and able to buy (GO 1998). In
this study, it is the number of female persons who actually uses organizer for their
jewelry.
Manpower. Is the amount of men whose strength and skills are available to a nation
(McKenhie, 2003).In this study, it shows the number of workers needed to carry out the
operation of business.
Market. It is a public place for the sale or purchase of commodities (Webster’s
Dictionary pp.45). In this study, market would mean the people or the customers of a
particular product.
Market share. Is the proportion of the total sales of a product secured by one particular
company or brand (Encarta 2003). In this study, it is the proportion of the sale of MaPLai
Co, to the sales of jewelry box in the market.
Partnership. Is when two or more people bind themselves to contribute money,
property or industry to a common fund with the intention of dividing the profits among
themselves (Article 1767 of the new civil code of the Philippines). In this study,
partnership means the relationship existing between the company as well as the of description

what form of business the firm is.

Profit. Is a pecuniary gain, benefit or advantage (Webster’s Dictionary pp. 57). In this
study, it is the gains acquire by selling products or rendering service to customers and
usually divided by the partners as part of their agreement.
Strategy. Refers to a unifying theme that gives coherence and direction to the various
decisions of the term (Johansson 1997). In this study, this refers to the methods the
proponents undertake toward the effective management of the proposed product.

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Supply. The amount of commodity offered at a given price or available for meeting a
demand. (Encarta 2003). In this study, it is the number of Jewelry boxes/ organizer that
the company manufactures.

Target market. It is the organizations that fit a particular set of criteria and are therefore
viewed as potential buyers for a product or service (Pagoso, Dela Cruz (2000),).
Operationally, it is all females’ ages 18 years old to 48 of 10 urban barangays in Batangas
City with monthly income and has the capacity to buy.

Working Capital. The amount of current assets that remains after the
current liabilities are deducted. (Encarta, 2003) in this study, it is the money available
for used by the business.

Business Description

The fast-paced trend of laundry business from the traditional, to the do-it-your way
commercial laundry services, coincides with technological change as well as the rapidly
changing modern lifestyle of the Filipinos. Laundry services are an easy and convenient
business to start. With the low capital requirement or management intensive. You can
start this business right from home and grow from there. It is a very profitable business,
as not everyone has the time and effort to do their own laundry. Not to mention the
unstoppable price increase of water and electricity bills. More and more households are
considering the practicality of paying for laundry services.

Business name

The distinction of the business name is vital in every business. It is important to have a
name that would get the attention of the people. The proposed business will operate
under the name The Laundry Lounge. The name was chosen because of its simplicity. It
was derived by choosing the words that would make you do one of the most tiresome
and time-consuming kind of house chore literally, while lounging.

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Location

The proposed business location is vital in every business organization. In choosing the
location of the business the factors that were considered are the following;
 Density or the population of residents
 Number of residential households
 Number of potential competitors
Other vital points such as business establishments, dormitories, schools, universities and
condominiums were also considered. The aforementioned factors are all important in
distinguishing the target market in order to attain the business goal; the owners chose a
location that can be easily located by the customers. The Laundry Lounge will be located
at #116 8th Ave, Barangay Socorro Quezon City, Metro Manila, a populated semi-
commercial area only 1 kilometer away from Araneta Center, Cubao where dormitels
and condominiums are situated and 2 kilometers away from Technological Institute of
the Philippines, which is also very ideal, as many dormitories are within the area.

Type of Business

The Laundry Lounge will be co-owned by 7 individuals, which shall be classified as a

partnership, an association of two or more persons to carry on as co-owners of the
business for a profit. The reasons behind the decision to come up with a partnership are
the following: (1) owners can easily increase and decrease capital (2) less regulation by
the government (3) less conflict and disagreements in manner of management (4) best
suited for small business (5) high credit standing (6) some are exempted for income tax
(7) suited to the practice of profession.

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Capitalization

Serves as a foundation of success or failure of every business, the business capital is

vital. The owners decided to start up with at least P 1,000,000 as capital. With six
partners to share equally the capital needed to facilitate the operation of their business.

Owners and capital contributions

Being a partnership as a form of the business organization, partners decided to

contribute money for buying equipment and raw materials, payment for rent, salaries
for workers and other expenses that will be incurred during the operation.
Table No. 1

Name Capital Contribution

Alyanna Bandrang P 142,857.14
Jhoanna Laire Cipriano P 142,857.14
Denzel Jaio Galicia P 142,857.14
Mary Ann Mabuti P 142,857.14
Daniella Sanchez P 142,857.14
Marinel Sanchez P 142,857.14
Meh Lea John Rim Virata. P 142,857.14

The table shows the capital contributed by each partner. The partners contributed a
total of 1,000,000.

Organizational Structure

Organizational structure is important to every business establishment; thus the owners

would prepare an appropriate organizational structure for their business in order to
have a systematic flow of authority in the business. The Laundry Lounge follows a flat
type since it is only considered as a small scale business.

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The pattern of task groupings, reporting relationships, and authority within an
organization preferred is the line and staff form. This structure requires coordination
and determination of what to do and who is to do it. Top management would include
the owners while down lines would include the staff and delivery man. The main job of
the General Manager is to see that the business is attaining the goals and objectives as
planned by the owners.

Table No. 2

Top Management

General Manager Finance Officer

Two (2) Machine Two (2) Route Bookeeper

Washers Operators

Project Summary

This section summarizes the feasibility that includes the market study, the management
study, technical study, financial study and socio economic study. In three-year time the
company aims to become one of the most competitive and household name in the
business industry
 Market Feasibility. In this part, it is being determined if the service can gain its
market share through indicating if there is a sufficient demand for the service.
Through series of researches and surveys, the business has known the existing
prices of the related services and what the price that should be adopted is.

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 For the service to be distinguished easily by the customers, the marketing
strategies and programs are examined to be able to increase sales and demand
for the product. The company also take into considerations the marketing
practices of competitors so that The Laundry Lounge will maintain its
competitive market position.

 Management Feasibility. The Laundry Lounge is a partnership type of business

which is formed by Alyanna Bandrang, Jhoanna Laire Cipriano, Denzel Jaio
Galicia, Mary Ann Mabuti, Daniella Sanchez, Marinel Sanchez and Meh Lea John
Rim Virata. This type of business is chosen involving the people needed in the
operation because they believe that this is the most appropriate for the
business. Each partner will contribute pro-rated amount for the capitalization to
cover up all financial matters and liable to all the profit. The organization is
administered by the finance officer and a bookkeeper whose duty is occasional;
will only be in the company four times a month. One general manager will also
be hired for the overall management of personnel. Three workers are hired for
the services to be performed based on their specifications and descriptions and
undergo the training program conducted by the entity. These workers will be
properly compensated with their salaries. The business will comply with all the
legal requirements needed in establishing a business.

 Technical Feasibility. In order for the service to find out its technical feasibility,
the entity determined that when the service takes place it can produce high
quality level at a least possible cost. By means of this, the company will be able
to know what are the raw materials included in the operations, what is the
objective and how it is done through the manufacturing and maintenance
process. It is also needed to distinguish the several factors of maintenance,
suppliers of materials and the location size and layout to determine the proper
strategic location of the proposed business.

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 The proposed business will be located at #116 8th Ave, Barangay Socorro
Quezon City, Metro Manila, a place accessible to the targeted customers. The
space for the shop will be rented for Php 50,000.00 a month.

 Financial Feasibility. After analyzing and computing all the financial matters
concerning the production as well as the operation, the company was able to
come up with its profitability level. It has been determined that there will be an
increasing profit with relation to the net income after taxes to its total
investment. It shows the financial assumptions made to compute the net income
for the next 3 years of operation. This also includes the detailed information
about cash flow, the balance sheet, and the expected ROI (Return of
Investment). Moreover, the total project cost was also calculated and the initial
capital requirements were established. The financial statement determined the
degree of indebtedness, its profitability and the overall firm liquidity.
Furthermore, the breakeven point, the amount needed to earn the certain
profit, the payback period and the price and its sales was provided in this part.
The cash needed for the commencement of the partnership operation will be
contributed equally by the partners. Supported by computations, the business
needs an initial capital of P 1,000,000.00 to carry out its ordinary course of
business.

 Socio-Economic Study. The proponents analyze the effect of the proposed

business in the society. Through employment of their workers, they were able to
lessen the unemployment rate in the country. With this, income of the
government will increase because of the taxes of the company. Based on the
research spontaneously conducted by the proponents, it has been apparent that
the laundry shop service business is feasible in its market, management,
technical, financial and socio-economic aspect.

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