ABSTRACT

This research focuses on the business operations of Sunny's Backyard Caffé,

investigating its business model, customer base, and market positioning. It evaluates key
elements such as market trends, financial viability, and operational considerations within the
local socio-economic context. The objective is to determine whether a small coffee shop
business like Sunny's Backyard Caffé can succeed in this particular location, contributing to
local economic growth and enriching the coffee culture in the Philippines. Preliminary
findings indicate a promising outlook, with a detailed evaluation provided for a
comprehensive understanding of the project's feasibility.

TABLE OF CONTENTS

ABSTRACT…………………………………………………………………………………………i
TABLE OF CONTENTS..………………………………………………………………………….ii
ACKNOWLEDGEMENTS...…………………………………………………………..…………..iii
LIST OFTABLES……………………………………………………………………………..…….iv
EXECUTIVE SUMMARY……………………………………………..…………………………....v

CHAPTER 1: Project Background and History

CHAPTER 2: Economic Feasibility

CHAPTER 3: Technical Feasibility

CHAPTER 4: Management

CHAPTER 5: Manpower

CHAPTER 6: Financial Feasibility

CHAPTER 7: Social Desirability

References

Appendices

Questionnaire
Request Letter
Certification of Proofreading
Curriculum Vitae
 List of Table
Table 2.1: Market Analysis

Table 2.2: Competitor Analysis

Table 2.3: Financial Analysis

Table 3.1: Production Program

Table 3.2: Plant Capacity

Table 3.3: Material Inputs

Table 3.4: Project Engineering

Table 4.1: Organizational Layout

Table 5.1: Estimated Manpower Requirements

Table 5.2: Estimated Annual Manpower Costs

Table 6.1: Total Investment Costs

Table 6.2: Financial Projection

Table 6.3: Production Cost

Table 7.1: Preliminary Tests

Executive Summary

Elly Andrade

Sunny's Backyard Caffé

Block 44 Lot 29 SMC NHA site 1 Calauan, Laguna

Sunny's Backyard Caffé is a market-oriented café located in Calauan, Laguna. With a

strong focus on quality, innovation, and customer satisfaction, the café aims to create a
unique and memorable experience for patrons. The project is designed to cater to the
evolving preferences and demands of the local community, offering specialty coffee blends,
a cozy ambiance, and personalized customer service.

Highlights of Major Assumptions and Summary of Findings and Conclusions:

1. Market Feasibility:

● Thorough market research indicates a growing demand for specialty coffee in

Calauan, Laguna.
-
● The café's unique selling points, such as high-quality coffee, cozy ambiance, and
excellent customer service, differentiate it from competitors.
● The target market primarily consists of the local community and neighboring areas.

2. Social and Economic Desirability:

● Sunny's Backyard Caffé aligns with the economic and industrial policies supporting
entrepreneurship and small business growth.
● The café contributes to the local economy by sourcing fresh, locally produced
ingredients and supporting the local community.
● By providing a welcoming environment and promoting social interactions, the café
aims to become an integral part of customers' daily lives.

3. Technical Feasibility:

● The café has identified the necessary plant capacity, material inputs, and project
engineering requirements to ensure smooth operations.
● Compliance with health, safety, and quality standards is prioritized to ensure
customer satisfaction and adhere to regulations.

4. Financial Feasibility:

● The projected financial statements demonstrate the viability of the business,

indicating a positive trend in profitability.
● The proposed capital structure, including personal savings, bank loans, and investor
contributions, supports the financial requirements of the project.
 ● Financial evaluations, such as the pay-off period, simple rate of return, break-even
point, and internal rate of return, indicate favorable returns on investment.

In conclusion, Sunny's Backyard Caffé shows strong potential for success in the local
market. The café's market-oriented approach, unique selling points, compliance with
regulations, and sound financial projections position it as a promising venture. With careful
execution and continuous adaptation to customer preferences, Sunny's Backyard Caffé can
establish itself as a go-to destination for coffee lovers in Calauan, Laguna.
 Chapter 1

1. Project Background and History

1.1 Name and Address of Project Promoter

Sunny's Backyard Caffé, located at Block 44 Lot 29 SMC NHA site 1 Calauan, Laguna.

1.2 Project Orientation: Market or Raw Material-Oriented

Sunny's Backyard Café is a market-oriented project, strategically designed to cater to

the evolving preferences and demands of the local community. With a strong focus on
quality, innovation, and customer satisfaction, the café aims to create a unique and
memorable experience for patrons.

1.3 Market Orientation: Domestic or Export

The market orientation of Sunny's Backyard Caffé is primarily domestic, targeting the
local community and neighboring areas. We firmly believe in the importance of building
strong relationships with our customers, becoming an integral part of their daily lives. By
understanding their preferences, cultural nuances, and evolving trends, we aim to provide a
personalized and enriching café experience.

1.4 Economic and Industrial Policies Supporting the Project

Sunny's Backyard Café benefits from a range of economic and industrial policies that
support entrepreneurship and small business growth. The government has introduced
initiatives to foster a thriving business ecosystem, providing financial incentives, mentorship
programs, and access to resources for aspiring entrepreneurs like Sunny. These policies
aim to stimulate economic development, create employment opportunities, and promote
local businesses.

Furthermore, the food and beverage industry is subject to stringent regulations and
standards to ensure the health, safety, and well-being of consumers. Sunny's Backyard Café
complies with all relevant regulations, maintaining the highest standards of food safety,
hygiene, and quality. We prioritize sourcing fresh, locally produced ingredients to support the
local economy and reduce our carbon footprint.
 Chapter 2

2. ECONOMIC FEASIBILITY

2.1 Demand and Market

The demand and market for Sunny's Backyard Caffé in Calauan, Laguna will depend
on factors such as the local community's preferences, coffee consumption habits, and
competition. By conducting thorough market research specific to the target location, the café
can determine the size of the target market, understand the demand for specialty coffee, and
tailor its offerings to meet the preferences of the local community. By providing unique
specialty coffee blends, a cozy ambiance, and personalized customer service, Sunny's
Backyard Caffé aims to attract and retain a loyal customer base and establish itself as a go-
to destination for coffee lovers in Calauan, Laguna.

Table 2.1 Market Analysis

Market Size Growth Rate Major Varieties Major Prospects

Problems

Growing 5% annually Various Intense Increasing

Competition demand for
specialty coffee
and growing
coffee culture

2.2 Sales Forecast and Marketing

Sunny's Backyard Caffé faces competition from other local coffee shops and cafes in
the area. To attract customers and create a loyal customer base, the café will focus on
providing high-quality coffee, a cozy ambiance, and excellent customer service. The
localization of the market will be centered around the local community in Calauan and
neighboring areas

Table 2.2 Competitor Analysis

Competitors Unique Selling Points

Coffee Shop A Wide variety of specialty coffee blends and

single-origin beans

Coffee Shop B Cozy ambiance with a focus on local art and

music

Coffee Shop C Emphasis on sustainable and ethically

 sourced coffee beans

Table 2.3 Financial Analysis

Year Estimated Sales Revenues

1 150,000

2 350,000

3 500,000

CHAPTER 3

3. Technical Feasibility

Table 3.1 Production Program

This table outlines the products that Sunny's Backyard Caffé will offer, including
specialty coffee blends. It also mentions the by-products that may be generated, such as
coffee grounds, which can be used for composting. The waste disposal method for the café
involves utilizing composting and recycling bins to manage waste in an environmentally
friendly manner.

Products By-products Waste Disposal l

Specialty coffee blends Coffee grounds for Composting and recycling

composting bins

Table 3.2 Plant Capacity

This table indicates the feasible normal plant capacity for Sunny's Backyard Caffé,
which is 50 cups of coffee per day. It also highlights the quantitative relationship between
sales volume and plant capacity, emphasizing that as sales volume increases, the plant
capacity needs to be adjusted accordingly.

Feasible Normal Plant Capacity Quantitative Relationship

50 cups of coffee per day Sales volume is directly proportional to plant

capacity
Table 3.3 Material Inputs

This table provides a comprehensive list of the material inputs required for Sunny's
Backyard Caffé. It includes raw materials like coffee beans, milk, sugar, and syrups, as well
as components such as flavorings and stirrers. Additionally, it mentions processed industrial
materials like coffee filters and packaging materials, along with auxiliary materials such as
cups, lids, and napkins. The table also highlights the need for various factory supplies and
utilities like electricity and water.

Raw Component Processed Auxiliary Factory Utilities,

Materials s Industrial Materials Supplies especially
Materials power

Coffee Milk, syrups, Coffee filters Packaging Cleaning Electricity

beans flavorings materials supplies

Milk Stirrers Office Water

supplies

Sugar Cups, lids

Syrups, Napkins
flavorings

Packaging
materials

Table 3.4 Project Engineering

This table outlines the scope of the café project, the technology and equipment
involved, the estimated costs of the technology, the proposed layout of the equipment, any
civil engineering works required, and the corresponding investment costs. It provides an
overview of the project's engineering aspects, including the espresso machines, coffee
grinders, POS system, floor plan, seating arrangement, renovation, plumbing works, and
electrical works.

Scope of Technology Costs of Layout of Civil Investment

Project and Technology Proposed Engineering Cost of Civil
Equipment Equipment Works Engineering
Works

Café Espresso 15,000 Floor plan Renovation 20,000

operations machines

Coffee 6,000 Seating Plumbing 3,000

grinders arrangement works

POS system 3,500 Storage area Electrical 3,000

 works

Chapter 4

4. Management

4.1 Organizational Layout

Table 4.1 Organizational Layout

This table provides an overview of the organizational layout of Sunny's Backyard Caffé.
It outlines the different departments within the café, including Production, Sales,
Administration, and Management. Each department has its specific responsibilities and
functions within the overall operation of the café.

The Production department focuses on the preparation and production of food and
beverages. The Sales department handles customer interactions, order taking, and payment
processing. The Administration department manages administrative tasks, scheduling,
record-keeping, and inventory management. The Management department oversees the
overall operations, strategic decision-making, and financial management of the café.

Department Description

Production Responsible for the preparation and

production of food and beverages

Sale Handles customer interactions, order taking,

and payment processing

Administration Manages administrative tasks, scheduling,

record-keeping, and inventory

Management Oversees overall operations, strategic

decision-making, and financial management

Chapter 5

5. Manpower

Table 5.1 Estimated Manpower Requirements

This table provides an estimation of the manpower requirements for Sunny's Backyard
Caffé, considering it as a small business. It suggests a more modest number of employees
for each position, including 2 baristas, 1 kitchen staff, 2 servers, and 1 manager.
 Position Number of Employees

Barista 2

Kitchen Staff 1

Server 2

Manager 1

5.2 Estimated Annual Manpower Costs

Table 5.2 Estimated Annual Manpower Costs

This table provides an estimation of the annual manpower costs for Sunny's Backyard
Caffé, it includes a more affordable salary range for each position, The annual manpower
costs are calculated by multiplying the monthly salary by 12.

Position Salary per Month Annual Manpower Cost

Barista 5,000 60,000

Kitchen Staff 3,000 36,000

Server 3,500 42,000

Manager 10,000 120,000

Chapter 6

6. Financial feasibility

6.1 Total Investment Cost

Item Amount

Working Capital Requirements 50,000

Estimated Fixed Assets 23,500

Total Investment Cost 73,500

6.2 Financial Projection

Projected Income Statement:

 Year Sales Revenue Expenses Profit

1 30,000 20,000 110,000

2 75,000 28,000 180,000

3 150,000 35,000 250,000

Projected Balance Sheet Statement:

Year Assets Liabilities Equity

1 15,000 5,000 5,000

2 20,000 10,000 5,000

3 30,000 20,000 10,000

Projected Cash Flow Statement:

Year Cash Inflow Cash Outflow Net Cash Flow

1 50,000 40,000 10,000

2 100,000 65,000 25,000

3 170,000 80,000 37,000

6.3 Production Cost

Item Fixed Costs Variable Costs

Estimated Expenses 200,000 300,000

6.4 Project Financing

Proposed Capital Structure and Proposed Financing

Personal Savings: 80,000

Bank Loan: 40,000
Investor Contribution: 4,500

Interest:
Bank Loan Interest Rate: 5% per annum
6.5 Financial Evaluation

Pay-off Period: Estimated to be within 2 yrs

Simple Rate of Return; 20% per annum
Break-even Point: Projected to be reached by the end of Year 1
Internal Rate of Return: 25%

Chapter 7

7. Social Desirability

7.1 Preliminary Test

Sunny's Backyard Caffé conducted preliminary tests to assess the social desirability of
the café. These tests aimed to gather insights into customer preferences and behaviors
related to reusable cups and sustainable practices. The tests involved surveys, interviews,
and focus group discussions with potential customers, local residents, and community
stakeholders. The findings from these tests provided valuable insights into the social
acceptance and desirability of implementing sustainable practices in the café.

Test Methods Participants Key Insights Overall Evaluation

Surveys Potential Customers Positive response to Highly favorable

the caffé concept
and offerings

Interviews Local Residents Appreciation for the Strongly positive

cozy ambiance and
unique experience

Focus Group Community Support for the Encouraging and

Discussion Stakeholders caffé’s contribution supportive
to the local economy

These preliminary test were conducted to gauge the social acceptance and desirability
of Sunny's Backyard Caffé based on the responses and feedback received from the
participants.

7.2 Approximate Cost-Benefit Analysis

Sunny's Backyard Caffé conducted an approximate cost-benefit analysis. This analysis

considered the costs associated with implementing sustainable practices, such as the use of
eco-friendly packaging, energy-efficient equipment, and waste management systems. It also
assessed the potential benefits, including customer loyalty, positive brand image, and long-
term cost savings. The analysis indicated that implementing sustainable practices would
result in a net social benefit for the café and the local community.
7.3 Economic Industrial Diversification

Sunny's Backyard Caffé explored the potential economic benefits of the café in terms of
economic industrial diversification. The café aims to contribute to the local economy by
supporting local suppliers, producers, and artisans. By sourcing ingredients locally and
collaborating with local businesses, the café can create a positive multiplier effect,
stimulating economic growth and fostering a sense of community.

7.4 Estimate of Employment-Creation Effect

Sunny's Backyard Caffé estimated the potential employment opportunities it can

generate. The café analyzed the direct and indirect jobs that would be created through café
operations, including positions in management, baristas, kitchen staff, and customer service.
By providing job opportunities and supporting local talent, the café aims to contribute to the
reduction of unemployment and the overall socio-economic well-being of the community.

7.5 Estimate of Foreign Exchange Savings

Sunny's Backyard Caffé estimated the potential foreign exchange savings resulting
from its operations. The café aims to source locally produced ingredients and products,
reducing the need for importing goods. By supporting local suppliers and producers, the café
can contribute to the country's balance of payments and promote economic sustainability.

7.6 Taxes

Sunny's Backyard Caffé recognizes its tax obligations. The café will comply with all
relevant tax regulations, including income tax, value-added tax (VAT), and local business
taxes. By fulfilling its tax obligations, the café contributes to the government's revenue,
supporting public services and infrastructure development.

Appendices