Feasibility Study and Business Plan

Rent to Own Pedal Cab

I. Introduction
Rent to own pedal cab “pot-pot” project is extended to Merida, Leyte and will be
operated by Delma Roble, Lyrma Boholst, Ruth Enderez, Sherlita Enero and Lolita Lias
who are a residents of Barangay Poblacion Merida, Leyte. Rent to own pedal cab is one
of the enterprise projects of NorWeLeDePAI as loan to augment the needs of the
registered families. The 5 shareholders will be provided with pedal cab each of them and
will be owned by them after they paid their loan amortization with in the given period of
paying. To implement this project, the 5 shareholders-RF are requesting the amount Php
80,000.00 to purchase the 5 unit of pedal cab. Each of shareholders will add an amount
of Php 500.00 as their counter part. The shareholders are strongly believe that pedal cab
operation is one of the solution to boost their economic living as their alternative source
of living. The objectives of the project generally, aim to provide daily income as to
improve the economic living of the families to compensate the daily consumptions and
needs. Specifically, it aimed to; 1) Have a sustainable source of income of the families;
2) Augment the daily basic needs of the family for the consumptions and to provide daily
needs of their children’s in the school; 3) Have an immediate access of transportation of
the students in going to school especially the registered children’s of the project and also
the residents of the community; and 4) Own one unit of pedal cab per beneficiary.

II. Operational Plan

 Facilities
The shareholders will provide the facilities such as tools spare parts of the pedal
cab. The barangay has a shop for pedal cab only that will provide services for the
maintenance of such troubleshooting.
 Management Team
Each shareholders is assigned with a corresponding task Delma Roble is the
leader/treasurer of the group. She is the supervisor and control of the affairs its
members. She shall prescribe policies of NorWeLeDePAI, It shall likewise
determine the adequacy of the bonds of accountable members to ensure faithful
performance of duties and responsibilities. She will also keep the accounts or
daily payments/boundaries of each member. She is also responsible in the
maintenance of the pedal cab facilities and equipments. Lyrma Boholst is the
collector of the boundary or daily payments for their amortization and will be
given to the treasurer to keep safe. Joel Enderez is assigned to monitor each
members of their daily operation and responsible in the reporting for the
negligent members and responsible in the maintenance of trouble shooting-repair
of the pedal cab.
 Risk Assessment
 Skilled worker availability
One of the member has the skill to repair a pedal cab in case of trouble of spare
parts.
 Spare parts shortages
In case of the spare parts of the pedal cab is not available in the town there are
hardware stores in nearby municipalities and city that can provide for immediate
needs of spare parts.
Each members will save P5.00 in daily basis for the maintenance and will be
given to the treasurer.

III. Technical and Operational Assessment

 Materials:
Materials needed in operating pedal cab are tools for assembling of pedal cab,
paint, spare parts such as tire (interior and exterior, bearing, chain, etc.) this will
be used for the maintenance.
 Materials Suppliers:
Potential Supplier of the materials are the hardware’s, shop and the supplier of
pedal cab. They can guarantee that the materials are good quality and can last
long for 3-5 years and they can provide discounts of prices of such materials.
 Facility:
Facilities can be located in the town, nearby municipalities and cities, hardware’s
and shops. Assembling of pedal cab is responsible by the supplier and the
purchaser doesn’t need to fit it and it will cost only Php 16,000.00 including all
facilities needed in pedal cab. The pedal cab supplier is located in Carigara,
Leyte, Baybay, Leyte and , Hindang, Leyte and other municipalities. Transporting
of pedal cabs is responsible of the supplier and delivered free.

 Managerial:
Signing of Memorandum of Agreement between the shareholders and
NorWeLeDePAI will be made before the release of pedal cab to formalize the
contracts, terms and conditions and enable to follow the rules and regulation
prescribe by the SIMED committee as the presiding body of NorWeLeDePAI
sustainable projects. Regular monitoring will be conducted to sustain the success
of the business. Monthly reporting will be given by the leader of the group and
will be reported during the BOT meeting. The leader will keep a record book for
the financial recordings and reportings. Operation of pedal cab is need to have a
well experienced in assembling and operating a pedal cab in order sustain and
maintain the quality of the pedal cab.
 Organizational Structure

NorWeLeDePAI

CDS staff

Leader –Delma Roble

Collector-
Lyrma Boholst
Monitoring- Joel Enderez

Member Member
Shherlita Enero Lolita Lias
IV. Business Concept

Rent to Own pedal cab is a small business operation that students, workers and
residents in the town are the passenger costumers. Servicing of pedal cab in town is
very helpful especially to the students from nearby barangays schooling in the town and
the workers in the municipality. Due to large size of the town where the municipal hall
and the school is at the center of the town, most of the students and workers are
preferred to ride a pedal cab than to walk alone. Rent to won pedal cab shareholders will
owned the pedal cab if they can completely paid the amortization from the
NorWeLeDePAI and will be responsible in the continuous operation.

V. Competitor Analysis

 Number of competitors

At present, there are about 150 units of pedal in the town but some of which are not
operated because the units are not functioning.

 Nature of competition

Competition of pedal cab operation in the town is not fragmented because most of the
pedal cabs are owned by three large operators and there were about 50 individual
operators of pedal cab but the drivers of large operators are not servicing well because
of other interest.

VI. Financial Assessment

 Total start-up costs needed to begin operations (per individual)

Price/Unit of pedal = 16,000.00

Facility/Tools = 1,000.00 (counter part of shareholders)
Legal costs in setting up a pedal cab operation (counter part of shareholders)
Barangay Clearance = 30.00
Police Clearance = 50.00
Plate No. = 100.00
CTC = 15.00
Divers License = 105.00
Accounting costs
Maintenance expenses = 200.00
Day-to-day operating costs involved. (cash
flow requirements of the business).

Boundary = P 25.00
Maintenance = 5.00
Interest payment on debts = 1% per daily income

 Based on estimated demand business's projected income

Minimum net income = 100.00/day
Maximum net income = 200.00/day
 Pricing arrangements of fair
Student minimum fair = P2.00
Regular minimum fair = P3.00
Maximum fair =P 5.00 -
10.00

 Based on estimated revenues and costs, the projected profit/loss of the business
over the first three years.
Projected income:
Average Daily net income = 120.00
Average monthly net income = 3,120.00
Average net income per annum = 37,440.00
Estimated revenue for 3 years =
112,320.00 Projected loss:
Maintenance =
3,000.00/year X 3= 9, 000.00 Loan Repayment
= 8,373.60/year X 3= 25,120.80 Renewal of
license = 500.00 X 3 = 1,500.00
Total = 35,620.00 Projected
profit for 3 years:
Total projected income = Php 112,320.00
Total projected loss = Php 35,620.00
Total projected profit = Php 76, 700.00

 Charges (mandatory savings) per individual

No. of shareholders = 5 RF’s

Term of payment = 3 years
Counter part = P 500.00
Price of Pedal Cab = P 16,500.00
Proposed budget = P 16,000.00 X 5 = 80,000.00
Service charge (2% per Annum) =P 960.00 X 5 = 4,800.00
Interest rate (12% per Annum) = P 5,760.00 X 5 = 28,800.00
S & I (4% per Annum) = P 1,920.00 X 5 = 9,600.00

PLF (1% per Annum) =P 480.00 X 5 = 2,400.00

Total Amortization = P 25,120.00 =12,560.00

Monthly amortization =P 697.80

Total Monthly Collectibles = P 3,489.00
Note: price of pedal cab may be discounted and the charges and amortizations
may decrease.
VII. Financial Plan

 Financial Statements (monthly for at least 12 months)

Income forecasts – the daily net income will be divided for the daily consumptions,
maintenance, savings, and loan repayments.

Cash Flow Projections- boundary of P25.00 as loan repayment will be collected daily
by the collector remitted monthly, savings of P5.00 as for the maintenance will be
collected also daily and keep by the treasurer, the rest of the income is for the
daily consumptions and their own savings. Expenses for repair and
reconditioning of the pedal cab will be taken from the P5.00 maintenance.
Breakeven analysis – the shareholders will return back the money invested by the
NorWeLeDePAI after 3 years of continuous operation. After three years the
operation of pedal cab may increase the income as they have to responsibility in
paying the loan.

//ronval//©2007
feasibility study_pedal cab