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Feasibility Study_Retailer Store
Feasibility Study_Retailer Store
(Retailer Store)
I. Introduction
Retailer Store is a sari-sari store where product is grocery items and purchase in a
wholesale price and sells in a retail price and selling viand also. The stores will be
established in the barangays of Tinag-an Sitio Magbangon, Albuera and Libjo, Merida,
Leyte. This business project is to be managed individually by the two shareholders who
are members of NorWeLeDePAI in the area. Retailer store is part of the micro-enterprise
project of NorWeLeDePAI as loan in order to assist and obtain the needs of the
registered families. The shareholders will be provided with building materials, facilities
and grocery items needed in the store. The amount of the materials, facilities and
grocery items will be paid in a given period of time (3 years). To implement this business
project, the shareholders are requesting an amount of Sixty Thousand pesos only (Php
60,000.00) as budget for the materials and grocery items needed to develop the store
building in order to start the business. The shareholders believed that provision of capital
for their business might help to have an alternative source of income that can augment
the economic situation of their family for the benefits of their children. The objective of
the project generally, it aimed to boost the economic living of the family in a sustainable
manner as it can compensate inadequate income of the family by giving the opportunity
both spouses to earn a living. Specifically, 1) Enable to support both spouses in the
family source of revenue. 2) To have a sari-sari store in the area with having affordable
prices for the residents especially the registered families of the project. 3) Have an
alternative livelihood and sustainable source of income; and 4) Increase the standard
economic living of the family.
Selling of products is to the individuals and households. There are about 100
households within the sitio of barangay where the store is located. Most of the residents
are expected to spend buying the products of the store since, there are only 3 existing
small store in the sitio alone. One of these store are operating for ten years but they are
only selling common commodities.
The target customers populations in the sitio as belong to the poor sector of the
area are highly needed an affordable food products for their daily consumption. To
provide these target customers the shareholders will sell products that is affordable
according to their needs. Though the existing stores are selling high price. These stores
may not be competing based on the products because the shareholder will sell products
different to them and it will compete base on price alone when they have the same
products sell. Customers will choose good quality and affordable prices that the
shareholders might provide.
Area of the Store: Libjo, Merida
There are about 400 households with an average size of six members in the
family within the proper of the barangay. These are the target costumers in the area who
spend much more in buying the products in the stores. There are 5 stores in the area still
operating and selling products such as; beverages, cigarettes, livestock feeds,
vegetables, delicacies, rice, junk foods and common commodities. One of these stores
is a wholesaler*retailer store, which is the common product, is the soft drink. Competition
between these stores is based on price on the kind of product and most of them are
monopolised store. Therefore, there is sufficient market demand in entering into a
retailer business store and selling products that is not available to them.
In the operation of small business store does not necessarily need to have large
building as long as the materials are good quality it does not also need two or three
person to manage. Facilities needed in the operation would be the weighing scale,
calculator, record book and table.
Management
The shareholder will solely manage the store in day-to day operation. All daily
activities and operation is responsible by them. The assigned staff will supervise and
monitor and the reporting is responsible by the shareholder. The shareholder is
responsible in all accounts and maintenance is also accounted by them.
Production Plan
The store building will be establishing inside the corner of the house of the
shareholder and is situated near the shoreline where the fishermen’s and other
residents are easily locate and buy their products. Suppliers of the products are the
grocery stores in the city of Ormoc and merchandisers. The shareholder will not
allow the creditors to commend the products in the store in order to avoid delinquent
creditors that result to fall down the production.
Building of the store is to be constructed and will be establish beside the national
road that the passers by and customers can easily locate. A supplier of the products
is also the supplier of the store in Magbangon to be establish and the shareholder
will not allow also the creditors to commend some products.
Risk Assessment
o Unreliable sales forecasts
In time of unreliable sales, the shareholder will take advantage to sell viand and
other demand goods/products in which there are sufficient supply
Materials:
Materials needed to operate a small business store is only; record book, ballpen,
pencil, calculator, plastic bag, cellophane, “garapon” and quality materials such as;
case for rice, weighing scale, bottles, gallon, sack and container.
Potential suppliers of the raw materials are the suppliers of the product also.
Container of products such as oil, soy sauce, rice and sugar will be recycled
Facility:
Facilities for the store may be located in nearby municipalities and city.
Renovation/construction of the two store building will cost only about Php11,500.00
including the utilities connected labor and transportation expenses.
Managerial:
V. Business Concept
Retailer store is a small business store where the product is the common
commodities, rice and viand by providing low prices to the residents who cannot
afford to buy the basic commodities. The two shareholders will be provided with
building materials each of them and will be manage individually. This business store
will be selling product in a retail price but affordable to the customers. The
shareholders will pay their amortizations within 3 years in a monthly basis and after
they paid the amortization they now own the business but the NorWeLeDePAI will
continue its supervision and monitoring.
VI. Competitor Analysis
Magbangon Area
Presently, there are 3 existing small stores in the area and one of which are selling
products in a veil situation because it has no formal store building and the customers
and visitors/strangers in the area may put out of sight. While the store of the shareholder
is easily located that regular customers from other stores might transfer.
Libjo Area
The barangay has 5 store presently operated by small business men and has a regular
supplier from merchandisers regularly delivered products from Ormoc to Isabel and
some are vendors of vegetables. These store operators were differed in selling between
their products and it is feasible to enter into a new store in the area through selling of
common commodities and viand.
o Accounting costs
From wholesale price is added with an amount ranging from Php 2.00 – Php 7.00
depend on the kind of products
Based on estimated revenues and costs, the projected profit/loss of the business
over the first 3 years.
Projected loss
o Accounting costs
Pricing arrangements
From wholesale price is added with an amount ranging from Php 0.50 – Php 20.00
depend on the kind of products
Based on estimated revenues and costs, the projected profit/loss of the business
over the first 3 years.
Projected loss
Income forecasts –based on the daily gross income/sales of Php 300 will be divided
for the savings, revolving amount, transportation expenses and loan repayments
and for the consumptions.
Cash Flow Projections per month
Transportation = Php 240.00
Revolving amount = Php 5,312.70
Loan Repayment = Php 1,047.20
Savings = Php 300.00
Consumption = Php 2,100.10 (profit)
Breakeven analysis – the shareholders will return back the money invested by the
NorWeLeDePAI after 3 years of continuous operation. After 3 years of operation
if the shareholder will fully paid the amortization the profit may increase, as they
have no responsibility in paying the loan.
Income forecasts –based on the daily gross income or sales of Php 400.00 will be
divided and set aside for the savings, revolving amount, transportation expenses,
electricity and loan repayments and for the consumptions.