SUMMARY OF THE PROJECT SUMMARY OF THE PROJECT Name of the Firm : STUDY HAVEN

*The projects proposed signage

Location

2nd Floor Arcade Building, T. Neri St., Cagayan de Oro City

Studying is fun only in Study Haven.

STUDY HAVEN

The researchers have chosen this location because it is strategically located near Xavier University thus making the project very accessible to the prospective customers. Also, for the convenience of the prospective customers, whenever they need to buy something, 24-hour convenience stores can be found nearby. Brief Description History of the Business Students, undergraduate or postgraduate, are always saddled with assignments, projects, quizzes, & other works with deadlines to meet. They need a place where they can do their tasks of studying or meeting with group mates to discuss a project. Though School library is very accessible, it is open only during class hours and closed after 8:00 pm. Thus, its difficult for students to find a space or a place where they can do their work and studies conductively after class hours and especially when the library is closed. Students would have to resort to coffee shops and fast food chains which are very inappropriate place for studying considering its environment. What's more, students are compelled to buy products/goods just to get to stay in a coffee shop or a fast food chain operating late hours just to stay in that place. With this burden on students, the researchers have been inspired to conduct & establish a feasibility study about study lounge business because the researchers understand the needs of the students for they also experience this dilemma. Furthermore, the researchers see this business to be very potential of being successful because of the its proposed strategic location and its very much needed service (product).

Nature/Kind of Industry : Type of Organization :

Student-Service Industry General Partnership

Studying is fun only in Study Haven.

STUDY HAVEN

Officers of the business & their qualifications:

Ayzajamelah Y. Datuharon - General Partner Ms. Datuharon is a graduate of Bachelor of Science in Accountancy at Xavier University. She is currently employed as a Bank Teller in Philippine Islamic Amanah Bank. She has taken up units in business management, strategic management, production operation, and marketing subjects in her undergraduate years. She was also active in XU-SIRAJ organization as its Finance Officer for two years from school year 2008 to 2010, and has gained enough experience in handling cash and day to day transactions. Linette Katreena V. de la Rita General Partner Ms. de la Rita is a Graduate of Bachelor of Science in Accountancy at Xavier University. She is currently employed as Junior Branch Manager in Metro Bank. She has taken up units in business management, strategic management, production operation, and marketing subjects in her undergraduate degree. She had bookkeeping and posting summer job experience at Department of Agrarian Reform, and has been a delegate of 7th MBMYC (Mindanao Business and Management Youth Congress). Karl Ian Marlon B. Silvestre General Partner Mr. Silvestre is a Graduate of Bachelor of Science in Accountancy at Xavier University. He has taken up units in business management, strategic management, production operation, and marketing subjects in his undergraduate degree. He is currently a marketing staff of Ororama Supercenter, Cagayan de Oro City.
Studying is fun only in Study Haven.

STUDY HAVEN

Sittie Naima M. Tomawis Silent Partner Ms. Tomawis is a graduate of Bachelor of Science in Accountancy at Xavier University and is currently enrolled as a 3rd year law student in San Beda College of Law. She has taken up units in business management, strategic management, production operation, and marketing subjects in her undergraduate degree. She has worked as an Accounting Officer of FM Tomawis Security Agency for 3 years and has been a Barangay Kagawad. She is now holding the position of Barangay Treasurer in her hometown barangay in Marawi City. Hazel B. Uy General Partner Ms. Uy is a Graduate of Bachelor of Science in Accountancy at Xavier University. She was a Valedictorian in high school at Liceo de Cagayan University. She has taken up units in business management, strategic management, production operation, and marketing subjects in her undergraduate degree. She has been the treasurer of Philippine Society of Youth Science ClubsRegion X in her high school years. She has also been a delegate of the 7th MBMYC (Mindanao Business and Management Youth Congress). Currently, she is a Junior Accountant in Nestle Philippines Inc.

Studying is fun only in Study Haven.

STUDY HAVEN

ECONOMIC ASPECTS
Economic aspect in a feasibility study plays a crucial role since it primarily reveals if the study will work and how will it work. As such, market analysis is done here to identify and determine if there is potentiality of the study. This section will basically present a description of the industry, the current market analysis based on the survey conducted by researchers, the existing entities in the industry, the anticipated future market potential, potential customers and sales projections. Also, this section will also tackle and show the methods of data gathering by the researchers and how they were evaluated to come up with the present and future demand and supply for the product, competition, selling prices, and marketing plans for the project.

General Market Description Cagayan de Oro City, as dubbed on its official website, is a city in bloom and it booms. And it certainly is. It has been considered as the melting pot of Mindanao in the Philippines because of its accessibility, business growth, attractions and most of all, its entire warm and hospitable people. (Wikipedia.org) This city is one of the highly urbanized city in Northern Mindanao boasting a population of 553,960 population in 2007 (www.census.gov.ph) and its growing still. An estimated percentage increase of 2.54 % per year is established to project the future increase population. Considering that it was over 3 years already since that number, it can be instituted that there is now an almost 600,000 population here in the City.
Studying is fun only in Study Haven.

Brought by this increasing population is the increasing various demands and needs of people which as much as possible must be satisfied. The Local Government tries to fill this needs by attracting and enticing investors to pour their money in the city and STUDY HAVEN establish businesses/industries that will meet up peoples needs and also provide jobs. The Local Government also welcomes local entrepreneurs to create and launch businesses here in the city which will aid not only the entrepreneurs but also the City itself. Because of these, the government has made extensive developments and renovations to various potential and existing business locations in the City. One of this is

the streets of Abejuela and T. Neri or simply commonly known to the locals as Divisoria. Here, one can see many diverse offices and businesses such as food and coffee stores, computer/technology shops, convenience/grocery stores, and more establishments. It has been considered as the heart of CDO for its strategic location for its nearness to schools, offices and besides lots of people do come here and hang out. It is where also events are held thus vacant office spaces are seldom found for they are very much coveted for many eager entrepreneurs grab the chance to sell their products here.

Target Market The primary target market of the proposed project would be the undergraduate and post graduate students of Xavier University, one of the schools near Divisoria. This school has been educating students from various cities in Mindanao for almost 80 years now. It offers various course programs such as four-year degree, vocational degree, law and medicine courses. As of this second semester of this year, the Universitys Registrar has determined that 10,979 students are currently enrolled, majority of which are undergraduate students and most of them are from the School of Business and Management (SBM).

The basis for determining the primary target market is that the population of students at Xavier University comprises approximately 40% of the students in Cagayan de Oro City, with 30% from Liceo de Cagayan University and the remaining 30% is from other universities and colleges in the city. This target is further attested in the market study conducted by 4th year accountancy students from Pilgrim Christian College which
Studying is fun only in Study Haven.

tackles about study lounge business. As shown in Table 1 which as the result of the market study these Pilgrim students have conducted, majority of their respondents, specifically 28.40%, who would consider patronizing a study lounge business are from STUDY HAVEN Xavier University. Table 1
Capitol University Liceo de Cagayan University Lourdes College 68 83 37 20.54% 25.08% 11.18%

Pilgrim Christian College Xavier University- Ateneo De Cagayan

49 94 331

14.80% 28.40% 100.00%

Customer/Market Characteristics and Behavior

A market survey was conducted to identify the profile, study behavior and needs of the market; and also to determine the size of the market; ascertain the acceptability of the market as to the proposed project. Since it has been established that the primary target is the Xavier University Students, the researchers have conducted the survey with Xavier University students as its respondents. There were 100 students - respondents from different colleges of different courses who have willingly gave time to fill the survey form provided by the researchers. The results of the market survey are represented by all the following tables below with its descriptions. Customers Profile. The target customers, who have considered to patronize the proposed project are classified according to age, degree, and financial (allowance) status. As shown in table 2a, 86.67% of prospective customers are of age above nineteen (19) and table 2b shows that 67.86% of prospective customers are undergraduates and 32.14% will be postgraduate students. These findings indicate that most of the prospective customers are students of mature age who are more likely serious in their studies. Table 2a Age Group 16-18 19-21 22 and above 13.33% 56.67% 30% STUDY HAVEN
Studying is fun only in Study Haven.

Table 2b Course Degree (who have considered studying in study lounge) Undergraduate students 67.86%

Postgraduate students

32.14%

Table 3 Daily Allowance Less than 100 P 101 P 150 P 151 P 200 P 201 P 300 Above P 300 35% 48% 14% 10% 5%

In terms of financial capability of the prospective customers, Table 3 shows that 35% have less than a hundred pesos of allowance, 48% has allowance ranging from P101 to P150, 14% have allowance of P151 to P200, while 15% are those who have allowance above P200. Table 4 Hours consumed in studying 1 hour 2 hours 3 hours 4 hours and above 6% 21% 26% 46%

In addition and as based on the market survey aided by the survey form as shown
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in Exhibit 1, the respondents or the prospective customers, presented in Table 4, 46% of which or majority of them consumes 4 hours or more to study, while 26% find 3 hours as to be enough time to study, 21% are satisfied for 2 hours, and 6% study only for an hour. STUDY HAVEN These respondents have different preferences as to what time they study. As shown in Table 5a, 49% find it effective to study during evenings, and 35% much prefer to study during dawn, and 31% prefer mornings, while only 16% choose afternoons as their study time. Based on this table, it can be seen that it will be an advantage for the project if students prefer evenings and dawns as their study time for the proposed project will be

open from five (5) in the afternoon until six (6) in the morning.

Table 5a Preferred time to study: During morning During Afternoon During Evening During Dawn 31% 16% 49% 35%

Furthermore, based on the survey and presented in Table 5b, the respondentstudents favor more to study every day as much as possible even though there are no pressing quizzes in the coming days. While the 13% has different habit in days of studying, some students much prefer to study only if there is an exam the next day.

Table 5b How many times in a week do you study? Every day Every other day Thrice a week Others 40% 26% 12% 13%

in the Pavilion where two cottages are structured to accommodate students who just want to relax or talk with fellow students. For those students who want a peaceful environment STUDY HAVEN to study they go to the schools library which can accommodate almost to three hundred students a day.

Studying is fun only in Study Haven.

After class hours, students can be seen to occupy benches within the university, or

However the library is usually full when it is open for, as shown by Table 6 below based on the survey conducted by researchers, 78% of respondent students find it effective to study in the library. Thus, students avail themselves of this place to concentrate in their studies.

Table 6 Place where you can study effectively: Yes Home No Sometimes Yes School Library No Sometimes Yes Within School premise No Sometimes Yes Coffee Shops No Sometimes Yes Fast Food Chains No Sometimes 63% 7% 28% 78% 2% 18% 10% 35% 49% 17% 45% 34% 5% 63% 28%

Furthermore, as shown in the Table 7 below, the library placed second to STUDY HAVEN respondents preferred place to study. Thus, it is no wonder that the library is jam-packed for there are even students slumped beside the bookshelves just to stay and study in the library. For library in the first place was as a place built for students to study.

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Studying is fun only in Study Haven.

Table 7 Preferred place to study: Home School Library Within Schools premise Coffee Shops Fast Food Chains 28.60% 27.67% 16.13% 16.37% 11.22%

However, due to large number of students enrolled in the University, and considering that only limited students can be accommodated by the school library, many students consider it as a dilemma when the library is full whenever they need to study. As indicated by the Table 8, 33% of the respondents find it difficult when the library is unavailable. Thus, it can be implied that clearly, students needs are not fully fulfilled and that there is a potential niche for this studys business. Table 8 Do you find it difficult when the library is unavailable? Yes No Sometimes 33% 38% 27%

The unavailability of place to study provides advantage to those establishments near Xavier University for instead of students doing their studies at home, there are some or about 16.37% and 11.22% as shown by table, prefers to study at available establishments such as coffee shops and fast food chains respectively. These establishments in some ways fill the need of students for a place to study because for one thing, they are very accessible and convenient since these are near the school and near stores. Because of the strategic locations of these shops, students just have to pass by and choose where they wish to study. Direct channels of distribution exits in here for the services provided by these establishments are directly given to customers/students. STUDY HAVEN
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Demand As indicated by table8 and table 9, there is a need of the students that can be satisfied and that is by providing a place for study to them. Table 9 shows that 68% of respondents will consider patronizing the proposed business. Table 9 Will you patronize the proposed study lounge? Yes No Maybe 68% 14% 17%

Based on the interviews conducted by researchers on those establishments near school like coffee shops and fast food chains and those presented in the Table 10, majority of these chops and chains customers are students. In addition, as indicated by Table 11, 12% of respondents frequent coffee shops and fast food chains just to study and 29% responded sometimes.

Table 10 Composition of Coffee shops and Fast food chains customers Customers Fast Food Chains Coffee Shops Students 75% 80% Non-students 20% 18% Others 5% 2%

Table 11 Do you frequent coffee shops and fast food chains just to study? Yes No Sometimes 12% STUDY HAVEN 55% 29%
Studying is fun only in Study Haven.

It is projected by these establishments that same scenario will still be present for the foreseeable future based on the past years.

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Nonetheless,

according to

these establishments,

about

75% of

these

customers/students patronize their place just to study especially before and during exam weeks, and not to indulge in their primary products that are food like donuts, coffee, and meal. This scenario is usual every school day from Monday to Saturday. Typically, in fast food chains, from 10:00 pm onwards, almost all of their customers are students studying. Aside from that, these students occupy a large space for they are usually in groups, and order only a drink/coffee per group. This is tolerated by the management of these chains but it irritates them when there are non-student customers who cannot find a table, though the management does not discourage students to patronize their business but it does not also encourage them. Accordingly, as much as possible, they wish students not to regard their place as an extension of the library. Same view with the coffee shops that the researchers have interviewed. Table 12a Students enrolled in Xavier University* (Average per year) 2007 2008 2009 2010 2011 9527 10028 10121 10506 10979 Table 12b Projected Students (Projected Demand)
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5.26% 0.927% 3.80% 4.50%

*Office of Registrar, Xavier University

2011 2012 2013 2014 2015

10979 11374 11783 12208 12647

3.6%** 3.6% 3.6% 3.6%

**Average growth rate of table 12a

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STUDY HAVEN

Supply Xavier Universitys school library has been the primary supplier of XU students in providing their needs for a place to study. At present, aside from the school library, students have six choices of patronage for their needs: Dunkin Donuts, Mister Donut, Coffee Works, Bos Coffee, Jollibee, and McDonalds. These establishments are conveniently located within or near Divisoria, making them very accessible to Xavier University students. Based on the Table 13 from the researchers survey, Dunkin Donuts is the most preferred place to study among the establishments in Divisoria. Table 13 Most preferred among the 6 establishments: Mister Donut Dunkin Donuts Coffee Works Jollibee McDonalds Bos Coffee 15.15% 33.33% 9.09% 12.12% 21.12% 6.06%

The suppliers for the past years have different descriptions and offerings to its customers/students. For one, the XU school library can accommodate up to 500 students a day. Its environment is a convenient and appropriate place to study with strict policy of observation of silence.

On the other hand, the other suppliers provide different service to students. Dunkin Donuts in Divisoria has been open since 1991 and has been offering to its customers a selection of donuts, coffee, bread, and sandwiches at reasonable prices. It is open for 24 hours everyday is near a 24-hour convenience store. Their place is dim lighted, plays music in the background, and air conditioned. Their ambiance STUDY HAVEN
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encourages customers to chat with each other and tantalize them with their products savory smell.

Another coffee shop is Mister Donut which has just been open for a year or more as of today. It offers the same as with Dunkin Donuts and has been considered as its competitor. Although, Mister Donuts space is small compared to the other one but its ambiance is much lighter than that of the Dunkin Donuts.

Coffee Works is a newly-opened coffee shop occupying a part of Xavier Universitys Gym. The ambiance is good with soft and mellow songs being played on the background and comfortable sofas instead of usual staid chairs are offered to customers. Majority of their customers are office workers for their place is conductive for meetings. Its customers can choose the airconditioned room or the tables outside for fresh air. Their products are high quality products compared to Dunkin Donuts and Mister Donut but at high prices. It provides free Wi-Fi access to its customers and is open 24 hours. Last in the coffee shops is the Bos Coffee. Same with Coffee works, it also offers high quality and high priced food products, free
Studying is fun only in Study Haven.

Wi-Fi, and an air conditioned room or a fresh air space. However, it is open only from 6:00am to 12:00 am.

As to the fast food chains, McDonalds and Jollibee compete with each other. Both offers the same line of food products and are open 24 hours.

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STUDY HAVEN

Both

of

these

establishments

environment is not suitable for studying. For one, their place is usually noisy with the coming ins and outs of customers and with the music being played every now and then.

Competitive Position Selling Price Availing the study lounge service has an hourly rate of Php20, per person. The rate for the mini-conference room is also Php20 per hour, per person.

Presently, there is no study lounge business existing near Xavier University. However, they were two study lounge businesses before but failed to operate longer due to a not strategic location and an inappropriate ambiance. Thus, the researchers were not able to conduct a price study of the direct competitors.

In spite of that, there are indirect competitors of this feasibility study. However, the six establishments (coffee shops & fast food chains) mainly offer food to its customers and are not really intended to be a place to study. Their ambiance is not suitable for serious studying of students for a variety of reasons. One, the place lightning is usually low or dim which discourages reading of textbooks and notebooks, and writing down some notes. Second, songs are being played the whole duration of the store thus it distracts and ruins the concentration of students. Third, some customers are loud in their
Studying is fun only in Study Haven.

talking which also ruins concentration. Fourth, the place is very open and students might be distracted of other customers going in and out of the stores. And some of these establishments products are costly which can deplete the students meager allowance. STUDY HAVEN

Competitiveness of the quality of the service Study Haven has competitive advantage over its indirect competitors since this study lounge offers a quiet ambiance, which creates a more conducive place for studying. The disadvantages of the existing indirect competitor establishments were already

16

discussed in the preceding paragraph. Study Haven is a venue for students who really want to grasp or fully understand what they are studying since it has a quiet environment and free from any distractions like loud background music being played in fast food chains and coffee shops.

Marketing Program

The indirect competitors of the proposed project have many marketing practices to entice their customers to patronize their place. The following summarizes the marketing practices of different suppliers: Dunkin Donuts Open 24 hours a day; Offers coffee, pastries, and donuts at affordable prices; promos/discounts especially during holidays such as Valentines day. Mister Donut Open 24 hours a day; Offers coffee, pastries, and donuts at affordable prices; promos/discounts especially during holidays such as Valentines day. Coffee Works Open 18 hours a day; Offers high quality coffee, pastries, and donuts at high prices; and free wifi. Jollibee Open 24 hours a day, diverse products such as meals, desserts, snacks, and pastas are offered to customers who have different preferences for food. McDonalds Open 24 hours a day, diverse products such as meals, desserts, snacks, and pastas are also offered to meet the needs of customers. Bos Coffee Open 18 hours a day; Offers high quality coffee, pastries, and donuts at high prices; free Wi-fi; and efficient, accommodating and friendly workers. STUDY HAVEN
Studying is fun only in Study Haven.

Proposed Marketing Program The researchers propose to adopt many marketing practices. First, the researchers

17

have focused on the four Ps of marketing: product, price, place and promotion. As to the place, the projects location will be located strategically, meaning it has to be near the school for easy accessibility for students such as within Divisoria. Based on the preferred ambiance of the respondents, the researchers will design the business as a quiet and cozy place in order for it to be very appropriate for studying such as providing the suitable lighting for reading and writing, with no music being played on the background. Also, instead of tables being shared with others, a table for one will be facilitated in order to assure privacy and full concentration for students and to discourage talking with fellow students. A free Wi-Fi also will be provided for those students who wish research topics while studying and a mini-couch will be provided for students to sit on and relax into during breaks from their study. Regarding the price, the entrance fee of the project will be initially at an affordable price of Php20. This is based on the survey conducted where 71% of respondents are willing to pay Php15-Php20 per hour. The researchers also have considered the financial status of its potential customers where 35% of respondents have less than Php100 daily allowance as previously shown in Table 3. Proposed Projects Logo and Signage The projects logo was uniquely designed by the researchers. The logo symbolizes that the what one has studied can be embedded in ones mind if the place where one is studying is appropriate for studying. As to the projects product, since its a service business, the researchers will insure that the quality of service will meet the expectations of the potential customers.

and distribute them at the front and back gates of the university to students. Aside from that, the projects leaflets will be posted to every available bulletin board within the university. Some of the leaflets will also be posted outside of those six establishments frequented by students. Aside from that, the researchers plan to give away cute ball pens

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STUDY HAVEN

As to promotion, the researchers plan to avail of leaflets to advertise the project

Studying is fun only in Study Haven.

and note pads as incentives for the first ten customers on the first day. Furthermore, the project shall be advertised on the Sun Star, a local newspaper circulation. Table 14 presents the promotional steps and corresponding costs in the projects opening .

Table 14a Promotions and corresponding costs: Leaflets (Printing, photocopying, and thumb tucks) Sun Star Advertising Freebies (ball pens and note pads) Tarpaulin print P1250 P 160 P 380 P 200

Table 14b shows the proposed marketing program for every month of operation. The researchers would like to establish a monthly marketing strategy by giving away 10 notebooks and 10 ball pens to the first 10 customers on the first day of every month starting June. Aside from that, there will be an expense for flyers every month to be scattered around the area. Table 14b Marketing Program (Monthy) Leaflets (Printing, photocopying, and thumb tucks) Freebies (ball pens and note pads) P 160
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P 100

The researchers would also consider marketing the project by word of the mouth to their friends, classmates, family, and colleagues. STUDY HAVEN

In day-to-day transactions, one of the partners will act as a cashier-receptionist to supervise the operation of the project. He/she shall have the authority to see to it that the projects rules and regulations will be obeyed by the customers to ensure that the place will be strictly quiet and peaceful as befit a studying place. These rules and regulations

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must be implemented to ensure that the project will be run smoothly and efficiently thus making the study of its customers effective. Aside from these, the cashier-receptionist shall handle and prepare cash flow reports after closing time. Also, so as not to discourage customers, also another one of the partners will ensure that cleanliness of the place will be maintained.

Projected Sales Table 15 Market Share Coffee Shops Fast Food Chains 59.32% 40.68%

The researchers propose to have an initial target market share of 3% during the first 5 years of operation of the project. The projected sales for the project for the next five (5) years are shown in Table 16. These are based on Tables 4, 7, 9, 11, and 12-B. Also, the selling price and target market share are considered to come up with the expected annual sales. Table 16 Projected Annual Sales 2011 2012 2013 2014 2015 P 340,000.00 P 350,200.00 P 360,700.00 P 371,520.00 P 390,100.00
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STUDY HAVEN

Contributions to the Philippine Economy

Labor Employed. The five researchers/partners will function as the staff of the project. Two partners will have shift in work every other day in a week.

Taxes Paid. Some of the partners are employed in a public and private entities, and since each partner will have his/her own share from the result of the proposed project, it is estimated the taxes that will be paid by each partner as individual tax income will fall under the bracket between P3,000 and P5,000 yearly.

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STUDY HAVEN

TECHNOLOGICAL ASPECTS
This aspect presents the proposed projects location, service schedule, lay out and the equipments needed. Service This feasibility study is for a service-related business. The study lounge has study tables and chairs, lamps, Wi-Fi access, mini-conference room and a comfort room. It also has a couch wherein students can relax after studying and which can also be used by customers while they wait if there is no vacant study cubicle yet. Furthermore, the study lounge has cubicles or divisions to give the customers some privacy. Basically, the study lounge is a quiet area wherein students can really concentrate while studying. Yet, Study Haven also has a designated area to cater the needs of customers who prefer to discuss with group mates. The mini-conference room is intended for group discussions and in making group projects. The Wi-Fi access is of much help to students especially when they have research work to do so they can just browse the internet provided they bring their own laptops to the lounge. Study Haven also has a comfort room for the customers to use. Plant Size The study lounge can accommodate ten to fifteen customers at a time since it has ten study tables and chairs and a conference table & chairs which has a capacity of five persons. Study Haven operates for ten months, equivalent to 300 days, and is open for 15 hours a day, 7 days a week. The researchers decided to operate for the months June to March only since according to the interview conducted with the Xavier University Registrar, there were about 4,000 enrollees for summer classes last year. Such number of students during summer would most likely cause a large decrease in sales and might not be enough to sustain the costs (e.g. electricity) that will be incurred if Study Haven will still operate during summer. Moreover, it is presumed that the Xavier University library STUDY HAVEN
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22

can accommodate that lesser number of students during summer classes and the subjects offered during summer are usually minor subjects. Machinery and Furniture & Fixtures Floor Plan of Study Haven

As enumerated above, the study lounge requires machine, furniture and fixtures, etc. in order to start the business operation and to make Study Haven the best place conducive for learning. It wants to give customers the convenience that they deserve while they are studying.

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STUDY HAVEN

This is the list, with specifications if any, of machines, furniture and fixtures and paraphernalia that will be used in the business: Air-conditioner Study Chairs - horsepower - Condura brand - Approximately 3 feet in length - Preferably, monoblock type so that it would lessen the cost. Study Tables Couch Counter table Meeting/Conference table Meeting/Conference table Study Lamps - These furniture and fixtures are made of wood. The specification of each would vary or depend on the furniture supplier since it is advantageous to order rather than buy readymade set of furniture in malls. - Preferably, it must be compact fluorescent lamp (CFL) with low-watt bulbs to lessen electricity cost. Clock Bell Wireless Fidelity (Wi-Fi) Zone - Round - Similar wall clocks used in Internet Cafes - Typical bell(s) used in libraries - Pocket Wi-Fi from leading internet providers (e.g. PLDT) * Setting up of Wi-Fi connection is estimated to be P 1000.00.
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STUDY HAVEN

The Proposed Projects location in Abejuela Street.

25

STUDY HAVEN

Studying is fun only in Study Haven.

Comparison of Quotations/Prices of different furniture suppliers and leading malls This table shows the information gathered by the researchers comparing the prices of different suppliers and stores within the vicinity of Cagayan de Oro. Ororama Super Center and Appliance Stores 1. Study tables P 5,000.00 (for 10 cubicles 2. Study chairs 3. Couch P 350.00 P 11,500.00 P 450.00 P 2,500.00 (wooden; good for 5-6 people) 4. Counter table 5. Conference table 6. Conference chairs 7. Study Lamps 8. Clock 9. Bell 10. Fluorescent bulbs
Studying is fun only in Study Haven.

Janeth Furniture

3J Furniture

P 7,000.00

P 500.00 P 5,000.00 (wooden; good for 5-6 people) P 3,000.00 P5,000.00

P 2,000.00 P 3,000.00

P 120.00 P 80.00 P 50.00 P 120.00

11. conditioner

Air-

P 10,000.00

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STUDY HAVEN

The researchers would choose the suppliers for the fixed assets based on who offer the lowest price shown in the table above. Thus, the chosen suppliers for the particular assets are shown below with their estimated economic life. Suppliers Study Table Study Chairs Couch Counter table Conference Table Conference Chairs Study Lamps Clock Bell Fluorescent bulbs Air-Conditioner Janeth Furniture Ororama Super Center Janeth Furniture Janeth Furniture Janeth Furniture Janeth Furniture Ororama Super Center Ororama Super Center Ororama Super Center Ororama Super Center Ororama Super Center Estimated Life (years) 10 10 10 10 10 10 1 2 1 n/a 10

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STUDY HAVEN

Plant Location Location Map of the Space/Study Lounge:

Legend:

- Site Location

Desirability of Location: This location is strategic since it is near Plaza Divisoria and is at the heart of the city. Aside from that, our primary target market, the Xavier University students, can easily go to Study Haven because it is just a few kilometers away from the university. There are also public utility vehicles which pass along Tirso Neri Street so prospective customers can easily locate where the study lounge is. As discussed in the economic aspects portion, it is a strategic location since there are pharmacies, 24/7 convenient stores and fast food chains located nearby wherein the customers can buy their other needs. STUDY HAVEN
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Building and Facilities The researchers have decided to rent a commercial building rather than to construct a new building to lessen the cost. The researchers have roamed commercial buildings within Divisoria to find an available and idyllic office space to establish the proposed project. With this, the researchers have found an available space in Arcade Building, located in Abejuela Street. So, instead of having costs for construction and erection, only rental expense of P10,000.00 per month will be incurred for the establishment of the proposed project. The space has a dimension of 12 square meters.

Utilities Electricity consumption is expected to run for 15 hours (from 3pm to 6am the following morning). With only an air condition, lights, and lamps on each table, light bill is estimated reach between P2500 to P3000. Electricity will be provided by Cagayan de Oro Electricity, Power and Light Corporation. Water consumption, however, is shared by all other occupants in the building. Thus, its rate varies dependently on the water bill of the building as a whole. Water supply is provided by Cagayan de Oro Water District.

Labor Requirements There are only two personnel in the work area namely, the cashier and the utility man. The cashier and utility man will be handled alternately by the partners themselves. Hence, no compensation is given to the partners. STUDY HAVEN
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FINANCIAL ASPECTS
This aspect presents the total investment costs and the source of financing for the proposed project. Furthermore, this section will also present the feasibility of the proposed project in terms of profitability and liquidity. Financial Assumptions In projecting the financial statements for the next five (5) years, the following assumptions were taken into consideration: 1) Pre-operating expenses would be treated as outright expenses during the first year of operation. 2) The economic life of some components of Furniture and Fixtures such as study tables, study chairs, couch, counter table, conference table/chairs, and airconditioner, will be 10 years. The other items such as study lamps and bell will have one year economic life. While the clock will have 2 years, and the calculator will have 3 years. Straight-line method is used in computing for the annual depreciation. It is also on the assumption that there is no salvage value on all furniture and fixtures. 3) Sales or Revenue and payment of operating expenses, except depreciation, will be on Cash Basis. There will be 30-day accrual on payment of electricity, water, and supplies. Here, the assumption is that the proposed project will be given a month to pay after the consumption of the said expenses.
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4) Sales on the first year of operation is based on the Break Even Analysis (Exhibit 2) at a mark-up cost of 20.77%. 5) Sales growth per year is 3% of the prior year rounded up to the nearest ones. STUDY HAVEN 6) Profit is not taxable as to the entity itself rather taxable income to the individual partners subject to individual tax rates. Financial Statements To appraise the financial prospect of the proposed project, financial projections

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have been made for five years starting this year from 2011 - 2015, or specifically this month of June which is also the proposed first month of operation. The financial projections prepared and analyzed are the following: 1) Projected Income Statements for the 5-year period, 2011 2015 2) Projected Cash Flow Statements, 2011 - 2015 3) Projected Balance Sheet, 2011 2015 Total Project Cost The Total Project Cost of the proposed project amounts to P 46, 450.33 broken down as follows:

STUDY HAVEN
PROJECT COST
Fixed Capital: Study Tables Study Chairs Couch Counter table Conference table w/ Chairs Study lamps Clock Bell Air-conditioner Calculator Net Working Capital: Current Assets: Total Service Costs Less: Supplies Utilities Total Cash Supplies Current Liabilities 5,000.00 5,500.00 2,500.00 2,000.00 3,000.00 1,200.00 80.00 50.00 10,000.00 200.00

29,530.00 Studying is fun only in Study Haven.

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182,306.67 1,500.00 30,800.00 150,006.67 7,500.33 1,500.00 9,000.33

Less: Current Liabilities Net Working Capital Pre-Operating Expenses Total Project Cost

3,080.00 5,920.33 11,000.00 46,450.33

Sources of Financing The proposed project will solely be financed by the share contribution of the partners. Each of the five partners will contribute P10,000.00 hence the total partners contribution will be P50,000.00. This total capital is adequate enough to meet the financial requirements of the project.

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STUDY HAVEN

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Financial Statement Analyses Certain ratios of profitability and liquidity are applied assess the feasibility and desirability of the proposed project.

Profitability Measures. The profitability of the proposed project may be measured with the use of selected ratios. The Average Ratios for the 5-year period, 2011-2015 are given below:
Average Return on Investment Average Return on Capital Average Return on Sales Average Return on Assets *Refer to page 34 for the detailed financial ratios per year. 47.38% 20.37% 5.93% 17.61%

For every peso of capital contributed, the project would generate an average net income of 47.38%. The higher the Return on Investment, the more favorable it is for the business. For the amount invested by the partners, the management can generate wealth for an average of 20.37% from the normal operations of the business. Increasing the wealth of the partners is the end concern of the business. Based on the projected financial statements, there would be increasing net profit and partners capital. Thus, it would give a favorable effect on the Return on Capital ratio. For every peso of net sales, the management can generate a return to owners of an average of 5.93%. Since it was assumed that sales growth would be 3% per year, it STUDY HAVEN corresponds to an increasing return on sales. If ever the company would actualize this assumption, it would mean an effective and efficient handling of all the costs and expenses encountered in the operating cycle. For every worth of assets, the return is an average of 17.61% . This indicates that
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through the use and management of assets, the company would yield a profit of 17.61% for five years (average of net income and total assets per year). Total Assets. The total assets of the proposed project at the end of 2011 would amount to P 66,603.33. This would rise to P 85,176.22 at the end of 2012, P 108,938.28 in 2013, and P138, 048.11 in 2014. This would also increase to P176, 645.75 in 2015. Liquidity Measures. The ability of the project to meet current obligations from the current assets may be measured in terms of selected ratios. The average ratios for 2011 2015 are given below:
Average Current Ratio Average Working Capital 6.062 0.6946

For every peso of current liabilities, the corresponding worth of current assets that the company can pay is 6.06 and for every peso of current liabilities, the corresponding peso worth of quick assets that the company can pay is also 6.06 since only Cash comprises the current assets. Because the current ratio is greater than 1, this would give a positive image to the creditors since the company has a high short-term debt paying capacity. For every peso worth of total assets, P0.6946 represents working capital.

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SUMMARY and CONCLUSION

Based on its findings, this study has revealed that the establishment of a study lounge business in Divisoria, Cagayan de Oro City is a viable project. The study showed that the project is feasible in all aspects- marketing, technical, and financial. The feasibility of the project lies in the fact that there is a niche or a market demand, and the willingness of at least 68% of prospective customers to patronize the proposed project. Aside from that, the availability of a favorable location which makes it accessible proved the technical feasibility of the project. On the financial side, the financial aspect showed that the project is profitable. With an investment of P50,000, a rate of return of 4.55%, 39.06%, 50.20% and 61.68% can be generated in 2011, 2012, 20113, and 2014 respectively. This means that the investment can be recovered in less than four years time. Indeed, the cumulative net income of the proposed project for 5 years time is P110,039.03, which is 2.20 times the partners capital contributed. In conclusion, based on the results of the study, the proposed project is feasible. It can therefore be recommended to be realized and established in Abejueal St., Cagayan de
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Oro City.

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