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MATS COLLEGE OF TECHNOLOGY

R. Castillo St. Agdao, Davao City


Tel. No. (082)225-3756/226-4560

AirMech Safety Marshalling Paddles and Wands

A Feasibility Study

Presented to the College of Engineering and Technology

MATS College of Technology

Davao City

In Partial Fulfillment of the Requirements for the Feasibility Study

Bachelor of Science in Aircraft Maintenance Technology

By:

Albert P. Migalbin Jr.

Xyllie Xean A. Valdez

March 2019
MATS COLLEGE OF TECHNOLOGY
R. Castillo St. Agdao, Davao City
Tel. No. (082)225-3756/226-4560

CHAPTER 1

Summary of the Project

AirMech Safety Marshalling Supplies is a business made for BS AMT


students and mechanics. This business project is a dealer of aircraft marshalling
equipment such as marshalling pads and marshalling wand. This project will
start its operation on the year of 2020. Two young Aviators from MATS College of
Technology compose the team of partnership type of business. We believe that
this business is quite feasible in accordance to our projected demand.

Location of the Project

AirMechs Safety Marshalling Supplies is located at 164 R. Castillo St,

Purok San Juan, Agdao, Davao City, and 8000 Davao del Sur. The building will

be installed with security measures.


MATS COLLEGE OF TECHNOLOGY
R. Castillo St. Agdao, Davao City
Tel. No. (082)225-3756/226-4560

We are planning to start this business on the year 2021 of April to 2025 after five

(5) years of plan we will decide if AirMech Safety Marshalling Paddles and

Wands will continue or shut down depending on the gained income of the project.

That produces BS AMT graduates for the business to grow and continue its

operation.

Market Projection

AirMech Safety Marshalling Pads and Wands will be located along

R. Castillio, Agdao, Davao City. The business site is near the schools of MATS

College of Technology, FAA, and AISAT. The target customers are BS AMT

students and aircraft mechanics from nearby locale in need for review. The

chosen location is in the heart of the city for easy access to customers. This

location is perfect place for this type of business.

Market Share

(Total Demand – Competitor Supply) / Total Demand x 100= Market Share

Our business computed an initial of 19.57% total market share from

targeted customers inside and outside the location in Davao City. The place has

potential customers like aircraft mechanics, students and the like.


MATS COLLEGE OF TECHNOLOGY
R. Castillo St. Agdao, Davao City
Tel. No. (082)225-3756/226-4560

Market Prize

Product Original Price Jack up Jack Up Price

Marshalling Php 24.96 45% Php 36.00 / Pair

Paddles

Marshalling Php 72.96 45% Php 105.00 / Pair

Lights
MATS COLLEGE OF TECHNOLOGY
R. Castillo St. Agdao, Davao City
Tel. No. (082)225-3756/226-4560

Investment Cost

The total investment cost of the project on its 5-year duration/operation would be

Php 1,945,510 as projected.

Investment Costs
Pre-Operating Period 2020 2021 2022 2023 2024
Acquire Bus. Permit 10,000 10,000 10,000 10,000 10,000
Location Rental Annually 50,000 50,000 50,000 50,000 50,000
Furniture 4,000
Office equipment 20,000
Display Cabinets 9,750
Air-Condition 14,000
Miscellaneous Expenses 7,000 7,000 7,000 7,000 7,000
Operating Period
Marshalling Paddles and Wands
Capital 85,440 85,440 85,440 85,440 85,440
Internet w/ Landline Annually 15,600 15,600 15,600 15,600 15,600
Electricity Bill 30,000 30,000 30,000 30,000 30,000
Water Bill 5,000 5,000 5,000 5,000 5,000
SSS 8,040 8,040 8,040 8,040
Pag-Ibig 3,800 3,800 3,800 3,800
Philhealth 3,800 3,800 3,800 3,800
Contigencies 7,000 7,000 7,000 7,000 7,000
Pickup truck/Bongo 305,000
Fuel allocation for service 15,000 15,000 15,000 15,000 15,000
Advertisement/Marketing 12,000 12,000 12,000 12,000 12,000
Salary (Employees) 69,000 69,000 69,000 69,000 69,000
Total Investment Cost 1,945,510
MATS COLLEGE OF TECHNOLOGY
R. Castillo St. Agdao, Davao City
Tel. No. (082)225-3756/226-4560

Method of Financing

The method of financing that will be used is equity and capital will

be provided by the member of the partnership. Each member will put in 50% of

their gross amount needed in providing the needs of business.

Market Feasibility

This project is marketable for the reason that our target customers are

capable of availing our products direct from store and online. People in the

location are continuously growing and that means more prospective demand of

the product in the business. The business provides a product within the reach of

each customers and have highest-quality compared to other competitors.

Technical Feasibility

The project is technically feasible because of the location is situated near


aviation schools and airports for easy access to the said business and can be
located easily. On the other hand, the major and minor cost in putting up the
business can be easily acquired and attained.

Financial Feasibility

A financial feasibility study is an assessment of the financial aspects

of something. In starting and running a business. It considers many things

including start-up capital, expenses, revenues, and investor income and

disbursement potential return for investors.


MATS COLLEGE OF TECHNOLOGY
R. Castillo St. Agdao, Davao City
Tel. No. (082)225-3756/226-4560

CHAPTER 2

MANAGEMENT ASPECT OF THE PROJECT

Pre-operating Period

The owners of business will be the one who is in charge in all

activities for the business during the pre-operating period. Since it will be the start

of our pre-operating period we will not hire too many personnel to minimize our

investment cost.

We will spend our first year for planning, capital sourcing, license

processing, renovation, hiring, and purchasing equipment. And for the remaining

months is for advertising our business to the public.

Operating Period

The operation will start when everything is already settled, such as

the business is well furnished, equipment and product is ready for selling. And

since the project is partnership, the owners segregate the task and their functions

in the business.

Type of Business Organization

The project type of business organizational is Line Business


MATS COLLEGE OF TECHNOLOGY
R. Castillo St. Agdao, Davao City
Tel. No. (082)225-3756/226-4560

Organizational Chart

General Manager

Advertising

Security Personnel Utility Personnel


MATS COLLEGE OF TECHNOLOGY
R. Castillo St. Agdao, Davao City
Tel. No. (082)225-3756/226-4560

Proposed Administrative Personnel Salary Expenses

Unit Management Hours to be Qualifications Compensation


Personnel dedicated for
project

General Manager 8 hours - Graduate of any 4- Equal Sharing of


year course with a profit
great sense of
responsibility
- Must be good in
developing budget
- Must have a good
coaching skills
- MS Word & Excel
proficient
- Must have a
accounting skills

Manager 8 hours -Graduate of any 4- Equal Sharing of profit


(Advertising) year course with a
great sense of
responsibility
-Good verbal
communication skills

Security Personnel 8 hours -With great sense of Php 120.00/ day


responsibility and
service
-Complete security
and countermeasures
training, with
experience is an
advantage

Utility Personnel 8 hours -With great sense of Php 130.00/day


responsibility and
service

Driver 8 hours -- Driver/mechanic, with Php 120.00/day


experience is an
advantage.
-must have a great
sense of responsibility
MATS COLLEGE OF TECHNOLOGY
R. Castillo St. Agdao, Davao City
Tel. No. (082)225-3756/226-4560

Benefits

 Pag-ibig

 SSS

 PhilHealth

 13th Month pay

Facilities:

 Office

 Computer

 Stock Room

 Counter

 Display Cabinets
MATS COLLEGE OF TECHNOLOGY
R. Castillo St. Agdao, Davao City
Tel. No. (082)225-3756/226-4560

Table 2: TIME TABLE OF THE PROJECT

Activities 2020 2021

July Aug Sept Oct Nov Dec Jan Feb Mar Apr May

Planning
Phases

Acquisition of
Capital

Renovation

Procurement of
Materials

Processing of
Business
Permit and
Requirements

Advertisement

Normal
Operation
MATS COLLEGE OF TECHNOLOGY
R. Castillo St. Agdao, Davao City
Tel. No. (082)225-3756/226-4560

CHAPTER III

MARKET STUDY

The objective is to assist various businesses who are going to buy our

products, our competitive position in the current market, and on how we could

contribute to the national economy.

Actual Demand

Number of Marshaling Paddles

SUGNI
YEAR UNITOP Enterprises TOTAL
2011 103 223 326
2012 108 263 371
2013 111 225 336
2014 145 243 388
2015 176 228 404
2016 223 212 435
2017 218 235 453
2018 222 241 463
2019 236 256 492
3,668

Number of Marshalling Wands/Lights


MATS COLLEGE OF TECHNOLOGY
R. Castillo St. Agdao, Davao City
Tel. No. (082)225-3756/226-4560

Sun Star LED Bao Sheng


YEAR Lots for Less Garden Enterprises TOTAL
2011 254 204 123 581
2012 262 246 143 651
2013 256 255 157 668
2014 276 274 123 673
2015 277 248 143 668
2016 284 249 156 689
2017 320 261 153 734
2018 312 267 176 755
2019 320 290 221 831
6,250

Sources of Data

The varied data was obtained through inquiry on the proposed demand of

customers of Sun Star LED Garden, Lots for Less and Bao Sheng Enterprises for

marshalling lights and UNITOP and SUGNI Enterprises for Marshalling Paddles.

Consumers

Current Buyers Address/Location

Aviation-related graduates and


undergraduates

Various AMO Schools in Mindanao (MATS, Metro Davao and various places in Mindanao,
FAA, AISAT, Cotabato AMO, GenSan AMO) Philippines

Aviation-related workers and consumers

Forecasted Annual Demand


MATS COLLEGE OF TECHNOLOGY
R. Castillo St. Agdao, Davao City
Tel. No. (082)225-3756/226-4560

For Marshalling Paddles

Projected
Year Actual Production X X² XY
Production YC
2011 326 -4 16 -1304 326.56
2012 371 -3 9 -1113 346.81
2013 336 -2 4 -672 367.06
2014 388 -1 1 -388 387.31
2015 404 0 0 0 407.56
2016 435 1 1 435 427.81
2017 453 2 4 906 448.06
2018 463 3 9 1389 468.31
2019 492 4 16 1968 488.56
TOTAL 3,668 60 1221

Jack-up
Year X YC Original Cost Total Price Total Sales
%
2020 5 509 Php 24.96 45% Php 36.00 Php 18,324

2021 6 530 Php 24.96 45% Php 36.00 Php 19,080

2022 7 550 Php 24.96 45% Php 36.00 Php 19,800

2023 8 570 Php 24.96 45% Php 36.00 Php 20,520

2024 9 591 Php 24.96 45% Php 36.00 Php 21,276

For Marshalling Wands


MATS COLLEGE OF TECHNOLOGY
R. Castillo St. Agdao, Davao City
Tel. No. (082)225-3756/226-4560

Actual Projected
Year X X² xy
Production Production YC
2011 581 -4 16 -2324 597.12
2012 651 -3 9 -1953 621.45
2013 668 -2 4 -1336 645.78
2014 673 -1 1 -673 670.11
2015 668 0 0 0 694.44
2016 689 1 1 689 718.77
2017 734 2 2 1468 743.1
2018 755 3 3 2265 767.43
2019 831 4 4 3324 791.76
TOTAL 6250 60 1460

Jack-up
Year X YC Original Cost Total Price Total Sales
%

2020 5 816 Php 72.96 45% Php 105.00 Php 85,680.00

2021 6 840 Php 72.96 45% Php 105.00 Php 88,200.00

2022 7 865 Php 72.96 45% Php 105.00 Php 90,825.00

2023 8 899 Php 72.96 45% Php 105.00 Php 94,395.00

2024 9 913 Php 72.96 45% Php 105.00 Php 95,865.00

Method Used

The method used to obtain these varied data is statistical straight line method.

Factors considered in preparing the forecasting


MATS COLLEGE OF TECHNOLOGY
R. Castillo St. Agdao, Davao City
Tel. No. (082)225-3756/226-4560

The factors which were considered on the forecasting are the supply, demand,

competition, and some certain legalities involved on operating a tool supply depot.

COMPETITIVE POSITION

Prevailing Price

Products Product price

AirMech Sun Star LED Bao Sheng Lots For Less


Garden Enterprises
Marshalling Php Php 130.00/pair Php 140.00/pair Php 110.00/pair
Wands 105.00/pair

Products Product price

AirMech UNITOP SUGNI Enterprises

Php 47.50/pair Php 50.00/pair


Marshalling Paddles Php 36.00/pair

Quality of the Product

Our product is designed as a durable, quality built, essential equipment for

aircraft and traffic control, this marshalling wand quickly attracts attention and has found

wide acceptance by police, emergency medical crews, construction crews, fire

departments and airport aircraft supervision staff.

Marketing Program
MATS COLLEGE OF TECHNOLOGY
R. Castillo St. Agdao, Davao City
Tel. No. (082)225-3756/226-4560

AirMech will be using tarpaulin and flyers as an advertisement and for

further effective strategy in promoting or advertising the product, Aviation will go

to every potential customer, during the opening week, we will be giving flyers for

every graduating aviation students and we will go to every hangar in Davao and

well giving a fliers to every aircraft mechanic.

Forms of packaging shall the product be sold:

Marshalling Wands Marshalling Paddles

Terms of Sales
MATS COLLEGE OF TECHNOLOGY
R. Castillo St. Agdao, Davao City
Tel. No. (082)225-3756/226-4560

We would sell our products on a CASH to CASH basis, while employing

the possibility of an installment program as it is the most effective way of

receiving the payments.

Supplier of the product

Our supplier is the Pan Touch & Go Pilot Supply. It is located at 20803

Stuebner Airline Rd, Spring, TX 77379, USA. We choose them as the supplier because

they are giving the unit retail price. Our supplier will deliver the product to our store.

CONTRIBUTION TO THE PHILIPPINE ECONOMY

We could help the national economy by paying our income taxes regularly,

declaring everything required by the national law, and having a more productive

store providing the necessary marshalling equipment for the economy.

Number of Workers

We will aim to employ two (2) security guards, and two (2) driver/utility

personnel for at least a total of four (4) individuals to our company, helping them

with their employment must-haves.

CHAPTER IV
MATS COLLEGE OF TECHNOLOGY
R. Castillo St. Agdao, Davao City
Tel. No. (082)225-3756/226-4560

Profit and Loss Satement

Revenue 2019 2020 2021 2022 2023


Total Aviation Tools and
6,216,135.16 8,027,074.25 10,311,699.09 13,187,418.76 16,799,894.12
Equipment revenue

COST OF SALES
4,351,294.61 5,618,951.97 7,218,189.36 9,231,193.13 11,759,925.88
Gross Profit 1,864,840.55 2,408,122.27 3,093,509.73 3,956,225.63 5,039,968.23
Operating Expenses
Salary(Employees) 517,200.00 517,200.00 517,200.00 517,200.00 517,200.00
Benefits 120,528.00 120,528.00 120,528.00 120,528.00 120,528.00
Electric Bill 38,000.00 38,000.00 38,000.00 38,000.00 38,000.00
Office Supplies/Maintenance 40,000.00 40,000.00 40,000.00 40,000.00 40,000.00
Miscellaneous 12,072.40 12,072.40 12,072.40 12,072.40 12,072.40
Fuel Cost and Maintenance
96,000.00 96,000.00 96,000.00 96,000.00 96,000.00
for Multi Cab
Advertisement 15,000.00 15,000.00 15,000.00 15,000.00 15,000.00
Water Bill 5,000.00 5,000.00 5,000.00 5,000.00 5,000.00
Connectivity Cost 20,000.00 20,000.00 20,000.00 20,000.00 20,000.00
CENRO 400.00 400.00 400.00 400.00 400.00
Business permits 20,000.00 20,000.00 20,000.00 20,000.00 20,000.00
Other Expenses 35,000.00 35,000.00 35,000.00 35,000.00 35,000.00
Rental for the Office 96,000.00 96,000.00 96,000.00 96,000.00 96,000.00
Depreciation 53,100.00 53,100.00 53,100.00 53,100.00 53,100.00

Total operating expenses 1,068,300.40 1,068,300.40 1,068,300.40 1,068,300.40 1,068,300.40


Net Income Before Income
796,540.15 1,339,821.87 2,025,209.33 2,887,925.23 3,971,667.83
Tax
Income Tax for the period at
79,654.01 133,982.19 202,520.93 288,792.52 397,166.78
30%
Income after Tax 716,886.13 1,205,839.69 1,822,688.39 2,599,132.70 3,574,501.05

TOTAL PROFIT AFTER TAX Php 9,919,047.97

CHAPTER V

Return of Investment
MATS COLLEGE OF TECHNOLOGY
R. Castillo St. Agdao, Davao City
Tel. No. (082)225-3756/226-4560

ROI= Total profit after tax x10

Total investment cost in 5 years

= 9,919,047.97/5,500,000

= 180%

Return of Equity

ROE= Total profit after tax x100

Owners’ Equity

= 9,919,047.97/30,944,613.05

= 32%

Cash Payment Payback

CPP=3.68 YEARS

CUMULATIVE CASH
YEAR CASH FLOW
FLOW
0 (5,500,000) (5,500,000)
1 716,886.13 (4,783,113.87)
2 1,205,839.69 (3,577,274.18)
3 1,822,688.39 (1,754,585.25)
4 2,599,132.70 844,547.45
5 3,574,501.05 4,419,048.50

Break-even Analysis
MATS COLLEGE OF TECHNOLOGY
R. Castillo St. Agdao, Davao City
Tel. No. (082)225-3756/226-4560

BEP = Php 1,183,798.36

Operating Expenses 2019 2020 2021 2022 2023


Salary(Employees) 517,200.00 517,200.00 517,200.00 517,200.00 517,200.00
Benefits 120,528.00 120,528.00 120,528.00 120,528.00 120,528.00
Electric Bill 38,000.00 38,000.00 38,000.00 38,000.00 38,000.00
Office Supplies/Maintenance 40,000.00 40,000.00 40,000.00 40,000.00 40,000.00
Miscellaneous 12,072.40 12,072.40 12,072.40 12,072.40 12,072.40
Fuel Cost and Maintenance for
96,000.00 96,000.00 96,000.00 96,000.00 96,000.00
Multi Cab
Advertisement 15,000.00 15,000.00 15,000.00 15,000.00 15,000.00
Water Bill 5,000.00 5,000.00 5,000.00 5,000.00 5,000.00
Connectivity Cost 20,000.00 20,000.00 20,000.00 20,000.00 20,000.00
CENRO 400.00 400.00 400.00 400.00 400.00
Business permits 20,000.00 20,000.00 20,000.00 20,000.00 20,000.00
Other Expenses 35,000.00 35,000.00 35,000.00 35,000.00 35,000.00
Rental for the Office 96,000.00 96,000.00 96,000.00 96,000.00 96,000.00
TOTAL VARIBLE ASSET = Php 5,076,002.00

Tool Display Stand 35,000.00

Office Furniture 25,000.00

Computer w/ printer 34,998.00

Airconditioner 2hp 9,000.00


Fire Security with Survey and
Installation 9,000.00

CCTV with Installation 15,000.00


450
Multi-cab ,000.00
TOTAL FIXED ASSET = Php 577,998.00