CHAPTER I

Introduction

The construction sector has been one of most focus industries in the Philippines

since 2016. With past and present administration’s consistent effort on building more

infrastructure throughout the country, the construction sector has expanded rapidly that

the Philippines become one of the fastest growing construction markets in Asia region

according to Finch Solution, a credit and macro intelligence solutions and market data

provider. Specifically, with the Duterte’s administration Build, Build, Build (BBB) project,

the country’s outdated ports, railways and roads have been renovated and upgraded

and one of the benefactors of this road improvement is the island of Batan, Rapu-Rapu,

Albay where herein proponent intended to use as a viable location for its hardware retail

store. As part of the construction sector, the hardware store has become a vital part of

every market to give the hardware needs of customers ranging from simple households

to complex construction companies. Since time immemorial, when men start building

their houses, the necessity of hardware store has been proven by the continuous

proliferation of housing villages and subdivisions. The hardware store holds (and

organizes) the tools, values, and knowledges that bind a community and define a

worldview.1  These materials have shaped every community and the indubitable

evidence that it has been embedded deep in the roots of the community can be simply

ascertained to the capacity of these “stuffs from the shelves” to hold up someone’s

building for years and years.

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Background of the Study

The researcher intends to operate the first hardware retail store in the target area

to provide hardware products and services to every resident of Brgy. San Ramon and

its neighboring barangays. Because of the high cost of transportation and unavoidable

inconveniences experience by every customer in the target barangay and its

neighborhood in buying hardware products in the city market, the presence of a retail

hardware store in the island that offers same hardware products and services of a city

hardware is considered a great relief.

Statement of the Problem

This feasibility study intends to evaluate the viability of establishing and operating

a hardware retail store in San Ramon, Batan, Rapu-Rapu, Albay.

Specifically, it aims to assess and analyze the following functional areas:

Technical

a. To determine the service process in importing/availing products of the business

from large hardware stores in the city in order to determine the cost involved.

b. To describe the product line of the proposed business.

c. To determine the equipment, furniture and fixtures, and other materials that will

be used in the operation of the business.

d. To come up with the design and layout of the business floor plan to determine

the efficiency and effectivity of the proposed operation.

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Marketing

a. To ascertain the business industry profile.

b. To determine the target market and its market segmentation.

c. To determine the demand of the target consumers.

d. To determine the business competitive condition.

e. To come up with the best marketing system and strategy to be able to fully

utilize its proposed sale and services in the target business area.

Financial

a. To estimate the initial cost in putting up the business to determine the capital

requirement.

b. To determine the cost expense schedule of the business.

c. To compute the business total expenses.

d. To project the business total demand and sales.

e. To present the three-year projected income statement, balance sheet, and cash

flow investment of the business.

Management

a. To determine the what is the form of ownership of the business.

b. To layout an organizational structure of the business operation.

c. To provide job analysis to determine the profile of workers in the business.

d. To layout an organizational structure of the business operation.

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 e. To create store policies to provide employees of clear understanding of business

process and operation to ensure achievement of firm’s goal.

Socio-economic

a. To determine the business contribution to the economy, government and society.

Conceptual Framework of the Study

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Scope and Limitation of the Study

The feasibility study of Engr’s Ware hardware business is restricted to the island

of Batan, Rapu-Rapu, Albay. Its target population market will only be residents of Brgy.

San Ramon and its adjacent barangays. The hardware business will be limited only to

selling hardware needs, providing expert advice on products use and delivering

purchased products to customer’s homes. This study is projected for a span of three (3)

years. Information were taken from survey, personal interview and personal

observation and researches from books, magazines and internet.

Significance of the Study

This study bears significance to the following:

To the customers – as they are the main benefactor of the proposed business plan by

way of providing their hardware needs and ultimately easing their inconvenience on

going to the city market just to buy their hardware needs.

To the businessmen – this will serve as a guide to those who are interested in

establishing and operating their own hardware retail business in an island area;

To the researchers – this study will serve as a reference to their studies;

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To the community – as first hardware store in the target community, this will be the

foundation of information and ideas on the feasibility of a hardware store and similar

business that could spearhead competition therefore contributing to investment and

growth of the target community.

To the researcher himself – this may serve as an additional knowledge on his chosen

field of education and can be used on his future business plans.

Definition of Terms

To clearly understand this study, the following terms are hereby defined:

Age. This is the number of years something has been alive or in existence.

(http://www.yourdictionary.com/age). Operationally, this is how old is the respondent.

Balance sheet. A condensed statement that shows the financial position of an entity on

a specified date (usually the last day of an accounting period).Among other items of

information, a balance sheet states (1) what assets the entity owns, (2) how it paid for

them, (3) what it owes (its liabilities), and (4) what is the amount left after satisfying the

liabilities. Balance sheet data is based on a fundamental accounting equation (assets =

liabilities + owners' equity), and is classified under subheadings such as current assets,

fixed assets, current liabilities, Long-term Liabilities. With income statement and cash

flow statement, it comprises the set of documents indispensable in running a business.

(http://www.businessdictionary.com/definition/balance-sheet.html). Operationally, this

pertains to the account of the store’s financial condition.

Break-even point. Calculation and examination of the margin of safety for an entity

based on the revenues collected and associated costs. Analyzing different price levels

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relating to various levels of demand a business uses break-even analysis to determine

what level of sales are necessary to cover the company's total fixed costs. A demand-

side analysis would give a seller significant insight regarding selling capabilities.

(https://www.investopedia.com/terms/b/breakevenanalysis.asp). Operationally, this

pertains to the point at which total cost and total revenue of the business are equal

where there is no net loss or gain.

Consumer. This is an individual who buys products or services for personal use.

(http://www.investowords.com/1055/consumer.html). In the study, this refers to a person

purchasing hardware products.

Construction industry. Sector of national economy engaged in preparation of land and

construction, alteration, and repair of buildings, structures, and other real property.

(http://www.businessdictionary.com/definition/construction-industry.html) Operationally,

this pertains to industry where hardware stores belong.

Consumer Behavior. This is the study of how individual costumers, groups or

organizations select, buy, use, and dispose ideas, goods, and services to satisfy their

needs and wants. It refers to the reactions of the consumers in the marketplace and the

underlying motives for those actions.

(http://www.yourarticlelibrary.com/marketing/market-segmentation/consumer-behaviour-

meaningdefiition-and-nature-of-consumer-behaviour/32301/). Operationally, this

pertains to behavior and reaction of target customers of the proposed business in the

establishment and operation of the hardware store.

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Educational Attainment. This is the highest degree of education an individual has

completed (US Census Bureau Glossary). Operationally, this is the highest level of

schooling a respondent has attained.

Hardware store. A merchant that sells tools, fasteners, and similar objects known

collectively as hardware, as well as related sundries used in construction and repair.

(https://www.yourdictionary.com/hardware-store) Operationally, this pertains to the store

that sells hardware products which the researcher intends to establish and operate.

Income statement. One of the three important financial statements used for reporting a

company's financial performance over a specific accounting period, with the other two

key statements being the balance sheet and the statement of cash flows.

(https://www.investopedia.com/terms/i/incomestatement.asp) Operationally, this

pertains to the store’s statement of revenue and expense in a particular period,

Marital Status. This is of several discrete options describing a person's relationship

with a significant other, such as single, married, divorced, widowed, civil union,

domestic partnership, etc. (http://www.yourdictionary.com/marital-status#wiktionary).

Operationally, this is classification of the respondent into single, married, and other

status.

Marketing strategy. Refers to a business's overall game plan for reaching prospective

consumers and turning them into customers of the products or services the business

provides. A marketing strategy contains the company’s value proposition, key brand

messaging, data on target customer demographics, and other high-level elements.

(https://www.investopedia.com/terms/m/marketing-strategy.asp) Operationally, this

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pertains to the overall tactics of the store in branding its name and service to the target

consumers.

Occupation. This is a job or the way one spends time to earn money.

(http://www.yourdictionary.com/occupation). Operationally, this is the classification of

the respondent into employed and unemployed.

Price. This is the amount of the money that has to be paid to acquire a given product.

(https://www.britannica.com/topic/price-economics). Operationally, this is the amount of

the store’s hardware products that the customers pay.

Sex. This is the classification of people as male or female, typically assigned at birth

based on the appearance of external anatomy. (http://www.yourdictionary.com/sex).

Operationally, this is the classification of the respondents into male and female.

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 Chapter II

Methodology

This chapter describes how the researcher will gather the data and information it

needed for the feasibility study. It provides the source of data and information, the type

of research chosen, research instrument used and the methods of collecting them. It

also describes the research locale and the target respondents.

Sources of Data

The sources of data of the study were gathered from primary and secondary

sources. Primary sources were the respondent’s answers to survey questionnaires

created by the researcher with the aid of personal interview for additional information

needed for the completion of data. Secondary resources were outsourced from printed

and electronic copies of related books, articles and studies.

Research Design

The researcher used a descriptive design in the conduct of the study. A semi-

structured-questionnaire was created as an instrument to assess the variables of the

study with the support of personal interview. In addition, personal observation of the

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researcher supplied the information of the study to assess the viability of the proposed

business project.

The first part of the questionnaire assesses the socio-economic profile of the

target consumers in terms of age, sex, marital status, income/ allowance, educational

attainment and occupation. The respondents were directed to check the blank on the

item that correspond to their answers. The second part of the questionnaire assesses

the behavior and response of the consumers for the proposed establishment of the

hardware store in the target locality. Respondents were directed to check the item that

corresponds to their answer on the given statement. The last part of the questionnaire

measures the willingness-to-pay (WTP) of consumers for the hardware products and

services. The researcher evaluated first the consumers overall costs when buying their

hardware needs in the city market. After the assessment, respondents were asked if

they are willing to pay an additional price for the convenience of having a hardware

store in the target area and the maximum amount they are willing to pay for it.

Research Locale

The study will be conducted in Brgy. San Ramon, Rapu-Rapu, Albay as this

place is the proposed target area of the business. As of 2015 population census, the

population of Brgy. San Ramon has grown to 2,230.

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 Figure1: Map of Barangay San Ramon

Respondents

The respondents of the study are the residents of the barangay. The researcher

did a quota sampling to select the 223 respondents as the sampling frame of the study.

Respondents who were once become customers of hardware stores and who purposely

go to any city market just to buy their hardware needs were chosen as part of the target

market population regardless of their age, sex, marital status, educational attainment

and occupation.

Table 1 shows the target market population of the proposed business with the

number of questionnaires distributed and retrieved.

Barangay Populatio Percentag No. of Percentag No. of

n e Questionnaire e Questionnaire

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 s Distributed s Retrieved

San
Ramon 2, 230 100% 223 100% 223

Total 2, 230 100% 223 100% 223

Table 1: Questionnaires Distributed

Chapter III

Technical Study

This chapter discusses the firm’s process of availing its products from large

hardware suppliers in the City of Legazpi in order to determine the initial cost involved in

the operation of the business. It also provides the equipment, furniture and fixtures, and

other materials that will be used in the construction and operation of the business. It will

show the location site of the firm, proposed business design and the floor plan layout,

size and structure of the product display and warehouse storage to determine the

efficiency and effectivity of the business operation.

Product Purchase Process

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 This part explains the process of how the store will purchase its hardware

products. The essential and common hardware needs of the customers will be the main

basis for the listing of the store’s supplies. After the list of supplies was determined, a

canvass of its price and possible terms and discounts on the products will be

conducted. The store will go directly to the largest hardware suppliers of Legazpi City

for the purchase of its product lines. The proponent wishes to concentrate first on

carrying out the identified items on the list before focusing on expanding them. A

shipping plan and schedule will be initiated beforehand in order to contract with the

owner of vehicles that are necessary for the transportation of the store supplies such as

jeepney to load and unload the supplies in the port of Legazpi, the roll-on/roll-off ( roro)

ship that pass the coastline of the barangay and small boats known as “casco”. After the

supplies arrived at the port of Batan, they will be brought to the warehouse storage with

the use of utility carts.

Product Line Description

The store’s product line will be divided into three categories: the General

Hardware and Hand Tools, Structural Materials, and Finishing Materials section. The

General Hardware and Hand Tools Section are composed of the popular and

commonly-used hardware materials and gears. It mainly used in performing small

repairs. Structural Materials Section on the other hand are the materials used in basic

construction and Finishing Materials Section are the hardware products that are used

for final set up of a structure.

Equipment and Furnitures to be Use

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Billing Machine – A machine designed specifically for some or all of the mechanical

operations (such as typing, adding or computations, and sometimes duplicating) usually

involved in filling out and providing a record of customer invoices or bills

Display Cabinets – cabinet with one or often more transparent tempered glass (or

plastic, normally acrylic for strength) surfaces, used to display objects for viewing

Storage Cabinets – cabinet that provides a hidden or

protected space for items that are not usually needed on

a day to day basis.

Office Equipment – electronic products

including, but not limited to, desktop computers, laptop

computers, monitors, printers, fax machines, scanners,

copiers, and telephones. 

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Business Location

The store will be located at Purok 1, San Ramon, Batan, Rapu-Rapu, Albay

along the road of the barangay. Below is the location of the proposed business.

Figure 2: Map of Barangay San

Ramon

Plan Layout

The plan layout shows the intended arrangement of the store’s products. The

store’s display is categorized into three sections: first, the General Hardware and Hand

Tools Section which contains the common and often use hardware materials and tools;

second, the Structural Materials Section which displays the structural hardware needs

and the Finishing Materials Section which provides the materials used for the

improvement and protection of the qualities of the structures. The front part and side

part of the store near the cashier are the store’s main area where essential hardware

materials and handy tools are displayed for easy access of the customers. The

warehouse storage is located at the back of the store displays. A backdoor near the

storage room is purposely built for the easier loading and unloading of the store’s

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supplies. An office area is also designated for the business usual operation and

transactions.

Figure 3: Perspective view of the Hardware Store

Figure 4: Floor Plan of the Hardware Store

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 CHAPTER IV

Marketing Study

This chapter describes the marketing aspect of the proposed business. It

discusses the viability of the establishing a hardware store in an island barangay

through analyzing the industry where it belongs, the target market and their demand for

the supplies. It also discusses the business products and services, the proposed pricing

strategy and policy, sales tactics and business advertising and promotion plans.

General Business Condition

For product line identification, the product display of the hardware store shall be

divided into three sections: the General Hardware and Hand Tools, Structural Materials

and Finishing Materials section. The General Hardware and Hand Tools section

displays the generally used and inquired hardware materials of the customers. The

Structural Materials section on the other hand, contains the supplies used in

construction while the Finishing Materials section displays the final materials used for

protection and decoration of structures. A warehouse storage will be constructed for the

purpose of storage, retrieval and inventory of the supplies of the store. It should always

be maintained in good condition to ensure that the products are protected from

exposure to any moisture or chemicals that causes rust and other defects in hardware

materials. A product stock and inventory control plan shall be created to determine the

movability of the products. The store shall always be kept clean and sanitized and the

equipment and machines used in the operation of the business shall have a regular

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maintenance and check-up. An office room shall be designated for the purpose of

conducting the business regular operation.

Description and Outlook of the Industry

The hardware business falls under the construction industry. This sector is

responsible for building, maintaining, and repairing structures. For the past years,

numerous government infrastructure programmes are implemented that render

recognition in the Philippines as one of the fastest growing construction industries in the

Asian region. As of fourth quarter of 2019, although the number of constructions in the

Philippines has dropped by 7.7 percent, according to the report of the Philippine

Statistic Authority (PSA) the industry is still reported as one of the main drivers of growth

in the country in terms of national revenue.

Size of the Industry

According to the 2017 Annual Survey of Philippine Business and Industry

(ASPBI), a total of 1, 726 establishments were engaged in Construction in the country in

2017.2 A total of 311, 012 employees are recorded part of this sector. By industry group,

construction of buildings employed the highest number of workers with 129,463 or 41.6

percent of the total employment. Construction of roads and railways followed next with

94,566 (30.4%) workers. Since the industry is large, its major contribution to the

country’s growth can never be doubted.

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Target Market

The target market of the business are the residents of the Brgy. San Ramon and

its neighboring barangays. Since the main reason of the researcher in putting up the

store is to solve or at least lessen the burdens and troubles of every customer in the

island on going downtown to just buy their hardware needs, they are the perfect target

market of the study. Aside from that, in the locality where a pioneer hardware retail store

is to be constructed, it would incur a direct benefit to the residents.

Market Segmentation

A behavioral market segmentation is used by the researcher in assessing the

significant groups of its potential consumers. The target market was classified according

to the customers acts and responses for the proposed establishment of business. They

are verified according to their purchasing and spending habits, user status and brand

interaction. Engr’s Ware Hardware was able to identify three significant group of

customers in the locality:

 The Pillar of Home Group – The head of the households is still the largest

group of potential customers in the target market.  In the target barangay and its

adjacent boarders, it is still true that in the family, fathers are the primary

performers of home repairs and improvement projects.  They are projected to be

the regular customers of the store because their consumption of hardware

materials is based on their consistent or at least regular needs for household

construction and repair.

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  The Local Workers Group – This pertains to the working individuals of the

locality who indispensably use hardware materials for the performance of their

work. This includes construction workers, fishers, miners, technicians and

mechanical workers in the area.

 Customers who need assistance in planning a project/repair Group – This

customer group is the least knowledgeable group of consumers into buying and

using hardware materials. The service and expert advice of the store workers are

extremely needed in this market segment.

Demand Study

The data below presents the result of survey and interview conducted by the

researcher and the analysis of information gathered.

I. Socio-economic Profile of the Target Market

a. Sex

Distribution of the sex of the resident customers of Bgry. San Ramon shows that

there are more male consumers purchasing hardware products than female. A total of

85% of male customers have been identified by the study as the dominant group of

consumers.

Sex Frequency Percentage

Male 190 85%
Female 33 15%
Total 223 100%

Table 2: Distribution of hardware products consumers by sex in Brgy San Ramon,

Rapu-Rapu, Albay: 2020

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b. Marital Status

The majority of the hardware products consumers in Brgy. San Ramon are

married. They composed the 80% of the total respondents. Least are recorded to be

single and having other status such as widowed which constitute the 14% and 6% of the

hardware products consumers respectively.

Marital Status Frequency Percentage

Married 178 80%
Single 31 14%
Others 14 6%
Total 223 100%

Table 3: Distribution of hardware products consumers by marital status in Brgy. San

Ramon, Rapu-Rapu, Albay: 2020

c. Age

Majority of the hardware products consumers in Brgy. San Ramon are 25-54

years old which is known as the prime working age group. They comprised the 66% of

the total potential consumers in the locality.

Age Frequency Percentage

Below 14 years old 0 0%
15- 24 years old 31 14%
25-54 years old 147 66%
55-64 years old 38 17%
65 years old and over 7 3%
Total 223 100%

Table 4: Distribution of hardware products consumers by age in Brgy. San Ramon,

Rapu-Rapu, Albay: 2020

d. Educational attainment

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 Dominant population of hardware products consumers in Brgy. San Ramon are

elementary graduates. They captured the 65% of the total consumers in the studied

market. They are followed next by consumers having secondary educational attainment.

Least has been recorded to have tertiary and higher educational attainment as they only

consist of 3% and 1% of the gathered data respectively.

Educational Attainment Frequency Percentage

Primary 145 65%
Secondary 69 31%
Tertiary 7 3%
Others 2 1%
Total 223 100%

Table 5: Distribution of hardware products consumers by educational attainment in

Brgy. San Ramon, Rapu-Rapu, Albay: 2020

e. Occupation

Hardware products consumers are majority employed. They composed 76% of

total purchasers in the locality. Other consumers recorded to be unemployed (13%) and

students (11%).

Occupation Frequency Percentage

Employed 169 76%
Unemployed 29 13%
Students 25 11%
Total 223 100%

Table 6: Distribution of hardware products consumers by occupation in Brgy. San

Ramon, Rapu-Rapu, Albay: 2020

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 Below data presents the earning capacity of the consumers of hardware products

of the barangay. The table below shows that 58% of the consumers are recorded to

have P600 and above weekly wage. While remaining employed consumers respond

that they are earning P500, P400 and P300 below weekly.

Weekly wage (employed) Frequency Percentage

P300 32 19%
P400 14 8%
P500 25 15%
P600 and above 98 58%
Total 169 100%

Table 7: Distribution of weekly wage of employed consumers of hardware products in

Brgy. San Ramon, Rapu-Rapu, Albay: 2020

Consumer Behavior

The data below presents the respondents consumption pattern and behavior in

purchasing hardware products as well as their perception in the construction and

operation of the proposed business.

1. How often do you buy hardware products in a month?

The figure below shows that most consumers buy hardware products twice a

month. A total of 120 respondents (54%) answered that they purchase the materials at

least two times a month. It was followed with consumers purchasing hardware products

once a month and least have been reported buying thrice or more in a month.

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 140

120
120

100

78
80

60

40

20 17
8
0
once a month twice a month thrice a month more than thrice a
month

Figure 5: Distribution of respondents’ frequency in buying hardware products in Brgy.

San Ramon, Rapu-Rapu, Albay: 2020

2.How do you purchase your hardware product needs?

Majority of consumers of hardware products in the area personally go to city

hardware stores to buy their hardware needs (70%). It was followed by consumers

asking someone’s help to purchase their hardware materials (28%) which commonly

known or termed as “pasaod/pasabuy” and quite common in the residents because the

distance of the island from the city is too far. Least have been recorded searching

hardware products in the locality (2%) since there are none or at least very few stores

180 which sale

160 156

140 hardware products

120
100 in the area.
80
62
60
40
20 5
0
Personally going to the Asking favor from someone Finding anything available
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city's hardware stores to buy the hardware in the locality
products in the city
 Figure 6: Distribution of respondents’ mode of purchasing hardware products in Brgy.

San Ramon, Rapu-Rapu, Albay: 2020

3. How do you find the construction/establishment of a hardware retail store in the

locality?

Dominant population of the target consumers have a positive response in the

establishment of a hardware retail store in the area. A total of 164 respondents find it

very helpful to have the store. This composed 74% of the total survey. Twenty-one

percent (21%) finds it moderately helpful and 5% opined that the construction of the

store is not necessary in the target area.

180
164
160

140

120

100

80

60
47
40

20 12

0
Very helpful Moderately helpful Not so helpful Page | 26
 Figure 7: Distribution of respondents’ opinion in establishing a hardware store in Brgy.

San Ramon, Rapu-Rapu, Albay: 2020

Competitive Condition

A close look at the industry of hardware stores shows that there exists a stiff

market competition in this sector as a lot of retailers are joining the market to compete

with industry’s big players. However, in the target location of the proposed business,

there exists no immediate local competition since it was going to be the first local

hardware store in the area. The firm will have a complete monopoly of the target

barangay and its adjacent barangay unless a new hardware store/s will be built in the

locality.

Products/ Services

Engr’s Ware hardware retail store will offer the basic and essential hardware

needs of the local customers. It will also provide expert advices and assistance to the

customers in purchasing and delivering their hardware products. The store’s products

will be purposely divided into three categories: the General Hardware and Hand Tools,

Structural materials, and Finishing materials section.

The following are sample products included in each category:

General Hardware and Hand Tools Section

 Hand tools such as:

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 Screw drivers

Tape measures

Claw hammer

Pliers

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Page | 29
Utility knife

Flashlight

Wrenches

Pry bar

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 putty knife

Handsaw

Clamps

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 Wire cutters

Caulk gun,

Round-tipped shovel and safety gear

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General hardware such as:

Braces

Fasteners

Hasps

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Structural Materials Section

Lumber and Wood

Gravel and Sand

Page | 34
 Hollow Blocks

Steel bars

Galvanized iron and roofing

sheets

Page | 35
 PVC and GC Pipes

Finishing Materials Section

Plumbing materials

Paints

Page | 36
 Electrical and wiring

fixtures

Ceramics

Glass

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 Aluminum

Marketing Strategy

Although the proposed business when established, will already have the

advantage of capturing almost the total sales of hardware products in the target locality,

it still needs a marketing strategy. The importance of having a marketing strategy even

for a business without nearby competitors is that, it gives the firm the opportunity to

brand its name to its potential customers which ultimately produce customer retention

and loyalty in the long run that prevents or at least minimizes the probability of the firm’s

losing customers when other firms of the same line of business started to emerge.

Engr’s Ware aims to create a personal client relationship with its consumers. It plans to

formulate a customer service strategy which end-goal is to have the maximum

satisfaction of the customers after every transaction. The researcher firmly believes that

when the business way of operation is aligned with the goal of providing customer’s

satisfaction, it will naturally attract customers that will stay with it for a lifetime. The store

will also strategize in having the best quality hardware products it can acquire from the

Page | 38
largest hardware suppliers of the City of Legazpi. The purpose of this is to enable the

customers to realize that they can already buy the same quality hardware materials they

need in the locality. Aside from quality, pricing will be the main consideration of the

store. The price discrepancy of the store’s hardware products and those available in the

city will only be slight and will only reflect what our customers had paid for the

convenience and satisfaction they experience from buying of the product in the store. In

view of that, the prices of store’s hardware products will always conform to the

prevailing market price. In the first month, the store will sell its essential and commonly

used hardware products in much lower price to help customers familiarized with how the

stores operate thereby initiating client relationship with them. Aside from market

penetration and price determination, the store also aims to strategize its market

development. For the first year of business operation, the store will determine the actual

purchasing pattern and behavior of its customers. It will assess what hardware products

are most needed and least bought by the customers so that it will know what supplies

are to increase, decrease and phase out thus, maximizing store’s resources. When the

store has able to secure its operation and income generation, it will start to shift its focus

on expanding the business to the neighboring barangays of Batan Island.

In summary, these are the specific marketing strategies Engr’s Ware intends to

implement:

 Introduce the hardware store to the locality by sending letters alongside with

store’s pamphlets and brochures to residents of Brgy. San Ramon and its

adjacent barangays.

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  Ensure that the store always have the supplies of the essential and commonly

used hardware materials in the locality.

 Create the store’s personality by having store monthly themes and concept.

 Position store’s signage/flexi banners at strategic locations of the barangays.

 Make a loyalty plan package for regular customers that provides discounts and

freebies in exclusive items.

 Engage with some of the activities of the barangays to further promote the store’s

publicity.

Advertising and Promotion

The following are the Engr’s Ware proposed steps in promoting and advertising

its products:

 Distribution of pamphlets and brochures to the residents of the target barangays

at the first month of business operation.

 Positioning store’s signages and banners in strategic areas of the barangays.

 Referrals from our regular customers who personally experience the store’s

service to promote publicity since internet platforms are futile in an island that

have rotational electricity supply and weak internet signal.

Distribution Strategy

Primarily, the products will be available in the store at the customer’s visit.

However, the store offers option for customers to have their hardware needs deliver

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door to door at reasonable delivery charge. They will deliver by means of motorcycle

since some areas have stiff roads.

CHAPTER V

Financial Study

This chapter discusses the financial aspect of the proposed business, the capital

needed, sources of such capital, returns on investment, and other financial

considerations. It also includes the balance sheet, income statement, cost expense

schedule, cost of goods and the cost of sales. The researcher projected a three-year

financial statement to determine the profitability of the store in the area.

Initial Capital Requirement

The proponent-researcher will raise an initial capital of P350,000 for the

establishment of the hardware business. The basis for such amount is the surveyed

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minimum P300,000 capital needed in operating the business with contingency for other

expenses. It will come from the personal savings of the proponent-researcher.

Cost and Expense Schedule

Schedule 1: Rent Expense

Monthly Annual
P 2,000 P 24,000

Table 8.1: Rent

Schedule 3: Salaries and Wages Cost  

Position Monthly Cost Annual Cost
Manager 8,400 100,800
Cashier 3,500 42,000
Helper 3,500 42,000
Total P 15,400 P 184,800

Table 8.2: Salaries and Wages

Schedule 4: Office Supplies    

Item Quantity Price Annual Cost
Official Receipt 3pcs 300 3600
Record Book 30 sheets 20 240
Ballpen 10 pcs 120 1440
Bondpapers 1 ream 150 1800
Stapler 2 pcs 70 840
Staple wires 10 boxes 100 1200
Total   P 760 P 9,120

Table 8.3: Office Supplies

Schedule 5: Packaging      
Item Quantity Price Monthly Cost Annual Cost
Paper Bag 50 20 1000 12,000
Box 30 5 150 1800
Total     P 1150 P 13,800

Table 8.4: Packaging

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Schedule 6: Transportation Cost  
Monthly Annual
Item Cost Cost
Purchasing of Hardware Products in the City Market
Expense 600 7,200
Total P 600 P 7,200

Table 8.5: Transportation Cost

Schedule 7: Promotional Expense    

No. of
Item Cost Months Annual Cost
Flyers 250 1 250
Brochures 350 1 350
Signage/Banners 700 1 700
Total P 1300   P 1300

Table 8.6: Promotional Expense

Schedule 8 : Furniture Expense      

Quantit Estimated Depreciation
Item y Price Amount Useful Life Expense
Display cabinet 3 3500 10,500 3 3500
Storage cabinet 5 5000 25,000 3 8333.33
Table 1 3000 3000 3 1000
Office chair 2 2000 4000 3 1333.33
Ceiling Fan 2 500 500 3 166.66
Total     P 43,000   P14,333.32

Table 8.7: Furniture Expense

Schedule 9: Equipment    
Item Quantity Price Amount
Laptop 1 P 25,000 P 25,000

Table 8.8: Equipment

Schedule 10: Depreciation

Expense      
  Cost Estimated Depreciation    

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 Useful
Life
Item     2020 2021 2022
Furniture
Equipment 43,000 3 14, 333.33 28, 666.66 42, 999.99
Office
Equipment 25,000 5 5,000 10,000 15,000
Total     P 19,333.33 P 38,666.66 P 57,999.99

Table 8.9: Depreciation Expense

Statement of Goods Sold

Statement of Cost of Goods Sold    

    2020 2021 2022
Beg. Inventory      
Add        
Cost of Good
Purchased 137,100 141,062 145,000
Overhead        
Packaging   7,000.00 7,000.00 7,000.00
Cost of Good Sold P144,100 P 148,062 P 152,000

Table 9: Statement of Goods Sold

Projected Demand and Sale for 2020-2022

Projected Demand for 2020-2022

Demand 2020 2021 2022
General Hardware and
Handy Tools 25,600 26,850 28, 450
Structural Materials 22,350 23,700 24,400
Finishing Materials 19,700 20,100 21,900

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 Total P 67,650 P 70,650 P 74,750

Table 10: Projected Demand for 2020-2022

Projected Sales for 2020-2022  

Sales      
Demand 2020 2021 2022
General Hardware and
Handy Tools 172,000 174,900 176,500
Structural Materials 160,000 163,500 166,900
Finishing Materials 156,400 158,800 160,000
Total 488,400 497,200 503,400

Table 11: Projected Sales for 2020-2022

Projected Income Statement

Engr's Ware Projected Income Statement    

For the Year ended Dec. 31, 2020-Dec. 25,2022  
       
  2020 2021 2022
Sales 488,400 497,200 503,400
Less: Cost of Goods Sold 144,100 148,062 152,000
Gross Income 344,300 349,138 351,400
       
Less: Operating Expense    
Rent 24,000 24,000 24,000
Salary 184,800 184,800 184,800
Office Supplies 9,120 9,120 9,120
Transportation Expense 7,200 7,200 7,200
Promotional Expense 1,300 1,300 1,300
Depreciation Expense 14,333.32 14,333.32 14,333.32
Total Operational Expense 240,753 240,753 240,753
Income Before Tax 103,547 108,385 110,647
Less: Income Tax 33,135.04 34,638.20 35,407.04
P70,411.9
Net Income 6 P73,701.80 P75,239.96

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 Table 12: Projected Income Statement for 2020-2022

Projected Statement of Cash Flow

Engr's Statement of Cash Flow    

For the Year ended Dec. 31, 2020-Dec. 25,2022  
       
  2020 2021 2022
Cash Inflow      
Cash Beg.   384,944.96 466,224.76
Initial Capital 350,000    
Sales 488,400 497,200 503,400
Total Cash Inflows 838,400 882,144.96 969,624.76
       
Less: Cash Outflows      
Purchase of Fixed Asset 43,000    
Cost of Goods/Products 137,100 141,062 145,000
Packaging 13,800 13,800 13,800
Salary and Wages 184,800 184,800 184,800
Office Suplies 9,120 9,120 9,120
Rent 24,000 24,000 24,000
Transportation expense 7,200 7,200 7,200
Promotional Expense 1,300 1,300 1,300
Income Tax 33,135.04 34,638.20 35,407.04

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Total Operating Expenses 453,455.04 415,920.20 420,627
P384,944.9
Cash Balance, End 6 P 466,224.76 P 548,997.76

Table 12: Projected Statement of Cashflow for 2020-2022

Projected Balance Sheet

Engr's Ware Projected Balance Sheet    

As of Dec. 31, 2020-Dec. 25,2022    
  2020 2021 2022
Assets      
Current Assets      
Cash P384,944.96 P466,224.76 P 548,997.76
Total Current Assets 384,944.96 466,224.76 548,997.76
       
Non-Current Assets      
Furniture and Fixtures 43,000 43,000 43,000
Office Equipment 25,000 25,000 25,000
Total 68,000 68,000 68,000
Less: Accumulated
19,333.33 38,666.66 57,999.99
Depreciation
Total Non-Current Assets 48,666.67 29,333.34 10,000.01
       
Total Assets 433,611.63 495,558.10 558,997.77
       

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 Liabilities and Equity    
Current Liabilities      
       
Equity      
Initial
350,000 433,611.63 495,558.10
Capital/Contribution
Add: Net Income 83,611.63 61,946.47 63,439.67
Total Liability and Equity
P433,611.63 P 495,558.1 P 558,997.77
end

Table 13: Projected Balance Sheet for 2020-2022

CHAPTER VI

Management Study

This chapter discusses the management and organizational set-up of the firm. It

provides the prescribe roles and responsibilities of the employees in the organization. It

also provides the flow of authority, manpower level requirement, and qualification of the

employees in order to determine the operational effectiveness of the business set-up.

Form of Ownership

The proposed business is a sole proprietorship where herein proponent-

researcher will be the sole owner and trader of the hardware products in the target

area.

Organizational Chart

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 Owner

Manager

Cashier Helper

Job Analysis

Manager

Job Description:

 Delegating responsibilities and supervising business operations

 Monitoring store activity

 Purchasing product supplies and ensuring product quality

 Ensuring clean workplace

 Generating and presenting business reports to owner

 Resolving conflicts or complaints from customers and employees

 Ensuring staff members follow store policies and procedures

 Establishing and achieving business and profit objectives

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  Other duties to ensure the overall success of the business

Job Qualifications:

 Bachelor’s Degree in Business, Management, or related field.

 Male or female, from 22-40 years old.

 Strong understanding of business management, financial, and leadership

principles.

 Excellent communication and leadership skills

 Time and project management skills.

 With pleasing personality.

Salary Scale: P 8,400 monthly

Cashier

Job Description:

 Handling cash or credit transactions with customers

 Scanning goods and collect payments

 Ensuring pricing is correct

 Issuing change, receipts, refunds, or tickets

 Redeeming stamps and coupons

 Making sales referrals, cross-sell products and introducing new ones

 Bagging items carefully

 Greeting customers when entering or leaving establishment

 Keeping reports of transactions

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  Answering customers' questions and get a manager if answer doesn't solve the

issue

 Pleasantly dealing with customers to ensure satisfaction

Job Qualifications:

 Must be a graduate of any 4-year business related course

 Male or female, from 21-30 years old

 At least 2 years working experience

 Good moral character

 Pleasing personality

Salary Scale: P 3, 500 monthly

Helper

Job Description:

 Assisting product purchase

 Unloading and loading products in warehouse storage

 Setting up/checking equipment

 Cleaning store

 Delivering products to customers

 Assisting other related task

Job Qualifications:

 At least 2 years working experience in hardware store

 Hardworking

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  Pleasing personality

Salary Scale: P 3, 500 monthly

Store Policies

 Strictly follow store working schedule

 Observe safety precautions to avoid accidents

 Ensure equipment are turned off when not in use

 All employees may be requested to work overtime provided communicated with

manager on reasonable scheduling requests.

 Any and all overtime hours must be scheduled and approved and must be part of

the written schedule and manager will be required to sign off with the payroll

processing on any deviation from the written schedule.

 Any Absent Without Official Leave (AWOL) without valid reason is subject to

disciplinary actions

 All sick leave shall be informed to manager/owner 3 hours before the schedule

shift

 Late arrival to work is subject to disciplinary action and wage deduction

 Employee is granted one-hour lunch break.

 Employee is entitled to received holiday pay during legal holidays

 Employee requesting a leave of absence must submit his/her request to manager

and the grant will be wholly within the discretion of the manager

 Every employee is subject to performance review once a year and will be use as

basis for wage increase

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  Additional reviews may be scheduled whenever management deems it

necessary, or at the discretion of management when requested by the employee.

 Smoking, drugs and alcohol are strictly prohibited in the workplace

 Sexual harassment and other forms of unlawful harassment are strictly

condemned in the business

CHAPTER VII

Socio-economic Study

This chapter shows the benefit of this project to the community, economy and the

government. The proposed business primarily aims to help residents in the target

barangays of Batan Island to completely solve or at least lessen the costs and

unnecessary inconvenience from purchasing hardware products in the city market. As

the pioneer hardware store in the target barangay, the business is committed to

providing quality hardware products and services to customers at reasonable price.

Contribution to the Economy

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 The proposed business is expected to produce employment in the target locality.

This will give the hired employees and their families source of income to sustain their

household and personal needs. As part of a major growth-driven industry, the business

will help spur economic growth.

Contribution to the Government

The tax payment of the business will help the government generate higher funds

to sustain its projects and investments in the form of national revenue.

Contribution to the Society

The proposed business will help the community by supplying its people quality

hardware products and excellent services. The proposed hardware store will promote a

material consciousness and a mechanical sensibility. It is vital to the society because

infrastructures will never be constructed without the use of hardware products.

CHAPTER VII

Conclusion and Recommendation

Conclusion

Based on the foregoing research study, the proponent concludes that the

establishment of the proposed hardware store in the locality is feasible and viable to the

target location.

Recommendation

After the overall assessment and analysis of the significant factors in the study

such as the technical, marketing, financial, management and socio-economic aspects of

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the study, herein proponent recommends that the Engr’s Ware hardware store be

established and operate in Brgy. San Ramon, Rapu-Rapu, Albay.

References

1
Mattern, S. (2018, July). Community Plumbing: How the hardware store orders things,

neighborhoods, and material worlds. Retrieved from

https://placesjournal.org/article/community-plumbing-a-history-of-the-hardware-store/?

cn-reloaded=1
2
2017 Annual Survey of Philippine Business and Industry (ASPBI) - Construction

Sector: Final Results. (2020, February 12). Retrieved from

https://psa.gov.ph/construction/aspbi-id/160048

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