A Feasibility Study on

Moda e Bella

The Feasibility of Online Selling of an Ukay-Ukay Business

Located in Poblacion II, Oroquieta City

In Partial Fulfillment of the Requirements for Management Consultancy (AE 28) Subject for

Bachelor of Science in Accountancy

Submitted by:

Looc, Myril Shyane M.

Ritcha, Rian B.

Submitted to:

Mr. Eleuterio Blasco Jr., CPA, JD

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 ACKNOWLEDGEMENT

This project feasibility study would not have been possible without the guidance and the

help of several individuals who in one way or another contributed and extended their valuable

assistance in the preparation and completion of this study. The completion of this feasibility study

was made possible through the encouragement and assistance of some persons who have given

their time and solicited advice to this study:

Mr. Eleuterio Jr. Blasco, our teacher, for his patience and guidance, encouragement and for

sharing his expertise in writing this feasibility study;

To our parents, who gave us life and guided us ever since we were born, and for the

financial and moral support;

To our friends, who are always there for us, to our classmates who gave us inspiration and

support to finish this study; and

Above all, to our Almighty Father, for His abundant graces and blessings showered to us

and our families for the strength and ability and His guidance for us to finish this study.

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 TABLE OF CONTENTS

Chapter 1: Introduction 1 - 8
Background of the Study 1 - 2
Statement of the Problem 2
Objectives of the Study 3 - 4
Marketing Objectives 3
Management Objectives 3
Technical Objectives 3
Financial Objectives 4
Significance of the Study 4 - 5
Scope and Limitation of the Study 5
Methodology 6 - 7
Research Design 6
Research Procedure 6 - 7
Data Gathering and Analysis 7
Sampling Procedures 7
Review of Related Literature 7 - 8
Definition of terms 8
Chapter 2: Marketing Aspect 9 - 15
Market Description 9
Comparison of Product with its Competitors 9 - 10
Location 10
Demand 10 - 11
Historical Demand 10 - 11
Projected Demand 11
Supply 11
Historical Supply 11
Projected Supply 11
Marketing
Mix 12 - 13
Price 12
Product 12
Promotion 13
Distribution 13
Sales
Revenue 13
Year 1 13 - 14
Sales Revenue Forecast
Year 2 14
Year 3 15
Summary of Sales 15
Chapter 3: Organization and Management Aspect 16 - 18
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 Form of Business Enterprise 16
Mode of Financing 16
Management and Organization Structure 16
Management Qualifications and Functions 17 - 18
Chapter 4: Technical Aspect 19 - 28
Store Layout 19
Fixed Capital 19 - 20
Life of Fixed Capital 20 - 21
Total
Purchases 21 - 22
Year 1 21
Year 2 21
Year 3 22
Utility
Expense 22
Projected Utilities Expense 22 - 23
Rent Expense 23
Repairs and Maintenance 23 - 24
Supplies 24
Projected Store Supplies Expense 25
Business Permit and Licenses 25
Transportation Expense 25 - 26
Advertising Expense 26
Salaries and Wages 26 - 27
Projected Salaries and Wages 27
Benefits Contribution 27
Projected Contribution 28
Summary of Expenses 28
Chapter 5: Financial Aspect 29 - 33
Total Projected Cost 29
Projected Income Statement 30
Projected Cash Flow 31
Projected Balance Sheet 32
Financial Ratio Analysis 32
Gross Profit Ratio 32
Net Profit
Ratio 33
Return on Investment 33

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 CHAPTER ONE

INTRODUCTION

Background of the Study

A study conducted by Abueg (2010), says that selling second-hand clothes or the so-called

ukay-ukay/thrift store is very rampant all over the Philippines. It shows that the primary factor why

many people choses to buy is its affordability and availability of branded items . Since the

pandemic has shattered and affected the world, businesses seek different ways for the survival of

their business. As physical stores close from time to time, online stores have found their best way

to attract customers. This idea came to the aspiring micro-entrepreneurs to engage in this kind of

activity and started the bloom of online selling. Putting up online stores and doing live selling is a

kind of strategy that some businesses engage in, thus giving ideas to the researchers to find its

feasibility and effectiveness when applied to ukay-ukay business.

As entrepreneurs, retailers conducted some strategy through inventory turnover and quick

circulation from racks to stock and also provided affordable prices to approach various types of

customers. Since the situation of business has been affected by sudden changes, this study aims to

learn how ukay-ukay business owners deal with the change of the market environment and also

assess if they have engaged in online selling and its outcome.

In this kind of business, owners tend to strengthen their bond with their customers through

being hospitable and complying with their requests (Han, 2013) and since physical contact with

customers are controlled researchers aim to learn how these owners invite customers considering

their safety and how they can assure their loyalty.

This sudden change is a challenge especially in this kind of business that leads researchers

to be determined to know what other strategies owners applied to save their business and aims to

1
give them ideas and hints if the online selling strategy is feasible that could help their business to

continue amidst any crisis.

Statement of the Problem

As the market widens its scope, the competition among business gets tight and the rivalry

has gone stronger. This has also been challenged by the pandemic crisis and led businesses to

formulate effective strategies that could keep them not just amidst the crisis but also throughout

the business cycle. Ukay-ukay business depends on the willingness of the customer to buy their

product and it is already known that their way to keep these customers on patronizing their store

is by giving it off with a very cheap price. However, customers also look for the quality of the

product and bargain with their willingness to pay. But as online shops started to bloom, ukay-ukay

stores are slowly losing their fame and attractiveness to customers. Hence, this feasibility study

tends to learn if the online selling of ukay-ukay garments is feasible and effective. In addition, this

study includes the other factors a business owner would consider in engaging in online business.

Aside from the pandemic crisis, different competitors of selling garments arose having

lower prices of ready to wear clothes making the ukay-ukay business become a second choice since

ukay-ukay- is an already used garment. The rivalry somehow caused the ukay-ukay business to

lose its appeal towards the new generation. A kind of situation like this pressures thrift stores to

improve their store ambiance and product qualities while maintaining the kind of price system they

do.

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Objectives of the Study

The following is the marketing objectives of this study

1. To determine the market demand and supply of ukay-ukay business in

Oroquieta City.

2. To formulate a marketing mix (Price, Product, Promotion, and Distribution)

to make online selling ukay-ukay competitive in the market.

3. To determine the most accessible specific location around the market.

The following is the management objectives of the feasibility study.

1. To identify supplies and sources needed in engaging this business.

2. To identify the number of workers needed to ensure the collaboration of

work and job satisfaction.

3. To determine the competitive remuneration for the worker/s.

The following is the technical objectives of this feasibility study.

1. To identify the best platform to use in conducting online selling.

2. To formulate the operational process in selling the ukay-ukay online.

3. To formulate ideas in how to retain customers and ensure their trust and

loyalty.

4. To identify the operational and legal requirements needed in this two-way

business.

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 The following is the financial objectives of this study

1. To assess a business’ possible profit raise upon engaging in this online ukay-

ukay business.

2. To identify the financial assumptions for the development of the financial

statements.

3. To prepare projected financial statements for the online ukay-ukay business

in Poblacion I, Oroquieta City.

Significance of the Study

This part shows the purpose and the benefits upon completion of this study. The following

are the possible beneficiaries of this feasibility study conducted.

This study will benefit the researchers in identifying the pros and cons of having online

ukay-ukay business. The purpose of this research is to determine the feasibility and effectiveness

of online selling of ukay-ukay garments.

This study also benefits the ukay-ukay entrepreneurs by giving them the idea on how to

manage their business, and to help them in their steps to upgrade their simple business to the online

world. This feasibility study would be their starting basis for the innovation of their business

structure. The transition of their business would be a challenge especially to those not tech savvy

owners therefore, included in this feasibility study is the hiring of workers and their respective

responsibility.

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 Another beneficiary of this feasibility study are the customers since this transition of

business structure would be more convenient, especially millennial patrons of ukay-ukay clothing.

This study is beneficial to customers since they should be the first to know the essential matters

concerning the things they usually purchase.

Lastly, this study is beneficial to the business industry since this will let entrepreneurs and

aspiring entrepreneurs on how to manage and run an online clothing business as well as have an

overview in this kind of business. This can also provide competitors with a different approach to

overpass the competition.

Scope and Limitation of the Study

This feasibility study is expected to be conducted in Poblacion II, Oroquieta City wherein

most businesses are located and the numbers of ukay-ukay stores are enough to have multiple

choices. Moreover, this study will cover those entrepreneurs who see this business transition as an

opportunity for the growth of their business. As a supporting idea, this study also includes online

sellers which sell ready to wear clothes and also pre-loved garments.

Some of the expected constraints include the reluctance of business owners to participate

and also those who will neglect the idea due to different reasons. At the same time, the responses

of the online sellers would also be a challenge since researchers cannot assure their availability to

participate in this study.

Customer responses will be collected from residents of Oroquieta City and other

neighboring municipalities regardless of age, gender, social and economic status, concluding that

these respondents are familiar with the online market.

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Methodology

Considering today’s situation, the researcher will utilize online platforms in gathering data

by sending out online survey forms to the chosen customer respondents. Also, researchers

conducted an online interview to two or more online sellers whose primary products are clothing

whether brand new or pre-loved. To ensure everyone’s safety, no face to face acquisition of data

is conducted.

Research Design

The study employed the feasibility study design which involved an extensive and

systematic analysis of all factors affecting the market, financial, technical and management success

of the proposed marketing strategy.

Research Procedure

1. Outlining the project scope and conducting current analysis.

2. Comparing the proposal to the market

3. Examine market conditions

4. Understanding the financial costs

5. Reviewing and analyzing data.

Data Gathering and Analysis

The researchers used survey questionnaires to collect information from the prospective

customers. These customers are residents from Oroquieta City and from neighboring

municipalities which have easy access to Oroquieta City.

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 Online interview is conducted to online sellers whose business line is clothing and

garments whether brand new or pre-loved. This is to gather accurate data from first hand

experiences of online selling.

Sampling Procedures

The researchers used the descriptive and correlational type of research and questionnaire

for the survey. In selecting the sample, the researchers used a random sampling method. The survey

was conducted by the researchers. Researchers give unbiased opinions in assessing the samples

and present the closest accurate result.

Review of Related Literature

The ukay-ukay clothing business has already occupied the hearts of many Filipinos. It is

already known to the Philippines as a cheap but fashionable source of clothes. Its bad reputation

does not stain its name for the Filipinos despite it being harmful and worn out as they say. The

spread of ukay-ukay shops has become a norm among Filipinos. With its cheap and affordable yet

still having that quality people look for, ukay-ukay will always be an option for the people.

The sustainable fashion theory includes that for fashion to be sustainable, it must consider

the economic, environmental, cultural, and social objectives (Wang et. al, 2019). In this research,

researchers conclude that ukay-ukay can actually be an alternative model for sustainable fashion.

The market for secondhand garments originated in Baguio City, Benguet. This business wasn't

moved even if the Republic Act 4653 (ratified July 1966) had been enacted which imposed the

confiscation and/or burning of such imported commodities. Filipinos believed that there is no clear

implementation of this law thus making the ukay-ukay business looks legal (Abueg, 2005).

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 As online business has already made its name to the market, (B Kurniawan and N M

Gunawan, 2019) stated that most online sellers use their social media as promotional media and

websites because of its easy use and accessibility. According to them, most users of online business

are students and they prefer to be in this business to utilize the technology in the market. Kozinets,

R.V et al states how marketers use social media marketing methods facing the situation of network

shipping and presented a study of marketing campaigns where mobile phones are primarily used

for blogging and online marketing. Soegoto and Akbar, 2018 concluded in their research that the

internet plays an important role in this new business era and in the increasing of sales and purchase

transactions.

Definition of terms

strategy - n. a plan of action or policy designed to achieve a major or overall aim.

online business - a business conducted entirely on the internet.

marketing - n. the action or business of promoting and selling products or services, including

market research and advertising

ukay-ukay - a Philippine store where secondhand items such as clothes, bags, shoes, and other

accessories are sold at a cheap price.

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 CHAPTER 2

Marketing Aspect

Market Description

Second-hand retailing can has been very popular in the business industry. From the start

of its bloom until many entrepreneurs find it a good choice to start a business. However, Han

(2013) making suitable business strategies and customer service has not been recognized since

retailers lack enough information which made it difficult to diverse business management styles,

marketing strategies and challenges of second-hand retailers. As time passes by, competition in

this area of the business line has widened giving customers many options making it challenging

for sellers to take risk in innovation.

Moda e Bella, from its english term, “beautiful fashion” is a clothing store which sells

second-hand clothes or as we call it ukay-ukay. This is not a common ukay-ukay store as owners

also engage in the new market trend which is online selling. This shop sells fashionable and

affordable ukay-ukay with excellent quality that would obviously let the customer join the fashion

trend. Moda e Bella aims to attract customers who are fond of buying clothes both on physical

stores and online. Utilizing the rise of new technology, Moda e Bella’s target market is not only

people living in Oroquieta City but even from neighboring municipalities which could be reached

via online platforms.

Comparison of Product with its Competitors

Moda e Bella assures customers with best quality products that would not be out of style.

Moreover, the online selling could be an advantage from local competitors since it could widen

the scope of the said business. With products of good quality, fashionable and are handled properly
9
that would not make it obvious that it is a second-hand clothes, Moda e Bella’s products will make

its name to the market.

Location

The proposed business will be located in Poblacion II, Oroquieta City, along the National

Highway fronting Stella Maris College Diamond 1. The said space was once rented by a printing

and photocopy purposes named JDT & Pharma.

Figure 1

Demand

Historical Demand

From research conducted about ukay-ukay in Oroquieta City, it is found that the majority

of young females have patronized ukay-ukay clothes and are willing to buy such items. Moreover,

it is found that during those times, consumers prefer to buy clothes from small stores where it is

more accessible and convenient to go. A higher percentage of the respondents say that they found

ukay-ukay clothes appealing which is a positive feedback to this proposed business. Majority of

10
the targeted customers are young females especially college students who find ukay-ukay clothes

affordable yet fashionable.

Projected Demand

For the computation, researchers gather data through surveys and randomly selected

samples as the basis for the demand analysis of the proposed business. Majority of the respondents

were aged 20 and above which shows their willingness to buy ukay-ukay clothes.. 96.6% are

familiar with online shops and 75.9% say they buy online occasionally. This said conclusion and

analysis could be used as a basis of the longer demand of ukay-ukay online since it has been already

introduced to the public and was patronized by most of the young-adult consumers.

Supply

Historical Supply

For the historical supply, the researchers interviewed one (1) existing business with the

same nature located at Poblacion II, Oroquieta City. From the gathered data, they acquire supply

through bulk orders coming from different suppliers. Since they sell various products, they buy

large bulks with different types of products.

Projected Supply

Moda e Bella aims to sell fashionable clothes and is limited to dress, blouse, jeans and

maong shorts, and men’s t-shirts following the fashion trend. Since, the targeted products are on

these only, supplies would be acquired from online shops who sell particular clothes in line with

the proposed business.

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Marketing Mix

Price

It is already known that ukay-ukay sells cheap, affordable and good quality clothes.

Furthermore, from the survey conducted, 58.6% of the respondents state that they purchase

clothing depending on their budget. This could be a basis for the researcher to retain the usual

pricing of ukay-ukay products which is having low yet justifiable prices of garments.

Table 1

PROJECTED SELLING PRICE

ITEMS YEAR 1 YEAR 2 YEAR 3

Pants 50.00 55.00 60.00

Maong shorts 40.00 45.00 50.00

Blouses and shirts 30.00 35.00 40.00

Men’s t-shirts 25.00 35.00 40.00

Dress 35.00 45.00 50.00

Product

The cleanliness and safety of garments is the owners’ priority. Therefore, before putting

the garments to display, it will be first washed and cleaned by laundry services, then ironed for a

pleasant presentation. Clothes will be checked from possible defects and to make sure it is usable.

Customer’s satisfaction is always considered and with proper arrangement and presentation of

products, it could be easily achieved.

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 Promotion

Ukay-ukay stores usually conduct a price drop every month. In Moda e Bella, aside from

conducting price sales, promoting online through different social media platforms (e.g live selling

in Facebook, posting in marketplace) is done from time to time. This is to make sure that the online

shop could reach beyond the expected customers which brings Moda e Bella’s products right into

their places.

Distribution

89.7% of the respondents consider the shipping fee before finally purchasing the product.

Since the shipment often varies to the distance between the store and the destination, Moda e Bella

aims to give a fair shipment fee by giving considerations to bulk orders. This would mean that

purchasing more products could give customers less shipment fee. Delivering of products is

through delivery businesses such as J&T Express. Shipping fee is shouldered by the buyer.

Sales Revenue

The table below shows the sales revenue of Year 1 of “Moda e Bella” business. The data

stated are based on the computation from the number of pieces purchased per year. Supply

capacity is multiplied by selling price to get the total sales.

Table 2

YEAR 1

Particulars Share in Quantity Selling Price Total Sales

Percentage

Pants 25% 5,000 50.00 250,000

Maong Shorts 10% 2,000 40.00 80,000

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 Blouses and 30% 6,000 30.00 180,000
shirts

Men’s shirts 20% 4,000 25.00 100,000

Dress 15% 3,000 35.00 105,000

Total 100% 20,000 P715,000

Sales Revenue Forecast

The table below shows the sales revenue of Year 2 of “Moda e Bella” business. The data

stated are based on the computation from the number of pieces purchased per year. Supply

capacity is multiplied by selling price to get the total sales.

Table 3

YEAR 2

Particulars Share in Quantity Selling Price Total Sales

Percentage

Pants 25% 5,500 50.00 302,500

Maong Shorts 10% 2,200 40.00 99,000

Blouses and 30% 6,600 30.00 231,000

shirts

Men’s shirts 20% 4,400 30.00 154,000

Dress 15% 3,300 40.00 148,500

Total 100% 22,000 P935,000

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Sales Revenue Forecast

The table below shows the sales revenue of Year 2 of “Moda e Bella” business. The data

stated are based on the computation from the number of pieces purchased per year. Supply

capacity is multiplied by selling price to get the total sales.

Table 4

YEAR 3

Particulars Share in Quantity Selling Price Total Sales

Percentage

Pants 25% 6,000 60.00 360,000

Maong Shorts 10% 2,400 50.00 120,000

Blouses and 30% 7,200 40.00 288,000

shirts

Men’s shirts 20% 4,800 40.00 192,000

Dress 15% 3,600 50.00 180,000

Total 100% 24,000 P1,140,000

Summary of Sales

The table below shows the summary of total sales revenue for the years 1, 2, and 3.

Table 5

YEAR TOTAL SALES

1 715,000

2 935,000

3 1,140,000

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 CHAPTER 3

Organization and Management Aspect

Form of Business Enterprise

“Moda e Bella'' is a sole proprietorship form of business. This is considered as the simplest

form of business organization. It is a type of enterprise that is owned and run by one person and in

which there is no legal distinction between the owner and the business entity. The capital is

provided itself, so as the expense and profit of the business. The overall decision is on the owner

as well as the control of the operation of the firm.

Mode of Financing

The mode of financing is from personal finance of owners. Each owner contributed 50%

to reach the target capital.

Management and Organization Structure

The owners will be the one who manage and decide what will be the activity and operations of the

business. The table below shows the organizational structure of the business.

Figure 2

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Management Qualifications and Functions
The table below shows the qualifications and functions of the workers. This would help them to
know their duties and responsibilities in order to do their tasks properly.
Table 6
Position Job Description
Manager ● Develop business
management goals and
objectives that tend to
growth and prosperity.
● Enforce policy to
cultivate an
environment that
makes employees
accountable for their
actions.
● Communicate and
motivate employees
while establishing
appropriate methods
to evaluate job
performance.
Sales Lady/ Men ● Assist customers and
must be able to answer
questions or concerns.
● Any complaints must
be handled
professionally and
must communicate
properly.
Cashier ● Scan the customer’s
selections, ensure that
prices and quantities
are accurate, accept
17
Job Specification
● Had broad knowledge
in merchandising
business.
● Know how to handle
employees and
customers.
● Establish and maintain
the desired
professional ethos
when in a workplace.
● At least a high school
graduate
● Had knowledge of
customer service and
sales.
● Had experience in
retail business
administration.
● With good manners
and right conduct.
● Have knowledge of
basic accounting.
● Customer service or
cashier experience.
 payments, issue ● Ability to handle
receipts, answer transactions accurately
inquiries, and provide and responsibly.
helpful information to
customers.
● Processing refunds
and exchanges,
resolving complaints.
Also, wrapping
purchases to ensure
safe transport.

Online Selling Staffs ● Assist during live ● Have knowledge how

selling. to pack the items
● Handle the packing as properly.
well as the delivery of ● Have good manners
purchased items. and right conduct.

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 CHAPTER 4

Technical Aspect

Store Layout

Figure 3

FIXED CAPITAL

Table 7

EQUIPMENT

Particulars Quantity Unit Cost Total Amount

Ceiling Fan 2 1,999.00 3,998.00

CCTV 1 10,000.00 10,000.00

Subtotal 13,998.00

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 FURNITURE AND FIXTURES

Table 1 500.00 500.00

Hangers 50 dozens 100.00 5,000.00

Clothes Display Rack 3 3,000.00 9,000.00

Mannequin 2 2,000.00 4,000.00

Chairs 2 350.00 700.00

Body-sized Mirror 1 600.00 600.00

SUB-TOTAL 19,800.00

GRAND TOTAL 33,798.00

Life of Fixed Capital

Table 8

Equipment

Depreciation

PARTICULARS AMOUNT ESTIMATED YEAR 1 YEAR 2 YEAR 3

LIFE OF
ASSET

Ceiling Fan 3,998.00 5 799.60 799.60 799.60

CCTV 10,000 5 2,000 2,000 2,000

Sub-total 13,998.00 2,799.60 2,799.60 2,799.60

FURNITURES AND FIXTURES

Table 500.00 2 250.00 250.00 0

Hangers 5,000.00 4 1,250.00 1,250.00 1,250.00

Clothes Display Rack 9,000.00 4 2,250.00 2,250.00 2,250.00

Mannequin 4,000.00 4 1,000.00 1,000.00 1,000.00

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Chair 700.00 2 350.00 350.00 0

Body-sized Mirror 600.00 4 150.00 150.00 150.00

Sub-Total 19,800.00 5,250.00 5,250.00 4,650.00

Grand Total 33,798.00 8,049.60 8,049.60 7,449.60

Total Purchases
Table 9 (Year 1)

Particulars Quantity Selling Price Original Price Cost of Purchases

Purchases

Pants 5,000 50.00 10 50,000

Maong Shorts 2,000 40.00 10 20,000

Blouses and shirts 6,000 30.00 5 30,000

Men’s shirts 4,000 25.00 10 40,000

Dress 3,000 35.00 10 30,000

TOTAL 20,000 170,000

Table 9.1 (Year 2)

Particulars Quantity Selling Price Original Price Cost of Purchases

Purchases

Pants 5,500 55.00 11 60,500

Maong Shorts 2,200 45.00 11 24,200

Blouses and shirts 6,600 35.00 6 39,600

Men’s shirts 4,400 35.00 11 48,900

Dress 3,300 45.00 11 36,300

TOTAL 22,000 209,000

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Table 9.3(Year 3)

Particulars Quantity Selling Price Original Price Cost of Purchases

Purchases

Pants 6,000 60.00 12 72,000

Maong Shorts 2,400 50.00 12 28,800

Blouses and shirts 7,200 40.00 7 50,400

Men’s shirts 4,800 40.00 12 57,600

Dress 3,600 50.00 12 43,200

TOTAL 24,000 252,000

Utility Expense

Presented in table below is the possible utilities expense to be incurred by the proposed

business and it is estimated to increase 5% per year.

Table 10

Utility Source Basis Rate per Month TOTAL

AMOUNT
(Annually)

Power Supply MOELCI - I Kilowatt hour 1,500.00 18,000.00

Water Supply MOWD Cubic Meters 250.00 3,000.00

TOTAL 21,000.00

Projected Utilities Expense

Table 11 shows the projected utilities expense for the first three years. It is assumed that

the expense will increase by 5% per year.

22
Table 11

PROJECTED UTILITIES EXPENSE

YEAR AMOUNT

1 P 21, 000.00

2 22, 050.00

3 23, 152.50

Rent Expense

Table 12 shows the rent expense of the building where the proposed business will be

located and it is assumed to increase by 5% per year. Rent expense is estimated at 8,000 per

month.

Table 12

PROJECTED RENT EXPENSE

YEAR AMOUNT

1 P 96, 000.00

2 100, 800.00

3 105, 840.00

Repairs and Maintenance

The proponents make sure that they have purchased high quality equipment. This is to

avoid errors in terms of business operations. The proponents decided to allocate P3,000.00 for its

maintenance to make sure that all of the equipment to be used would function well and it was

assumed to increase 10% per year.

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Table 13

PROJECTED REPAIRS AND MAINTENANCE

YEAR AMOUNT

1 P 3,000.00

2 3, 300.00

3 3, 630.00

Supplies

Table 14 shows expenses of supply that will be used by the business. This will serve as a

tool for completing everyday transactions.

Table 14

SUPPLIES EXPENSE

Particulars Unit Cost Quantity Annual Cost

Ball pen 190.00 2 boxes 380.00

Calculator 385.00 2 pcs 770.00

Garbage Bins 105.00 2 pcs 210.00

Dust Pan 150.00 1 150.00

Garbage Cellophane 45.00 2 rolls 90.00

Broom 50.00 2 pcs 100.00

Record Book 160.00 2 pcs 320.00

Plastic Bag 70.00/ream 50 reams 3, 500.00

TOTAL P5, 520.00

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Projected Store Supplies Expense

Table 15 shows the projected store supplies expense of the business. It will increase by

5% per year.

Table 15

PROJECTED STORE SUPPLIES EXPENSE

YEAR AMOUNT

1 P 5, 520.00

2 5, 796.00

3 6, 085.00

Business Permit and Licenses

Table 16 shows the Business Permit and Licenses which are important in the

establishment in order for the starting business to be legal. It is assumed that the business permit

will increase by 5% due to the changes in capital.

Table 16

BUSINESS PERMIT AND LICENSE

YEAR AMOUNT

1 P 3,000.00

2 3,150.00

3 3,307.50
Transportation Expense

Table 17 shows the Transportation Expense of the business which is used in purchasing

necessary material for the operation of the business which is used in purchasing necessary

25
material for the operation of the business and the proponents assume that it will increase by 5%

per year.

Table 17

YEAR AMOUNT

1 P 24,000.00

2 25,200.00

3 26,460.00

Advertising Expense

Table 18 shows the Advertising Expense of the business which will be used for paying

the load expense when promoting the products online and by conducting live selling. The

proponents assume that there is no increase in advertising expenses.

Table 18

YEAR 1 2 3

Total Amount P2, 250.00 P2, 250.00 P2, 250.00

Salaries and Wages

Table 19 shows the salaries and wages of the employees were the monthly salary of

cashier, sales lady/men and staff for online selling.

Table 19

Employees Rate per Day Monthly Salary Annual Salary

Cashier 350.00 10,500.00 126,000.00

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 Sales lady/boy 300.00 9,000.00 108,000.00

Online Selling Staff 300.00 9,000.00 108,000.00

TOTAL 342,000.00

Projected Salaries and Wages

Table 20 shows the projected salaries and wages of the employees where there is an

increase of 5% every year.

Table 20

Employees Year 1 Year 2 Year 3

Cashier 126,000.00 126,000.00 126,000.00

Sales Lady/boy 108,000.00 108,000.00 108,000.00

Online Selling Staff 108,000.00 108,000.00 108,000.00

342,000.00 342,000.00 342,000.00

Benefits Contribution

Table 21

PhilHealth Contribution SSS Premium Contribution

Employees EE Monthly ER Monthly EE Monthly ER Monthly Total Yearly

Share Share Share Share Contribution

Cashier 150.00 150.00 340.00 680.00 9,960.00

Sales 150.00 150.00 300.00 600.00 9,000.00

Lady/men

Online 150.00 150.00 300.00 600.00 9,000.00

Selling Staff

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Projected Contribution

Table 22

Employees Year 1 Year 2 Year 3

Cashier 9,960.00 9,960.00 9,960.00

Sales Lady/boy 9,000.00 9,000.00 9,000.00

Online Selling Staff 9,000.00 9,000.00 9,000.00

27,600.00 27,600.00 27,600.00

Summary of Expenses

Table 23

Operating Expenses

Particulars Year 1 Year 2 Year 3

Depreciation Expense 5,949.60 5,949.60 5,349.60

Utilities Expense 21, 000.00 22,050.00 23,152.50

Repairs and Maintenance 3,000.00 3,300.00 3,630.00

Store Supplies Expense 5,520.00 5,796.00 6,085.00

Rent Expense 96,000.00 100,800.00 105,840.00

Permit and Licenses 3,000.00 3,150.00 3,307.50

Transportation Expense 24,000.00 25,200.00 26,460.00

Benefit Contribution 27,600.00 27,600.00 27,600.00

Salaries and Wages 342,000.00 342,000.00 342,000.00

Advertisement 2,250.00 2,250.00 2,250.00

TOTAL 509,319.60 538,095.60 545,674.60

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 CHAPTER 5

FINANCIAL ASPECT

Total Projected Cost

The proposed business needs 150,000.00 to support the operation of the business.

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Financial Ratio Analysis

In determining the projected performance of the proposed business, the financial rations

are important which will reflect the feasibility of the study.

Gross Profit Ratio

The Gross Profit ratio for the first three years of business operations of the proposed

business are 76%, 78%, and 78% respectively. Below shows the proposed business performance

in the succeeding years.

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Net Profit Ratio

The net profit ratios of the first three years of operation of the proposed business are 2%,

20%, and 29% respectively. Below show the proposed business will be efficient in converting

the sales into actual profit.

Return on Investment

The return on investment results in 8%, 53% and 48% respectively. The computation

shows below.

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