FEASIBILITY STUDY TITLE TYPEWRITTEN IN

INVERTED PYRAMID, 14-POINT, ARIAL,

BOLD, AND ALL CAPS

A Feasibility Study
Presented to the Faculty of the College of Business Administration
AMA Computer College, South Superhighway
Makati City

In Partial Fulfillment of the Requirements for the Degree

Bachelor of Science in Business Administration

By

Name of Researcher 1
Name of Researcher 2
Name of Researcher 3

August 2022

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 TABLE OF CONTENTS

PROJECT BACKGROUND AND HISTORY 1

Introduction 1
Name and Address of Project Promoter 1
Profile of the Business 1
Products and Services 2
Short Term and Long Term Goals 2
Target Market 2
Economic and Industrial Policies Supporting the Project 2

MANAGEMENT FEASIBILITY 3
Introduction 3
Legal Structure of the Business 3
Organization Chart 3
Job Descriptions, Duties and Responsibilities 4
Employee Benefits 4

MARKET FEASIBILITY 5
Introduction 5
Demand Analysis 5
Supply Analysis 5
Sales Forecast 5
Marketing Strategy 6
Marketing Plan 6

TECHNICAL FEASIBILITY 8
Introduction 8
Physical Location 8
Floor Plan (Layout) 8
Description of Products and Services 8
Technology Requirements 9
Machines and Equipment 9
Production Process 9
Production Schedule 9
Inventory Schedule 10
Product Delivery 10
Manpower Requirement 10
Project Timetable (Gantt Chart) 10

FINANCIAL FEASIBILITY 12
Introduction 12
Start-Up Costs 12
Capital Requirement 14
Loan Repayment Schedule 14
Sales Forecast 15
Cost of Sales 15

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 Operating Expense Forecast 15
Projected Income Statement 15
Statement of Financial Position 16
Cash Flow Statement 16
Financial Ratios 16
Liquidity Ratios 16
Leverage Financial Ratios 17
Efficiency Ratios 17
Profitability Ratios 18

SOCIO-ECONOMIC FEASIBILITY 19
Introduction 19
Contribution to the government 19
Contribution to the society 19

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 Chapter 1

PROJECT BACKGROUND AND HISTORY

Introduction
Guide (remove texts in red fonts when done): Write a short introduction on what the chapter is all about
and what are the sections being discussed.

Start writing here…

Name and Address of Project Promoter

Guide (remove texts in red fonts when done): A project promoter is an individual or organization that
helps raise money for some type of investment activity. For this feasibility study, the students are the
project promoters.

NAME ADDRESS

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Profile of the Business

Guide (remove texts in red fonts when done):

● What’s your business proposed business name?

● What’s the formal structure of your business? Are you a sole trader, in a partnership, a trust or
company?
● Where does your business operate from? Include location map.
● Who are the owners of the business? Include capital contribution.
● What is the business’ vision and mission? A Vision statement should describe WHERE you want
your business to be in the future. A Mission statement should outline HOW you will get to where
you want your business to be in the future (Your Vision). It should define the PURPOSE and
PRIMARY OBJECTIVES of your business and answer the question, 'What do we do?'
● What is the business Unique Selling Proposition (USP)?

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Products and Services
Guide (remove texts in red fonts when done): What products and/or services do you sell?

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Short Term and Long Term Goals

Guide (remove texts in red fonts when done): What are three primary short-term goals for your business
(6-12 Months)? What are three primary long-term goals for your business (1-3 Years)? Your objectives
should follow SMART principle (specific, measurable, attainable, realistic, and time-bound)

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Target Market
Guide (remove texts in red fonts when done): A target market is a set of individuals sharing similar needs
or characteristics that your company hopes to serve. These individuals are usually the end users most
likely to purchase your product. It should include some basic demographics like age, gender, education
and income level, geographic location, occupation and marital status.

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Economic and Industrial Policies Supporting the Project

Guide (remove texts in red fonts when done):

The economic policy of governments covers the systems for setting levels of taxation, government
budgets, the money supply and interest rates as well as the labour market, national ownership, and many
other areas of government interventions into the economy (Wikipedia, 2021).

Industrial Policy is defined as the strategic effort by the state to encourage the development and growth of
a sector of the economy. It refers to “any type of selective government intervention or policy that attempts
to alter the structure of production in favor of sectors that are expected to offer better prospects for
economic growth in a way that would not occur in the absence of such intervention in the market
equilibrium” (Pack and Saggi, 2006).

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 Chapter 2

MANAGEMENT FEASIBILITY

Introduction

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Legal Structure of the Business

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Organization Chart

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Insert organization chart here…

Job Descriptions, Duties and Responsibilities

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Employee Benefits

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 Chapter 2

ECONOMIC FEASIBILITY

Introduction
Guide (remove texts in red fonts when done): Write a short introduction on what the chapter is all about
and what are the sections being discussed.

Start writing here…

Demand Analysis
Guide (remove texts in red fonts when done): Demand is the customer’s desire for a particular product, at
the given price, which he/she is ready to buy in one market at different prices during a given period of
time. Demand analysis is the process of understanding the customer demand for a product or service in a
target market. Companies use demand analysis techniques to determine if they can successfully enter a
market and generate expected profits to expand their business operations.

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Supply Analysis
Guide (remove texts in red fonts when done): Supply implies the quantity (how much) of a product or
service which are offered by the manufacturer for sale at various prices to the customers, during a given
period of time. Supply Analysis is a research and analysis done to understand the supply trends and
responses to changing market and production variables. Supply Analysis takes into account the
production costs, raw material costs, technology, labour wages etc. The analysis helps the manufacturers
and companies to understand the impact of these variables on supply and eventually demand.

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Sales Forecast
Guide (remove texts in red fonts when done): Sales forecasting is the process of estimating future sales.
Accurate sales forecasts enable companies to make informed business decisions and predict short-term
and long-term performance. Companies can base their forecasts on past sales data, industry-wide
comparisons, and economic trends.

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Units sold Sales per Year 1

Products/Services Price
per month Month Sales

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 TOTALS

Marketing Strategy

Guide (remove texts in red fonts when done): Use this section to detail the overall strategy you will use
to position yourself within the market to meet your customers’ needs. Whatever your strategy, you goal
should be to differentiate yourself from your competitors to encourage customers to choose your
business first. The specific elements that make up your marketing strategy are typically referred to as
the marketing mix. Each element can be varied to broaden the appeal of products and services, and will
therefore have a direct impact on sales.

The 4 P's of marketing

● Your PRODUCT (or SERVICE) - describe your long-term product strategy in detail; what features
and benefits do you offer?; what makes your product/service different from your competitors’?

● The PRICING of your product/service - price is a critical component of your marketing mix. Why?
Because choosing the right price for your products/services will help you to maximize profits
and also build strong relationships with your customers. By pricing effectively you will also avoid
the serious financial consequences that can occur if you price too low (not enough profit) or too
high (not enough sales).

● Your POSITION (place) in the marketplace - Place represents the location where a product can
be purchased. It is often referred to as the distribution channel. This may include any physical
store (supermarket, departmental stores) as well as virtual stores (e-markets and e-malls) on the
Internet. This is crucial as this provides the place utility to the consumer, which often becomes a
deciding factor for the purchase of many products across multiple product categories.

● The PROMOTION of your product of service - State how you currently promote and market your
business now (or intend to). Compare (where applicable) what your competitors do for
promotion, noting what does and doesn’t work for them as well as yourself. Regardless of how
good your business is, if you don’t promote it and tell people you exist, it’s unlikely you will
make many sales.

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Marketing Plan

Guide (remove texts in red fonts when done): Once you have defined your marketing mix, the next step
is to detail the specific activities that you will undertake to achieve your marketing objectives. As you

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create these activities, keep referring back to your marketing mix – it will help you to assess which
activities are worth the time and effort to implement.

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 Chapter 4
TECHNICAL FEASIBILITY

Introduction

Guide (remove texts in red fonts when done): A technical feasibility study assesses the details of how you
intend to deliver a product or service to customers. Think materials, labor, transportation, where your
business will be located, and the technology that will be necessary to bring all this together. It's the
logistical or tactical plan of how your business will produce, store, deliver, and track its products or
services.

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Physical Location

Guide (remove texts in red fonts when done): Business Location means the location organized to
implement specific business operations of the Company. Describe the location of the storefront or any
other purchased or rented facilities to conduct your business. You may include location map for better
understanding of the reader.

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Floor Plan (Layout)

Guide (remove texts in red fonts when done): Floor plans are scale drawings that show the relationship
between rooms, spaces and physical features viewed from above. They provide a way to visualize how
people will move through the space. Floor plans may also include details of fixtures like sinks, water
heaters, furnaces, etc.

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Description of Products and Services

Guide (remove texts in red fonts when done): What products and/or services do you sell?

Photo Product or service

of the

product or service Description

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 Price

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Technology Requirements

Guide (remove texts in red fonts when done): Every business needs at least some kind of technology to
operate. The technology component of your feasibility study should include discussions about telephone
answering systems, computer hardware and software, computer network and internet connection, multi-
function printer, and other office machines. Don't overlook items like cash registers and potentially the
ability to accept credit cards and process checks. You might need special devices to accommodate the
disabled, or teleconferencing equipment and facilities. Smartphones are almost a must for most
businesses, and you might need alarm or camera systems.

Description Amount Source

Machines and Equipment

Guide (remove texts in red fonts when done): This refers to the machines and equipment necessary to
make the product or complete the service.

Description Amount Source

Production Process

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Guide (remove texts in red fonts when done): This is a step-by-step description of how the product is
made or the service completed.

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Production Materials

Guide (remove texts in red fonts when done): This refers to the major materials that you will use to make
a product or complete a service. There are two types of production materials, direct materials and indirect
materials. Direct materials refer to the materials that become part of, or are directly related to the product
you make or service you offer. Indirect materials refer to some materials that are usually used in small
amounts to make a product or complete a service.

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Production Schedule

Guide (remove texts in red fonts when done): This gives in detail how the work is going to be spread out
in the next 12 months. This has to be made in order to ensure that the number of units to be sold or
services to be completed, based on the projected sales, are produced in time. Among others, the
schedule will show the status of production at any point during the production period; the specific periods
when production or service will start and when the product or service will be completed.

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Inventory Schedule

Guide (remove texts in red fonts when done): Inventory refers to the stock of materials, supplies, and
spares required for making the product or completing the service. The inventory record will keep you
informed of the date of purchase, quantity purchased, cost, date released for production, quantity issued,
and remaining balances. Keeping track of these items will ensure that you do not only have the materials
you need to make the product or complete the service on short notice but also to prevent you from
keeping obsolete or expired materials in your stock.

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Product Delivery

Guide (remove texts in red fonts when done): You can make the best product in the world, but if you don't
have a delivery strategy for getting it to your customers, you'll end up with a fully stocked warehouse and
no incoming revenue. Product delivery should be thoughtfully planned and executed and should fit into
your company's overall mission and marketing strategy.

Start writing here…

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Manpower Requirement

Guide (remove texts in red fonts when done): This comes in the form of direct labor and indirect labor.
Direct labor refers to the people who are actually involved in making the product or completing the
service. In the soap business, this will be the mixer. Indirect labor refers to the people who perform tasks
that do not have anything to do directly with making the product or completing the service. They are the
production helpers, quality control inspector, supervisor, etc.

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Project Timetable (Gantt Chart)

Guide (remove texts in red fonts when done): This is a list of all the activities you are to do prior to
launching the business and the timeframe for accomplishing them. Preparing the Gantt Chart is a useful
exercise that allows you to have a view of the pre-operating activities and their cost implications. These
activities include writing of the business plan, negotiation for financing, construction or improvement of the
building, acquisition of machinery and equipment, recruitment (and training, as applicable) of personnel,
registration of the business etc..

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 Chapter 5
FINANCIAL FEASIBILITY

Introduction

Guidelines (remove when done): A financial feasibility study projects how much start-up capital is
needed, sources of capital, returns on investment, and other financial considerations. It looks at how
much cash is required, where it will come from, and how it will be spent.

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Start-Up Costs

Guidelines (remove when done): Startup costs are the expenses incurred during the process of creating
a new business. Pre-opening startup costs include a business plan, research expenses, borrowing costs,
and expenses for technology. Post-opening startup costs include advertising, promotion, and employee
expenses.

Start-Up Costs includes the following:

● Business Plan - A business plan forces consideration of the different startup costs.

● Research Expenses - Careful research of the industry and consumer makeup must be conducted
before starting a business. Some business owners choose to hire market research firms to aid
them in the assessment process, thus, the expense of hiring these experts must be included in
the business plan.

● Borrowing Costs - Starting up any kind of business requires an infusion of capital. For small
business owners, the most likely source of financing is debt in the form of a small business loan.
Like any other loan, business loans are accompanied by interest payments. These payments
must be planned for when starting a business, as the cost of default is very high.

● Insurance, License, and Permit Fees - Many businesses are expected to submit to health
inspections and authorizations to obtain certain business licenses and permits. Some businesses
might require basic licenses while others need industry-specific permits. Carrying insurance to
cover your employees, customers, business assets, and yourself can help protect your personal
assets from any liabilities that may arise.

● Technological Expenses - Technological expenses include the cost of a website, information

systems, and software, including accounting and payroll software, for a business. Some small
business owners choose to outsource these functions to other companies to save on payroll and
benefits.

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 ● Machines and Equipment - Proper office machines and equipment help businesses run like well-
oiled machines. Although each business may have specific equipment determined by industry,
there are universal technologies for all office spaces. Each item works together to ensure duties
can be performed in-house, which can save time and money. Examples are computers, printers,
copiers, faax machine, telephone systems

● Furniture and Fixtures Expenses - Furniture and fixtures are larger items of movable equipment
that are used to furnish an office. Examples are bookcases, chairs, desks, filing cabinets, and
tables.

● Advertising and Promotion - A new company or startup business is unlikely to succeed without
promoting itself. Promoting a business entails much more than placing ads in a local newspaper.
It also includes marketing—everything a company does to attract clients to the business.

● Pre-Employment Expenses - planning to hire employees must plan for wages, salaries, and
benefits. Failure to compensate employees adequately can end in low morale, mutiny, and bad
publicity, all of which can be disastrous to a company. Pre-employment expenses include
medical, training, and other related expenses.

Particular Amount

FOUNDING EXPENSES

Legal fees

Business permits, licenses and insurance fees

CAPITAL EXPENDITURES

Machines and Equipment

Furniture and Fixtures

Technological Expenses

PRE-OPERATING EXPENSES

Site Improvement

Rent

Advertising and Promotion

Purchases

Other Pre-Operating Expenses

Total Start-Up Costs

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 Start writing here…

Capital Requirement

Guidelines (remove when done): The capital requirement is the sum of funds that your company needs
to achieve its goals. Plainly speaking: How much money do you need until your business is up and
running? You can calculate the capital requirements by adding founding expenses, investments and
start-up costs together. By subtracting your equity capital from the capital requirements, you calculate
how much external capital you are going to need.

Particular Amount

Total Start-Up Costs

Less: Owner’s Capital Contribution

Total Amount to be Financed

Loan Repayment Schedule

Guidelines (remove when done): When you take out a loan, you are required to pay it back to the lender
within a specified period of time. The repayment includes both the principal amount along with the
interest over a predefined number of monthly installments.

Simply put, the act of repaying the loan through a series of scheduled payments generally referred to as
EMIs that includes both the principal amount outstanding and the interest component is known as the
Repayment Schedule. It is also called an Amortization Table.

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Insert Loan Amortization Table here…

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Projected Income Statement

Guidelines (remove when done): An income statement, also known as a profit and loss statement,
shows your revenues, expenses and profit for a particular period. If you are developing these projections
prior to starting your business, this is where you will want to do the bulk of your forecasting.

The key sections of an income statement are:

1. Sales – This is the money you will earn from whatever goods or services you provide.
2. Cost of Sales – This represents the direct costs related to the manufacturing or purchasing of
goods which has been sold.
3. Gross Income – computed as Sales less Cost of Sales
4. Operating Expenses – Be sure to account for all of the expenses you will encounter, including
general and administrative costs such as accounting and legal fees, advertising, bank charges,
insurance, office rent, telecommunications, etc.
5. Net Income – computed as Gross income less Operating Expenses.

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Statement of Financial Position

Guidelines (remove when done): Statement of Financial Position or commonly known as the Balance
Sheet will present a picture of your business’ net worth at a particular time. It is a summary of all your
business’ financial data in three categories: assets, liabilities and equity.

Start writing here…

Cash Flow Statement

Guidelines (remove when done): A cash flow projection will demonstrate to a loan officer or investor
that you are a good credit risk and can pay back a loan if it’s granted. The three sections of a cash flow
projection are:

● Cash revenues – This is an overview of your estimated sales for a given time period. Be sure
that you only account for cash sales you will collect and not credit.
● Cash disbursements – Look through your ledger and list all of the cash expenditures that
you expect to pay that month.
● Reconciliation of cash revenues to cash disbursements – This one is pretty easy: you just
take the amount of cash disbursements and subtract it from your total cash revenue. If you
have a balance from the previous month, you’ll want to carry this amount over and add it to
your cash revenue total.

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Financial Ratios

Liquidity Ratios

Liquidity ratios are financial ratios that measure a company’s ability to repay both short- and long-term
obligations. Common liquidity ratios include the following:

The current ratio measures a company’s ability to pay off short-term liabilities with current assets:

Current ratio = Current assets / Current liabilities

The acid-test ratio measures a company’s ability to pay off short-term liabilities with quick assets:

Acid-test ratio = Current assets – Inventories / Current liabilities

The cash ratio measures a company’s ability to pay off short-term liabilities with cash and cash
equivalents:

Cash ratio = Cash and Cash equivalents / Current Liabilities

The operating cash flow ratio is a measure of the number of times a company can pay off current
liabilities with the cash generated in a given period:

Operating cash flow ratio = Operating cash flow / Current liabilities

Leverage Financial Ratios

Leverage ratios measure the amount of capital that comes from debt. In other words, leverage financial
ratios are used to evaluate a company’s debt levels. Common leverage ratios include the following:

The debt ratio measures the relative amount of a company’s assets that are provided from debt:

Debt ratio = Total liabilities / Total assets

The debt to equity ratio calculates the weight of total debt and financial liabilities against shareholders’
equity:

Debt to equity ratio = Total liabilities / Shareholder’s equity

The interest coverage ratio shows how easily a company can pay its interest expenses:

Interest coverage ratio = Operating income / Interest expenses

The debt service coverage ratio reveals how easily a company can pay its debt obligations:

Debt service coverage ratio = Operating income / Total debt service

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Efficiency Ratios

Efficiency ratios, also known as activity financial ratios, are used to measure how well a company is
utilizing its assets and resources. Common efficiency ratios include:

The asset turnover ratio measures a company’s ability to generate sales from assets:

Asset turnover ratio = Net sales / Average total assets

The inventory turnover ratio measures how many times a company’s inventory is sold and replaced
over a given period:

Inventory turnover ratio = Cost of goods sold / Average inventory

The accounts receivable turnover ratio measures how many times a company can turn receivables into
cash over a given period:

Receivables turnover ratio = Net credit sales / Average accounts receivable

The days sales in inventory ratio measures the average number of days that a company holds on to
inventory before selling it to customers:

Days sales in inventory ratio = 365 days / Inventory turnover ratio

Profitability Ratios

Profitability ratios measure a company’s ability to generate income relative to revenue, balance sheet
assets, operating costs, and equity. Common profitability financial ratios include the following:

The gross margin ratio compares the gross profit of a company to its net sales to show how much profit
a company makes after paying its cost of goods sold:

Gross margin ratio = Gross profit / Net sales

The operating margin ratio compares the operating income of a company to its net sales to determine
operating efficiency:

Operating margin ratio = Operating income / Net sales

The return on assets ratio measures how efficiently a company is using its assets to generate profit:

Return on assets ratio = Net income / Total assets

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The return on equity ratio measures how efficiently a company is using its equity to generate profit:

Return on equity ratio = Net income / Shareholder’s equity

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 Chapter 6
SOCIO-ECONOMIC FEASIBILITY

Introduction

Guidelines (remove when done): The socio-economic study shows the contribution of the business to
the government and to the society. This area proves that the business existed not only for profit
purposes, but also for the improvement of the welfare of the people.

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Contribution to the government

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Contribution to the society

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 APPENDIX A
Legal Requirements to Establish a Business

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 APPENDIX B
Permits and Licenses

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 APPENDIX C
Articles of Partnership/Corporation

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 APPENDIX D
Complete Products and Services

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 APPENDIX E
Machines & Equipment

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 APPENDIX F
Furniture & Fixtures

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 APPENDIX G
AEQ Analysis Table

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 APPENDIX H
Other Relevant Documents

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 APPENDIX I
Curriculum Vitae

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