HONEY LEMON SUGARING WAX

A feasibility Study

Prepared to

The Faculty of the College of Business Education

Of

Northeastern Mindanao Colleges

Surigao City

In Partial Fulfillment

Of the Requirements for the Degree

Bachelor of Science in Business Administration

OLIMPUS, GIRLY C.

PEDARSE, JULIE

ELICO, LHORE MEL T.

TUQUIB, FRANCES ELOISE

 CHAPTER2

MANAGEMENT FEASIBILITY

BUSINESS ORGANIZATION

An entity created for the purpose of conducting business is a business

organization. A system of law governing contract and trade, property rights, and

incorporation is the foundation of such an organization.

Therefore, aligning your goals, capacities and resources with the law and the

type of business organization is crucial. You have to assure that the chosen form suits

best and that it will bring more favorable outcomes. In starting a business, the first thing

you have to consider is whether you’re doing the Business alone, or you’ll be teaming

up with another person/s.

The researchers have chosen a sole proprietorship form of business organization

in the proposed business owned by one individual who controls all aspects of the

organization. In sole proprietorship only one person owns all the assets of the business

and the profits generated by it, the ease with which business decisions can be made,

the Simplicity of bookkeeping, and relatively low startup costs compared to other

businesses.

Advantages of Sole Proprietorship

● You’re the voice.

● Profits are all ours.

 ● Minimal start-up costs.

● The running process is simpler.

Disadvantages of Sole Proprietorship

● Unlimited Liabilities

● Raising Capital is Limited.

● Decision-making is all yours.

ORGANIZATIONAL STRUCTURE

Organizational structure specifies how roles, power, and duties are delegated,

regulated, coordinated, and how information flows between the various levels of

management. To gain a lasting competitive advantage, an organization must be

effective, flexible, innovative, and caring.

An organization can be structured in many different ways, depending on its

objectives. The structure of an organization will determine the modes in which it

operates and performs. We have chosen this line structure which is a simple, clear, and

common structure in businesses. The diagram below shows the flow of authority and

distribution of work from the owner, manager, and cashier down to the workers. (See

figure 2.0)
 OWNER/ CASHIER/ MANAGER

WORKER

FIGURE 2.0 PROPOSED ORGANIZATIONAL STRUCTURE

To realize the vision of an organization, establishing a cohesive and clear flow of

every employee’s position helps follow their role.

BUSINESS LOCATION

One of the most difficult aspects of setting up a business is deciding where to live

in your business space. In fact, a suitable location has a significant long-term impact on

the ability to produce quality items and reach the target market.

The proposed location for the business is located at Borromeo st. Surigao City.

The purpose of these location maps and sketch maps is to locate the area easily by

customers. (See fig. 2.1)

Location map

It helps us to locate which way is the most convenient and easy way to the

proposed business location. The figure shows the location of the proposed business

which is located at Borromeo Street, Surigao City with an area of 160 sqm. (See fig.

2.1)
 FIGURE 2.1 LOCATION MAP OF THE PROPOSED BUILDING

Sketch Map

An outline map that merely depicts the region’s key features is created based on

observation rather than precise survey measurements. For a better giving of direction or

location, a sketch map is used by individuals. It is a sketch drawn using boxes and other

shapes to represent the placement of buildings. (See figure 2.2)

FIGURE 2.2 SKETCH MAP OF THE PROPOSED BUILDING

MANAGEMENT PERSONNEL REQUIREMENTS

Management personnel is those employees who bear authority and/or

responsibility in planning, directing, and controlling business activities whether directly

or otherwise. Understaffing makes the working process slow and overstaffing results in

employees’ lack of engagement and commitment to work.

The owner, who also serves as the manager and cashier, does not receive a

salary since she owns the entire profit. The employee will work four weeks a month, six

days a week. They will labor a total of 26 days, except the four Sundays, and receive

$350 per day. (See table 2.0)

TABLE 2.0 MANAGEMENT PERSONNEL REQUIREMENTS

The above table indicates how the management compensates their worker for

every service they lend every day. Where the employees will work six days a week for
four weeks each month. With a daily salary wage of 350 per day and the worker will

generate a total of 9,100 every month and a total 109, 200.

TABLE 2.1 PERSONNEL CONTRIBUTION-EMPLOYEE

DEDUCTIONS
POSITION MONTHLY SALARY ANNUAL SALARY NET TOTAL 13TH MONTH PAY NET PAY
SSS Pag-IBIG philhealth TOTAL
WORKER 9,100 109,000 4,905 2,180 3,815 10,900 98,100 9,100 107,200
TOTAL 9,100 109,000 4,905 2,180 3,815 10,900 98,100 9,100 107,200

Since the manager pays himself his wage, deductions for him are not included in

the total since otherwise, the company would dare to profit from his income. Keep in

mind that the employee's monthly salary determines the 13th month's pay. Based on

the employees' yearly contributions, deductions are made. (See table 2.1)

TABLE 2.2PERSONNEL CONTRIBUTION-EMPLOYER

DEDUCTIONS
POSITION MONTHLY SALARY
SSS Pag-IBIG philhealth TOTAL CONTRIBUTION
WORKER 9,100 9,265 2,180 3,185 15,260
TOTAL 9,100 9,265 2,180 3,185 15,260
Since the owner serves as the manager, the manager's annual contribution is not

included in the computation. An employee and employer contribution schedule for SSS

is provided in brackets.

As in the case of the Pag-IBIG (HDMF) employee contribution, 1% of the

employee's monthly salary is withheld if it is less than $1,500 and 2% if it is more than

$1,500. Regardless of the employee's salary, the employer must contribute 2%.

PhilHealth (PHIC) charges a premium rate of 3.5%. Employees making less than

$10,000 are subject to a fixed contribution of $350. Calculations for those making over
10,000 but less than 69,999.99 are made using the monthly wage multiplied by 3.5%.

Both employers and employees must contribute equally to the total monthly premiums.

REGULATORY REQUIREMENTS

The regulatory requirements are the goal that organizations aspire to achieve in

their efforts to ensure that they are aware of and take steps to comply with relevant

laws, policies, and regulations. These are the important things to secure before the

initial operations of the business start. It is for the legality of the business. Without it, the

said business is considered illegal and that is prohibited by the law. In some cases,

businesses operate without adherence to the rules and regulations set by the country in

which they want to operate. Countries may differ in the kind of law they exercise in

regulating businesses. Such requirements differ depending on the type of business

structure and offering- a particular business wants to provide.

These are the following requirements:

1. Department of Trade and Industry (DTI) allows businesses to trade products

and services. It covers matters including agreements, legal processes, and

procedures.

2. Barangay Clearance is typically required when securing other permits such as

DTI and Mayor’s Permit and when registering at BIR. It is a document certifying

that a particular business is free from illegal acts and conduct.

3. Mayor’s Permit allows the business to legally operate. It guarantees that a

business has the right to perform operations related to its nature and gives

authority to perform necessary tasks.

 4. Sanitary Permit is a document issued by the Department of Public Health and

Social Services authorizing the establishment to operate its business after

meeting the health standards and safety protocols set by the government.

5. Bureau of Internal Revenue (BIR) Registration is a document that obliges the

business to pay the tax levied on it. The Bureau assesses the revenue earned by

the business and monitors the payment made annually.

TABLE 2.3 COSTS OF REGULATORY REQUIREMENTS

COST FOR COST FOR

DESCRIPTION
2022 2023-2026
DTI Permit 1,530.00
Barangay Clearance 130 130
Mayor's/Business Permit 1,200 1,200
Sanitary Permit 400 400
BIR Registration 600 600
Total Regulatory
Requirements 3,860.00 2,360.00
Table 2.3 shows the list of regulatory requirements needed for the business to

legally operate. Except for DTI Permit whose coverage lasts for 5 years, the rest of the

requirements are to be acquired and paid annually. Regulatory fees are assumed to be

constant for the next four years.

BUILDING, FACILITIES, AND EQUIPMENT REQUIREMENTS

Building Requirement The desired building is spacious and reasonably priced,

leaving only the first floor for Php 10,000.00 per month, or Php 100,000.00 annually.

Building Requirements
 The building is needed by the workers to serve as a resting place and storage

area for the tools that are used. The building will also serve as the official site of the

product.

TABLE 2.4 BUILDING REQUIREMENT

RENT MONTHLY ANNUAL

OFFICE AND PRODUCTION 10,000 100,000
TOTAL 10,000 100,000

Renovation cost Requirements

The projected labor expense is PHP 5,000 for 2 employees working 5 days at a

rate of PHP 500 each. After adding the labor costs for leasehold improvements and

dividing the total by 5, the number of useful lives, the yearly depreciation cost of

refurbishment is calculated. Annually, an amount of Php 1,677.60 is depreciated, and at

the end of the fifth year, the account for leasehold improvements is zero.

Table 2.5 renovation cost Requirements

Perspective view

The structure comprises two stories, the first of which is proposed to have six

rooms and a space for the drying process. The planned building's interior and external

designs were specifically created to evoke a rustic yet elegant vibe. Customers are

given the familiar by using wood materials and building walls that resemble Nipa.

Warmth, friendliness, and a rustic atmosphere. Everything is seen in wood, a real

Filipino characteristic, from wall paint to doors and drawers. (See fig. 2.3)

FIGURE 2.3 PERSPECTIVE VIEW

Floor Plan

An inside top view is used to create a floor plan, which is a two-dimensional

representation of the building. It displays how the structure's levels are divided up into

rooms. A good floor plan makes the most of the available space and provides

customers with ease and comfort. 16 The proponents explored conducting both

production and administrative activities at the same site. The office, counter, and
receiving area is where paperwork, transactions, and customer service take place. The

stockroom houses finished goods and production-related supplies. The processing area

is connected to a small lavatory (where materials are processed and sealed (See figure

2.4)

FIGURE 2.4 FLOOR PLAN OF THE PROPOSED BUILDING

Office furniture & fixtures requirements

The office furniture & fixtures needed to be placed in the office section for business

transaction purposes. it also shows the estimates useful life of furniture and fixtures and

its annual depreciation (see table 2.6)

TABLE 2.6 FURNITURE AND FIXTURES REQUIREMENTS

DESCRIPTION SOURCE QTY UNIT COST TOTAL COST EUL ANNUAL DEP'N
PLASTIC CHAIRS Parkway 4 pc 450 1,800 6 300
OFFICE TABLES Parkway 2 pc 980 1,960 6 326.67
DRAWER Parkway 1 pc 1,249 1,249 6 208.17
Total office furniture and fixtures cost 5,009 834.84
Office Equipment Requirements

Equipment is a valuable asset for each business. They continue to use

administrative processes that are more exact and efficient. The right equipment
purchases make operating a business easier and more convenient. Table 2.8 shows

lists of the office equipment; the same depreciation approach is used for OFF (Office

Furniture and Fixtures). (See Table 2.7)

TABLE 2.7 OFFICE EQUIPMENT

DESCRIPTION SOURCE QTY UNIT COST TOTAL COST EUL ANNUAL DEP'N
10-lbs Fire extinguisher Ace Hardware 1 pc 1,720 1,720 7 215
Stapler with staple remover Unicity 2 pcs 120 240 7 34.28
Carrier inverter AC EMCOR 1 pc 12,000 12,000 7 1,500

Office Supplies Requirements

Various goods are needed to support the business' administrative procedures.

These materials are required for transactions, maintenance, inventory, and accounting.

Any organization is aware of the impact that inadequate supply may have on

operations. Thus, planning ahead reduces supply shortages and insufficiency. For

annual Office Supplies and Office Supplies projections (see Tables 2.8 and 2.9).

Table 2.8 Office Supplies Requirements

DESCRIPTION SOURCE QTY UNIT COST TOTAL COST

Columnar Notebook K3 Centerpoint 3 pc 39 117
Bond Paper K3 Centerpoint 2 Rim 175 350
Pioneer Sign Pen K3 Centerpoint 3 box 200 600
1gallon Ethyl Alcohol Princetown 2 gallon 550 1100
225ML Safeguard Hand soap Princetown 8 bottle 110 880
5L orocan Trash Bin Princetown 2 pc 165 330
Small Ordinary Trash Bag Princetown 3 pc 25 75
Broomstick & dust-pan Princetown 1 set 259 259
Floor map & Basin Princetown 1 set 180 180
12m Correction Tape K3 Centerpoint 6 pc 20 120
Total Office Supplies Cost 4011
Table 2.9 Office Supplies Projection
 Table 2.9 shows the projected office supplies cost and it is assumed that the cost

will increase by 5% every year due to inevitable inflation.