1

Introduction

The Refrigeration and Air-conditioning Service and Repair Shops are the

establishments primarily engaged in servicing and repairing household and

commercial electrical refrigerators and air-conditioning and refrigeration

equipment.

This study, however, primarily will also engaged in servicing and repairing

gas refrigeration equipment repairing automotive air-conditioning equipment.

Since the middle of the twentieth century, refrigeration and air-conditioning

products have evolved from luxury items primarily offering comfort and

convenience to vital components of many industries. In the early 2010s, virtually

every scientific and technological industry relies on cooling systems and

equipment that control the temperature, humidity, air movement, and air quality

of enclosed environments. Commercial, residential, and other buildings also rely

on climate control systems.

Refrigeration and air-conditioning service and repair shops employ the

mechanics and service technicians who keep self-contained and split-system air-

conditioner units, electric refrigeration equipment, and electric refrigerators in

good repair. In the mid-1990s, there were an estimated 3,658 establishments in

this category. Typically, these firms were small. By 2005 the total number of

refrigeration and air-conditioning service and repair shops had climbed to 8,204

establishments, with a workforce of 38,447 employees. Combined, shops posted

revenues of $2.5 billion. By the end of the decade, the number of firms had fallen

slightly to 8,005, but the workforce remained relatively steady at 38,624. Industry
 2

revenues, however, climbed to $3.02 billion, and experts predicted a positive

outlook for the industry into the 2010s.

The Air-Conditioning Contractors industry market report contains strategic

analysis of the key drivers influencing the industry. Save hours of time on

research and prospecting using IBIS World’s standardized, up-to-date reports on

thousands of industries. Our industry research provides growth and profit

forecasts for a five-year outlook period, presented in a clear and user-friendly

format.

The Industry Statistics & Market Size of Airconditioning and Refrigeration

have posted Revenue of $88bn and Annual Growth of 4.9%; with an

Employment468,773, and Business establishments of 105,018.

Air-conditioning installations were expected to account for 62.3% of

industry revenue in 2016. The rebound in new construction activity led AC

installation work to expand as a share of revenue. Conversely, maintenance

services that have to be undertaken regardless of economic conditions

decreased as a share of revenue.The increase in installation activity was driven

by the rebound and growth of the real estate market during the past five years.

Most installation projects are associated with new building construction (51.7% of

revenue in 2016), but this segment also includes upgrades and replacement

services in existing buildings (10.6%) (IBIS World, 2017).

The feasibility study went through the 5 aspects of the proposed business

in an SME scale (instead of Entrepreneurship) due to appropriate use of

terminology with respect to truthful meaning and concept of Entrepreneurship

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CHAPTER 2

MARKETING FEASIBILITY

Market Description

The IBISWorld analysts (2017) also discussed how external factors such

as Housing starts and Private spending on home improvements in the Air-

Conditioning Contractors industry impact industry performance.

In Tacloban City, Philippines alone, the housing and construction growth

of 27% (PSA, 2016) has impacted positively the purchases and acquisition in

home appliances primarily the airconditioning and refrigeration with 50,890

households.

In Eastern Visayas, Region VIII, 612,746 registered vehicles are reported

to LTO in 2010-2014. This dataset contains the annual number of registered

motor vehicles from 2010 to 2013, classified according to use (i.e., Private, For

Hire, Government, Diplomatic, and Tax-Exempt), vehicle type (i.e., Cars, UV,

SUV, Trucks, Motorcycles/Tricycles, and Trailers), and region (NSA, 2015).

The market of JAS in V & G and Caibaan alone, with 1,143 households (owned

residential units in Brgy 109 A); 208 (owned in Brgy 109), 1,089 households

(owned in Brgy 95), has a total of 2,440 households with refrigerators, home

airconditions and or car vehicles.

Tacloban City has an estimated of 10,473 business establishments.

According to a February 2009 survey conducted by the Air Conditioning,

Refrigeration News, more consumers were opting for repairs rather than

replacement. Bill Mihalovich, president of Air Repair Mechanical Services, noted

 4

that "a lot of [residential] customers, both new and existing, want to fix older

systems rather than replace them."

The demographic profile of the market which is scanned and surveyed in random

by proponents resulted with and analysedto 2,410 households or 98.78% home-

owners (distinguished from renters and informal settlers and sharing), 100% with

refrigeration/freezers and 54% with home air-conditions. The respondents’

willingness to get the services of JAS Aircondition& Refrigeration Services &

Repair Shop is posted at 54.69% or 1,335 households in V & G and Caibaan

areas.

SWOT Analysis

As more homes and commercial structures are built, demand for industry

contractors will rise. Operators received more contracts for replacing and

upgrading systems in existing structures. Accelerating construction markets will

continue to boost demand for new installations

The biggest challenge facing refrigeration and air-conditioning service and

repair technicians in the 1990s and first decade of the 2000s was compliance

with rules and regulations governing refrigerants. During the early 1970s,

scientists identified the use of chlorofluorocarbons (CFCs)--a common

refrigerant--as a primary cause of the depletion of the ozone layer of the earth's

atmosphere, which protects life from harmful radiation. The U.S. Environmental

Protection Agency (EPA) and the Food and Drug Administration (FDA) banned

the use of CFCs in all but a few essential applications in 1978.

 5

Recognizing the global nature of the problem, 24 nations and the

European Economic Community (EEC) convened in Canada in 1987. As a result

of the meeting, in 1992 most of the major CFC and HCFC (halon) producing and

consuming nations signed the Montreal Protocol on Substances That Deplete the

Ozone Layer. The Montreal Protocol, along with later amendments, called for a

gradual reduction in worldwide consumption of eight chemicals and, ultimately,

their complete phase-out. The agreement also encouraged countries to recover,

recycle, and reclaim controlled refrigerants.

The United States drafted additional regulations regarding CFC and HCFC

substances as part of the 1990 Amendments to the Clean Air Act. The act

contained regulations affecting mechanics repairing or servicing an appliance or

industrial process refrigeration. As of July 1, 1992, a service technician could not

knowingly release or dispose of any substance used as a refrigerant in a manner

which permitted the substance to enter the environment. Furthermore, effective

November 1995, the prohibition applied to substitutes for CFCs and other

banned refrigerants, unless the EPA specifically determined the substances

posed no threat to the environment. CFC production was completely banned by

2000. The penalties and fines for violating the act's provisions could be severe.

A phase-out period was developed to provide equipment owners with

enough time to switch to ozone-friendly refrigeration. According to IBISWorld, the

air-conditioning industry in the United States was worth about $67 billion in the

early 2010s. Government initiatives to install more energy-efficient systems were

also expected to help boost the industry in the 2010s. Indoor Environment

 6

&Energy Efficiency (IE3), the official journal of the ACCA, also noted the effect of

heightened energy-consumption awareness on the industry. According to Jim

Fisher of Goodman Global Group in Texas, "Homeowners recognize that energy

costs are not going down. The AC system is a fairly large consumer of fuels, so

their counter to high energy costs is a more efficient product." Whether this

involves installation of a whole new system or upgrades to existing systems, the

future for the AC repair and service industry was optimistic as the nation entered

the 2010s.

The Department of Environment and Natural Resources (DENR) has

issued new guidelines for the refrigeration and air-conditioning industry after the

phase-out of chlorofluorocarbons (CFCs) and some other ozone-depleting

substances (ODS).

The new Code of Practice (COP) for the refrigeration and air-conditioning

sector revises the original code crafted in 2002 to incorporate practices and

technologies of the present time and help  save the environment.

Environmental Management Bureau Director Juan Miguel  Cuna said the

COP was revised to guide the affected sector on updated  procedures and

complement shifting technologies (Villanueva in Philippine Star, 2013)

Hydrochlorofluorocarbons  or HCFCs, the last ODS in the list, will be phased out

gradually starting this year and will be completely banned by 2040.

The Department of Trade and Industry (DTI) has tightened the

accreditation requirements for airconditioning and refrigeration service and repair

shops.
 7

The issuance of Department Administrative Order (DAO) 3, which governs

the accreditation of enterprises engaged in the service and repair of machine or

equipment, is intended to ultimately phase-out the use of refrigerants in the form

of chlorofluorocarbon (CFC), a substance which causes the thinning of the

earth’s protective ozone layer.

DTI officials said the new ruling is part of the agency’s support to the

National CFC Phase-out Plan (NCPP) through which the country carries out its

commitment to the Montreal Protocol in the gradual reduction of ozone-depleting

substances (ODS), the most common of which is CFC, by the year 2010.

Based on a study conducted by the Department of Environment and

Natural Resources (DENR), the lead agency to the NCPP, the servicing sector;

which includes refrigeration and airconditioning service and repair shops ; was

found to be responsible for 74.7 percent of the country’s ODS consumption.

DTI-Bureau of Trade Regulation and Consumer Protection (BTRCP)

director VictorioDimagiba added that the new order also requires service

technicians to obtain particular competencies and certification in accordance with

training regulations of the Technical Education and Skills Development Authority

(TESDA).

DTI, through the BTRCP and its regional and provincial offices, is

mandated by law to evaluate and accredit businesses in the servicing sector to

protect the public against unethical, unfair and incompetent practices.

Also under DAO 3, three standard classifications for airconditioning and

refrigeration service and repair enterprises were identified, namely window type
 8

air-conditioning / domestic refrigeration (Type A), package type air-conditioning /

commercial refrigeration (Type B), and transport air-conditioning and refrigeration

(Type C).

These are classified into five star ratings, each depending on the repair

shop’s number of full-time service mechanics with corresponding TESDA

qualification as well as other mandatory requirements.

The order also amends other provisions including the additional

requirements for accreditation, the minimum amount of insurance coverage for

equipment service/repair enterprises, and the amount of bond intended to

guarantee the repair shop’s faithful performance of the job in accordance and

compliance to PD 1572 as amended.

INTERNAL FACTORS EXTERNAL FACTORS

Strength Opportunities

BIT ERAC degree holder proponent- GDP Growth of 6%

partners
Region 8 positive growth with an average
of 26.12% growth
TESDA Accreditation

DTI Accreditation as per PD 1572

Weakness Threats

Government ban on
Financial Position Hydrochlorofluorocarbons  or HCFCs

Environmental Laws and Energy

Conservation Policy
 9

Competition Analysis

The JAS Airconditioning& Refrigeration Services & Repair has Three

competitors within Tacloban City namely Mark Allied Airconditioning&

Refrigeration Services & Repair , Pick Point Airconditioning& Refrigeration

Services & Repair and Lapu-lapu Airconditioning& Refrigeration Services &

Repair:

MARK ALLIED Pick Point Lapu-lapu

Weigh Rating Score Rating Score Rating Score

Product Quality t0.13 4 0.52 4 0.52 4 0.52

Competitive Price 0.13 4 0.52 2 0.24 2 0.24
Convenience and 0.13 3 0.52 4 0.52 3 0.36
Accessibility
CSR 0.12 2 0.24 3 0.36 3 0.36
Financial Position 0.13 1 0.13 3 0.39 3 0.39
Good People 0.12 3 0.36 2 0.24 2 0.24
Practices
Market 0.12 2 0.24 2 0.24 2 0.24
Communication
Socio-Cultural 0.12 3 0.36 4 0.48 2 0.24
Sensitivity
Total 1.00 2.89 2.99 2.45

Competitive Position

The JAS Airconditioning& Refrigeration Services & Repair

Shop will enter the industry and will have a competitive position in the

market.

JAS MARK ALLIED Pick Point Lapu-lapu

Weigh Rating Score Rating Score Ratin Scor Rating Score

Product Quality t0.13 4 0.52 4 0.52 g

4 e
0.52 4 0.52
Competitive Price 0.13 4 0.24 4 0.52 2 0.24 2 0.24
Convenience and 0.13 2 0.24 3 0.52 4 0.52 3 0.36
Accessibility
CSR 0.12 2 0.24 2 0.24 3 0.36 3 0.36
Financial Position 0.13 1 0.13 1 0.13 3 0.39 3 0.39
Good People 0.12 3 0.36 3 0.36 2 0.24 2 0.24
Practices
 10

Market 0.12 2 0.24 2 0.24 2 0.24 2 0.24

Communication
Socio-Cultural 0.12 2 0.24 3 0.36 4 0.48 2 0.24
Sensitivity
Total 1.00 2.37 2.89 2.99 2.45

Services

JAS Air-conditioning& Refrigeration Services and Repair Shop is competent

in the installation, maintenance, service, repair, reconditioning and re-installation

of the following air-conditioning and refrigeration equipment:

(a) Gas, solar or electrically operated conventional and frost-free

refrigerators and freezers;

(b) Beverage coolers, water coolers, vendo machines, ice cream, ice drop

and ice cube making machines;

(c) Room, free-blow or ducted split and unitary package type (air-cooled

and water cooled) air-conditioners, auto air-conditioners for bantam up to

extra, heavy vehicles.

(d) Sealed, semi-sealed and open type air-conditioning and refrigeration

compressors;

(e) Cold storage, walk-in refrigerators and freezers, ice making equipment

and its accessories, air-conditioning and refrigeration mains including

insulation works, brine tanks, brine coils and storage coils; and

(f) Air-ducts, air grilles, cooling towers, air handling units, dehumidifiers,

condensers and evaporator coils.

Price
 11

Price is reasonable and affordable. Customers are always in control. If our

technician finds your air-con/ refrigerator doesn’t need all the services you

requested, we’ll remove those unneeded services and lower your bill, right on the

spot. If the client’s air-con/refrigerator needs additional repair services, our

technician will provide you with an itemized list of what you need. The client’s will

decide to accept or decline those additional services.

SERVICE/Product Price
Refrigeration Repair 2,000.00
Air con Repair 1,500.00
Cleaning Air con unit 500.00
Installation Aircon unit (Split and Window type) 4,000.00
Dirty Motors Repair 500.00
Sample fair price calculation:

People

People are BIT ERAC educated and TESDA Accredited. People who are

experienced furniture carpenters and aquarium glass makerswill be hired to

ensure the quality of the products for sale.

Place

Caibaan, Tacloban City is the place of proposed business.

Advertising

Advertising method Quantity Cost Total Cost

Callcard 10 box 500.00/box 5,000.00
Posters 100 each 10.00/each 1,000.00
TOTAL 6,000.00
The cost of Advertising which includes banner/streamers and Facebook

advertising is estimated to reach PhP 1,500.00 per annum

 12

Channel of Distribution

Administrative
Customer Records/Supplies/
Service/Diagnosis Billing

Repair/Installation/
Maintenance Customer

TRANSACTION PROCESS---Diagnosis, servicing, billing to payment.

Operation Schedule

Day Time Activities

8:00AM-8:30AM Opening of Business
8:30AM-12:00AM Operation
Monday -Saturday
12:00AM-1:00PM Lunchbreak
1:00AM-5:00AM Operation

5:00PM-5:30PM Closing Time

Marketing Cost

Marketing method Quantity Cost Total Cost

Signage 1 pcs (3x6pcs) 150.00/sq. feet 2,700.00
Callcard 10 box 500.00/box 5,000.00
Posters 100 each 10.00/each 1,000.00
Facebook - - -
 13

TOTAL 8,700.00

Projected Sales

Daily
Deman Daily Monthly Annually
SERVICE/Product Price d Income Income Income
Refrigeration Repair 2,000.0 6,000.0
0 3 0 156,000.00 1,872,000.00
Air con Repair 1,500.0 3,000.0
0 2 0 78,000.00 936,000.00
3,500.0
Cleaning Air con unit 500.00 7 0 91,000.00 1,092,000.00
Installation Aircon unit 4,000.0
(Split and Window type) 0 12,000.00 144,000.00
Dirty Motors Repair 1,000.0
500.00 2 0 26,000.00 312,000.00
TOTAL 363,000.0 4,356,000.0
0 0
 14

CHAPTER 2

TECHNICAL FEASIBILITY

Service Description

The earliest climate control systems--piped steam installed to heat

factories, churches, assembly halls, and other large buildings--eventually led to

systems that combined with circulation of fresh air. About the same time

systems were being developed, experimentation with artificial refrigeration

began. By the mid-1800s, inventors understood the principles on which

mechanical refrigerators operated. Dr. John Gorrie applied those principles when

he invented a cold-air machine to relieve the suffering of yellow fever patients in

a Florida hospital in 1842. After the Civil War, several companies in southern

states applied them in ammonia-absorption machines to make artificial ice.

 15

Nevertheless, until the early twentieth century, refrigeration continued to rely on

ice cut during the winter and stored for later use.

While the technology to cool and circulate air was developed by the

beginning of the twentieth century, nothing was known about regulating its

moisture content, or humidity, until Willis Carrier carried out a scientific study on

air-conditioning. In the summer of 1902 he designed the first system to control

the temperature, humidity, and circulation of indoor air. Soon afterward he

devised a way to cool using an artificial fog instead of coils. The two methods

became the basic ones involved in all later air-conditioning equipment. Industry

after industry adapted Carrier's invention for controlling humidity to their particular

production purpose. Because of his pioneering research and inventions, Carrier

became known as the father of air-conditioning.

In 1914 Carrier developed the first residential air-conditioning system.

Seven years later, he created the centrifugal refrigerating machine. This machine

had a refrigerant that made it possible to produce safe, dependable, large-

capacity cooling devices. By the 1930s, air-conditioning spread from industry to

become common in stores, theaters, and other large buildings.

In the early days of the industry, manufacturers and distributors trained

most technicians and mechanics in how to repair air-conditioning and

refrigeration equipment. The equipment had limited capacity to cool and regulate

air quality, so the systems and the skills needed to maintain them were relatively

simple. Over the years the equipment became increasingly sophisticated, and

the knowledge and skills required in maintaining cooling systems became more
 16

specialized. Modern equipment utilizes a wide variety of synthetic refrigerants,

depending on the cooling job to be done and the types of evaporators,

condensers, and compressors in the system. In addition, components are being

installed with microcomputer controls. Because of the high-technology aspects,

modern refrigeration service and repair workers generally receive training at

community colleges, vocational-technical schools, and trade associations.

Preparatory courses include electronics, chemistry, physics, mathematics,

drafting, and writing.

JAS Airconditioning& Refrigeration Services and Repair Shop is

competent in the installation, maintenance, service, repair, reconditioning and re-

installation of the following air-conditioning and refrigeration equipment:

(a) Gas, solar or electrically operated conventional and frost-free

refrigerators and freezers;

(b) Beverage coolers, water coolers, vendor machines, ice cream, ice drop

and ice cube making machines;

(c) Room, free-blow or ducted split and unitary package type (air-cooled

and water cooled) air-conditioners, auto air-conditioners for bantam up to

extra, heavy vehicles.

(d) Sealed, semi-sealed and open type air-conditioning and refrigeration

compressors;

(e) Cold storage, walk-in refrigerators and freezers, ice making equipment

and its accessories, air-conditioning and refrigeration mains including

insulation works, brine tanks, brine coils and storage coils; and
 17

(f) Airducts, air grilles, cooling towers, air handling units, dehumidifiers,

condensers and evaporator coils.

Effective all-in-one solution for all air-conditioning sales, installation, services and

repairs.

 Fully qualified technician s (TESDA Certified NC II Accreditation)

 Warranty repairs for all leading refrigeration and air-conditioning brands

 Installations

 Refrigerated and merchandising cabinets

 Cool rooms/freezer rooms

 Custom built/kit forms

 Ice-machines

JAS Aircondition& Refrigeration Services & Repair Shop is proficient

in the service and repair of:

 Dirty motors and condenser coils

 Inefficient refrigerator charge
 Worn and loose relays wirings, pulleys, belts and connections
 Bad capacitors
 Improperly lubricated motors and bearing
 Improperly calibrated cooler/freons

WORKING SCHEDULE

JAS Aircondition& Refrigeration Services & Repair Shop will be open from 8:00 A.M to

5:30 P.M. Monday to Saturday

Building
 18

The building that will be use by this business is from the ancestors of one of the

proponents. The rent is free as their way of helping their relative. The renovation

cost will cost

Renovation Cost

Total Cost
Materials QTY Unit Cost
Plywood 5 pcs 380.00 1,900.00
Paint 5 gallons 900.00 4,500.00
Rolling brush 2 pcs 150.00 300.00
Cement 2 sacks 350.00 750.00
Shovel 2 pcs 150.00 300.00
Lights 7 pcs 100.00 700.00
Outlet 5 pcs 100.00 500.00
8,950.00
Total
Office Supplies

Total Cost
PARTICULARS QTY Unit Cost
Short Bond Paper 2 250.00 500.00
Long Bond Paper 1 275.00 275.00
Ballpen 1 set/12 pcs 150.00 150.00
Log book 3 pcs/200 leaves 75.00 225.00
Dye Ink 1 set/ CMYK 250.00 1,000.00
2,150.00
Total

Office Equipment

PARTICULARS QTY TOTAL AMOUNT

PC 1 pcs 18,000.00
18,000.00

Total

Cleaning Supplies
 19

PARTICULARS QTY Unit Cost Total Cost

Dust Pan 2 pcs 50.00 100.00
Rugs 10 pcs 10.00 100.00
Trash can 2 pcs 150.00 300.00
Mop 1 pcs 200.00 200.00
Broom Stick 2 pcs 75.00 150.00
Broom 2 pcs 80.00 160.00
bucket 2 pcs 200.00 400.00
Toilet mug 2 pcs 50.00 100.00
1,510.00

Total

Semi-Expendable Equipment

Semi-Expandable Equipment QTY Unit Cost TOTAL AMOUNT

Vacuum pump 1 6,000.00 6,000.00
Nitrogen regulator 1 5,000.00 5,000.00
Air compressor 1 5,000.00 5,000.00
Generator Set 1 10,500.00 10,500.00
Printer 1 pcs 7,000.00 7,000.00
Airconditioner 1 set  5,000.00  5,000.00
Fire Extinguisher 2 sets  1,500.00  3,000.00
Emergency Lights 1 set  1,000.00  1,000.00
42,500.00
TOTAL

Shop Equipment

Equipment QTY TOTAL AMOUNT

Oxy-acetylene welding set 1 20,000.00 20,000.00
Electric welding set 1 15,000.00 15,000.00
35,000.00
TOTAL
 20

Tools

Tools QTY TOTAL AMOUNT

Spray gun 2 1,100.00 2,200.00
Charging cylinder, adapter,
manifold and hose 1 3,500.00 3,500.00
Flaring and charging tools 1 2,300.00
Volt-ohmmeter 1 4,500.00 4,500.00
Volt-ammeter 1 4,500.00 4,500.00
Screw driver (philips and 100.00
ordinary) 9 900.00
Electrical and mechanical 169.00
pliers 6 1,014.00
Thermometer 5 250.00 1,250.00
Leak detector 2 1,500.00 3,000.00
Electric drill, electric solder 2 3,500.00 7,000.00
Hand truck, anvil, lifter 1 10,000.00 10,000.00
Wrench, hammer, saw 2 1,500.00 3,000.00
Electric grinder, vise, vise 2,500.00
grip 2 5,000.00
45,864.00

TOTAL

Semi-Expendable Furnitures and Fixture

Semi-Expandable Equipment QTY Unit Cost TOTAL AMOUNT

Office Table and Chair 1 set 15,000.00/set 15,000.00
Monoblock Chair 5 pcs 250.00/each 5,000.00
Cabinet 1 pcs 5,000.00 5,000.00
25,000.00

TOTAL

Utilities

Monthly Annual
Particulars Expenses Expenses
LEYECO Electric Bill 3,000.00 36,000.00
Telephone with Wi-fi connection 1,200.00 14,400.00
Water Bill 1,000.00 12,000.00
Gasoline/Diesel for Genset 500.00 6,000.00
TOTAL 68,400.00
 21

Permit and Taxes

Particulars Amount

Barangay Certificate 200.00

DTI accreditation 2,000.00
BIR registration 500.00
Mayor Permit 1.500.00
BFP permit 1,500.00
Sanitary 1,000.00
 TOTAL 5,200.00

Miscellaneous

Monthly Annual
Particulars Expenses Expenses
Fare and Snack 3,500.00 42,000.00
 TOTAL 42,000.00

Delivery Equipment

Unit Cost Total Cost

Particulars
Tricycle 25,000.00 25,000.00
 TOTAL 25,000.00

Site Location

The business proposed location is in Caibaan, Brgy 95,Tacloban City.

Location Map
 22

Vicinity Map
 23

Architectural Design

Layout
 24

Waste Disposal

Waste disposal shall be compliant to Tacloban City Engineering, Health

and Public Safety standards, CENRO and ordinances.

Hazards detected in same and or similar sector

Some of the common hazards include hazard communication of physical

and health hazards of chemical substancesin the workplace.

Waste disposal, safe work practices and training; permit required

confined-space entry—identification, evaluation and safe entry

procedures;personal protective equipment—assessments, selection and use of

eye, face, hand, foot and head protection

Guarding machines, equipment and tools to protect operators and

adjacent workers from hazards at point of operation, ingoing nip points, and from

rotating parts, flying chips or sparks, saw dusts; includes fixed machinery,

portable machinery and portable power tools, and adjustment of guards and work

rests on abrasive wheel machinery (grinders).

 25

CHAPTER 3

MANAGEMENT FEASIBILITY

Form of Ownership

The form of business ownership is partnership.

Pre-operation management Requirements

DTI Business Name Registration

DTI Accreditation (see Appendices Forms)

Mayor Business Permit

BIR Tax Registration

Pre-operation management Requirements

During the operating period, the proponents will be the one who assign

some of their personnel who will organize most of the key positions with

respective roles.

Personnel

The personnel will be selected according to their skills that they have and

potentially be an asset to the business who also can handle clients and do their

job even they are under pressure.

 26

Organizational Structure

MANAGEMENT

PRODUCTION ADMINISTRATION MARKETING

SHOP ON SITE
 27

Job Descriptions, Duties& Responsibilities

Manager

Managers handle transactions made in a furniture store or for a furniture

manufacturer. Typical duties listed on a Manager resume example are

networking with customers, identifying new prospects, shipping furniture, dealing

returns and exchanges, developing promotional offers, doing paperwork, training

and guiding personnel, and signing for employees' payroll. The best resumes for

this job showcase assets such as the ability to sell, leadership, communication

and interpersonal skills, recordkeeping, and computer operation. Knowledge of

furniture products is essential. Most Furniture Sales Managers hold a Bachelor's

Degree and are trained in marketing or business administration.

 To provide first- and second-level service recovery as needed.

Understand when to step in to ensure a balanced solution.

 To Ensure that the venue is properly staffed at all times to provide

adequate coverage that matches the volume of clients’ order, to include

specific staffing needs related to special designs and order lead time.

 Developed daily, monthly, and yearly goals to exceed gross margin, net

promoter, and warranty goals.

 28

 Maintained a world class net promoter score for a retail industry of 75 or

better. Assisted in maintaining strong margins in a competitive market by

working with vendors to supply the best products at the best prices while

improving sales goals by 7% growth on consistent basis.

Administrative Assistant

 Must answer phones, interface with customers, vendors and employees.

In addition they also perform payroll, ordering office supplies, assist with

service and repair orders and processing invoices.

 Filing, faxing, preparing and distributing documents and photocopying;

Create, coordinate and maintain records, files and spreadsheets; Assist

service and parts department with repair orders; Perform payroll and time

entries – vacation/sick time record keeping; Serves as a resource or “go

to” for staff questions regarding office policies and procedures; Support

staff in assigned project-based work; Collect and maintain inventory of

office equipment and supplies; Daily reconciling of credit card, deposits;

Perform general accounts payable/accounts receivable duties;

Make/process purchase orders; Process employee expense reports;

Perform various clerical and administrative duties relating to

Airconditioning, and Refrigeration. 

 Maintain customer account agreements, other required information;

Create and maintain service and billing files for Services fees related to

these accounts; Ensure payment for billings or accounts receivable are

received timely and posted as well as contact customers for reconciliation

 29

of discrepancies; Analyze and manage customer vehicle throughput via

daily report/query capabilities;

 Work with Manager to achieve customer's expectations of department

deliverables through proactive communications; Work with manager to

establish and maintain deep service relationships with customers;

 Respond to customer inquiries relating to PURCHASE ORDERS, provide

quality service, and assist in resolving problems;Monitor in-process job

service orders through Services process track and progress cards and

completed and recorded to ensure timeline commitment is met; May work

with finance/local management to ensure customers are charged and A/R

is collected timely. 

Aircon Refrigeration Technician

 Job duties of air conditioning technicians include reviewing blueprints,

installing air conditioning systems, testing systems for proper functioning,

performing emergency repairs, maintaining tools, ordering supplies, and

making routine adjustments to maximize operational efficiency. They may

also record data when inspecting systems, such as temperature of

equipment, fuel consumption and hours of operation. Air conditioning

technicians must recover and properly dispose of refrigerants when

servicing air conditioning equipment since refrigerants can be harmful to

the environment. They may also sell service contracts to clients in order to

ensure long-term client relationships.

 Refrigeration Technicians must complete various tasks pertaining to the

operation of refrigeration systems. We have reviewed several job listings and

 30

other sources and found the following among the core Refrigeration Technician

duties and responsibilities.

 Install New Refrigeration Systems

Refrigeration Technicians are typically responsible for installing climate-

control systems, and some specialize only in this area. They need to be

knowledgeable about all components of these systems, read blueprints and

schematics, understand compliance standards, know local building codes and

apply welding and soldering techniques as required.

 Repair and Upgrade Refrigeration Systems

A primary responsibility of a Refrigeration Technician is to diagnose

problems and make repairs to existing equipment. Refrigeration

Technicians apply troubleshooting methods, replace parts and run tests to

ensure the systems is working properly following repairs. They also

upgrade systems to satisfy new regulations or meet new standards.

 Maintain Existing Refrigeration Systems

Performing preventative maintenance on refrigeration systems is another

primary duty of a Refrigeration Technician. This entails following a

checklist of parts and operations that need to be tested during a routine

inspection of existing equipment, such as compressors, condensers,

electrical connections and motor operations.

The airconditioning technicians are responsible for installing, maintaining,

and repairing of air-conditioning equipment. They can even do heating or

refrigeration work, as they are trained to work on cooling units, including

motors, switches, pumps, wiring, thermostats and fans.

 31

Other Duties

 Approves finished products by confirming specifications; conducting visual

and measurement tests; returning products for re-work; confirming re-

work.

 Documents inspection results by completing reports and logs;

summarizing re-work and waste; inputting data into quality database.

 Keeps measurement equipment operating by following operating

instructions; calling for repairs.

 Maintains safe and healthy work environment by following standards and

procedures; complying with legal regulations.

 Updates job knowledge by participating in educational opportunities;

reading technical publications.

 Accomplishes quality and organization mission by completing related

results as needed

Salaries & Wages

Daily Monthly
Job Position Annual Salary
Rate Salary

Manager 500.00 13,000.00 156,000.00

Admin Assistant 500.00 13,000.00 156,000.00
Technician 1 400.00 10,400.00 124,800.00
Technician 2
400.00 10,400.00 124,800.00
Technician 3 400.00 10,400.00 124,800.00
 32

57,200.0
686,400.00
Total 0

Fridge Benefits

Basic
Monthly
Total
Salary Phil. Total benefits
Job Position SSS Benefits
per Health Annaully
monthly
Employe
e

Manager 13,000.00 967.70 162.50 1,130.20 13,562.40

Admin Assistant 13,000.00 967.70 162.50 1,130.20 13,562.40
Technician 1 10,400.00 783.50 125.00 908.50 10,902.00
783.50
Technician 1 10,400.00 125.00 908.50 10,902.00

783.50
Technician 1 10,400.00 125.00 908.50 10,902.00

59,830.80
TOTAL

GHANT Chart

ACTIVITIES June- Nov Dec Jan Feb Mar Apr May Jun
October- 2018
Feasibility Study
Preparation
Business Plan
Preparation
Gov’t Reg’n& Permits
Shop Renovation
Acquisition of Tools &
Equipment
Hiring & Training
Marketing, Ad & Promo
Start
 33

CHAPTER 4

FINANCIAL FEASIBILITY

TOTAL PROJECTED COST 1,098,154.80

Financial Assumptions

 Salaries and wages are assumed to increase 3% annually.

 Semi-exp. Furnitures are assumed to increase 3% annually

 Semi-exp. Equipment are assumed to increase 3% annually

 Fringe benefits are assumed to increase 3% annually.

 Utilities (Electrical, Water, Gasoline and Internet) are assumed to

increase 3% annum.

 Permit & License are assumed to increase 3% annum.

 Advertising expense is expected to increase 3% per annum.

 Miscellaneous expense is expected to increase 3% per annum.

 Tax rate expected to increase 12% per annum.

 Office supply are assumed to increase 3% per annum.

 Cleaning supplies are assumed to increase 3% per annum.

 Include projected sales increase 3% per year.

 Tools expected to increase 3% per annum.

 Revenue are assumed to increase 3% per annum.

 34

CAPITAL REQUIRMENT

Fixed Asset
Office Equipment 18,000.00
Shop Equipment 35,000.00
Delivery Equipment 25,000.00
TOTAL 78,000.00
Working Capital
Office supplies 25,800.00
Cleaning supplies 1,510.00
Semi-exp. Equipment 42,500.00
Tools 45,864.00
Semi-exp. Furnitures and Fixtures 25,000.00
TOTAL 140,674.00
Operating Expense
Marketing Cost 8,700.00
Utilities 68,400.00
Fridge Benefits 59,830.80
Salaries And Wages 686,400.00
TOTAL 823,330.80

Pre-operating expense

Renovation Cost 8,950.00

Permit & License 5,200.00
Miscellaneous expense 42,000.00
TOTAL 56,150.00
TOTAL PROJECTED COST 1,098,154.80
 35

SCHEDULE 1: Projected Sales

Daily Daily Monthly Annually

SERVICE/Product Price Demand Income Income Income
Refrigeration Repair 2,000.00 3 6,000.00 156,000.00 1,872,000.00
Air con Repair 1,500.00 2 3,000.00 78,000.00 936,000.00
Cleaning Air con unit 500.00 7 3,500.00 91,000.00 1,092,000.00
Installation Aircon unit
(Split and Window type) 4,000.00 12,000.00 144,000.00
Dirty Motors Repair 500.00 2 1,000.00 26,000.00 312,000.00
TOTAL 363,000.00 4,356,000.00

SERVICE/Product Year 1 Year 2 Year 3 Year 4 Year 5

Refrigeration
Repair 1,872,000.00 1,928,160.00 1,986,004.80 2,045,584.94 2,106,952.49
Air con Repair 936,000.00 964,080.00 993,002.40 1,022,792.47 1,053,476.25
Cleaning Air con
unit 1,092,000.00 1,124,760.00 1,158,502.80 1,193,257.88 1,229,055.62
Installation Aircon
unit (Split and
Window type) 144,000.00 148,320.00 152,769.60 157,352.69 162,073.27
Dirty Motors Repair 312,000.00 321,360.00 331,000.80 340,930.82 351,158.74
TOTAL 4,356,000.00 4,486,680.00 4,621,280.40 4,759,918.80 4,902,716.37

SCHEDULE 1.a : Sales Revenue

 36

Schedule 2: Yearly Operating Expense

SERVICE/Product Year 1 Year 2 Year 3 Year 4 Year 5

Marketing Cost 8,700.00 8,961.00 9,229.83 9,506.72 9,791.93
Office supplies 25,800.00 26,574.00 27,371.22 28,192.36 29,038.13
Cleaning supplies 1,510.00 1,555.3 1,601.96 1,650.02 1,699.52
Semi-exp.
42,500.00
Equipment 43,775.00 45,088.25 46,440.90 47,834.12
Tools 45,864.00 47,239.92 48,657.11 50,116.83 51,620.34
Semi-exp.
Furnitures and 25,000.00
Fixtures 25,750.00 26,522.50 27,318.18 28,137.72
Utilities 68,400.00 70,452.00 72,565.56 74,742.52 76,984.80
Fringe benefits 59,830.80 61,625.72 63,474.50 65,378.73 67,340.09
Salaries and
686,400.00
wages 706,992.00 728,201.76 750,047.81 772,549.28
8,950.00
Renovation Cost
- - - -
5,200.00
Permit & License
5,356.00 5,516.68 5,682.18 5,852.64
Miscellaneous 42,000.00
expense 43,260.00 44,557.80 45,894.53 47,271.37
(Depreciation) 3,000.00 3,000.00 3,000.00 3,000.00 3,000.00
Office Equipment
(Depreciation) 2,500.00 2,500.00 2,500.00 2,500.00 2,500.00
Shop Equipment
(Depreciation) 2,000.00 2,000.00 2,000.00 2,000.00 2,000.00
Delivery
Equipment
TOTAL 1,027,654.80 1,049,040.94 1,080,287.17 1,112,470.78 1,145,619.94
 37

Schedule 3: Source of Fund

The Total Projected cost of this business is P 1,098,154.80 which is to be

provided by the propents by helping each other to come up with the Partner’s Equity.

The total equity distribution of the two owners will be P 549,077.40

Schedule 4: Payment of Fund

The Owners has a sufficient fund to have this business.

Tax Rate Business Tax

Income 12% payable
Year 1 3,328,345.20 X12% 399,401.42
Year 2 3,437,639.06 X12% 412,516.69
Year 3 3,540,993.23 X12% 424,919.19
Year 4 3,647,448.02 X12% 437,693.76
Year 5 3,757,096.45 X12% 450,851.57
Schedule 5: Business Tax Payable

Schedule 6: Depreciation
 38

Estimated Depreciation
Salvage Cost
Fixed Assets Fixed Cost Value Estimated Life
Office Equipment 18,000.00 3,000.00 5 3,000.00
Shop Equipment 35,000.00 10,000 10 2,500.00
2,000.00
Delivery Equipment
25,000.00 5,000.00 10
TOTAL 7500.00

¿ Cost – Estimated Salvage Value

D=
Estimated Useful Life

Office Equipment

Cost: P18,000.00
Life: 5 years
SV: ₱ 3,000

₱ 18,000.00 – ₱ 3,000.00
D=
5

D =₱ 3,000.00

Shop Equipment

Cost: P 35,000.00
Life: 10 years
SV: ₱ 10,000

₱ 35,000.00 – ₱ 10,000.00
D=
10

D =₱ 2,500.00

Delivery Equipment

Cost: P 25,000.00
Life: 10 years
SV: ₱ 5,000.00
 39

₱ 25,000.00 – ₱ 5,000.00
D=
10

D =₱ 2,000.00

2018 2019 2020 2021 2022

4,356,000.00 4,486,680.00 4,621,280.40 4,759,918.80 4,902,716.37
Revenue
Total Sales 4,356,000.00 4,486,680.00 4,621,280.40 4,759,918.80 4,902,716.37
Revenue
Less Expense
Marketing Cost 8,700.00 8,961.00 9,229.83 9,506.72 9,791.93
Office supplies 25,800.00 26,574.00 27,371.22 28,192.36 29,038.13
Cleaning supplies 1,510.00 1,555.3 1,601.96 1,650.02 1,699.52
Semi-exp.
42,500.00
Equipment 43,775.00 45,088.25 46,440.90 47,834.12
Tools 45,864.00 47,239.92 48,657.11 50,116.83 51,620.34
Semi-exp.
Furnitures and 25,000.00
Fixtures 25,750.00 26,522.50 27,318.18 28,137.72
Utilities 68,400.00 70,452.00 72,565.56 74,742.52 76,984.80
Fringe benefits 59,830.80 61,625.72 63,474.50 65,378.73 67,340.09
Salaries and
686,400.00
wages 706,992.00 728,201.76 750,047.81 772,549.25
8,950.00
Renovation Cost
- - - -
5,200.00
Permit & License
5,356.00 5,516.68 5,682.18 5,852.65
Miscellaneous 42,000.00
expense 43,260.00 44,557.80 45,894.53 47,271.37
(Depreciation) 3,000.00 3,000.00 3,000.00 3,000.00 3,000.00
Office Equipment
(Depreciation) 2,500.00 2,500.00 2,500.00 2,500.00 2,500.00
Shop Equipment
(Depreciation) 2,000.00 2,000.00 2,000.00 2,000.00 2,000.00
Delivery
Equipment
TOTAL 1,027,654.80 1,049,040.94 1,080,287.17 1,112,470.78 1,145,619.92
EXPENSE
Income before tax 3,328,345.20 3,437,639.06 3,540,993.23 3,647,448.02 3,757,096.45

Less 12% Income 399,401.42 412,516.69 424,919.19 437,693.76 450,851.57

Tax
NET INCOME 2,928,943.78 3,025,122.37 3,116,074.04 3,209,754.26 3,306,244.88
 40

Projected Income Statement

Cash In-Flow 2018 2019 2020 2021 2022

Cash flow from
Operating
activities
4,356,000.00 4,486,680.00 4,621,280.40 4,759,918.80 4,902,716.37
Revenue
Cash outflow
from Operating
activities
Less Expense
Marketing Cost 8,700.00 8,961.00 9,229.83 9,506.72 9,791.93
Office supplies 25,800.00 26,574.00 27,371.22 28,192.36 29,038.13
Cleaning supplies 1,510.00 1,555.3 1,601.96 1,650.02 1,699.52
Semi-exp.
42,500.00
Equipment 43,775.00 45,088.25 46,440.90 47,834.12
Tools 45,864.00 47,239.92 48,657.11 50,116.83 51,620.34
Semi-exp.
Furnitures and 25,000.00
Fixtures 25,750.00 26,522.50 27,318.18 28,137.72
Utilities 68,400.00 70,452.00 72,565.56 74,742.52 76,984.80
Fringe benefits 59,830.80 61,625.72 63,474.50 65,378.73 67,340.09
Salaries and
686,400.00
wages 706,992.00 728,201.76 750,047.81 772,549.25
8,950.00
Renovation Cost
- - - -
5,200.00
Permit & License
5,356.00 5,516.68 5,682.18 5,852.65
Miscellaneous 42,000.00
expense 43,260.00 44,557.80 45,894.53 47,271.37
399,401.42 412,516.69 424,919.19 437,693.76 450,851.58
Income tax
Total Cash 1,419,556.22 1,454,057.63 1,497,706.36 1,542,664.54 1,588,971.50
Outflow
Net Cash 2,936,443.78 3,032,622.3 3,123,574.0 3,217,254.2 3,313,744.8
provided by 7 4 6 8
(used in)
operating
activities
 41

Projected Cash Flow

Cash inflow
investing
Activities
INITIAL
1,098,154.80
CAPITAL 3,956,295.58 6,989,220.95 10,112,749.99 13,330,049
Total cash
outflow from
investing
Activities
Office Equipment 18,000.00
Shop Equipment 35,000.00
Delivery
Equipment 25,000.00
Cash Outflow
from Investing 78,000.00
Activities
NET CASH
PROVIDED BY
(USED IN) 1,020,154.80
INVESTING
ACTIVITIES 3,956,295.58 6,989,220.95 10,112,749.99 13,330,049.2
Cash Outflow
from Financing
Activities
Net Cash
provided by
(used in)
financing
Net Cash end 3,956,598.58 6,989,220.95 10,112,749.99 13,330,049.25 16,643,794

Balance Sheet
 42

2018 2019 2020 2021 2022

ASSETS
3,956,598.58 6,989,220.95 10,112,749.9 13,330,049.25 16,643,794.13
CURRENT ASSET 9

3,956,598.58 6,989,220.95 10,112,749.9 13,330,049.25 16,643,794.13

CASH 9

TOTAL 3,956,598.58 6,989,220.95 10,112,749.9 13,330,049.25 16,643,794.13

CURRENT 9
ASSET
NON-CURRENT
ASSET
Office Equipment 18,000.00 18,000.00 18,000.00 18,000.00 18,000.00
Acc. Dept.
3,000.00
Office Equipment 6,000.00 9,000.00 12,000.00 15,000.00
TOTAL 15,000.00 12,000.00 9,000.00 6,000.00 3,000.00
Shop Equipment 35,000.00 35,000.00 35,000.00 35,000.00 35,000.00
Acc. Dept. Shop 2,500.00
Equipt. 5,000.00 7,500.00 10,000.00 12,500.00
TOTAL 32,500.00 30,000.00 27,500.00 25,000.00 22,500.00
Delivery
25,000.00
Equipment 25,000.00 25,000.00 25,000.00 25,000.00
2,000.00
Acc. Dep. Delivery
Equipt.
4,000.00 6,000.00 8,000.00 10,000.00
TOTAL 23,000.00 21,000.00 19,000.00 17,000.00 15,000.00
TOTAL NON-
CURRENT 70,500.00
ASSET 63,000.00 55,500.00 48,000.00 40,500.00
10,168,249.9
TOTAL ASSET 4,027,098.58
7,052,220.95 9 13,378,049.25 16,684,294.13
-0-
LIABILITIES
-0- -0- -0- -0-
TOTAL -0-
LIABILITIES -0- -0- -0- -0-
PARTNER’S 1,098,154.80
EQUITY 4,027,098.58 7,052,220.95 10,168,294.99 13,378,049.25
PROFIT FOR THE 2,928,943.78 3,025,122.37 3,116,074.04 3,209,754.26 3,306,244.88
YEAR
PARTNER’S END
TOTAL 10,168,294.9
4,027,098.58 7,052,220.95 13,378,049.25 16,684,294.13
LIABILITIES & 9
PARTNERS
EQUITY
 43

4.1. Financial Risk Analysis

ROI = 20.08%

Payback Period= 4.87 or average of 2.4 months

 44

CHAPTER 5. SOCIO-ECONOMIC FEASIBILITY

5.1. Social Desirability

The social desirability of the JAS Aircondition& Refrigeration

Services & Repair Shop business activity is not totally accepted

especially by environment-conscious consumers unless the

products are ECC compliant.

5.2. Related industries

The business proposal will contribute positively to the growth

of furniture industry, and other related industry such as paint

industry, construction industry and WRT.

5.3. Socio-Economic Impact

The business proposal will generate employment and

provide income to the unemployed particularly in Tacloban City.

5.4. Contribution to government

The JAS Aircondition& Refrigeration Services & Repair

Shopwill contribute to the treasury of the government in terms of

income tax.
45