A PRE-FEASIBILITY STUDY FOR ONLINE ORDERING AND HOME DELIVERY

SERVICE OF SNACK BAR BUSINESS

DONNA GRACE G. CAÑARES

APRIL ROSE M. DOMINGO
NELCA G. LOCSIN
JEAN E. FOCBIT

A PRE-FEASIBILITY STUDY SUBMITTED TO ROY B. CABARLES OF THE

COLLEGE OF BUSINESS MANAGEMENT, WESTERN
PHILIPPINES UNIVERSITY, ABORLAN, PALAWAN
IN PARTIAL FULFILLMENT OF THE
REQUIREMENTS IN GEE6 (THE
ENTREPRENEURIAL MIND)

BACHELOR OF SCIENCE IN HOSPITALITY MANAGEMENT

JULY 2021
 TABLE OF CONTENTS
TITLE PAGE i
TABLE OF CONTENTS ii
LIST OF FIGURES iii
LIST OF TABLES iv
CHAPTER Page
I. INTRODUCTION 1
Brief Description 1
Objectives 1
II. MARKET POTENCIAL AND PROSPECTS 2
Products/Services 2
Market Segmentation 3
SWOT Analysis 4
Market Share and Sales 5
III. TECHNOLOGY ASSESSMENT AND OPERATIONS
VIABILITY 6
Technology Requirements 6
Equipment and Machineries Needed 6
IV. INVESTMENT REQUIREMENTS AND PRODUCTION/
SERVICING COSTS 7

Source of Capitalization 7
Pre-Operating Cost 7
Production/Service Facilities Investment 8
Working Capital Investment 8
V. FINANCIAL FORECAST AND DETERMINATION OF
FINANCIAL FEASIBILITY 9
Initial Capital Requirement 9
Financial Statements 9
Return of Investment 10
 List of Figures
Page
Figure 1. Online Ordering and Home Delivery 5
Service Market Shares
Figure 2. Online Ordering and Home Delivery 5
Service Market Sales
 List of Tables
Page
Table 1. Target Market 3
Table 2. SWOT Analysis 4
Table 3. Source of Capitalization 7
Table 4. Pre-Operating Cost 7
Table 5. Long-term Investment 8
Table 6. Working Capital Investment 8
Table 7. Financial Statement 9
 CHAPTER I

Introduction

Brief Description

Due to COVID-19 pandemic, the foodservice sector was majorly hit by the strict
lockdown measures introduced in the Philippines to limit the spread of virus. The food
industry or establishments are forced to either close down or operate but with many
limitations in Palawan and only takeaway and delivery services were allowed.

The increase in interest penetration, quick access to smartphones and simplified e-

banking systems have resulted in more purchases through online channels. This has
propelled several online portals to enhance online ordering by offering improved
selection, convenience, transparency and security to the customers. The online
ordering and home delivery service was the recommended action that the snack bar
business wants to utilize.

This study will assess the potential of online ordering and home delivery service as well
as its impact to the sales of the business.

Objectives

This study aims to present the information about the recommended action that the
snack bar in Brgy. Ipilan, Narra, Palawan wants to utilize.

Specifically, it aims to give the following information:

1. To identify the market potential of online ordering and home delivery service
for the snack bar business.
2. To identify investment requirements, production and servicing cost of the
recommended action.
3. To identify the technologies, equipment’s and machineries needed for the
operation.

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 CHAPTER II

Market Potential and Prospects

Products/Services

The services presented in this study are online ordering and home delivery. It enables
the customers to place their orders and have it delivered to their house. The snack bar
offers different kinds of snacks such as burgers, pizza, lomi, pancit palabok, drinks and
shakes. This enables the snack to provide more variety of snacks while maintaining its
affordable price and the quality of the foods. So Hungry snack bar will ensure product
quality through the use of fresh ingredients, sanitation and cleanliness.

2
Market Segmentation

It will be the first snack bar in barangay Ipilan, which will give an advantage because
competitor is minimal. Moreover, the snack bar will have an extensive target market.
People of all ages that enjoy delicious snacks will be included in the target market.

The snack bar customers consist of four target groups.

FACEBOOK USERS TEENS AND LOCAL OUTSIDE

YOUNGER COMMUNITY BARANGAY
ADULTS MEMBERS

Since the business

will be introduce to
They are the avid The local The outside
the social media,
community barangay
specifically in social media
represents the 15%
Facebook, 25% of users, loves to eat members
of the target
its target customers and loves to post, represent the
are the Facebook
market and are the
share and make 40% of the best opportunity
users. It is not comments on target customer
difficult to have a
for online ordering
something that base and are the and take delivery
customer in
catches their best service.
Facebook since
almost of the people attention 20% of opportunity for
has Facebook the teens and repeat
account. And younger adults customers.
Filipinos are known are the target
for being a social customers of So
media addict, then Hungry snack
it will give our bar.
business an
advantage, and
most of the people
are scared to go out
because of
pandemic.
Table 1. Target Market

3
SWOT Analysis

The table below shows the strengths, weaknesses, opportunities and threats of online
ordering and home delivery service for the snack bar business.

STRENGTHS WEAKNESSES OPPORTUNITIES THREATS

-Entry of new
-Customer -Limited -Business growth
competitors
centered manpower and expansion
- Poor internet
- Quick response -Limited -Increase the
connection
to customer resources number of
demands and customers -Unavailability
- Limited capital of supplies
inquiries -Creation of
- Highly business -Customers
convenient and opportunity to wishing to do it
easy to use. other places themselves

- Licensed -Increase in - Changes in

delivery drivers demand for home weather
delivery service conditions/Acci
dents
- Poor publicity
in social media

Table 2. SWOT Analysis -Weakening

customer
satisfaction

4
Market Share and Sales

The online ordering and home delivery service of the snack bar is expected to
contribute 70% of the market shares of the business for a month. And at least 40% for
the market sales of the snack bar for a month.

MARKET SHARES

10%

20%

70%

Online Ordering Home Delivery Service Snack Bar Information Others

Figure 1. Online Ordering and Home Delivery Service Market Shares

MARKET SALES

15% Home Delivery Service

Dine-in
35%
Takeout
10%
Online Ordering

40%

Figure 2. Online Ordering and Home Delivery Service Market Sales

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 CHAPTER III

Technology Assessment and Operations Viability

Technology Requirements

The online ordering and home delivery service will use integrated online ordering
system through Facebook that will help the customers to visualize the product they’re
looking and place their orders easily.

Equipment and Machineries Needed

The snack bar will use motorcycle equipped with heavy-duty insulated food delivery
bags with food and drink holders to prevent the food or drinks from spilling.

Motorcycle Equipped with Heavy-Duty Insulated Food Delivery Bag

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 CHAPTER IV

Investment Requirements and Production/Servicing Costs

Source of Capitalization

The table below shows the sources of capitalization and the amount for the online
ordering and home delivery service.

Source of Capitalization Amount

Owner Php 25,500.00

Php 60,000.00
Bank Loan
Total Php 85,500.00
Table 3. Source of Capitalization

Pre-Operating Costs

The table below shows the pre-operating cost of online ordering and home delivery
service of the snack bar.

PRE-OPERATING COST
Online Ordering System Php 6,000.00
Delivery Box Php 2,000.00
Motorcycle Php 55,500.00
Fuel/Gasoline Php 1,500.00
Heavy-duty Insulated Food Delivery Bags Php 2,000.00
Supplies Php 2,000.00
Start-up Inventory Php 10,000.00
Working Capital & Contingency __Php 6,500.00_
Total Cost Php 85,500.00
Table 4. Pre-Operating Cost

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Production/Service Facilities Investment

The table below shows the long-term investment for the production/service facilities
of the online ordering and home delivery service.

Long-Term Investment

Online Ordering System Php 6,000.00

Php 55,500.00
Motorcycle
Total Investment Php 61,500.00
Table 5. Long-term Investment

Working Capital Investment

The table below shows the working capital investment of the online and home delivery
service of the snack bar as well as its current assets and liabilities.

Current Liabilities

Account Payable Php 60,000.00

Total Liabilities Php 60,000.00
Working Capital Php 25,500.00

Current Assets

Cash Php 25,500.00

Account Receivable Php 60,000.00

Total Assets Php 85,500.00
Table 6. Working Capital Investments

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 CHAPTER V

Financial Forecast and Determination of Financial Feasibility

Initial Capital Requirement

The amount required from the owner, as shown in the Source of Capitalization
section on chapter IV is dependent upon the successful acquisition of funds from
each of the listed sources. The funds will be used to comply the projected capital
budget requirements as explained in the Financial Statement section. Adjustments to
the amount of funds needed may be necessary in the event of unforeseen
circumstances.
Financial Statements

The table below indicates the financial statement of the online ordering and home
delivery service of the snack bar as well as the sources of funds and its allocations.

Source of Funds Amount

Equity Contributions Php 25,500

Bank Loan Php 60,000

Total Php 85,500
Uses of Cash:
Online Ordering System Php 6,000.00
Delivery Box Php 2,000.00
Motorcycle Php 55,500.00
Fuel/Gasoline Php 1,500.00
Heavy-duty Insulated Food Delivery Bags Php 2,000.00
Supplies Php 2,000.00
Start-up Inventory Php 10,000.00
Working Capital & Contingency __Php 6,500.00_
Total Uses of Cash Php 85,500.00

Table 7. Financial Statement

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Return on Investment

The snack bar is estimated to earn Php 600,000.00 a year and about Php 50,000.00
a month. The online ordering and home delivery service is expected to contribute
about 40% of the profit of the snack bar. The estimated net income for online ordering
and home delivery service for the snack bar is Php 50,000.00 every month and a total
investment of Php 85,500.00 for online ordering and home delivery service.

ROI = _50,000.00_
85,500.00
ROI = 0.5847953216374
ROI= 0.58
The return of investment for the online ordering and home delivery service is 0.58 or
58%.

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