ACKNOWLEDGEMENT

The proponents want to express their heartfelt, and unending gratitude to

those whose unwavering support, invaluable advice, inspirations, recommendations,

and encouragement helped them succeed in this feasibility study.

First and foremost, to our Almighty God for the wisdom He bestowed upon us,

the strength, peace of mind and good health to finish this feasibility study.

To Professor Maria Teresa Ozoa, our Strategic Business Analysis mentor, for

her unwavering support, patience, encouragement, passion, and for sharing her vast

expertise. Her advice was invaluable throughout the duration and composition of this

feasibility study. We could not have asked for a better lecturer and mentor to guide

us through our studies.

Our appreciation and big thanks are dedicated to all our respondents and the

owners of the Coffee Shop for their willingness to answer the questionnaire and for

giving us information that helped us finish this feasibility study.

Last but not the least, we want to express our gratitude to our families for

supporting us with love, understanding and priceless motivation that brought us to

this success.

A million thanks to all of you. To God be the glory!

THE PROPONENTS

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 PREFACE

As students at the University of Mindanao Tagum College, pursuing a

Bachelor of Science in Accounting. This comprehensive study was prepared as part

of an academic requirement where students may meet real working people and learn

how to handle this type of business. We studied, analyzed, and determined the

feasibility of a coffee shop in the real world.

The project's main emphasis is on how a firm operates to strengthen our

economy. The purpose of this feasibility study is to observe and collect essential

data from the population, predicted supply, historical demand, and socioeconomic

and management factors. It also considers the risks and rewards of starting and

running a business for a future owner and employees.

The feasibility study's objective is to provide students with knowledge and

information about how to develop their moral, social, and cognitive orientations. To

have the ability to evaluate the project's technical, economic, financial, legal, and

environmental aspects.

This will help students interested in creating a profitable market where the

primary focus is on building relationships with customers and fostering goodwill like

we did to provide quality and good service as marketers and promote a positive

image and reputation for the entity.

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 TABLE OF CONTENTS

TITLE PAGE……………………………………………………………………………. i

ACKNOWLEDGEMENT………………………………………………………………. ii

PREFACE………………………………………………………………………………. iii

TABLE OF CONTENTS………………………………………………………………. iv

LIST OF FIGURES……………………………………..……………………………… vii

LIST OF TABLES………………………………………..……………………………. ix

CHAPTER I. INTRODUCTION…………………………………………………….. 1

OBJECTIVE OF THE STUDY……………………………………………………... 2

SCOPE AND LIMITATIONS OF THE STUDY………………………………….. 2

2 EXECUTIVE SUMMARY………………………….……………………….. 3
Brief Description of the Project………………….……………...…. 3
Brief Profile of the Proponents…………………………………….. 3
Project Contribution to Economy………………………………….. 4
Project Summary………………………………………………..………….. 4
Market Summary…………………………………..……………….. 5
Production Summary……………………………………...……….. 5
Management and Organization Summary………………………. 6
Financial Summary……………………….…………….………….. 6
3 MARKETING PLAN……………………………………………………….. 7
Description of the Business……………………………………….. 7
Location……………………………………….…………………….. 7
Market Area…………………………..…………………………….. 8
Main Customers………………………………………..…………... 8
SWOT Analysis…………………………………………………….. 9

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 Demand……………………………………………………………………… 10
Historical Demand…………..……………………………………… 10
Projected Demand…………………………..……………………… 11
Supply……………………………………………..…………………………. 11
Main Competitors…………………………..………………………. 11
Historical Supply……………………………………………………. 12
Projected Supply……………………………………………………. 12
Demand and Supply Gap Analysis………………….……………. 12
Market Share………………………………………….……………………. 13
Market Share Analysis of Competitors…..………………………. 13
Market Share Analysis of the Business……….…………………. 14
Projected Selling Price …………………………………………… 15
Sales Revenue – Year 1………………………………………….. 16-18
Sales Revenue – Year 2………………..…………………………. 19-20
Sales Revenue – Year 3………………..…………………………. 21
Summary of Sales Revenue………………………………………. 22
Marketing Strategies………………………………………….……………. 23
Product Strategies………………….………………………………. 23
Quality Strategy ……………………………………….…………… 24
Cost Strategy ……………….……………………………………… 24
Place Strategy…………………………………………….……….. 24
Pricing Strategy…………………………………………………… 24
Promotion…………………………………………………………… 25
Flyers and Tarpaulin…………….…………………………………. 26
Facebook Page………………………………………..…………… 26
Marketing Budget………………………………………………… 27
Promotional Expense……………………………………………… 28
Summary of Promotional Expense…………………………… 28
4 Production Plan……………………………………………….…………. 28
Service/Production Process………………………………………. 29

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COFFEE………………………………………………………………………. 29

CARAMEL MACCHIATO………………………………… 29

ICED CARAMEL MACCHIATO………………………… 29

ICED MATCHA LATTE………………………………….. 30

PASTRIES/SNACKS………………………………………………………... 31

CAKE……………………………………………………… 31

WAFFLE………………………………………………….. 33

CHOCOLATE CHIP COOKIES………………………… 34

Equipment and Machinery……………………………………… 36
Furniture and Fixtures…………………………...……………… 36
Depreciation……………………………………………………… 37
Production Capacity………………..…………………………… 39
Purchase Material………………………………………………. 39
Cost per serving of Caramel Macchiato……………………… 40
Cost per serving of Iced Caramel Macchiato……………….. 40

Cost per serving of Iced Matcha Latte………………………. 41

Cost per serving of Sliced Cake……………………………… 42
Cost per serving of Plain Waffle……………………………… 42

Cost per serving of Chocolate Chip Cookies………………. 43

Caramel Macchiato…………………………………………… 44

Iced Caramel Macchiato…………………………………….. 45

Iced Matcha Latte……………………………………………. 45

Chocolate Chip Cookies……………………………………. 46

Sliced Cake………………………………………………….. 46

Plain Waffle………………………………………………….. 47

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Projected Cost of Purchase Material……………………... 44

Operating Expense……………………………………… 44

Rent Expense……………………………………………... 45
Projected Rent Expense……………………………….. 45
Salaries Expense…………………………………….…… 45
Projected Salaries Expense…………………………….. 45
Benefits Expense…………………………………...…… 46
Projected Benefits Expense……………………………. 47
Permits, Taxes, and Licenses………….………………. 47
Projected Cost of Purchase Material………………… 47
Operating Expense…………………………………….. 48
Rent Expense…………………………………………… 48
Projected Rent Expense……………………………… 48
Salaries Expense……………………………………… 49
Benefit Expense……………………………………….. 50
Projected Benefit Expense…………………………… 51
Permit, Taxes and Licenses………………………….. 52
Summary of Permit, Taxes and Licenses………….. 52
Projected Permits, Taxes and Licenses……………… 53
Store Supplies……………………………………………. 54
Projected Store Supplies……………………………….. 55
Utensils Expense……………………………………….… 56
Projected Utility Expense……………………………….. 57
Transportation Expense…………………………………. 57
Projected Transportation Expense………….………….. 58
Utility Expense…………………………….…………….. 59
Projected Utility Expense……………………………… 59
Office Supplies………………………………………….. 59
Projected Office Supplies……………………………… 60

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 Honorarium Expense…………………………………... 61
Channels of Distribution……………..………………… 61
Inventory Scheme……………………………………… 61
5 MANAGEMENT AND ORGANIZATION PLAN
Form of Business Enterprise……………………………………. 63
Vision………………………………………………………………. 62
Mission…………………………………………………………… 62
Management and Organization Structure………………..……. 62
Management Qualifications and Functions……………………. 63
Accounting System………………………………………………. 65

6 FINANCIAL PLAN………………………………………………………. 66
Major Assumptions………………………………………………. 66
Total Projected Cost……………………………….……………. 67
Projected Income Statement……………………..……………. 68
Projected Statement of Cash Flow……………………………. 69
Projected Balance Sheet………………………………………. 71
Projected Statement of Owner’s Equity………………………. 73
Financial Ratio Analysis……………………………..…………. 74
Net Profit Ratio……………………………………….…………. 74
Return on Investment………………………………..…………. 75
Payback Period…………………………………………………. 76
ANNEXES………………………………………………………………………. 78
APPENDICES……………………………………………………….…………. 81

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 LIST OF TABLES

Table

1 Brief Profile of the Proponents…………………………… 3

2 SWOT Analysis…………………………………………… 9

3 Historical Demand ………………………………………. 10

4 Projected Demand ……………………………………… 11

5 Historical Supply ………………………………………… 12

6 Projected Supply ………………………………………… 12

7 Demand Supply Gap Analysis………………………….. 12

8 Market Share Analysis of Competitors………………… 13

9 Market Share Analysis of the Business………………... 14

10 Projected Selling Price …………………………………. 15

11 Sales Revenue – Year 1…………………………………. 17

12 Sales Revenue – Year 2…………………………………. 19

13 Sales Revenue – Year 3…………………………………. 21

14 Summary of Sales Revenue…………………………………. 23

15 Marketing Budget …………………………………. 28

16 Summary of Promotional Expense………………………. 28

17 Equipment and Machinery …………………………………. 36

18 Furniture & Fixtures …………………………………. 37

19 Depreciation of Fixed Assets……………………………… 38

20 Production Capacity…………………………………. 39

21 Cost per serving of Caramel Macchiato………………… 40

22 Cost per serving of Iced Caramel Macchiato……………… 40

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23 Cost per serving of Iced Matcha Latte……………………… 41

24 Cost per serving of Sliced Cake……………………………… 42

25 Cost per serving of Plain Waffle…………………… 42

26 Cost per serving of Chocolate Chip Cookies …………… 43

27 Caramel Macchiato……………………… 44

28 Iced Caramel Macchiato ……………………… 45

29 Iced Matcha Latte ……………………… 45

30 Chocolate Chip Cookies……………………… 46

31 Sliced Cake ……………………… 46

32 Plain Waffle……………………… 47

33 Projected Cost of Purchase Material ……………………… 47

34 Rent Expense……………………… 48

35 Projected Rent Expense……………………… 48

36 Salaries Expense ……………………… 49

37 Store Supplies……………………… 49

38 Benefit Expense ……………………… 50

39 Projected Benefit expense……………………… 52

40 Summary of Permit, Taxes and Licenses…………………… 52

41 Projected Permit, Taxes and Licenses ……………………… 53

42 Store Supplies……………………… 55

43 Projected Store Supplies……………………… 55

44 Utensils Expense……………………… 56

45 Projected Utensils Expense……………………… 57

46 Transportation Expense……………………… 58

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47 Projected Transportation Expense……………………… 58

48 Utility Expense……………………… 59

49 Projected Utility Expense……………………… 59

50 Office Supplies……………………… 60

51 Projected Office Supplies……………………… 60

52 Honorarium Expense……………………… 62

53 Proposed Organization Chart……………………… 63

54 Total Projected Cost……………………… 67

55 Projected Income Statement……………………… 68

56 Projected Cash Flow Statement……………………… 69

57 Projected Balance Sheet……………………… 71

58 Projected Statements of Changes in Owners’ Equity……… 73

59 Net Profit Ratio……………………… 74

60 Return on Investments/Assets……………………… 75

61 Payback Period……………………… 78

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 LIST OF FIGURES

Figure

1 Vicinity Map ……………………… 7

2 Store Layout……………………… 8

3 Layout for Tarpaulin and Flyers ………….. 26

4 Official Facebook Page…………………….. 27

5 Proposed Production Process

5.1 Production Process of Caramel Macchiato….. 29

5.2 Production Process of Iced Caramel Macchiato….30

5.3 Production Process Iced Matcha Latte……… 31

5.4 Production Process of Cake………………… 33

5.5 Production Process of Waffle……………….. 34

5.6 Production Process Chocolate Chip Cookies…. 35

6 Proposed Organization Chart……………………. 63

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