PROJECT FEASIBILITY

STUDY GUIDE
 Chapter 1:
Introduction


 Objective of the Study
The objective of the group why the study is
conducted. What do you want to know about the
business?
Example:
This study aims to determine the feasibility of
Dress Quilting business in Tagum City.
It specifically aims to know the following :
1. To analyze the competitiveness of the business
in the market
2. to investigate the production and technical
aspect
3. to study the appropriate management set up of
the business
4. to analyze the financial feasibility of the
business.
Methodology
 How the study is to be conducted. Method
adopted like interview, observations, or
Questionnaires and others.

 What method used by the proponents during

the conduct of the study to be able to know
the feasibility of the proposed business.
Scope and limitations of the study

 In every business research undertakings there

are always limitations. Researchers must
focus on specific area of study to be able to
finish the study within the time frame . Focus
on the four important aspects the Marketing,
Technical/Production, Organization
/Management Aspect and Financial Aspect
 Chapter 2:
Executive Summary
 This is the summarised
version of the feasibility
study. It must adequately
cover the major points of the
feasibility study on one or
two pages.

Brief Description of the Project or the
business
 Briefly describe the proposed projects
(FS) or existing Business (Bus. Plan) in
terms of the following:
 the product,
 market,
 location,
 legal form,
 plan of operation
 Financing plan.

 Brief Profile of the Entrepreneur

 BUSINESS PLAN: (Narrative Form)

◦ What are the entrepreneur’s personal profile

competencies and qualifications? Mention the
work/business experiences, trainings and seminars
attended related to the project, skills, knowledge
that can be applied into the business.

◦ Note: subject teacher should give example to the

students as to how to come up with short profile
story about model client like as to how he or she
started and others. Then advisers and panel has to
double check during advising and defenses
respectively.
FEASIBILITY STUDY:
 State the name of the proponents of the
project study. Suggested Format:

NAME EDUCATIONAL ADDRESS

(proponents) BACKGROUND
Projects’ contributions to the economy (Socio Economic Aspect)

 Describe the important socio-economic and

development contributions of the proposed project to
the local and national economy. These contributions
may be in the form of attaining our bottom line goals.

 Researchers must cite facts or data in local or national

or even international information relating to the
business on study.
FOCUS ON THE FOLLOWING:
 Contribution to the Economy
◦ Employment generation
◦ Income generation (Businessman and
Government-Tax)
 Stimulating Effect on other related business
◦ Investment generation
 Preservation and Utilization of Raw
Materials into marketable Products
◦ Utilization of recyclable waste materials
◦ Local Agricultural products
 (
Summary of Findings and Recommendations FOR BUSINESS PLAN) )

 STUDENTS MUST BE INSTRUCTED THAT SUMMARY OF FINDINGS AND

RECOMMENDATIONMUST DONE ONLY AFTER ALL THE CHAPTERS HAS BEEN
ORGANIZED

Particular Findings Recommendation

Marketing Plan

Production Plan

Organization and
Management Plan

Financial Plan
 In the findings and recommendation, the
subject teachers, advisers and panel has to
check if all the findings have corresponding
recommendations and must be reflected in
the Proposed Plan of every chapter of the
Business Plan .
 Note: This is for the bus. Plan
 Chapter 3:
MARKETING Plan
Description of the
Products/Services
 Describe your product/service here
◦ Briefly describe the product/services – its
physical attributes, raw materials used etc.

 Example: Sheila’s Kwek2x offers a delicious

kwek2x (boiled egg coated with butter and
add on sidings of cucumber, pineapple and
seaweed. The food is sold at an affordable
price to consumers .
Comparison of the product with its
competitors’
◦ Compare product /services with those of
the competitors.
◦ Describe how it is similar and what makes
it different.
◦ Include a comparison of the product itself,
the packaging, the prices, quality, taste
and volume.
◦ What are the factors that make it more
saleable in the market and competitive?
Location
 Location of the business. State the advantages of the area.
Present the vicinity map of the location in a separate sheet and
label it as Figure ____.

◦ Head office
◦ Plant site/Business site
◦ state here the factors that affect the choice of location in
terms of the following:
A. sources of raw materials
B. labor and utilities
C. proximity to the market
D. availability of transportation
E. the cost of land and transportation
Note: The project must be at place where in maximum
efficiency can be maintained at a lowest possible cost.
 Market Area

◦ What specific area covered by the business?

Is it Davao del Norte? Or other particular
place. Geographic area of operation.

 Main Customers

◦ Define the target market. Children, Adult,

Middle age, infant, Male or female sector?
TOTAL DEMAND
 In the establishment of DEMAND, the kind business
proposal has to be considered first to exactly
identify or reconstruct the historical demand which
also serve as basis in making projection , thus it
should be analyzed whether it will be based on the
following :

Target Clients:
◦ population,
◦ household
◦ Age bracket
◦ or the specific target clients or user

 Note: the geographical location (the whole

city/province /municipality/barangay or purok)
Percentage of Target Clients
 Estimated total demand is depending on your target
market and the type of product or services ( it can
be estimated based on total population, age
bracket of user , households , specific target
clients , etc. )

 Discuss the basis of the information presented on

the table.

 Random interview or survey must be conducted.

State the total number of sample or percentage or
based on
The previous study or in the internet

 Note: Discuss the information first before the table

presentation.
Frequency/ or unit of measure / no of pieces
/no. of times.

 A realistic basis must be established. How? internet ,

books or actual survey and other references

 For example:

◦ standard number of kilos of rice consumed in one household

◦ number of grams of bread consume by a typical Filipino
◦ Number of gallons of water consume per person or
household.

Note: Use moving average in the computation of Supply

and Demand Projection in both the Business Plan and FS
ILLUSTRATION ON THE
FEASIBILITY STUDY
DEMAND AND SUPPLY
ANALYSIS
Total demand
Table ____
Historical Demand
Averag
Average Total No.
e
Populati percenta of balut
consu
Year on ge of egg
mption
16-60 client consumed
per
(60%) per year
month
2012 135, 840 81, 504 10 9, 780, 480
2013 139, 439 83, 663 10 10, 039, 560
2014 143, 106 85, 864 10 10, 303, 680
 Table ____
Projected Demand
Year Based Year Average % Average No. of balut eggs
Increase per year

1 10, 303, 680 2.6% 10, 571, 576

2 10, 571, 567 2.6% 10, 864, 437

3 10, 864, 437 2.6% 11, 128, 444

Note: use moving average in the computation

of the Demand and Supply Projection in both
the Business Plan and FS
Computation : Moving Average
10, 864, 437-10, 571, 576
10, 571, 576

 =.0277
11, 128, 444-10, 864, 437
10, 864, 437
=.0243
Total.052/2 Average Increase=
.026 x 100=2.6%
Total Supply
Table ___
Historical supply
Competitors 2010 2011 2012

Mercedes Melloria 50,400 60, 480 70, 560

Lanie Pestillas 40, 230 50, 400 60, 480

Rachelle Sapal 30, 240 40, 320 50, 400

Others 100, 800 120, 960 211, 680

Total 221, 760 272, 160 393, 120
 272,160-221-76 = .2273
 221-760

 393,120-272,160 = .4444
272,160 ______
Total ………… .6717/2
% of Average Increase=
.33585x100=33.59% or 34%
 Table ___
Projected Supply
Year Based Year Average Projected
Increase Supply

1 393, 120 34% 526, 781

2 526, 781 34% 705, 887

3 705, 887 34% 945, 889

Computation

 393, 120x 34%= 133,661
 Add:…………….. 393,120.
 Projected Demand
◦ In year 1 …………. 526,781
 =====
◦ Then :
◦ PD. Year 1 526,781x 34%
◦ = 179.106
◦ Add:PD Yr.1 526,781
◦ Total 705,887
=====

Then same process on the third year

 Table____
Demand and Supply Analysis

Year Demand Supply Unsatisfied Demand

Past
1 9,780,480 221, 760 9, 558, 720

2 10,039,560 272, 160 9, 767, 400

3 10,303,680 393, 120 9, 910, 560

…
Projected
1 10,571,576 526, 781 10, 044, 795

2 10,846,437 705, 887 10, 140, 550

3 11,128,444 945, 889 10, 182, 555

…
Market Share

Comparing the estimated demand data with

total estimated supply (based on the volume
capacity of existing suppliers both within and
outside of the area), you get the gap or the
unserved portion of the market. Give an
estimate (percentage) out of the total demand
as your projected market share.
 Table____
Market Share

Year Unsatisfied Production Market Share

Demand Capacity per
year
1 10, 044, 795 1,004,480 10%
2 10, 140, 550 1,014,055 10%
3 10, 182, 555 1,018,256 10%
Projected Selling Price

 Projected Sales Revenue

Promotional Measures and Marketing
◦ Describe the promotional measures to be adopted and the
corresponding marketing strategies.

 Distribution Strategy
◦ Mode of distribution or channel of distribution at present or any
suggestions and recommendation

 Pricing strategy
◦ How the product or services are being priced.

 Marketing budget
Discuss the present marketing budget of the business. Then you
can make recommendation for future operation improvement or
increase of sales if possible based also on the marketing strategy
recommended or planned.
 CHAPTER 4
PRODUCTION PLAN
PRODUCTION ASPECT
Production Process

Describe the process of production.

Note: Students must be reminded always to

show the flow of operation.

Fixed Capital (Machineries/ Tools and

Equipment

Identify the buildings and machinery needed and

their corresponding cost. (for feasibility study)

Business Plan; The current existing fixed capital

 For the Feasibility Study , identify the
estimated life of the proposed capital
equipment

Table __
Fixes Assets

PARTICULARS QUANTITY UNIT COST TOTAL COST

Life of Fixed Capital

 What is the life span/ estimated useful life of

the asset.
Particulars Total cost Estima Year 1 Year 2 Year 3
ted life

Utensils P3,000 3 P1,000 P1,000 P1,000

Table 2,000 3 667 667 666

Total P5,000 P1,667 P1,667 P1,667

 Sources of Equipment
◦ Where did they acquire it?

 Planned Capacity
◦ How much the capacity will be used?

 Terms and Condition of Purchase Equipment

◦ Describe how the purchased equipment will be paid

 Factory Location and Layout

◦ Describe the location and lay-out of the plant

 Raw Materials Needed

◦ What are the raw materials used by the business (Note: It can be
enumerated)
 Cost of raw materials
How much (Must be presented in detail and if possible get cost
per unit if the
product can be produced per piece)

 Raw Materials Availability

Describe the sources and availability of the raw materials used.

 Labor
Discuss the manpower size requirement and the skills needed

 Labor Productivity
Are the workers available throughout the year? If not, what
will be its effect on production?
 Cost of Labor

….. if production concern business

Position No. of Mode of Rate Total Cost

workers payment
Factory Overhead Expense

◦ Expense related to the production of the

products

◦ If in case of production concern business,

there is Factory overhead, then this factory
overhead will be part of the production
Cost (Materials , labor and FOH)
Operating Expenses
 Expenses incurred in the operation of the
business.
 if in case there are expenses that is difficult `to
trace then we can allocate a certain Percentage
share as to how much is for the operating
expenses and how much for the FOH . In the case
of the busienss plan let the students ask the
model client regarding the components of their
operating expenses /FOH

 In the FS , the proposed operating Expenses to be

incurred is depending upon on the kind of business.
Expenses not necessary should be deleted
Production Costs
Materials, labor and Overhead

PRODUCTION PLAN
(Business Plan)
Is there any changes necessary? If none then
just discuss or explain that there is no need
to change the process because it is still
workable and if there is a need of additional
equipment or change of business location
then you have to advise the students to
reflect it. All plans of the business
undertakings must be presented under the
Production Plan /Service Plan
 Chapter 5

ORGANIZATION AND
MANAGEMENT PLAN
 ORGANIZATION AND MANAGEMENT ASPECT
Form of Business Enterprise
◦ (Business Plan) What is the current form of business
organization? How it is being organized

◦ Note; the student can make recommendation of the

changes of the form of business organization if
necessary but must be reflected in the
Organizational plan as the proposed
organizational structure.

◦ (Feasibility Study) let the student cite the

advantages and disadvantages of choosing the form.
Emphasize the cost benefit analysis of choosing the
form.
Management and Organizational Structure
◦ (business Plan ) What is the current
structure of the business? Discuss as
to the flow of operation. If changes
is necessary then present it in the
Orgnaizational Plan

◦ (feasibility Study) What is the

proposed Organizational structure
Management Qualification and Functions

 (Business Plan/FS ) What are the business

experiences and qualifications of the
entrepreneur?

Office Equipment / Facilities

◦ (Business Plan) What are the available fixed assets
at present?

◦ (Feasibility Study ) What are the proposed fixed

assets ?
Administrative Costs

◦ (Business Plan) The present

administrative expenses of
the business client.

◦ (Feasibility Study) Proposed

Administrative Cost
ORGANIZATION AND
MANAGEMENT PLAN
(Business Plan)

◦ Is there any changes necessary? If none then just

discuss or explain that there is no need to change
the preset Organizational Structure because it is
still workable and if there is a need of additional
office equipment or administrative expenses then
you have to advise the students to reflect it. All
plans of the business undertakings must be
presented under the Organization And Management
Plan
 Chapter 6

FINANCIAL PLAN
 FINANCIAL ASPECT
Made an introduction as to what this chapter all
about .Define or explain what the 3 basic financial
statements is all about.

 Major Assumption
 Total Project Cost (FS Only)
◦ How much is the total capital required?
◦ Is there any loan? How much is the equity contribution of the
entrepreneur
◦ What is the collateral the loan?
 Historical Financial Statement (Business Plan only)
◦ Income statement (Immediate Past Year)
◦ Cash flow (Immediate Past Year)
◦ Balance sheet (Immediate Past Year)
 FINANCIAL PLAN (for business plan only)

 Total Additional Investment (If needed)

◦ How much is the total capital required?

◦ Is a loan needed? What will be the equity

contribution of the entrepreneur?

◦ And Financing Plan and Loan Requirement How

much?

◦ What collateral will secure.

 Projected Income Statement

 Projected Cash flow Statement

 Projected Balance Sheet

 Financial Ratio Analysis

You have to discuss all the ratio analysis as to
their significance
 Net Profit Rate
 Gross profit rate
 Return On Investment