ST. LOUISE DE MARILLAC COLLEGE OF SORSOGON

HIGHER EDUCATION DEPARTMENT

S.Y. 2015 – 2016 First Semester

DORMITORIO DELLO STUDENTE

FEASIBILITY STUDY

In Partial Fulfillment of the requirements in the degree of

Bachelor of Science in Accountancy

Submitted by:

CELESTINE JOY GERES

JOAN DEUNA

ALYSSA DECANO

ACKNOWLEDGMENT

TABLE OF CONTENTS

EXECUTIVE SUMMARY

CHAPTER I

Market Feasibility

A. Demand and Market Study

Sorsogon City has all the major resources when it comes to education. The aggressive

move of the Colleges around the area to further improve its academic programs and

facilities will eventually result to the increase of student population. Students from all

over the localities move to the city to gain a good quality education. These developments

will definitely bring a need for safe, livable, affordable and comfortable housing

accommodations for these students in the future. Demands on rooming houses have all

been increasing for the past 5 years. It has been an increasing trend of business venture

for entrepreneurs. Rooming houses are a good diverse service provider to its consumers,

as well as providing an opportunity for the local government in generating income

through taxes paid by the operator engaged in the business. Dormitorio dello Studente

provides a service composed of different characteristics to its tenants. It caters and satisfy

the different needs based on its costumers’ different demands.

1. Market Segmentation

Market Segment Characteristics/Type

A. Security Physical and environmental safety.

B. Comfort Harmonious, homey, place of relaxation.

C. Cleanliness Organized and good living condition

environment.

D. Healthful Well sanitized environment and

surroundings.

2. Demand Analysis

The primary target market of Dormitorio dello Studente are the students of Sorsogon

City. The various market of the proposed dormitory constitutes the demand for this

service. Considering the nature of the business, fluctuation on demand rate is possible

throughout the operation. The Dormitorio dello Studente promotes and maintains the

well-kept sanitation control and homey feel environment that most of the students need

on their daily activities and routine.

In economic upturns, the demand for dormitories tends to be particularly strong

especially to the places where majority of educational institutions can be located.

Sorsogon City create business opportunities intensely for entrepreneurs, thus increasing

the value of economy all the way through the time.

3. Market Preference

The market is predominantly students so rental rates is a major concern. The

dormitory is a forty-room dormitory. Since, the dormitory will have amenities that are

usually needed by students, rental rates will not be a major consideration in choosing a

student housing.

B. Sales forecast and Marketing

Local accommodation management owner provide a just and satisfactory service to

most of its tenants. Boarding houses are the enterprises that give a lot of competition to

the owners or operators in this industry. Different criteria and schemes are introduced in

gaining and convincing existing and potential tenants. The Dormitorio dello Studente is a

business venture providing a necessary environmental components of safety, healthful

and sanitary. Prioritize the comfort and satisfaction of its tenants through providing and

recognizing their well-being affected by the living condition offered by the dormitory.

Gaining potential tenants through flyers and tarpaulin advertisement promotion strategy,

the dormitory occupants are estimated.

Estimate of Sales Revenues

The Dormitorio dello Studente is likely to recognize a total of P1,248,000.00

projected revenue in its 2nd year of operation. Meanwhile, during the first year, the

business venture cannot be able to generate revenue for the construction of the

dormitory building. The project has the probability to increase its average service

price due to increase in demand.

PROJECTED SEVEN YEARS REVENUE

Year Yearly Costumer

Rate

Average Service

Price

Total Projected

Revenue

1

2 65% 1000 1,248,000

3 70% 1,000 1,344,000

4 75% 1,000 1,440,000

5 80% 1000 1,536,000

6 85% 1,000 1,632,000

7 95% 1,000 1,824,000

CHAPTER 2

TECHNICAL FEASIBILITY

A. Program Summary

The project will house 160 students in a total area of 1,335. There are three primary

program components:

1. STUDENT ROOMS

There will be 20 rooms available for each floors (2nd and 3rd) and a maximum

of 4 students will be accommodated in each room. Each room will be furnished

with these basics:

Curtains

Two Bunk beds

Study desks with chairs

Four Closets

Stand fan

2. COMMON SPACES

Common spaces will be provided for the students on each floor. On the ground

level, a multi-purpose hall will accommodate meetings and students guests. Study

lounges will be provided on each of the upper two levels with a sala set feature. A

laundry area located at the roof deck will be provided for the students.

3. CANTEEN

Dining facilities will be open to the students every day where students can have

their meal in a cheap price but maintaining the quality of the food.

4. ADMINISTRATIVE OFFICE

The office hour starts at 9:00-11:00 in the morning and will resume transaction

at 1:00 pm up until 4:00 pm. The administrative office conduct all the transaction

from admission up to payment of rent fees of its tenants. It will be furnished with

the following furniture and fixture:

Office Desks

Computer set

Stand Fan

B. Plant Capacity

YEAR CAPACITY UNITS (ROOMS)

1 - -

2 65% 26

3 70% 28

4 75% 30

5 80% 32

6 85% 34

7 95% 38

C. Location Map

The area selected for the proposed building is appropriately located within the

City at Barangay Piot, Sorsogon City. The area is accessible to different schools

within the City. It is a five-minute walk to college schools like Bicol Merchant Marine

College, Inc. and Aemilianum College. The place is accessible for public transport

which is three to five minute drive to the City proper where shopping areas and

different department stores can be found.

D. Plant Layout

E. FURNITURE AND FIXTURE

Dormitorio dello Studente believe that necessary improvements are essential to

achieve its objectives in providing a good quality of service to its tenants.

Furniture and Fixture No. of Units Estimated Cost Total Estimated Cost

Utilities Supplies 1 3,000.00 3,000.00

Bunk Beds 80 3,500.00 280,000.00

Closet 160 1,000.00 160,000.00

Curtains 40 100.00 4,000.00

Study Desk 40 1,500.00 60,000.00

Sala Set 2 5,000.00 10,000.00

Stand Fan 40 800.00 32,000

Total Estimated Cost 549,000

F. OFFICE EQUIPMENT

Computer Set 25,000

Office Desk 1,500

Total Estimated Cost 26,500

G. Flow Chart

CHECKING FACILITIES & EQUIPMENT – Administrative staff will check the

conditions of the dorm before the tenants occupy the room for safety purposes.

HIRING OF PERSONNEL – It is important to hire personnel such as guard, for

the securities of every person in this dorm; maintenance for the cleanliness of the

facilities; and administrative staff for inquiries and others as needed.

ACCEPT TENANTS – The dormitory are encouraging students living outside

the city proper to provide cheap and convenient place to stay away from home.

ACCEPT RENTALS FOR COMMERCIAL SPACE – At the first floor of our

dormitory, we have two (2) commercial spaces to be rented by the person who wants to

operate their own business like canteen and gym.

PAYMENT PROCEDURES – If the customers are satisfied at our dormitory, and

they are interested to accommodate some rooms, we will explain them the procedures for

payment and the policy for payment is one (1) month advance and 1 month deposit.

ESTABLISHING SECURITIES– We want to protect our tenants to those people

who has bad intentions to our dorm, so we will hire a security guard to monitor the

people entering the dorm.

ACCEPTING THE VISITORS OF TENANT – The tenant must inform the

administrative staff that they have friends, relatives, classmates that will visit them. And

the visitors will wait at the visitor’s area only.

IMPLEMENTING THE RULES & REGULATIONS – The rules and regulations

of the dormitory will be posted at the information desk and it will be explain to every

tenant living in the dorm.

SERVING PEOPLE – We will serve our beloved customers to satisfy their needs

and to help them find a home that they never fell emptiness and to have peaceful outlook

in life.

CHAPTER III

Management Aspect

1. Management of the Project

A. During the pre-operating period, the sole proprietor and the supervisor hired for the

project oversee the activities and construction of the building for the preparation of

the business venture. Both supervised the progress of the project and monitor the cost

invested and expensed placed therein.

B. The Dormitorio dello Studente is an establishment owned by a sole proprietor. It is a

service provider to the students which gives quality renting space and environment.

Personnel are hired to afford a quality service provided and to accommodate the

needs of its tenants.

Organizational Chart

Dormitorio dello Studente is an accommodation management service

capitalized by a sole proprietor who acts as the manager and cashier of the

business venture. Oversee the situation of the students/tenants of the dormitory

and stands as the landlord of the rooming house venture. To help the owner in

managing and supervising the business project, an administrator, maintenance

crew and utility worker are hired to assist in the daily transaction and activity of

the project. The administrator is concern with admitting the tenants to the

dormitory. Responsible for acquiring the basic information of the students

through the admission form provided by the business project. The maintenance

crew administer the proper waste disposal and maintain the cleanliness of the

surroundings of the establishment.

Unit Management

Personnel

Time to be

Devoted to the

Project and

Duties

Qualifications Compensation

Administrator 8 hrs. 7,000

Maintenance

Crew and Utility

Worker

8 hrs. 6,000

C. To effectively provide a quality service, certain qualifications are required from the

hired employees of the dormitory.

Labor Skills

Required

Number of Labor

Required

Qualifications Compensation

1 7,000

2 6,000

D. Recruitment and Training Programs

1. Selection and placement

a. Experience

There is no substitute for the experience. The management prefers

applicant who have gained experience through the years of exposure to job.

They hold this to say that it takes time before one is able to acquire a

necessary and desirable experience.

b. Physical Characteristics

This is important for certain kind of work especially those requiring the

use of stamina or physically strong workers carrying heavy load. Good health

means resistance to diseases and therefore less absences that are bane of the

management in that they could result to the slow pace in production and as a

consequence a reduction in output.

c. Mental Alertness

This is known under the popular term intelligence. Those possessing high

degree of intelligence generally prove as an asset to the organization for the

simple reason that they could use their mental faculties and make individual

decisions without unnecessarily relying on their superiors.

d. Attitude toward Employment

If an employee considers his work as nothing more than a job. He is not

bound to accomplish much. As such, this type of employee cares less whether

he produce enough or performed in an adequate level of energy.

e. Adaptability

A rational individual must be able to adapt the changing condition, that is,

he must be flexible. Employees must always try to prove their worth to the

organization.

f. Personality

Where the nature of business require constant exposure to the public,

undoubtedly those possessing with a strong and pleasing personality are

preferred over the other applicants.

g. Educational Background

Those who have pursued and finished college courses are generally

preferred over those who were not able to. In fact, literacy does not merely

mean ability to read and write. Rather, it means being able to understand what

he has read and putting to a good use what he has learned.

Acquiring the best human resources is an important challenge for the

accommodation business because the efficiency and effectiveness of the

performance of a business depends much to its employees. Similarly, if an

organization makes the accurate selection decision, it is possible to minimize

turnover rates.

2. Training Programs

One common approach to the problem of how to improve the efficiency

and effectiveness of performance on the part of the workers and employees is

through intensive training programs. Effective training enables an employee to

learn and perform the job proficiently.

Training maybe simply described as the process of increasing the skills

and knowledge of the personnel for the purpose of improving individual and

organizational performance to attain its objectives and development.

The Dormitorio dello Studente sends its employees to undergo trainings

and seminars which are related to their respective area of expertise and

accommodation management assemblies. These are essential to set the mode of

the employees on the job they are about to hold.

Training programs are important in ensuring employees productivity.

Gaining additional knowledge would mean increase in profitability and fostering

strong consumer’s satisfaction.

E. FRINGE BENEFITS

Dormitorio dello Studente provides employee benefits especially to those managerial

and administrative positions. Covered employees are entitled to a package of benefits

under Social Security, PhilHealth, and PAG-IBIG.

1. SOCIAL SECURITY SYSTEM

Social security system provides for a replacement of income lost on account of

the aforementioned contingencies. The benefits under the programs are as

follows:

Sickness benefits

Maternity benefits

Disability benefits

Retirement benefits

Death benefits

CONTRIBUTION:

The monthly contributions are based on the compensation of members. The

current SSS contribution rate is 11% of the monthly salary credit not

exceeding P16,000 and this is being shared by the employer (7.37%) and the

employee (3.63%).

2. PAG-IBIG FUND

This program promotes home ownership through the establishment of an

affordable and adequate housing credit system for its members. It also provides

small and short-term loans. Membership in the fund is mandatory upon all

employees covered by the Social Security System and their respective employers.

3. PHILHEALTH

The program provides health insurance to its members. It is one of the benefits

employers should provide to its employees mandated by our Philippine law.

F. WASTE MANAGEMENT PROGRAM

Generating waste is almost unavoidable in today’s living condition. Waste

management programs play an integral role across the world by providing the proper

disposal of different kinds of waste such as garbage and refuse. This waste may

include both hazardous and non-hazardous materials, as a result there should have

specific waste management programs to handle properly and dispose any forms of

trash. Depending on the type of service offered, a waste management program may be

overseen by private business entities that specializes in the disposal of specific type of

trash.

Waste management facilities maybe in charge of a number of disposal related

programs including medical waste management, hazardous or toxic waste

management, recycling programs, and trash collections. The placement of the

companies that specialize in waste disposal can vary depending on the demand for

their service, and the availability of waste professionals within the location they are

needed.

A typical waste management program is responsible for the daily and weekly garbage

pickup and disposal from any business ventures. The waste management programs

may also require an additional service, such as recycling, depending on the type of

waste collected.

Dormitorio dello Studente observe specific process for waste management disposal

system:

1. COLLECTION/PREPARATION

The hired maintenance crew of the business project is responsible for the

collection of trash disposals of each tenants on their respective dorm units and

proper waste disposals from the corresponding units.

2. IDENTIFICATION AND SEGREGATION

Once collected, wastes are properly identified and segregated whether it has the

probability and characteristics of a recyclable material. This is an effective

method on how to properly dispose trash and wastes.

3. DISPOSAL

A proper way of dumping wastes should be observe in following different rules

and regulations imposed by the local government.

CHAPTER IV

FINANCIAL ASPECT

I. TOTAL INVESTMENT COST:

A. Cost of Land : P 2,752,500.00

B. Estimated Cost of Construction

Contract Name:

Construction of 3-Storey Dormitory Building

Location: Brgy. Bitan-O Dalipay, Sorsogon City

SUMMARY OF BID PRICES(All Parts of Bill of Quantities)

Part No. Part Description Total Amount

I Mobilization/Demobilization 4,480.00II Safety and Health 20,832.67III Earthworks

Item 803 : Excavation of Column Footing and WF 33,000.00Item 804(a) : Backfilling of Excavated Materials 28,451.50Item 804(b) : Gravel Bedding @ CF, SW, WF, FTB, SOF

495,633.90

Item 804(c) : Embankment 100,298.88IV Termite Control Works (Soil Poisoning) 182,224.25V Concrete Works 8,170,971

.06VI Rebar Works 117,859.41VII Masonry Works (CHB) 1,001,297.68VIII Cement Plaster Finish 800,646.88IX Doors 70,156.80X Windows 83,148.80XI Tile Works 4,001,278.32XII Ceiling Works 2,248,640.00XIII Roofing Works 504,893.84XIV Structural Steel 1,501,570.54

Fixed Investment Costs Land 2,752,500.00 Buildings 21,207,486.45 Office Equipment 26,500.00 Furniture & Fixture

549,000.00 Total initial fixed investment 24,535,486.45Working capital 100,000.00Pre-production capital Expenditures 1,128,845.66 Total initial investment costs 25,764,332.11

XV Painting Works 1,581,937.12XVI Electrical Works 94,841.60XVII Plumbing Works 89,514.88XVIII Sanitary Works 75,808.32

TOTAL AMOUNTS 21,207,486.45

C. Estimated Pre-operating Expenditures

Building Permit Fees 10,561.66Zoning Clearance 1,108,974.00Electrical Installation Fees 5,000.00Mayor's Permit Fees 530.00Sanitary Permit Fees 450.00CENRO Certificate Fees 1,000.00BFP Clearance Fees 1,000.00DTI Fees 215.00BIR Permit 1,115.00Total Permit and Licences Expenses: 1,128,845.66

COST OF THE PROJECT

ECONOMIC EVALUATION

Break-Even Analysis

Price ……………………………………………………… P1,000.00 100%

Less variable Expenses……………………........................ 227.00 22.7%

Contribution Margin……………………………………… 773.00 77.3%

Revenue = Variable Expenses + Fixed Expenses + Profits

1,000X = 227X + 1,058,869.95 + 0

773X = 1,058,869.95

X = 1058,869.95 / 773

X = P1, 369,818.82

Analysis:

On the second year of operation, the dormitory will be able to cover its expenses

and will gain a profit of P178,181.18.

The degree of operating leverage:

Contribution Margin / Net Income = Degree of Operating Leverage

773,000 / 418,756.81 = 1.85

Payback Period:

CHAPTER V

SOCIO-ECONOMIC STUDY

A. SOCIAL IMPACT

The Dormitorio dello Studente will have a significant impact on creating

employment opportunities which not only directly benefit local people but also act as a

catalyst for delivering regeneration and economic benefit.

Create employment for the administrative positions.

Help develop the community by offering working salary to its utilities.

Deliver a higher standard for security to the students.

B. ECONOMIC BENEFIT

Increase in tax collection by the local government unit through its operations.

Help to decrease the unemployment rate in Sorsogon City by offering job opportunities to

its localities.

SURVEY

(TALLY)

Gender:

Male – 43 %

Female – 57 %

Age:

16 to 18 yrs. Old – 51.72 %

19 to 21 yrs. Old – 41.38 %

22 and above – 6.90 %

Address:

Bulusan – 30.77 %

Barcelona – 23.07 %

Prieto Diaz – 19.23 %

Magallanes – 7.69 %

Gubat – 7.69 %

Casiguran – 3.85 %

Matnog – 3.85 %

Irosin – 3.85 %

1. What factors can affect you in choosing your boarding house?

oDistance from your school – 30.508 %

oSecurity – 32.203 %

o Price – 20.339 %

o Boardmates – 15.254 %

o Others (accessibility) – 1.695 %

2. Are you satisfied with your current boarding house?

o Yes – 87 %

o No – 13 %

3. What problem do you encounter in your current boarding house?

o Distance from school – 12.12 %

oSecurity of place – 24.24 %

oPrice – 15.15 %

o Boardmates – 33.33 %

4. Would you like to have a security guard on your boarding house?

o Yes – 43 %

o No – 57 %

5. Would you prefer to have your own canteen at the boarding house?

oYes – 83 %

o No – 17 %

If yes, then in what manner would you like to pay your food expenses?

Pay as you order – 82.61 %

To be added on your rent fee – 17.39 %

6. On what range are you willing to pay for your comfort as a tenant?

o500 -700 – 43 %

o701-1,000 – 50%

o1,001-1,500 – 7 %

7. Do you prefer having a curfew hour?

oYes – 40 %

o No – 60 %

At what time do you want your curfew to take effect?

9pm to 10pm. – 50 %

11pm to 12midnight – 50 %

8. What policy or rules from your current boarding house would you like to impose if ever

you decided to transfer to another boarding house?

oHaving a canteen

oNo curfew hour

oNo visitors allowed

oWaste management

oNo restriction on using water & electricity

oRespect for fellow boardmates