Feasibility Studies - Tsirt Printing
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Chapter I
INTRODUCTION
A. Brief History of the Project
Twenty first (21st) century is called the digital age because it is the era of
modern technologies that we are using in our everyday life. These advance and
sophiscated technologies help us to do our work easier and faster. One of the
advance technologies is the digital t-shirt printer. It is one of the newest machine
that was invented to satisfy our growing needs, wants and desires. Printed T-
shirts are in demand nowadays thats why the researchers chose to establish a
Digital T-Shirt Printing Business.
The proposed name of the business is WATTASHIRT. This name was
chosen because of its simplicity, uniqueness and sweetness sound that can be
easily distinguished by the market. The researchers want to attract customers not
only for its remarkable name, but significantly the quality and standard of every
printed shirts that it can produce. This establishment is located at the 2nd floor of
Mega Center the Mall,Gen. Tinio St., Cabanatuan City financed by Mr. Roberto
U. Cariazo Jr. This kind of business is a service type which needs to be
established in a place where it is well populated and should be easy to
locate.With that the researchers have chosen the right and the best location for
the said business.
WATTASHIRT targets the people of Cabanatuan most especially the
students in the nearby schools/universities.
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B. Statement of the Problem
The central problem of this study is the evaluation of the viability of
establishing WATTASHIRT, a digital t-shirt printing business here in
Cabanatuan City, Nueva Ecija.
C. Objectives
The main objective of this study is to determine the viability and feasibility of
the proposed venture.
Specifically, objectives from the point of view of the four functional areas ofmanagement are as follows.
1. Marketing
a. To identify the demand and supply for the products.
b. To formulate marketing strategies for a successful business operations.
2. Technical
a. To develop the processes involved in operationalizing the project in the
most effective and economical way.
b. To know the production requirement in the establishment of a digital
printing business.
3. Organization and Management
a. To design organizational set-up that is best suited for the proposed
project.
b. To determine the number and qualifications of the people required to
manage the project effectively.
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4. Financial
a. To identify the sources and mode of financing of the proposed business.
b. To make an estimate of the amount of initial investment required to
execute the project.
c. To present projected financial statement of the proposed venture for the
next five years.
d. To evaluate the profitabiliy, liquidity and stability of the proposed business
venture.
D. Significance of the Study
The significance of the study has a great impact to the community and
society as a whole, these are as follows: Firstly, to the potential customers they
will have a personalized t-shirt at a very affordable price. Secondly, to the printing
industry for it will improve the customers buying habit, and of course the
industrys merely stability as well.
To the university, this study will serve as a reference in the library.
To show to the aspiring businessman that this kind of business is
profitable.
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E. Scope and Limitations
This study covers the establishment of WATTASHIRT in Mega Center
the Mall, Gen. Tinio St.,Cabanatuan City. All necessary information are
gathered.
This study was done within a regular term of second semester of school
year 2009 -2010. Relevant datas were gathered during this period.
The survey covers those people in the mall. Generally, the target market
of this business are the end users. This market includes the students, and those
people who were t-shirt lovers. The limitations of the researchers in the study isthe actual distance of other possible customers outside the vicinity of Mega
Center the Mall, Gen. Tinio St., Cabanatuan City. This study is for academic
purposes only.
F. Methodology
1. Sources of Data
The Researcher used two classes of data, primary and secondary data.
a. Primary Data were obtained through survey questionnaires and
interviews. A sample survey questionnaire was formulated by researchers for the
target market. This was validated by the five experts and five laymen before
administration. Experts are those directly involved or have experience in running
a business venture with some advancement in technology. A copy of the
validation sheet and questionnaire are presented in Exhibit I-A and Exhibit I-B
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respectively. Three hundred ninety five (395) copies of survey questionnaires
were distributed, all of which were retrieved.
Interviews were conducted to those who have existing printing business. A
copy of a sample letter of request for an interview and structured interview guide
questions are presented in Exhibit I-C.
b. Secondary Data were gathered from printed materials, books,
magazines and related studies made on the subject. These materials were
generated from National Statistics Office (NSO), Bureau of Fire Protection(BFP),
Department of Trade and Industry(DTI) and some of the website in the internet.2. Research Design
To yield a meaningful and relevant information, the researcher used
exploratory and descriptive methods.
a. Exploratory Method. The researcher conducted survey and some
interviews to some well known establishments who also practice the same
business.
There were no printed studies regarding this type of business in Araullo
University library however, lots of sufficient information were obtained through
internet research and surveys. The result of interviews is presented in Exibit I-E.
b. Descriptive Method. Descriptive method was used to gather and
describe comprehensively the characteristics of the target markets elements.
The description is based on a sample size which represents the total population.
Survey questionaires were distributed randomly to the prospective clients to
study and determine the demand and supply rate.
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The formula in computing the sample size is:
= N where;
= sample size
1+N N = estimated population
= margin error
The target market is composed of eleven thousand one hundred fifty (11,
150) ages 10 20, Nine thousand nine hundred thirty five (9, 935) ages 21 30
and eight thousand seven hundred fifteen (8, 715) ages 31 55.Table I-A
Target Market Population2009
Ages 10 20 Ages 21 30 Ages 31 55 Total11, 150 9, 935 8, 715 29, 800
Source: Mega Center Mall management
The sample size of three hundred ninety five (395) is resultant of the following
computation.
= 29800
1+29800 (5%)
= 395
where;
= sample size
N= 29800 = 5%
The sample size was pro-rated accodding to the weight of each category
in population. One hundred fifty five (155) copies where distributed to ages 10
20, One hundred twenty eight (128) copies where distributed to ages 21 30,
One hundred twelve (112) copies where distributed to ages 31 55 respectively.
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3. Treatment of Data
All quantitative data gathered were processed using manual or personal
method. Comparative analysis was also used to analyzed data.
Historical information on variables involved in forecasting the figures in the
marketing aspect were inconsistently increasing. Hence, projections were
computed through the use of Statistical Straight-line Method. This method has a
formula that goes as follows:
Y = a + bx Where;
= Y - b
X = is the assigned value
B = XY- XY/n a = is the constant
X - ( X) b = is the parameter
N = number of years
Y = is the given data
To determine the earning desirability of the investment, the following formula
were used.
a. Net Present Value (NPV). A sophisticated capital budgeting technique;
found by subtracting the projects initial investments from the present value
of its cash inflow discounted at tha rate equal to the investors cost of
capital.
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Formula: Present Value of cash flow
Less: Cost of Investment
Net Present Value
b. Internal Rate of Return (IRR) is a technique used to determine the
discount rate which equates the present value of cash inflows with the
initial investment associated with the project. The rate is actually the
compound annual rate of return the investor will earn if it invest in the
project and receives the project cash inflows.
n
IRR = ___t____ =
t=1 (1 + IRR ) t t
Where;
= initial investment = cash flow
t = period k = cost of capital
c. Profitability index (PI) is the ratio of the present value of the future cash
flows to the investment.
Formula:
PI = Present value of cash flow/cost of investment
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To ascertain the viability in terms of soundness and condition of the
project if implemented, the following formula were used.
d. Current Ratio is measure of the number of pesos of current asset
available to meet current obligation. It is best-knoww liquidity
measurement. A current ratio of less than one indicates the firm has a
negative working capital.
Current Ratio = Current Assets
Current Liabilities
e. Operating Performance Ratios examine the performance of the
management in the operating business. They are divided into two
subcategories operating efficiency and operating profitability.
e.1 Operating Efficiency Ratios question how efficient would the
management be using the asset they have at their disposal based in the plans
set forth in this study.
i. Net Fixed Asset Turnover Ratio is a measure of the projects
utilization of fixed assets.
ii. Equity Turnover Ratio measures how effectively would the
owners net worth will be used in the project
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Total Fixed Asset Turnover = Revenue
Average Total Net Fixed Asset
Equity Turnover = Revenue
Average Equity
e.2 Operating Profitability Ratios look at how good plans are set in
gaining profit out of the investment in the project.
i. Gross profit margin equals percent of sales available after
deducting cost of goods sold. This percentage is a available to cover selling
general and administrative costs and also earn a profit. It indicates the basic cost
structure of the project and its cost-prize position.
ii. Operating Profit Margin relates the projects profit to its net sales .
The variability of this ratio is a prime indicator of the business risk of the project.
A higher ratio implies that the company has a higher level of fixed costs and
therefore inflexible.
iii. Profit Margin shows how much profit is generated on every peso
of sales.
iv. Return on Net Equity indicates the projects return on all the net
worth employed. It measures return on all available internal funding.
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Profit Margin = Profit
Revenue
Return on Net Equity = Profit
Average Net Equity
G. Review of Related Literature
The literature review identifies and gathers key issues about the quality
and status of printing business, including its influences and the range of
provisions for students and some professionals and possible customers.
At the beginning of the twentieth century, the T-Shirt quickly became an
American favorite. Now, a century later, at the beginning of the twenty-first
century, the T-Shirt remains as popular as ever.
The American T-Shirt began during WWI when American troops noticed
European soldiers wearing a comfortable and lightweight cotton undershirt during
the hot and humid European summer days. Compared to the wool uniforms that
the American soldiers wore, these undershirts were cooler and more comfortable
and they quickly caught on with the Americans. Due to their simple design, these
shirts became known in the USA as "T" shirts or, as we know them now, "T-
Shirts".
By the 1920's, "T-Shirt" had become an official word in the American
English language with it's inclusion in Merriam-Webster's Dictionary. By W.W. II,
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both the Navy and the Army had included the T-Shirt as standard issue
underwear.
Initially pegged as an undergarment, the T-Shirt soon came in to it's own
on the big screen. John Wayne, Marlon Brando and James Dean all shocked
Americans by wearing their underwear on national TV. In 1951, Marlon Brando
shocked Americans in his film "A Streetcar Named Desire" when his T-Shirt was
ripped off of his body revealing his naked chest.
By 1955, the T-Shirt was tolerated worn without another shirt covering it. Then
James Dean made the T-Shirt real cool in "Rebel Without A Cause". JamesDean made the T-Shirt a contemporary symbol of rebellious youth.
In the 60's people began to tie dye and screenprint the basic cotton T-Shirt
making it an even bigger commercial success. Advances in printing and dying
allowed more variety and the Tank Top, Muscle Shirt, Scoop Neck, V-Neck, and
many other variations of the T-Shirt came in to fashion.
The T-Shirt was inexpensive, in style, and could make any statement you
cared to print. The American T-Shirt came into it's own during the late sixties and
seventies. Rock and Roll bands began to realize that they could make significant
amounts of money selling their T-Shirts. Professional Sports caught on and soon
the officially licensed T-Shirt became hot merchandise.
During the 80's and 90's the production of T-Shirts and the mechanics of printing
on them increased the volume and availability. Soon the American T-Shirt was
being called a commodity item in the apparel industry.
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H. Definitions of terms
The following terms are defined as used operationally in this research:
a. Round neck Shirts a collarless usually short sleeves knit shirt without
fastenings usually made of cotton and worn for leissure and sports.
b. Polo shirts a lightweight casual shirt, usually made of knitted cotton
with the small collar and bottoned opening at the neck
c. License a permit granting permission to engaged in an activity that
would otherwise be illegel. The main purpose of a license is to protect the
public interest. A licensed issued by the government agency is required inorder to pursue a certain occupantions, run certain business and enjoy
certain privileges.
d. Ink colored paste use in printing
e. Printing the production of printed matter.
f. Proprietorship is the capacity of an individual in effective and efficiently
managing abusiness towards customer satisfaction and profitability of
services.
g. Proprietor an individual who owns the business himself.
h. Market can be categorized into consumers.
i. Depreciation the systematic allocation of the depreciaable amount of an
assets over its useful life.
j. Cashier - a person in charge of the cash transaction.
k. Design the arrangement of parts, forms, color, especially as to produce
an artistic unit.
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l. Designer a person whose work is making a design.
m. Cotton a soft, white, fibrous mattter around the seeds of various plants
of the mallow family.
n. Rayon any of various textile fibers produced by pressing a cellulose
solution through very small holes and solidifying it in the form of filaments
o. Silk a fine, soft, shiny fiber produced by the silkworm.
p. Linen thread or cloth made by flax.
q. Wool a soft, curly hair of some animals like sheep and goat.
r. Whole sale a sale of goods in relatively large quantities, usually at alower cost per item.
s. Retail the sale of goods in small quatities directly to the consumer.
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Chapter IIMarketing Aspect
A. Product Description
Being different to others make us unique and cool. We are engage in a
digital t-shirt printing business. Statement and personalized shirts nowadays are
really in demand. We offer an instant printed shirt by using a digital printing
machine which is better than the other printing press that only uses heat press
machine. We dont want our customers to wait for a long period of time. We
assure that our customers will only wait for a maximum of ten (10) minutes. The
machine that we use is the latest t-shirt printer.
We sell a finish printed shirt. The customers could choose the designs that
they want. They may choose the color size and type of shirts they want.
Satisfaction of our customers is always our priority.
B. Industry profile
We are in printing industry and there are many competitors engaged in the
same industry. We are confident with the kind of business that we have even
though we knew we have a lot of competitors because we know that we will beat
all of them through the use of our latest digital printer.
We are concern with our customers need and satisfaction. Our price is
very affordable.
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Strengths
The equipment used is the latest and newest machine a printing company
ever had. It could print at the maximum of ten (10) minutes. The finish product is
absolutely clean. No mess at all. The business doesn t require bulk printing of t
shirts, it accepts even a single piece of printing works. The business offers not
just printing of t shirts it also has its finish products to sell.
Weaknesses
The ink consumption and electrical consumptions are the only
weaknesses of the business.Opportunities
The business could also do personalized things aside from printing t
shirts. It could establish another branch in the nearby towns, barangays, and
cities.
Threats
Competitions is a business rivalry; competing for customers or markets
would be a great threat for the business. There could be a lot of printing
industries around the city. Economic crisis as well could have a great impact on
the sales of the business and lastly theft among the employees would also affect
the operation of the business.
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C. Demand
Demand is the quantity of good that buyers are willing to buy. Before
anyone could establish a business that he desire, he must need to know if there
is demand in whatever kind of business hes willing to operate.
Cabanatuan City is considered as one of the most progressive place here
in Nueva Ecija. Modern technology is already spread out all over the City. The
Computation of projected population is presented at Exhibit II B and results of
survey question is presented at Exhibit II A.
All quantitative data gathered were processed using manual or personal
method. Comparative analysis was also used to analyze data.
Historical information on variables involved in forecasting the figures were
inconsistently increasing. Hence, projections were computed through the use of
Statistical Straight-line Method. This method has a formula that goes as follows:
Y = a + bx Where;
= Y - b
X = is the assigned value
B = XY- XY/n a = is the constant
X - ( X) b = is the parameter
N = number of years
Y = is the given data
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Table II-A
Historical Population of Nueva EcijaAges 15 30Class A C
1990 2007Year Population1990 404, 3161995 460, 8592000 586, 9402007 626, 023
Source: National Statistic Office
Table II - BProjected Population
Nueva Ecija
Year Population2010 690, 3832011 804, 2822012 918, 1812013 1, 032, 0802014 1, 145, 979
D. Supply
The supply is the quantity of goods that sellers are willing to sell. If there is
a demand there should always be a supply. Our business is in printing industry
there are many existing competitors.
Kameraworld and Picture frenzy are our inside competitors. They are
accepting t-shirt printing. They need more time to do the printing because they
will bring it to manila. Their price is higher compare to us.
Octograpix, R. Macapagal and Pinoy advertising are some of our outside
competitors. They are using heat press and it takes time to do the job. They dont
accept one time printing because of very expensive cost.
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E. Demand Supply Analysis
The researcher recognizes that the existing capacity of competitors is not
enough to satisfy the demand of the market. The data gathered from the question
no. 1 of survey questionnaires is the demand of the proposed business. Being
conservative, the market share is computed by deducting the hypothetical
projected supply from the projected demand. This is based on the assumption
regardless of continual supply from the existing competitors availed by the of the
market, there is still remaining share for Watta shirt.
To analyze the market share meaningfully, the researchers translated the
projected demand and projected supply in monetary terms. The projected
demand of Watta Shirt is multiplied to unit price. Likewise, the projected supply of
Watta shirt is multiplied to unit price to arrive at the total amount. The total
amount is projected supply is deducted to the total amount of projected demand
to get the total amount of unmet demand.
The computation shows that the unmet demand is seven thousand
eighteen (7, 018) on 2010 eight thousand one hundred seventy five (8, 175) on
2011 nine thousand three hundred thirty three (9, 333) on 2012 ten thousand four
hundred ninety two (10, 492) on 2013 and eleven thousand six hundred forty
nine (11, 649) on 2014.
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Table II CDemand and Supply
Year Demand Supply UnmetDemand
Roundneck t-shirt
Collaredt-shirt
Marketshare
Quantity Price Peso Price Peso Percent2010 833, 406 826, 388 7, 018 250 1, 000, 000 310 935, 580 .84%
2011 970, 901 962, 726 8, 175 250 1, 165, 000 310 1, 089, 650 .84%
2012 1, 108, 396 1, 099, 063 9, 333 250 1, 330, 000 310 1, 244, 030 .84%
2013 1, 245, 892 1, 235, 400 10, 492 250 1, 495, 000 310 1, 398, 720 .84%
2014 1, 383, 386 1, 371, 731 11, 649 250 1, 660, 000 310 1, 552, 790 .84%
Refer to exhibit II A Question no. 2 and Exhibit II C and II D for supporting computation.
Figure I Present demand and Supply
InMilions
Refer to Table II - C
It can be deduced from the figure I that the demand and supply is
gradually increasing in five years, yet the demand is stills exceed the supply.
Hence, revenue is assures through the year.
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F. Marketing Plans
Occupants
Our target markets are the people who are buying t-shirt specially the
personalized t-shirt.
Object
Our products and services are different from the others because of the
digital machine that we are using. Customers may customize their own design.
The can buy ready to wear t-shirts. T-shirts may vary in color, shape, size and
design according to the customers choice.
Objective
Many buyers look for affordable product having high quality. The product
that we are going to sell is affordable. We are rendering service with high quality.
We want to meet our customers satisfaction.
Occasion
Most of the buyers usually buy the products occasionally.
Outlet
Buyers can buy retail or wholesale from us. We are both retailer and
wholesaler.
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Product
In competitive situation, we are different in using the printer. Our
competitors are using a heat press machine. It takes so much time to wait and
more expensive material that will use just to print a shirt.
In our business we are using a digital t-shirt printer, where in ten minutes
is enough to wait the finish product. It is much cheaper compare to our
competitors price.
Promotion
In our opening day we are conducting a big discount a ten percent (10%)
discount for the fisrt (1st) fifty (50) customers. Discounts will be offered to
increase and maintain the volume of customers who will buy in bulk.
There are several ways of promoting our business such as giving pliers
and putting tarpaulin in some place. In other cases the best way to promote our
product to our customer, by personal selling to inform the public that there is
such product.
Pricing
The objective of every business is to maximize profit. The price of our
product is based on what kind of materials we will use. We determine its price
after deducting the cost of raw materials, direct labor and factory overhead. The
full cost of product is presented in Table II D.
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Table II DCost of the Product
Prices Unit PriceDark color Light Color White Average Labor Factory
OverheadInk Total Mark
UpDirectMaterials:Round Neck 80 75 65 73.333 10 25 50 158.333 63.333%Collared 110 100 105 10 25 50 190 61.29%
Sources: Emy Tesoro, and Sulit.com
G. Channel of Distribution
The finished product will be sold at the second (2nd) floor Mega CenterMall, Gen. Tinio St., Cabanatuan City. We are also accepting t-shirt printing job.
Figure II A
Channel of Distribution
Supplier
Raw Materials
Processing
CustomerH. People
The people are committed to the business. They really know the product.
It is easy to promote our product. Our personnel are motivated and we assure
our customers will be satisfied.
Our personnel are very approachable. They have the knowledge to do the
job. Our designer is very artistic he knows a lot in fashion and his design is
different from others.
They serve with a smile. They dont work only for money but to enjoy the
things that they are doing.
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Chapter IIITechnical Aspect
Exhibits III AProcess Flow
Creating
Preparing
Placing
Printing
Packa in
A. Production Process
The exhibits above shows the production process starting from creating
innovative designs, then preparing the t shirt(s) to be used after the
preparations is the placing of the t shirt(s) in the printer and then the printing of
designs on the t shirt(s) and lastly the packaging of the finish product.
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B. Equipment, Machinery, Furniture and Fixture
T-shirt Printer- is the most important equipment in establishing a Digital T-shirt
printing business. It prints any images directly on the textile with nice, bright, and
sharp result. The designs on the t-shirts are waterproof. With our unique software
the operations is quite easy to operate. It is just like a normal inkjet printer. It is
just highly efficient and low cost.
Computer Desktop- it is use to design t-shirts. It can install all the applications
needed in t-shirt printing. The pictures of tools and equipment is presented in
Exhibits III C.Computer Table it holds the computer desktop and t-shirt printer.
Divider it is where the t-shirts are being store/kept.
Cashiers Table it is where the customer is being entertained and the files are
stored.
Bench it is where the customer will sit while waiting for their shirts
Chair it is where the employee will sit while doing their jobs.
Table III-APrices of listed assets
Description Quantity Useful life Depreciations CostComputer Desktop 1 5 P 4,478 P22,390T-shirt Printer 1 5 P 26,000 P 130,000Computer Table 1 5 P 190 P 950Cahiers Table 1 5 P 530 P 2,650
Divider 1 5 P 970 P 4,850Chair 2 5 P 198 P 990Bench 1 5 P 450 P2,250TOTAL P32,816 P164,080
Source: Blass Edward, sulit.com and Mega Center the Mall
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C. Building
The place of the business is located at the second (2nd) floor of Mega
Center Mall, Gen. Tinio St., Cabanatuan City. It is situated in eight (8) square
meter lot; Mega Centers management doesnt allow a lease contract. They only
accept rentals for a maximum of one (1) year. Mega Centers management have
a policy that as long as the mall will opened the stall must be opened. They have
penalty of ten pesos (P10) per minute when the stall will closed but the mall is
still opened. Rental fee is twenty two thousand pesos (P22, 000) per month.
D. Location
Location of the business can be considered as one of the most important
thing to be done in establishing a business. The location should be desirable and
should fit the kind of business that you were conducting.
Our business is located in the second (2nd) floor of Mega Center Mall in
the proper city of Cabanatuan, because it is well populated and that exactly what
we need in our business. The location must easy to reach by the customers.
E. Capacity/Scheduling
The maximum capacity of the printer is two hundred (200) t-shirts per day
but it can operate as long as they are inks. For every five (5) ml of ink one
hundred (100) pieces of half bond paper designed t-shirts could be printed and
for every one (1) liter of ink one thousand (1, 000) pieces of whole bond paper
designed t-shirts could be printed.
The employee work ten (10) hours a day, starting from 10:00 a.m to 8:00
p.m
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F. Utilities and Other Operating Cost
In establishing a business the following cost will incurred:
a. DTI Permit a permit issued by the government specifically DTI that all
the registered business establishment have different names so that they
would have they own identity. P150 is needed for the issuance of the said
permit and additional P15 with the total cos of P165 and it is renewable
every five (5) years.
b. Business Permits and License it is issued by the government (mayors
office) to protect the public interest. It is needed by every establishment tooperate and enjoy certain privileges
Table III - BThe Business Permits and Licenses Fees
Descriptions PriceElectrical permit P20Business name P60
Badge fee P160Business permit P120Personnel permit for five (5) persons P900
Municipal permit P625Total P 1, 885
Source: Municipal Office of Cabanatuan City
c. Fire Safety Inspection Certificate issued by the BFP to assure the
public that the establishment building or occupancy has been duly
inspected for fire safety with the findings that it has substantially complied
with fire safety and protection requirements. Fire safety inspection
equivalent to ten percent (10%) of all fees charged by the building official.
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d. Taxes BIR collects taxes to every establishment to help the government
raise funds for the construction of public highways and other projects for
the benefit of the public. P500 is needed for issuance of BIR form.
e. SSS contribution and Philhealth as an employer it is our duty to give
our employees the benefits that they needed in case of sickness,
maternity, partial/permanent disability, funeral, death, retirement and
health.
f. Electricity the proposed business would not operate when there is noelectricity P1, 000 monthly is enough to pay the electrical consumption of
the business.
G. Production Cost
Fashion nowadays include printed t-shirt or t-shirts with slogans which
really in demand. We could see every teens even those young at hearts wearing
printed or customized shirts anywhere. Every business has their own materials
for them to operate well. In digital t-shirt printing business the raw materials that
are needed are as follow:
a. T-shirts it is where the desired designs are printed, we do have our
own stocks of t-shirts that were supplied to us by Mrs. Emy Tesoro.
Her stall is located at #48 Bldg.A Cabanatuan City Super Market. Wee
see to it that thirty (30) pieces of shirts were maintain for our safety and
sixty (60) pieces of shirts for our reorder point.
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b. Ink every printed must have inks to be able to print whatever designs
the customer wants. One (1) liter of ink is necessarily maintained for
our safety stocks and three (3) liters is the reorder point. The pictures
of the raw materials needed is presented in Exhibit III D. And the
sample pictures of finish product is presented in Exhidits III E.
c. Software it is the software that gives ability to adjust the ink
saturation, sharpen the image, manipulate color contrast add lettering
effects to your artwork and a variety of other art functions only found in
advance programs. The name of the software is Fast ARTIST 1.5Image Editing Software.
d. Pretreatment #1 - This is an odorless, non-toxic inkjet pretreatment
designed to be used exclusively with FastINK white textile ink.It will
help white ink appear brighter.
The direct labor cost is seven nine thousand two hundred (P79, 200)
yearly; the other cost to produce the product is estimated to be tho
hundred fifty percent (250%) of direct labor. The summary of Production
Cost is shown in Exhibit III B.
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Chapter IVManagement Aspect
A. Forms of Business Organization
This business will be established as a single or sole proprietorship as the
most convenient and suitable type of form of set up. The ownership is vested into
one person. The owner enjoys the full freedom of operation. He has the power
and full control of the enterprise. He can do what he want in the operation of the
business. The owner has the authority to give what benefits and profits that
accrue from the business.
He can set his own policies and procedure and makes his own decision
without asking and consulting anyone.
Advantages
The established business is very easy to organize it only need at least one
computer and one digital printer to operate the business. It only needs at least
two (2) employees. It is the first in Cabanatuan City to use a digital printer. Ten
(10) minutes is the maximum time to print whatever designs the customers
desired. It provide fast and high quality services at an affordable prices. The
customers would not wait for a weeks or days for the finish product.
Disadvantages
The disadvantage of the business is the threat that the competitors may
ruin the operations of the business. Its income is subject to tax regardless of
whether it is drawn or not. The business has limited capital and is limited only to
the areas in which the proprietor has expertise.
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B. Duties and Responsibilities
Manager/ Owner
He must be efficient leader in order to win workers trust and full
cooperation.
He must be fair in treating his worker.
He must be contract and negotiate of the market.
He must be responsible in supervising his staff and motivate them to
achieve the company/ business objective.
He must be responsible for the records, files, and keep all the book of
account.
Printer/Designer
Must be knowledge to measure design.
Must be aware to the latest fashion.
Must know how to use computer.
Should be responsible in helping others in their vacant time.
The working hours is ten (10) hours a day. Seven days a week.
Receiver/Cashier
Must contact and negotiate with the customer.
Must know to receive and releases stocks. Must be responsible for the records, files, and keep all the book of
accounts.
Must know how to use computer.
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The working hours is ten (10) hours a day. Seven days a week.
Should be responsible in helping others in their vacant time.
Exhibits IV - AORGANIZATIONAL CHART
Manager/owner
CashierPrinter/Designer
C. Personnel Requirement
A worker is usually assigned to perform tasks, duties and responsibilities
which may differ from those of other job.
In this kind of business are the numbers of workers are composing by the
following:
Table IV APersonnel of the Business
Position Number of workersManager/owner 1Printer/designer 1Receiver/cashier 1
Total 3 workers
D. Qualification Standards
a)Printer/Designer
18-25 years of age
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College level
Computer literate/ knows how to use, designs and encode
With pleasing personality
Must have good moral character
Must be industrious and hardworking
b)Receiver/Cashier
18 25 years of age
College level
Have a knowledge on how to record a transaction
With pleasing personality
Must be trust
Must have good moral character
Must be industrious and hardworkin
E. Compensation Package
In any other business operation compensation is primarily given a
consideration, The owner wants profit while workers wants a higher wage and
shorter time for work. Salary and benefits inspire the workers in performing their
job well. The salary of most workers is based on more or less the same salary
paid in the community for the same type of work. The employees must be paid in
accordance with their knowledge in the business and also with regards to their
efforts in works.
The owner/manager will receive net profit based upon the sales after
deducting all the expense had been used. The cashier and the designer/printer
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will receive their salary as a monthly terms basis. The computation and the
summary of wages and compensation of the employee is presented in Exhibit IV-
B.
Table IV BCompensation Package
Deductions
Position No. Of person Rate SSS Philhealt Monthly Annually
Cashier 1 P200 P200 P75 P5, 725 P68, 700
Designer 1 P220 P233.30 P75 P6, 291.70 P75, 500.40
Total 2 P 144, 200.40
Table IV CProjected Time Table
Gantt Chart
Activities Weeks1 2 3 4 5 6 7 8
acquiring the required capital
applying for loanbusiness registrationcanvassing of machine andequipmentpurchasing and delivery ofequipmentrecruiting and hiring ofworkersTraining of the employeepurchasing, canvassing anddelivery of raw materials
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Chapter VFinancial Aspect
This potion determines the profitability level of the project which is
the generally defined as the relationship of the of the net income after taxes to
the total investment. It is largely based on the available opportunity cost in a
particular period of time and place. It also involves thorough coverage of all the
monetary information of the business. It covers detailed information on the total
project cost, initial capital, sources of financing, financial statements and the
financial analysis. The financial health of the business is assessed in the financialstatements and analysis showing the three important accounting statements
such as income, cash flow and balance sheets. Pertinent financial ratios are also
illustrated describing the over all business liquidity, degree of indebtedness and
profitability. Additional information are also provided such as break even outputs,
sales and prices amount of sales required to earn a certain amount of profit and
the cash payback period.
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a. Major Assumption:
The following are the general major assumption that the study makes:
a. Sales -are the revenues by the business. Sales projection is how much
money will be invested into the business, and the potential markets. The
sales of the business are based on the demand and supply discussed in
Chapter II Marketing Aspect. The business is assumed that on the
average twenty one (21) customers per day for the first year of operations.
The revenue projection is presented in Exhibit V A.
b. Cost of Goods Sold/Cost of Sales-is the cost of inventory that thebusiness has sold to the customers. The cost of sales is discussed in
Chapter III Technical Aspect. It is presented in Exhibit V B.
c. Salary, Wages and Benefits the salaries that the employeereceived is
discussed in Chapter IV Management Aspect. The supporting computation
are presented in Exhibit IV A.
d. Rent-the rental cost of the business is two hundred sixty four pesos (P264,
000) per year. It is discussed in Chapter III Technical Aspect.
e. Advertising-the cost for the advertisement of the business is five thousand
(P5, 000) and it is increased by ten percent (10%) for the succeeding
years. It is discussed in Chapter II Marketing Aspect.
f. Supplies it is the additional materials that are needed by the business. It
is discussed in Chapter III Technical Aspect.
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g. Utilities are the electricity consumed by the business. The estimated
electric consumption of the business is one thousand pesos (P1, 000)
monthly; twelve thousand pesos per year and it is increased by ten
percent (10%) annually. It is discussed in Chapter III Technical Aspect.
h. SSS and Philhealth Contribution is the only benefit received by the
employees. The business assumed that it is included in Factory
Overhead. It is discussed in Chapter IV Management Aspect. The
schedule of SSS and Philhealth Contribution is presented in the Appendix.
i. Depreciation the company estimated that the useful life of tools,
equipment and furniture and fixtures is five years. The total depreciation of
the business is thirty two thousand eight hundred sixteen pesos (P32,
816). The supporting computation is presented in Table III A.
j. Permits, Licenses and Taxes the permits, licenses and taxes that is
paid by the business is presented and discussed in Chapter III Technical
Aspect.
b. Capital Requirement
1. Pre-Operating Expenses
a. Business Permits, Licenses and Taxes this is the cost incurred for the
legality of the business. It is discussed in Chapter III Technical Aspect.
The total cost incurred by the business is nine thousand one hundred
thirty five pesos (P9, 135).
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b. Advertising is the cost incurred for the popularity of the business. It is
incurred by the business for them to know the market. It is discussed in
Chapter II Marketing Aspect. The pre-operating advertising cost is five
thousand pesos (P5, 000) and increased by ten percent (10%) for the
succeeding years.
c. Electricity- the estimated electric consumption of the business is one
thousand pesos (P1, 000) and it is increased by ten percent (10%)
annually.
d. Salaries salaries and wages of the employees are divided in twosegments. The direct labor and the indirect labor. The total cost of salaries
in the pre-operating period is twelve thousand six hundred pesos (P12,
600) per month.
e. Rental Cost the pre-operating period of rental cost incurred by the
business is twenty two thousand pesos (P22, 000) and forty four
thousand pesos (P44, 000) for the rental deposits, respectively.
f. Office Supplies the office supplies pre-operating period is three
thousand pesos (P3, 000).
g. Raw Materials the business have a total of the twenty thousand seven
hundred fifty pesos (P20, 750).
2. Operating Expense
a. Raw Materials it is the primary materials that use to produced the
product. The total purchases are presented in the Exhibit V B.
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b. Advertising is the cost that incurred for the promotion of the business.
The advertising cost is five thousand pesos (P5, 000) and increased by
ten percent (10%) for the succeeding years.
c. Electricity- the electric consumption of the business is twelve thousand
pesos (P12, 000) per year and it is increased by ten percent (10%) for the
next years.
d. Salaries the gross salaries that the employee receive is twelve thousand
pesos (P12, 000) for indirect labor. It is increased by ten percent (10%) for
the next years.
e. Permits and licenses the permits and licenses is renewable yearly. The
total cost that incurred for the permits and licenses is nine thousand one
hundred thirty five pesos (P9, 135).
f. Rental Cost-the rental cost for the year is two hundred sixty four
thousand pesos (P264, 000).
g. Office Supplies the business incurred for the supplies is ten thousand
pesos (P10, 000) for the first year of the operations and increased by ten
percent (10%) for the succeeding years.
h. Interest Expense the business has fifty thousand pesos (P50, 000) loans
payable and it has twelve percent (12%) interest per year. The business
has six thousand pesos (6, 000) interest payment.
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3. Capital Expenditure/Fixed Assets
The following are the fixed assets needed by the business.
a. Tools and Equipment it is the equipment that needed by the business. It
is discussed in Chapter V A. And the pictures of tools and equipment is
presented in Exhibit III C.
Table V ATools and Equipment
DESCRIPTION QUANTITY UNIT UNIT COST TOTAL COST
COMPUTER 1 SET P22, 390 P22, 390
T-SHIRT PRINTER 1 UNIT P130, 000 P130,000TOTAL P152, 390
b. Furniture and Fixture the furniture and fixtures that are needed that by
the business are discussed in Chapter III Technical Aspect. The summary
of Furniture and Fixture is presented in Table V B.
Table V - B
Furniture and FixturesDESCRIPTION QUANTITY UNIT COST UNIT TOTAL COST
COMPUTER TABLE 1 PIECE P950 P950CASHIERS TABLE 1 PIECE P2, 650 P2, 650
DIVIDER 1 PIECE P4, 850 P4, 850CHAIR 2 PIECE P450 P990BENCH 1 PIECE P2, 250 P2, 250TOTAL P11, 690
c. Sourcesof Financing
The business is financed by Mr. Roberto U, Cariazo Jr. The business
has loan payable of fifty thousand pesos (P50, 000) to Atty. Villar with
twelve percent (12%) interest per year. It is payable after one (1) year.
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d. Preparation of Financial Statements
1. Income Statement is the formal statement showing the performance of
the business for a year. It is summarizes the sale, cost of sales, and
expenses incurred for a year. The projected Income Statement is
presented in Exhibit V- C.
2. Cash Flow Statement it provides information about the cash receipts
and cash payments of a business for a year. It is a formal statement that
classifies cash receipts (Cash Inflow) and cash payments (Cash Outflow)into operating, investments and financing activities. The Projected Cash
flow is presented in Exhibit V D.
3. Balance Sheets is a statement that shows the financial position or
condition of the business by listing the assets, liabilities and owner equity.
The Projected Balance Sheets is presented in Exhibit V- E.
e. Financial Analysis
The following is the method that uses to analyze the financial statement.
The computation for the Financial Analysis is presented in Exhibit V F.
a. Net Present Value (NPV )-this refers to the excessof the present value of
cash returns discounted at a chosen cut off rate bovver the amount of the
investment.
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b. Internal Rate Return (IRR) this refers to the rate of return that a long
term investments.
c. Profitability Index (Benefits/Cost Ratio/Present value Index) this refers to
the ratio of the present value of cash returns discounted at a chosen cut-
off rate to the investment requirement.
d. Current Ratio indicates the ability to pay current obligations.
e. Net Fixed Asset Turnover Ratio is a measure of the projects utilization of
fixed assets.
f. Equity Turnover Ratio measures how effectively would the owners networth will be used in the project.
g. Gross Profit Margin equals percent of sales available after deducting
cost of good sold. This percentage is available to cover selling, general
and administrative costs and also earn a profit. It indicates the basic cost
structure of the project and its cost prize position.
h. Operating Profit Margin relates the projects profit to its net sales. The
variability of this ratio is a prime indicator of the business risk od the
project . A higher ratio implies that the company has a higher level of
fixed costs and therefore inflexible.
i. Payback Period this refers to the length of period or numbers of years it
would take to recover an investment.
j. Break Even it is the level of activity (production and sales) at which the
company would be able to avoid a loss. The break even point of the
company is one thousand two hundred one (1, 201) units
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Chapter VISocio Economic Desirability
Socio Economic Desirability the proposed project is hoping to be beneficial
to all for the coming years. The business will continuously achieve its objective.The study will offer entrepreneurs an attached area of investment:
A. Customers the most important factor to be considered in service output
will be the customer. The company must always think about the new
trends of design which rides for the satisfaction of their needs, wants and
desires of the customer
B. Employees the business would require the acquisition of manpower.
And by this means the unemployment rate would be lessen and would
also propagate the generation of income, which would positively influence
the improvement of the standard of living of employed individuals family.
C. Creditors/Supplier the establishment of this kind of business will
promote the growth of other business firms which will provide the raw
materials and services or which will further process its products.
D. Owners in establishing this kind of business the benefits of the owner
are they earn income in this business the benefits of the owner are they
earn income in a decent way and they give opportunity for a better life to
other people.
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E. Community/Society/Church in the presence of economic crisis, people
think how they earn money to minimize their daily expenses. In
establishing this kind of business here in Cabanatuan City would help the
people to have a decent job that would give them a better opportunity to
earn a living for their family. The establishment of this project would
benefit the consuming public through the lowering of retail prices.
F. Government this project will benefit local and national government
because it helps in generating income through taxes. It will contribute for
the improvement of Philippine economy.
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Chapter 7Findings, Conclusion, and Recommendation
A. Findings
A Digital t-shirt printing business was established to expedite the present
way of printing t-shirts nowadays. The present way of printing or manual method
of T-shirt printing is messy and it took long period days to do the finish product.
The business will provide a high-speed printing and more presentable, affordable
and neat t-shirt for its customers. The Business can provide undeniable fast
service. The speed in printing t-shirts will be done in more convenient way. The
business will provide great ease for that t-shirt lovers; they will be benefited by
the business ability to print t-shirts faster. The proposed business is convenient
and easy to operate because it only need a designer and cashier to manage the
business. However the person needs to have knowledge on using computer in
order to create designs and also the cashier needs to be at least College level.
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B. Conclusions:
Based on the findings of the study the following conclusions are drawn:
1. The proposed business would be the first not just in Cabanatuan City
but in Nueva Ecija to use digital t-shirt printing customized designs on
T-shirts.
2. Ten (10) minutes is the maximum time to wait for the finish product.
3. It can provide fast, easy, affordable and high quality services for its
customers.
4. The proposed business could assure its customer that there will beno stain and mess on printed t-shirts. This is one great advantage of
the digital t-shirt printing business over its competitors.
C. Recommendations
Based on the research study conducted, the researchers recommend the
usage of digital t-shirt printer for the printing of t-shirts. The researchers also
recommends that when the operating the business, the employees (for layout)
must have taken computer-related trainings or must be knowledgeable in using
computers such as hands-on operation, encoding layouts/designing, the cashier
must at least college level. The business needs at least one (1) computer to be
used by the employees. As in any other studies in its initial application, the
proposed business is still far from perfect and can still be improved in time. It is
limited to digital printing businesses. For further research the proposed business
be applied and operated.
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EXHIBIT I-B
Araullo UniversityPHINMA Education Network
College of Management and Accountancy
SURVEY QUESTIONNAIRE
Dear Respondent:The researchers, students of Araullo University- Phinma Education
Network, aim to determine the feasibility of establishing a Digital T-shirt PrintingBusiness in Mega Center the Mall, Gen. Tinio,Cabanatuan City, Nueva Ecija as arequirement for the degree Bachelor of Science in Business Administration Majorin Financial Accounting.
Please be assured that the information you will provide for the researcherswill be treated with strict confidentiality. The identity of the respondents will in no
way be disclosed. Your participation and kind cooperation will be of great help inthe completion of this study. Thank you for sharing your time and effort.The Researchers
Respondents Profile
Name: (Optional) Age:Address: Sex:Occupation: Income level:
Instruction: Please encircle your answer.
1. Do you buy T-shirts?a.) Yesb.) No
2. Which T-shirts do you prefer to wear?a.) Round neckb.) Collared
3. What color do you like most when youre wearing t-shirts?a.) Is it plain? or (Please specify the color)b.) Multi colored design t-shirts
4. Would you prefer to weara.) Imitated designsb.) Personalized designs
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5. Which would you prefer?a.) Cotton d.) Linenb.) Rayon e.) Woolc.) Silk f.) Acetate
6. Is 10-minute printing enough for you?a.) Yesb.) No (Specify the time you prefer)
7. What is the affordable price for you? (Round neck)(Collared T-shirts)a.) 270 a.) 310b.) 310 b.) 300c.) 250 c.) 330
8. When do you usually buy T-shirts?
a.) Monthlyb.) Weeklyc.) During occasionsd.) Others (Specify)
9. Where do you usually buy T-shirts?a.) Stall in mallb.) Market stallc.) Catalogue
10. What is your preference in choosing T-shirts?a.) Qualityb.) Pricec.) Brandd.) Style/designe.) According to your mood
11. How do you usually buy t-shirts?a.) Retailb.) Wholesale
12. What kind of personality do you belong?a.) Funk/emo/rockerb.) Sportc.) Simpled.) Fashionistae.) Girlyf.) Other (specify)
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EXHIBIT I-C
LETTER OF REQUEST FOR AN INTERVIEW
Sir/Madam:
As a partial requirement of the course, Bachelor of Science in Business
Administration Major in Financial Accounting, we are conducting a ProjectFeasibilty Study. The undersigned are planning to study on how to establish aDigital T- Shirt Printing Business in Mega Center the Mall Gwn. Tinio,Cabanatuan City.
In this regard, may we request your office to grant us an interview and give someinformation about the study. We assure you that all data we gathered will betreated as confidential.
Thank you.
Respectfully Yours,
Maria Yvette M. Badilla Roberto Cariazo Jr. Ria Zelle DeGuzman
Kylene Maranan Kristine Kaye Valdez
Endorsed by:
Josephine C. Evangelista, PhDInstructor, Project Feasibility Study
Noted by:
Emerita Modesto, CPA, CIA, MBADean, College of Management and Accountancy
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Exhibits I DStructured Interview Guide Questions
1. What made you decide to put up a t- shirts printing?
2. Where is your business site?
3. How long do you spend in this kind of business?
4. How many t shirts do you produce in one (1) year?
5. What are your marketing strategies to expand your market?
6. Where do you avail your goods?
7. What are the agreements do you have in your supplier?8. What are the materials do you needed in the printing the t shirts?
9. Do you use Digital t shirt printer when you print the t- shirts?
10. Are you having an employee/s?
11. How are there monthly salaries?
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51
Exhibits I EResults of Structured Interview
Questions:
1. What made you decide to putup a t- shirts printing?
2. Where is your business site?
3. How long you do spend in this
kind of business?
4. How many t shirts do you
produce in one (1) year?
5. What are your marketing
strategies to expand your market?
6. Where do you avail your
goods?
7. What are the agreements do
you have in your supplier?
8. What are the materials do you
needed in the printing the t shirts?
9. Do you use Digital t shirt
printer when you print the t- shirts?
10. Are you having an
employee/s?
11. How is there a monthly
salary?
Kuya Wilfred
1. It is the only jobs I alreadyknow to do.
2. Perfect locations for the
business
3. Fifteen (15) years
4. Twenty five to thirty thousand
t shirts.
5. I have my own supplier and I
transact directly to all schools
here in Cababatuan.
6. I avail t shirts to Mrs. Emy
tesoro.
7. She I in charge for the t
shirts and only the labor is in
charge to me.
8. T shirts, silk screen, paint
and computer for the designs
9. No, silk screen only
10. No,
11. Nothing
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Structured Interview Guide Questions
1. What are the requirements in renting the space?Is there a contract?
2. What is the agreement for those who wants to rent the space?
3. Are allowing the five (5) years lease agreement? If yes, how is the
payment goes? Monthly, semi annually, annually?
4. Is the rental payment not fixed?
5. What size is the smallest space available for rent? How much? And what
floor?
6. This past five (5) years, how much is the rental for the space?
7. Are you the one who spend money for the renovation of the space? Or the
one who rent it?
8. What is the agreement for the payment of electric bill?
9. Can I ask the total numbers of customers who cane in the place at the
regular days? In holidays?
10. Are advance payment/ deposits needed? How many months?
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Results of Structured Interview
Questionnaires
1. What are the requirements in
renting the space?Is there acontract?
2. What is the agreement for those
who wants to rent the space?
3. Are allowing the five (5) years
lease agreement? If yes, how is
the payment goes? Monthly, semi
annually, annually?4. Is the rental payment not fixed?
5. What size is the smallest space
available for rent? How much?
And what floor?
6. This past five (5) years, how
much is the rental for the space?
7. Are you the one who spend
money for the renovation of the
space? Or the one who rent it?
8. What is the agreement for the
payment of electric bill?
9. Can I ask the total numbers of
customers who cane in the place
at the regular days? In holidays?
10. Are advance payment/
deposits needed? How many
months?
Analiza Go
1. Letter of interviewed,
electrical load, picture ofequipment. Yes
2. Six months to one year.
3. No
4. Fix rental
5. Four sq. M., 2nd floor, fifteen
thousand pesos
approximately.
6. Same
7. You will provide the
equipment; we will provide the
space only.
8. Rendered
9. Estimated twenty five
thousand (25,000) for regular
days and forty thousand
(40,000) for holidays.
10. Yes, three months advance
refundable
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Exhibit II ASurvey Results
No. of Copies Percentage (%)
AgeBelow 20
21 3031 above
Sex :MaleFemale
1. Do you buy t- shirts?A. YesB. No
2. Which t-shirts do youprefer to wear?a. Round Neckb. Collared
3. What color do you likemost when yourewearing t-shirts?
A. PlainB. Multi colored
4. Would you prefer towear?
A. Imitated designsB. Personalized
designs
5. Which would youprefer?
A. CottonB. RayonC. Silk
D. LinenE. WoolF. Acetate
6. What is the affordableprice for you?(Round Neck)
A. 270
155
128112395
280115395
37520395
209186395
241154395
122273395
36344
1644
395
7116122395
39.24
32.2428.35100
7129100
955
100
5347100
6139100
3169100
9211411
100
184
31100
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B. 310C. 250
( Collared)A. 310
B. 300C. 330
7. Is 10 minute printingenough for you?
A. YesB. No
8. When do you usuallybuy t- shirts?
A. Monthly
B. WeeklyC. During occasionsD. Other
9. Where do you usuallybuy T-shirts?
A. Stall in mallB. Market stallC. Catalogue
10. What is you preference
in choosing t-shirts?A. QualityB. PriceC. BrandD. StyleE. According to your
mood
11. How do you usually buyt-shirts?
A. RetailB. Wholesale
12. What kind of personalitydo you belong?
A. Funk/emo/rockerB. SportC. SimpleD. Fashionista
875148395
288107395
1304019431
395
3204827395
14624
3611871
395
31979395
314023343408
395
221312100
7327100
3310498
100
81127
100
376
93018
100
8020100
8105911102
100
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E. GirlyF. Other
Exhibit II BComputation of Projected Population
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Year X Y X XY1990 -2 404, 316 4 -808, 6321995 -1 460, 859 1 -460, 859
2000 1 586, 940 1 586, 9402007 2 626, 023 4 1, 252, 046Total 0 2, 078, 138 10 569, 495
b = XY - XY a = Y - bXn n
X - (X) = 2, 078, 138 (56, 949.50)(0)n 4
= 569, 495 (0)(2, 078, 138) = 2, 078, 138
4 410 - (0) = 519, 534.504
= 569, 495 010
= 56, 949.50
Y = a+bX
2010 = 519, 534.50 + 56, 949.50 (3)= 690, 383
2011 = 519, 534.50 + 56, 949.50 (5)= 804, 282
2012 = 519, 534.50 + 56, 949.50 (7)= 918, 181
2013 = 519, 534.50 + 56, 949.50 (9)= 1, 032, 080
2014 = 519, 534.50 + 56, 949.50 (11)= 1, 145, 979
Exhibit II C
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Demand Analysis
Formula: Projected population x % of willingness x % of users x no. of frequency
Where:
Projected Population% of willingness = Respondent background, Question no. 1, Exhibit II A% of users = Respondent background, Question no. 4, Exhibit II ANo. of frequency = once or twice
2010
ProjectedPopulation
% ofwillingness
% ofUsers
No. ofFrequency
Total Total
.69 1 452, 546.06690,383 .95
.31 2 406, 635.59859, 181.65 .97 833, 406
2011
ProjectedPopulation
% ofwillingness
% ofUsers
No. ofFrequency
Total Total
.69 1 527, 206.85804, 282 .95
.31 2 473, 722.101, 000, 928.95 .97 970, 901
2012
ProjectedPopulation
% ofwillingness
% ofUsers
No. ofFrequency
Total Total
.69 1 601, 867.65918,181 .95
.31 2 540, 808.611, 142, 676.26 .97 1, 108, 396
2013
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ProjectedPopulation
% ofwillingness
% ofUsers
No. ofFrequency
Total Total
.69 1 676, 529.101, 032, 081 .95
.31 2 607, 895.71
1, 284, 424.81 .97 1, 245, 892
2014
ProjectedPopulation
% ofwillingness
% ofUsers
No. ofFrequency
Total Total
.69 1 751, 183.231, 145, 979 .95
.31 2 674, 981.631, 426, 170.83 .97 1, 383, 386
Exhibit II DSupply Analysis
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Formula: Projected population x % of alternatives x % of users x no. of frequency
Where:Projected population
% of users = Respondent background, Question no. 1, Exhibit II A% of Alternatives = Respondent background, Question no. 9, Exhibit II ANo. of frequency = once, twice or thrice
2010
ProjectedPopulation
% of users% of
AlternativesNo. of
FrequencyTotal
.81 1 531, 250690, 383 .95 .12 2 157, 407
.07 3 137, 731
826, 388
2011
ProjectedPopulation
% of users% of
AlternativesNo. of
FrequencyTotal
.81 1 618, 895804, 282 .95 .12 2 183, 376
.07 3 160, 455962, 726
2012
ProjectedPopulation
% of users% of
AlternativesNo. of
FrequencyTotal
.81 1 706, 540918, 181 .95 .12 2 209, 346
.07 3 183, 1771, 099, 063
2013
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ProjectedPopulation
% of users% of
AlternativesNo. of
FrequencyTotal
.81 1 794, 1861, 032, 080 .95 .12 2 235, 314
.07 3 205, 900
1, 235, 400
2014ProjectedPopulation
% of users% of
AlternativesNo. of
FrequencyTotal
.81 1 881, 8311, 145, 979 .95 .12 2 261, 283
.07 3 228, 6231, 371, 737
Exhibit III BProduction Cost
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Direct Materials:
Round neck T-shirts:
Descriptions Quantity Unit Unit Cost Total
Dark color 25 Pieces P 80 P 2,000
Light color 25 Pieces P 75 P 1,875
White 25 Pieces P 65 P 1,625
TOTAL P5,500
Collared T-shirts:
Descriptions Quantity Unit Unit Cost Total
Collored 25 Pieces P 110 P 2,750White 25 Pieces P 100 P 2,500
TOTAL P 5,250
Ink
Descriptions Quantity Unit Unit Cost TotalInk 6.667 Litres P 1,500 P10,000TOTAL P10,000
Direct Labor:
P79, 200 per year (Refer To Chapter IV for supporting Computation)
Factory Overhead:
Direct Labor P79, 200X 250%
Factory Over Head P198, 000
Exhibit III C
Pictures of Tools and Equipments
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T-shirt Printer
Computer
Exhibit III D
Pictures of Raw Materials
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T-shirt
Inks
Software
Exhibit III E
Pictures of Finished Products
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pICpTURES
Exhibit IV- BCompensation Package
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Deductions
Position No. Of person Rate SSS Philhealt Monthly Annually
Cashier 1 P200 P200 P75 P5, 725 P68, 700
Designer1 P220
P233.30P75 P6, 291.70 P75, 500.40Total 2 P 144, 200.40
Computation:
Cashier
P200 per day*30 DaysP6, 000 per month
-P275 BenefitsP5, 725 net monthly salary*12P68, 700 net yearly salary
Designer/printer
P220 per day*30 daysP6, 600-P308.30Benefits
P6, 291.70 net monthly salary*12P75, 500.40 net yearly salary
Exhibits V ARevenue Projections
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68
Round Neck (2010- 2014)
YearCustomer
per Day
Days Weekly Monthly
Total no.of units
sold perYear
PriceTotal
revenue
per Year
2010 12 7 4 12 4, 302 250 1, 008, 0002011 14 7 4 12 4, 704 250 1, 176, 0002012 16 7 4 12 5, 376 250 1, 344, 0002013 18 7 4 12 6, 048 250 1, 512, 0002014 20 7 4 12 6, 720 250 1, 680, 000
Method of Projection: Statistical Straight - line
Collared T shirts (2010 2014)
Year Customerper Day
Days Weekly MonthlyTotal no.of unitssold per
Year
PriceTotal
revenueper Year
2010 9 7 4 12 3, 024 310 937, 4402011 10 7 4 12 3, 360 310 1, 041, 6002012 12 7 4 12 4, 032 310 1, 249, 9202013 13 7 4 12 4, 368 310 1, 354, 0802014 15 7 4 12 5, 040 310 1, 562, 400
Method of Projection: Statistical Straight - line
Total Revenues (2010 2014)Year Total2010 P1, 945, 4402011 P2, 217, 6002012 P2, 593, 9202013 P2, 866, 0802014 P3, 242, 400
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Exhibits V B
Watta ShirtsProjected Cost of Sales
For the five (5) Year Period
Year 1 Year 2 Year 3 YeaDirect Materials:Direct materials beg P20, 750 35, 666 P38, 340.95 P41, 0
Add: Purchases P629, 981.96 P699, 541.76 P819, 381.54 P903, 9Total Materials Available P650, 731.96 P735, 207.76 P857, 722.49 P944, 9Less: Direct Materials End (P35, 666) (P38, 340.95) (P41, 015.90) (43, 69Direct materials used P615, 065.96 P696, 866.81 P816, 706.59 P901, 2Direct Labor P79, 200 P87, 120 P95, 832 P105, 4
Applied FOH P190,066 P207,144 P221,714 P251Total manufacturing cost P892, 265.96 P1, 001, 786.81 P1, 178, 034.89 P1, 270,
Add: finished goods beg - P23, 433 P25, 916.30 P28, 3TGAS P892, 265.96 P1, 025, 219.81 P1, 149, 635.29 P1, 298, Less finished goods end (P23, 433) (P25, 916.30) (P28, 399.60) (P30, 88Cost of sales 860,898.96 988,647.51 1,131,769.29 1,255,5
Computation for Factory Overhead
Year 1 Year 2 Year 3 YearEmployee fringe Benefits 3,699.6 3,849.60 4,250.40 4,599Employer Contribution 6,956.40 7,106.40 7,953.60 8,528Packaging 33,100 35,247 32,474.90 43,467Transportation Cost 15,500 16,500 181,150 19,9
Training Cost 32,400 35,640 39,204 423,12Training Allowance 97,400 107,140 117,854 129,63Other Expense P1510 P1661 P1827.10 2009Total P190,066 P207,144 P221,714 P251,
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Exhibits V C
Watta ShirtsProjected Income StatementFor the five (5) Year Period
Pre - operating Year 1 Year 2 Year 3 Y
Sales P1, 945, 440 P2, 217, 600 P2, 593, 920 P2,Less: Cost of sales (860,898.96) (988,647.51) (1,131,769.29) (1,2
Gross profit 1,084,541.041,228,952.49
1,462,150.71 1
Less: operatingExpense
Advertising P5, 000 P5, 000 P5, 500 P6, 050 PElectricity P1, 000 P12, 000 P13, 200 P14, 520 PEmployee FringeBenefits 3,300 3,699.60 3,849.60 4EmployerContribution 4,634 6,956.40 7,106.40 7Salaries P12, 600 P72, 000 P79, 200 P87, 120 PPermit and license P9, 135 P9, 135 P9, 135 P9, 135 PRental Payment P22, 000 P242, 000 P264, 000 P264, 000 P2Depreciation exp. - P32, 816 P32, 816 P32, 816 POfficesupplies
- P9, 500 P10, 500 P11, 600 P
Interest expense - P6, 000 - - Total operating Expense P49, 735 396,385.00 425,007.00 436,197.00 Net income beforeTax (49, 735) P688, 156.04 P803, 945.49 P1, 019, 043.71 P1,
Income Tax - (166, 446.81) (201, 183.65) (P265, 713.11) (P30Net income aftertax (49, 735) P521, 709.23 P602, 761.84 P753, 330.60 P85
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Exhibit V D
Watta Shirts
Projected Cash Flow StatementFor Five (5) Year Period
Pre Operating Year 1 Year 2 Year 3 Cash Bal. Beg - P18, 435 P556,798.16 P1,039,879.24 Cash flow from Operating
ActivitiesCash inflows fromOperating Activities
Collection from customer - P1, 945, 440 P2, 217, 600 P2, 593, 920 Total cash inflow fromoperating Activities - P1, 945, 440 P2, 217, 600 P2, 593, 920 Cash outflow fromoperating Activities
Payment for Purchases P20, 750 P907, 181.96 P1, 004, 461.76 P1, 154, 793.54 Advertising P5, 000 P5, 000 P5, 500 P6, 050 Electricity P1, 000 P12, 000 P13, 200 P14, 520 Employee Fringe Benefits 3,300 3,699.60 3,849.60 Employer Contribution 4,634 6,956.40 7,106.40 Salaries P12, 600 P72, 000 P79, 200 P87, 120 Permit and License P9, 135 P9, 135 P9, 135 P9, 135 Rental Payment P22, 000 P242, 000 P264, 000 P264, 000 Rental Deposits P44, 000Office Supplies P3, 000 P10, 000 P11, 000 P12, 100 Income Tax
paid
- 200, 188.85 216, 067.67
Interest Expense - P6, 000Total Cash outflowfrom operating
Activities
1,263,316.96 1,552,943.58 1,741,992.18
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Continuation of projected cash flow
Net Cash inflow (outflow) from OperatingActivities
P 117,485 682,123.04 664,656.42 851,927.82
Cash flow fromInvesting Activities
Tools and equipment P 152,392
Furniture andFixture P 11,690
Total cash out flowfrom investing
activities
P 164,080
cash outflow fromfinancing activities
Loan Payment P 50,000
Borrowing P 50,000
Investment P 250,000
Withdrawal P200,000 P 200,000 P200,000
Net cash outflow
from financingactivities P 300,000 P 250,000 P200,000 P200,000
Cash balanceending P18,435 P450, 558.04 P915, 214.47 P1,560, 232.28
Note: Payment for purchases is computed by adding Purchases, Direct Labor and Factory Overhe
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Exhibits V - E
Watta ShirtsProjected Balance Sheets
For the Five (5) Years PeriodPre Operating Year 1 Year 2 Year 3
Assets:Cash P18, 435 P450, 558.04 P915, 214.47 P1,560, 232.28 P 2,Inventory P20, 750 P59, 099 P64, 257.25 P69, 415.50 P7Rent Deposits P44, 000 P44, 000 P44, 000 P44, 000 POffice Supplies P3, 000 P3, 500 P4, 000 P4, 500 PTools and Equipment P152, 390 P152, 390 P152, 390 P152, 390 PFurniture and Fixtures P11, 690 P11, 690 P11, 690 P11, 690 P
Accumulated Depreciation - (P32, 816) (P65, 632) (P98, 448) (PTotal Assets P250, 265 P688, 421.04 P1,125, 919.72 P1, 743, 779.78 P2,
Liabilities:Loan Payable P50, 000 -Income Tax Payable P166, 446.81 P201, 183.65 P265, 712.11 P30Total Liability P50, 000 P166, 446.81 P201, 183.65 P265, 712.11 P30Owners EquityCapital Balance Beg P200, 265 P521, 974.23 P924, 736.07 P1,
Add/(Deduct): Investment P250, 000
Net Income/(loss) (P49, 735) P521, 709.23 P602, 761.84 P753, 330.60 P85Total P200, 265 P721, 974.23 P1, 124, 736.07 P1, 678, 066.67 P2, Less: Withdrawal (P200, 000) (P200, 000) (P200, 000) (PTotal Owners Equity P200, 265 P521, 974.23 P924, 736.07 P1, 478, 066.67 P2, Total Liabilities andOwners Equity P250, 265 P688, 421.04 P1,125, 919.72 P1, 743, 779.78 P2,
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Exhibits V FFinancial Analysis
Net Present Value
Present Value of Cash returns discounted at twelve percent (12%)
Year 1 P 682, 123.04 x .893 = P609, 135.87Year 2 P664, 656.42 x .797 = P529, 731.17Year 3 P845, 017.82 x .712 = P601, 652.69Year 4 P922, 568.37 x .636 = P586, 753.48Year 5 P1, 086, 352.37 x .567 = P615, 961.79
P2, 943, 235(P300, 000)P2, 643, 235
Internal Rate of Return:
*Payback Period = Investment of P300, 000Average cash returns per year = .3571
(P 682, 123.04 + P664, 656.42 +P845, 017.82 + P922, 568.37 +P1, 086, 352.37)/5
** Compute the payback period in the present value of an annuity, it between2.78% and 2.77%.
Profitability Index (PI)Year 1 Year 2 Year 3 Year 4 Year 5
PV ofannualCashreturns
P609, 135.87 P529, 731.17 P601, 652.69 P586, 753.48 P615, 961.79
Divide byInvestment
P300, 000 P300, 000 P300, 000 P300, 000 P300, 000
PI 2.03 1.77 2.01 1.96 2.05
Current Ratio
Year 1 Year 2 Year 3 Year 4 Year 5Current Asset P557, 157.04 P1, 027, 471.72 P1, 678, 147.78 P2, 406, 374.41 P3, 298, 385.03CurrentLiabilities
P166, 446.81 P201, 183.65 P265, 712.11 P308, 337.12 P370, 259.52
CurrentRatio
3.347 5.107 6.316 7.8048.908
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Net Fixed Assets Turnover Ratio
Year 1 Year 2 Year 3 Year 4 Year 5Net income P521, 709.23 P602, 761.84 P753, 330.60 P852, 786.62 P997, 272.22
Ave. totalnet Fixed
AssetsP65, 632 P65, 632 P65, 632 P65, 632 P65, 632
Net fixedassetsturnover
7.949 9.184 11.478 12.993 15.195
Equity Turnover Ratio
Year 2 Year 3 Year 4 Year 5Net income P521, 709.23 P602, 761.84 P753, 330.60 P852, 786.62
Ave. Equity P723, 355.15 P1, 201, 401.37 P1, 804, 459.98 P2, 529, 489.40Equity turnover .721 .502 .417 .337
Gross Profit Margin
Year 1 Year 2 Year 3 Year 4 Year 5Gross profit P1, 076, 607.04 P1, 218, 296.49 P1, 444, 284.71 P1, 598, 343.74 P1, 817, 928.64Net sales P1, 945, 440 P2, 217, 600 P2, 593, 920 P2, 866, 080 P3, 242, 400Gross profitmargin
.553 .549 .557 .558 .561
Operating Profit Margin
Year 1 Year 2 Year 3 Year 4 Year 5COS +O.exp
P1, 257, 283.96 P1, 413, 654.51 P1, 574, 876.29 P1, 704, 956.26 P1, 874, 868.26
Net Sales P1, 945, 440 P2, 217, 600 P2, 593, 920 P2, 866, 080 P3, 242, 400OperatingRatio
.646 .637 .607 .595 .578
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Break Even AnalysisSales Mix
Break Even in units CompositeProduct USP UVC UCM SMR UCM
Round Neck P250 P13.52 P236.48 57% P134.79Collared P310 P31.10 P278.90 43% P119.93
Total P560 P254.72CMR 45.49%
BEP = FCComposite UCM
= P305, 951P254.72
= 1, 201 units
Break Even in Peso
BEP = FCCMR
= P305, 95145.49%
= P672, 631