WESLEYAN UNIVERSITY – PHILIPPINES

College of Commerce, Accountancy and Office Administration

Cabanatuan City

A FEASIBILITY STUDY OF VULCANIZING AND REPAIR SHOP IN GAPAN CITY

WESLEYAN UNIVERSITY – PHILIPPINES

College of Commerce, Accountancy and Office Administration
Cabanatuan City

FEASIBILITY ABSTRACT
TITLE: The Feasibility Study of Establishing Vulcanizing and Repair Shop in Gapan City
RESEARCHER:
ADVISER:
SCHOOL:
DEGREE: Ph D.BA.
MAJOR:
STATEMENT OF THE PROBLEM:
It is the intention of the researcher to determine and analyze the Feasibility of Establishing a Vulcanizing and Repair Shop in Gapan City.
This study seeks to answer the following questions:
What is the type of business organization suited for the project/business?
What are the marketing programs to be used in the business? Is there a demand for the proposed project?
What are the technical requirements needed in the operation of the proposed business?
How much capital needed for the project? Is the proposed business profitable?
What is the social significance of the project?
What are the potential problems to be encountered by the business?
RESEARCH METHOD USED
The researcher employed the descriptive method in this study. According to Good and Scates, a descriptive research is a fact finding survey with adequate
interpretation, description, and analysis of the prevailing condition. Descriptive research describes units, occurrence or phenomena.
The feasibility study describes, interprets, and analyzes the marketability of putting up business and operating a Vulcanizing and Repair Shop in Gapan City. This
study describes the technicalities, the market condition that regards with supply and demand analysis and the current trend of the business in the area related with serving.
TECHNIQUES USED IN DATA GATHERING
In pursuing data collection, the researcher employed questionnaires, interview and documentation of reviewed literature and studies about the proposed
project.
Interview. The researcher employed the interview as the means of data collection. They conducted an interview to Mr. Aldrin Tuazon, owner of Vulcanizing Shop. An
interview is a verbal communication in which there are existing guidelines or formal questions.
Observation. They observed that it is necessary to organize the business in the form of a single proprietorship because it allows the proprietor to have different control
over the business. They also observed that many customers rendered their services.
Library Techniques. This technique in data gathering procedure is also employed. Documentation of written information about the subject is taken place.
FINDINGS OF THE STUDY
It has been found out that there is feasibility and viability in the establishment of Vulcanizing and Repair Shop in Gapan City. It is such a potential and lucrative
business.
The management aspect showed that single proprietorship is the best organizational set-up to be used in this kind of project. The project can easily be established
under the control of one man. Line type of organization is used in project because it has a direct flow of authority from the top position down to the subordinate level.
The business will be offered in the proper town of Gapan City and the business will focus on Vulcanizing and Repair Services.
The technical procedure in operating the business is very simple. The proponent need to construct the building shop and makes a proper design of the work
place in order to operate the business properly.
Financial study showed that the project requires enough capital to start the business. Financial analysis showed that the project is moderately profitable and
that the total investment could be recovered within 2 years and 8 months.
The proposed project is also socially and economically desirable.
CONCLUSION
Based on presented information regarding the establishment of Vulcanizing and Repair Shop in Gapan City, it can be concluded that this venture is feasible
because of the following:
That the organization best suited is single proprietorship.
That there is a demand for the proposed project.
That there is more profit to be derived from the business.
That the maintenance of this project is very simple.
That the business is very feasible.
That the business is socially desirable and gives benefit not only to the owner, customers but also to the government.
RECOMMENDATION
In the light of conclusion, the following are recommended:
Individuals who are interested in Establishing a Vulcanizing and Repair Shop should find good location such as cities and urban areas because that is the place where most
costumers/buyers come.
They should hire of qualified and skilled workers in the business so that they can carry out business more effectively.
Different marketing strategies should be applied in this business in order to make the products and services more attractive.
Capitalization requirements should balance the procurement of materials and equipment in the operation of the said business.
Systematic financial procedures and control system be given more emphasis.
TABLE OF CONTENTS
Page
TITLE PAGE…………………………………………………………………………………………………………………………………… I
THESIS ABSTRACT……………………………………………………………………………………………………………………….. II
APPROVAL SHEET…………………………………………………………………………………………………………………………
GRADING SHEET…………………………………………………………………………………………………………………………..
ACKNOWLEDGEMENT…………………………………………………………………………………………………………………. VI
DEDICATION……………………………………………………………………………………………………………………………….. VII
TABLE OF CONTENTS………………………………………………………………………………………………………………….. VIII
CHAPTER
I. THE PROBLEM
Introduction………………………………………………………………………………………………………………….. 1
Statement of the Problem……………………………………………………………………………………………. 3
Significance of the Study………………………………………………………………………………………………. 3
Scope and Delimitation of the Study……………………………………………………………………………. 4
Definition of Terms……………………………………………………………………………………………………….. 5
II. REVIEW OF RELATED LITERATURE AND STUDIES
Foreign Literature………………………………………………………………………………………………………….. 7
Local Literature………………………………………………………………………………………………………………. 10
Justification of the Study……………………………………………………………………………………………….. 11
III. RESEARCH METHODOLY AND SOURCES OF DATA
Research and Method Used……………………………………………………………………………………………. 12
Techniques Used…………………………………………………………………………………………………………….. 12
Treatment of the Data…………………………………………………………………………………………………….. 13
Payback Period………………………………………………………………………………………………………………… 13
IV. PRESENTATION, ANALYSIS AND INTERPRETATION OF DATA
Organization and Management Aspect………………………………………………………………………….. 15
Marketing Aspect…………………………………………………………………………………………………………….. 13
Technical Aspect………………………………………………………………………………………………………………. 21
Financial Aspect……………………………………………………………………………………………………………….. 25
Financial Analysis…………………………………………………………………………………………………………….. 35
V. SUMMARY, CONCLUSIONS AND RECOMMENDATIONS
Summary………………………………………………………………………………………………………………………….. 39
Conclusion……………………………………………………………………………………………………………………….. 41
Recommendation……………………………………………………………………………………………………………. 42
BIBLIOGRAPHY………………………………………………………………………………………………………………………………. 43
CURRICULUM VITAE……………………………………………………………………………………………………………………… 44

LIST OF FIGURES
Figure Page
1 Organizational Chart 17
2 Vulcanizing Process Chart 23
3 Repair and Wheel Balancing 24
4 Location Map
5 Shop Layout

LIST OF TABLES
Table Page
Total Project Cost 26
Schedule Revenue 27
Computation of Income Tax 28
Schedule of Depreciation 29
Schedule of Operating Expenses 30
Schedule of Salaries and Wages 31
Projected Income Statement 32
Cash of Flow Statement 33
Projected Balance Sheet 34

CHAPTER 1
PROBLEM AND IT’S SETTING
INTRODUCTION
Although the government claimed for an upsurge of our economy for the last two years, it cannot be denied that the employment is still the pressing problem
of society. Majority of the graduates in colleges and universities fail to have a good paying job. Many sought refuge in other countries were graduates of prestigious courses,
such as engineering, commerce, education, and others, land as laborers, and domestic helpers. In the local labor market, many graduates enter in the fields different from
the courses they pursued in college such as accountants employed as cashiers working as casuals in government offices and others. The introduction of labor contracting
even added to the woes of these graduates. The system terminated the chance of the graduates to get a job with benefits and security of tenure. They are employed only
for a period of five to six months and are terminated and replaced by another batch of five to six months contract labor. This difficulty to get a job had led others who have
the means to venture in business of their own.
Venturing in a small or medium scale business would not be as simple as registering the business, securing the necessary permit and licenses, and start the
business operation, in this concept, many tried and failed due to lack of proper analysis and preparation, most of all no feasibility study has been conducted.
At present the most simple and easily managed business is Vulcanizing and Repair Shop. This business has become the most lucrative and these are small time
businessmen who want to engage into this kind of business but they do not have enough knowledge in running the business.
In Gapan City, there are more than thousands of tricycle units passing the streets in Gapan City and increased the doubly in a five year period from 3,600 units
in 1992, in the year 2003 based on the legalized volume of tricycles from the record of Gapan City Tricycle Franchising and Legalization Department this figure becomes
4,200 units of tricycle registered in the City.
From the above statistics, considering only the legalized volume of tricycle units in Gapan City, there are 21,900 tricycles tires rolling the streets every day. The
average life span of a brand new tire is six (6) months such that for the whole year, from the 7,300 units, there are 43,800 tires consumed annually where a brand new tire
cost an average of P320.00 per piece.
This statistics provided an idea for the researcher to conduct a feasibility study on a business that would help the tricycle operators minimize their growing
operational expenses as brought by the increasing prices of gasoline, oil and spare parts. The researcher conducted some surveys on tricycle using recapped tires they are
using are from a sole tire recapping in Gapan City, Nueva Ecija. No one among the fourteen (14) stores selling motorcycles spare parts and tires within Gapan City, Nueva
Ecija that has been interviewed by the researcher carry vulcanized tires.
A comparative computation was conducted by the researchers in order to get a bird’s eye view on the economic difference between a vulcanized tire and a
brand new tire. If the average lifespan of a vulcanized tire is 4.5 months at P180.00 per tire, its expenses per month is P53.00. If the average lifespan of a recapped tire is
4.5 months at P180.00 per tire, its expenses per monthwould be P40.00. The difference between the two is P13.00 per month or a 24.5 percent difference making the
vulcanized tire more economical to use.
Although a motorcycle vulcanizing shop is already in operation in Gapan City, Nueva Ecija, the business is not yet fully tapped since the existing one cater only
to tricycle drivers who bring their carcass in the establishment for vulcanizing. No actual carcass collection system or marketing strategy is undertaken.
From the above statistics, the researcher came out for this study. “A Feasibility Study of Establishing a Vulcanizing and Repair Shop in Gapan City, Nueva Ecija.”

STATEMENT OF THE PROBLEM

It is the intention of the research to determine and analyze the Feasibility of Establishing a Vulcanizing and Repair Shop in Gapan City.
This study seeks to answer the following questions:
What is the type of business organization suited for the project/business?
What are the marketing programs to be used in the business? Is there a demand for the proposed project?
What are the technical requirements needed in the operation of the proposed business?
How much capital needed for the project? Is the proposed business profitable?
What is the social significance of the project?
What are the potential problems to be encountered by the business?
SIGNIFICANCE OF THE STUDY
This study entitled “Feasibility of Establishing a Vulcanizing and Repair Shop in Gapan City,” could be of help to the following:
The Researchers. They will be familiar with the needed information that is essential in handling the business.
The Future Researchers. The result of this study would be a source of information to the future researchers who will be involved in this kind of business.
The Prospective Investors. This study will be a guide to a future investors and for them to realize that putting up business like this is very feasible.

SCOPE AND DELIMITATION OF THE STUDY

This study is limited only the vulcanization of motorcycle tires, and repair of the tire like the tire rim (rayos), where statistics used were based on the franchised
and legalized 7,300 tricycle units in Gapan City. Single motor services were not included and others. Financial analysis is limited to the cost of equipment, tools, and materials
used, as well as the process of production expenses, target markets, and projected market grab (share) with the financial analysis on profit statement and Rate of Return
of Investment (RROI).
 To organizational aspect, this study justifies the type of business organizational it intends to put up. This aspect will also define the duties and responsibilities of
the required personnel and their compensation.
The production aspect, shall limits its discussion with emphasis to the location of the working shop, shop facilities, shop size and the services offered.
As to financial aspect, the possible sources of financing the profit will be shown as well as the organized presentation of financial tools and analysis to justify the
viability and feasibility of the project.

DEFINITION OF TERMS
The following are define in order to guide the readers in understanding this study.
AIR COMPRESSOR. A device used to accumulate air with pressure greater than atmospheric pressure used to power a mechanical device or provide a portable
supply of air, or oxygen.
CARCASS. As used in the study, this term refers to the exterior tire where the outer upper layer has already been consumed.
ELECTRIC GRINDER. The term refers to a grindstone electrically operated, used to grind, polish or sharpen tools.
EXTERIOR. The term refers to the outer part of rubber tire.
INTERIOR. The term refers to the inner part of rubber tire made up of a thin tubular circular rubber which is air inflated.
MARKETING STRATEGY. The term refers to the techniques employed in order to penetrate a certain product into the market which is in this particular study, the
recapped tire.
HEATING PLATE. This term refers to equipment used in hearing the rubber strip in order to cover the damaged part of the tire.
WHEEL BALANCING EQUIPMENT. Refers to a simple machine used to repair the river of the tire when the latter is not already circular in nature (oblong).
MECHANICAL TOOL SET. These terms refers to equipment used to fixed and loosen the metal screw of the tire.
REPAIR. To restore, to sound or a good condition after damage.
SHOP. A place for making or repairing any article, a business subject for conversation.
CHAPTER II
REVIEW OF RELATED LITERATURE AND STUDIES
This chapter presents review of some studies and available literature which are in a way related to the proposed study.

FOREIGN LITERATURE
The history of rubber tires began in 1839 when Charles Goodyear discovered the secret of vulcanization. Although the first air-inflated tire was not built until
1845. A young Scottish engineer, Robert W. Thompson, filled rubber tubes with air, encased them in leather and put them on carriage wheels. Thompson’s tire where not
strong enough to last long or wear well. In 1888, John Dunlop, an Irish veterinarian built a pneumatic tire for his son’s bicycles. This was successful and Dunlop entered the
business of making bicycles tires. At the beginning of 20th century, tires were made of single tub bolted to the wheel through crescent – shaped rims.
George W. Rium described how tires are manufactured. According to him, rubber, natural or synthetic, is compounded in a mill between two (2) revolving
smooth, hollow steel rolls. Carbon, black sulfur, pigments (such as zinc oxide) and accelerators are included to give the rubber an added strength and wear, heat and aging
resistance. A Banbury mixer which contains rotating knives is a rapid and efficient means of mixing these ingredients. When all ingredients have been uniformly needed
into the rubber, the mixture is removed from the roll mill in a long thin sheet. Tetile fiber, and for special uses thin steel wires are used to give the tire body strength and
resilience. Reylon, nylon, and cotton are most often sued and all new artificial fibers are being tested. Square woven fabrics are combined with the thin sheets of rubber on
a 3-roll colander unto a single sheet, which is out to shape or place in rolls for the various steps in tire making. The rubberized fabrics are cut on the bias into diagonal strips.
A tire is made up two (2) main parts, the carcass and the tread. The tread is producted by feeding the rubber into an extruding machine, which forms it to shape
and size. The sidewall rubber can be made as part of the same piece or extruded separately. High tensile steel wire is then coated with rubber and formed into sheets to
form the head. The tire builder lays several plies of rubberized fabrics on revolving cylinder shaped like a drum. After (2) plies are placed around the drum, the bead are
placed on top and additional plies are added to the drum. The tread and sidewall are wrapped around the drum over the rubberized fabric. The drum is collapsed and the
heavy rubber-fabric body removed. It is then ready for shaping and curing.
The tire is place in pneumatic press where hydraulic pressure compress the heavy casing into shape. A specially contoured tube, called a curing bag, is placed
inside the curing die and inflated. These forces softened rubber against the design of the mold to give the sharply outlined design of the treat surface. High pressure steam
is sued to cure the tire at a temperature of about 3000F for about 45 minutes. New types of tire molds have the air bag on air bladder, built into the machine rather than as
a separate piece of equipment.
Richard A. Riley, a chairman of the Firestone Tire and Rubber Company stressed the need to shape the tread of the tire in accordance to the terrain as a tire
safety measures. He said that conventional tires provide good traction under most conditions perform relatively poorly on smooth surface all season tires have wide grooves
and tread patterns designed to penetrate snow and provide good traction. To reduce skidding, some tires are provided with studs embedded on the tread.
Studded tires are, however illegal because they tend to damaged paved roads. Worn thread do not grip the road well and increases possibilities of skids. Tires
should be replaced when their tread had worn down 1/16 inch (1.6mm) this depth is indicated by a built in wear bars that show up as smooth horizontal bands across the
tread. This depth is also an ideal wear for possible recapping.
Since recapping is in itself a method of recycling used tires, it is worthy to note the words of Akiyama Tadasuke. He said that recycling can refer to variety of
ways of refusing resource and products, from the recycling of home garbage to the systematic recovery and reuse of products of other materials and processing of industrial
waste by government or industry.
With regard to used tires, the researcher has been trying to develop practical methods of disposing of the millions of worned tires scrapped each year. Some of
these tires are ground up, and the rubber is reclaimed for use in new rubber products. Some are used as artificial reefs on ocean bottoms, to provide heavens for fish. Still,
others are ground up and used in asphalt for paving.
Another method of disposing the tires is to use them as a source of energy. By burning them in a specially designed pollution – free incinerators, old tires could
become valuable energy resource. But this method is extremely costly (a synthetic rubber fuel containing an oxygen-rich chemical is used in rockets).
Aside from studies and literature about tires and recycling, some studies about marketing or business venture is important to note in this study.
On entrepreneurship, to enter into a new venture necessities environmental assessment, the economic environmental plays a vital role in the success or failure
of any new venture. Too often, it becomes obvious that a little effort was made to determine whether the economic environment was friendly or hostile to a specific
venture. Kuratco recommended the following to assess economic environment in order to avoid pitfalls:
How many firms are in this venture?
Do the firms vary or are they similar?
Are they in one area or widely spread?
Do the firms serve only to the domestic market?
What is the competitive nature of this business?

Answer to these question provide an overall picture of the business eliminate within which a new ventures must realize that certain attitudes and perceptions from
prospective clienteles are needed for proper assessment of the environment.
Michael E. Porter recommends other useful steps that can assist an entrepreneur in examining any new venture:
Adequate definition of the industry for the new venture.
Analyze the competition.
Determine the strength and characteristics of suppliers.
Establish the “value added” measure of the new venture.
Project the market size for the particular industry.

LOCAL LITERATURE
The role, tasks, and responsibilities of management do not actually vary, to a significant extent, among organizations, instead, it is the manager with his own
unique sets of attitudes and norms – and the kind of subordinates he handles that differ widely in all organizations. Andres discourses on the Filipino values and management
practices in the Philippines as he believes that the Filipino entrepreneur has its unique style of management according to Andres, the Filipino manager needs from his
subordinates.
JUSTIFICATION OF THIS STUDY
The researcher found out that the project is feasible and viable and assure that this study is not duplicated or copied from other studies thus this study is original
and it is the product of combined effort or the researchers.
The scope of this study has similarity and differences to other studies. It is similar in term of techniques used in data gathering and also in treatment of data, but
differs in term of explanation and meaning. It also differs in the content of the study, and also its location and capitalization.
CHAPTER III
RESEARCH METHODOLOGY AND SOURCES OF DATA
 This chapter presents the research method utilized by the researchers, the manner of gathering data, their sources and procedures used to test the viability of
the project.

RESEARCH METHOD USED

In this study the descriptive method of research was utilized by the writer with documentary analysis as the main technique for data gathering. Description
research was utilized to describe the ways and methods of producing vulcanizing and repair shop business.
Reports and other written documents from private and government agencies such as Department of Trade and Industries, Private Business Publications and
other institutions were utilized by the researchers. Interviews with people in vulcanizing business were also undertaken.

TECHNIQUES USED IN DATA GATHERING

Interview – needed facts were obtained through interview and it gives the researchers the much more assurance to the accuracy of the results.
Observation – they observed that it is necessary to organize the business in the form of a single proprietorship because it allows the proprietor to have different control
over the business.
Library Technique – was also conducted by the researchers in order to furnish all the needed data that will be a big help to the study. Published books, magazines, journals
and internet in personal computer were used in this study, in this study, in order to find out the difficult problems involved in this research study.
TREATMENT OF THE DATA
The following financial methods of evaluating the feasibility of a certain project were utilized by the researchers.

RETURN ON INVESTMENT
Foremost among investors is the rate that these would give. This significance rate of return promise by investment project when investors consider the time value of the
investment.
ROI = Annual Net Income
Total Investment

PAYBACK PERIOD
Measures the length of time required to recover the amount of initial investment it is the time interval between the time of initial outlay and the full recovery of the
investment.
Payback = Net Investment
Annual Cash Return
PRESENT VALUE ANALYSIS
It is the excess of the present of the cash inflows generated by the project over the amount of the initial investment. It is the discounted cash flows approach to investment.
It was a required discount rate to find the present value of the project cash flows. If, after deducting the original investment from the sum of equal to or greater than zero,
then the study is acceptable.
CHAPTER IV
PRESENTATION, ANALYSIS AND INTERPRATATION OF DATA
This chapter consist the entire content of the study organization and management, technical, marketing, and financial aspects of the project. Special mention is
made concerning potential problems, and social desirability of the proposed study.
Organization and Management Aspect
This business will start on a small case basis. This is a single proprietorship business which will supply the operate as vulcanizing and repair shop.
It is usual in this kind of business that the manager will directly supervise the workers.
PERSONNEL WORKERS
The organizational structure of the business will be composed of the following personnel and workers:
Manager / Owner
Secretary / Bookkeeper / Cashier
Vulcanizers
Wheel / Tire Repairmen
Shopkeeper / Helper
ORGANIZATIONAL STRUCTURE
It is usual for this kind of organization to use the line type of organizational structure from where there is a direct flow of authority from
the top position to its subordinates. A characteristics of this this type is the superior – subordinate relationship wherein a superior delegates authority to a subordinate
who in turn delegates authority to another subordinate thus forming a line from the very top of the lowest level of the organizational structure.
Line type of organization is the simplest form of organization types, hence it is easily understood by its members. Every person knows from whom he receives
his order and to whom to report. A person with line authority knows what he is expected from him and he is responsible for the unit to which he is expected or assigned
to function for the attainment of the goals of the enterprise.
The proposed project, being on a small scale will have simple organizational structure
JOB DESCRIPTION AND SPECIFICATION
The following are the responsibilities of the employees/ personnel.
General Manager/Owner. He is responsible in dealing different kind of persons like tricycle drivers, customers and other persons in the business. He should make an
effective plan in the management of the business. He should make an effective plan in the management of the business and create a good marketing strategies. He should
be knowledgeable in the whole operation of the business.
Secretary. Her primary function is to issue receipts and pay bills of the company. She should have a thorough understanding on different proceedings of the business
and very well knowledgeable in proper recording of transaction made by the business.
Vulcanizers. They are responsible in dealing with their needs and problems of the customers. Their duties are the main important jobs in the shop and they are also
the responsible persons in the repair and maintenance needed by the customers and tricycle drivers.
Shop Keeper or Helper. He is responsible in repairing the broken wheel / tire support (rayos). After changing the broken tire support, the repairman makes the
necessary balancing the wheel/tire of the tricycle on order to maintain the wheel circular in nature.
Salary Distribution
Job Title Salary/Wages per month
Manager / Owner 12, 500
Secretary 8,000
3 Vulcanizers/Workers (P4,000.00) each 12,000
2 wheel Repairmen (P4,000.00) each 8,000
1 Helper or Shop Keeper 3,000

MARKETING ASPECT
A business organization such as that of an vulcanizing and repair shop operates on a very competitive organization. Business uses the limited resources available to
them as well as for the limited markets of their services. In such situation a project must have a clear idea of the role which it plays in society. It should always aim to offer
better quality services that of its competitors for this is the only deciding factor in which a consumer could decide because the prices of the services in this company does
not vary with each other. Also the best suited marketing strategy as well as the proper advertisement procedures was revealed in this part.
MARKET STUDY
In Gapan City, there are only few vulcanizing and repair shops offering a business which is something big and unique. The business is different from the vulcanizing
shops shown in pathways of the mainroads (Bangketa). The minimum number of vulcanizing stand is five (5) sets and two (2) sets of wheel balancing equipment are available
in the shop, with the rate of increase tricycles in the city, there is a need to install a vulcanizing shop, which is big and has enough space to accommodate at least five
customers at a time. According to Land Transportation Office there are at least 5,200 tricycles registered in Gapan City alone aside from the tricycle moving/operating in
the adjacent town of Gapan like San Isidro, San Leonardo, and Penaranda. In this situation, the researchers believed that there is a big market.

Market of the Product

The primary market place of the business of San Vicente, Gapan City other nearby places also the target market. The manager himself will transact with the tricycle
drivers in Gapan and in other nearby places like San Leonardo, San Isidro, and Penaranda, Nueva Ecija wherein there are many existing tricycle driving in the streets of
Gapan for the vulcanizing service and repair.
Marketing Strategies
 On the store site the business will simply place a billboards and the numerous poster and banners will be located in different places.
The main marketing strategy to be used is by informing the tricycle drivers about the shop and offering lower prices of the products. There is no need for the proponent
to advertise the shop eagerly because there is a big demand in vulcanizing and repair business in the City.

Supple and Demand Analysis

Market Demand. The proponent considers the analysis of supply and demand of the project. As per survey, the demand for vulcanizing and repair shop is one of the
great demands the tricycle in the city. In this connection there will be no problem as far as the demand for the services offered by the shop is concerned. According to the
present vulcanizing shop owners (small time) this project is still blooming, thereby allowing a bigger demand for the future and still giving an opportunity for earning for
those who are interested in getting into this kind of business.
Market Supply. Supply and materials to be used in the operation of the business are not considered a problem because there are many equipment and materials
available for purchase nearest the project, therefore, there is no limitation on the source of supply in operating the said business. Gapan City, being one of the business
centers in the province have enough of supplies and materials for vulcanizing and repair shop where materials for the project can easily be secured.

TECHNICAL ASPECT
This part of the study was consisted of the necessities in handling the product and it also discuss the store site and the renovation of the shop building.

Location
The location of the shop should be in that can reach by many people. The place should have a small workplace to accommodate customers and other tricycle drivers.
The store site will be located at San Vicente, Gapan City where anybody in the area could access the shops. The vicinity map of the store was presented in Figure 4.
Building Renovation
It is estimated that the shop to be renovated will cost P6,000.00 pesos that means this amount was necessary in the renovation of the building shop.
The shop site will be renovated in the description appropriate for the vulcanizing and repair services, 5 working places for the vulcanizing and 2 sets for wheel balancing
and repair shop. The office of the manager was build inside the shop and the cashier windows as well. The store area should be at least 8 meters wide.
Source of the Products
The main source of the products are the leading suppliers of vulcanizing materials in Metro Manila that offers a low wholesale price which means lower cost of the
products.

Machineries and Equipment

The following are the equipment needed by the project
Air Compressor. It is necessary in providing air for the tire when it is already vulcanized.
Calculators / Adding Machine. It is usually used by the cashiers and sales clerk for the computation of the sold items.
Healing plate (stall). This equipment is important/necessary in heating the rubber strip in order to cover the damaged part of the tire.
Lighter / Matches. These items are also needed in lightning the heating plate with diesel.
Wheel Balancing Equipment. This in needed in repairing the rim of the tire when the tire is not already circular in nature (oblong tire).
Drum. This is necessary in locating the damaged part of the tire (butas).
Mechanical Tool Set. This is very important in loosing and fixing the metal screw of the tire.
Rubber Strip (Adhesive). This is the main material used in covering the broken interior of the tire.
FINANCIAL ASPECT
The total capital requirements for the project will amount to about P75,000.00. the equity shall be the owner’s investment without borrowing money from any
financial institutions. Since the business is only a small scale industry, the proponent decided not to borrow money from the bank. The proponent’s capital is enough to
operate a small business like a vulcanizing shop. The following table shows the detail of the total capital requirement of the proposed business.

Table 1
TOTAL PROJECT COST

PARTICULARS AMOUNT
Building / Shop Renovations P6,000.00
Advanced Deposit for Rentals
(2 months – P3,500 per month) 7,000.00
Machineries and Equipmet
Air Compressor P20,000.00
Heating Plates (5pcs) 2,500.00
Wheel Balancing Eqpt. (2pcs) 4,000.00
Mechanical Tool Set 5,000.00
Drums (2pcs) 500.00 32,000.00

Working Capital 30,000.00

Total Project Cost P75,000.00

Table 2
SCHEDULE OF REVENUE
(SERVICE FEE COLLECTED)
PARTICULARS DAILY MOTHLY ANNUALLY
Vulcanzizing Fees P750.00 P22,500.00 P270,000.00
Wheel/Tire Repair P800.00 24,000.00 P288,00.00
Fees
Total Revenues P1,550.00 46,500.00 P558,000.00

Sample Computation:
Vulcanizing
50 pcs x P15.00 = P750.50/day
Wheel Tire Repair
10 pcs x P80.00 = P800.00/day

Table 3
COMPUTATION OF INCOME TAX

SUBJECT FOR INCOME TAX INCOME TAX

1st year
P31,400 – 30,00 = P1,400 x 15% + P 2,500.00 = P2,710.00
2nd year
P35,300 – 30,000 = P5,300 x 15% + P2,500.00 = P3,295.00
3rd year
P39,590 – 30,000 = P9,590 x 15% + P2,500.00 = P3,939.00
4th year
P46,309 – 30,000 = P 16,309 – x 15% + P 2,500.00 = P4,946.00
5th year
P49,500 – 30,00 = P19,500 x 15% + P2,500.00 = P5,425.00
 Table 4
SCHEDULE OF DEPRECIATION

PARTICULARS COST USEFUL LIFE DEPRECIATION

Shop Space (Renovation) P6.000.00 5 years P1,200.00
Machineries and Equipment P32,000.00 5 years P6,400.00
Total P7,600.00
Table 5
SCHEDULE OF OPERATION EXPENSES
PARTICULARS YEAR YEAR YEAR YEAR YEAR
1 2 3 4 5
SALARIES/Wages P456,000 P501,600 P551,700 P606,936 P667,630
Rent 12,000 46,200 50,820 55,902 61,492
Light & Water 6,000 6,600 7,260 7,986 8,785
Supplies 12,000 13,200 14,500 15,972 17,569
Depreciation 7,6000 7,600 7,600 7,600 7,600
Repair & Maint. 1,000 1,100 1,210 1,331 1,464
License and Permit 2,000 2,200 2,420 2,662 2,928
Total P526,000 P578,500 P635,590 P698,389 P767,468
Table 6
SCHEDULE OF SALARIES AND WAGES
1 Manager / Onwer P9,000.00
1 Secretary 6,000.00
3 Vulcanizers P4,000.00 each 8,000.00
2 Wheel Repair Men P4,000.00 each 8,000.00
1 Helper 3,000.00
Total Salaries and Wages P 38,000.00/month
387,000.00 x 12 months = P456,000.00/year

Table 7
PROJECTED INCOME STATEMENT
PARTICULARS YEAR YEAR YEAR YEAR YEAR
1 2 3 4 5
Vulcanizing P270,000 P297,000 P326,700 P359,370 P395,307
Wheel / Tire Repair 288,000 316,800 348,480 388,328 421,661
Gross Revenue 558,000 613,8000 675,180 742,698 816,968
Less: Operating 526,6000 578,500 635,590 698,389 767,468
Expensing
Income before tax 31,400 35,300 39,590 46,309 49,500
Less: Prov. For 2,710 3,295 3,939 4,946 5,425
Income Tax
Net Income Tax P28,690 P32,005 P35,651 P41,363 P44,075

Average Income = P36,367.00 =48%

75,000.00

Table 8
CASH FLOW STATEMENT
YEAR 1 YEAR 2 YEAR 3 YEAR 4 YEAR 5
Net Income After tax P28,690.00 P32,005.00 P35,651.00 P41,363.00 44,075.00
Add: Non cash Items 7,600.00 7,600.00 7,600.00 7,600.00 7,600.00
Amortization and Depreciation 2,710.00 585.00 644.00 1,007.00 479.00
Increase in tax liability
Total P39,000.00 P40,190.00 P43,895.00 P49,970.00 P52,154.00
Add: Cash bal. Beg P30,000.00 P6,900.00 P10,919.00 P15,309.00 P20,306.00
Cash end P69,000.00 P109,190.00 P153,085.00 P203,055.00 P255,209.00
Table 9
PROJECT BALANCE SHEET
YEAR 1 YEAR 2 YEAR 3 YEAR 4 YEAR 5
Cash P69,000.00 P109,190.00 P153,085.00 P203,055.00 P255,209.00
Advance deposit 7,00.0 7,000.00 7,000.00 7,000.00 7,000.00
Bldg. Renovation 6,000.00 6,000.00 6,000.00 6,000.00 6,000.00
Less: Accum Depreciation (1,200.00 (2,400.00) (3,600.00) (4,800.00) (6,000.00)
Machineries 32,000.00 32,000.00 32,000.00 32,000.00 32,000.00
Less: Accum Depreciation (6,400.00) (12,800.00) (19,200.00) (25,600.00) (32,000.00)
P106,400.00 P138,990.00 P175,285.00 P217,655.00 P262,209.00
Taxes Payable 2,710.00 3,295.00 3,939.00 4,946.00 5,425.00
Owner’s beg. Cap 75,000.00 P103,690.00 P135,695.00 P171,346.00 P212,709.00
Add: Net Income 28,690.00 32,005.00 35,651.00 41,363.00 44,075.00
Total Operating Expenses P103,690.00 P135,695.00 P171,346.00 P212,709.00 P246,784.00
Total Liab. And Owner’s Equity P106,400.00 P138,990.00 P175,285.00 P217,655.00 P262,209.00

FINANCIAL ANALYSIS
The following are the barometrics/indicators used in the study in order to test the profitability of the proposed project/business. Average rate of return cash
payback period and the present value analysis.
Average Rate of Return = Average/Annual Income
Total Investment

= P36, 367
75,000

ARR = 48%
Payback Period
Payback period indicates the number of years required to fully recovered the initial investment. This figure shows in the following computations.

CPP = Total Project Cost____

Net Income + Depreciation
 = ____P75,000______
P28,690 + 7,660.00

= 75,000
36,290

= 2.067 x 12 months

CPP = 2 years and 8 months

PRESENT VALUE ANALYSIS

YEAR CASH INFLOWS PV of P1 At 12% PRESENT VALUE

1 P 36,290.00 0.893 P32,406.97
2 36,605.00 0.797 31,565.19
3 43,251.00 0.712 30,794.47
4 48,963.00 0.636 31,140.47
5 51,675.00 0.587 30,333.23
Total Present Value of Cash Inflow P156,240.57
Less: Total Project Cost 75,000.00
Net Present Value P81,240.57
SOCIAL DESIRABILITY OF THE PROJECT
In this study, the proposed viability is not all that is considered when investing in business is concern. The project socio-economic contributions to the country
should likewise solicit an equal degree of consideration. The project is expected to be a contributor’s, as well as a helping hand for the upliftment of the social and economic
living in the city. The following areas are also considered.
Employment Generation. A developed vulcanizing industry and those indirectly involved in the project providing them employment during the renovation of the
shop as well as during its actual operation.
Income Generation. Considering employment opportunities, this project could contribute income to those who work in the business not only the employees but
also the investors who will go into this kind of business.
Generating Funds for the Government. By means of licenses and taxes fees to be paid by the business, it can generate funds for the government which will
eventually be of assistance in uplifting the socio-economic life in the country.
POTENTIAL PROBLEMS
The potential problems as envisioned by the proponent in the actual operation project are as follows:
Due to the city ordinances considering the non-franchising of tricycles in the city could affect the operation of the business.
There is a tendency that through the development of the city, allowing taxi and multi cab to operate business in the city. Through this change in the system and policies,
the project will also be affected.

CHAPTER V
SUMMARY, CONCLUSIONS, ANF RECOMMENDATIONS
This chapter deals with the summary of findings, the conclusions and the recommendations for the successful management of the business.

SUMMARY
This study wants to find out the feasibility study of vulcanizing and repair shop in Gapan City. This study deals with the four aspects of management.

Management Aspect
This business will be formed as a single proprietorship. This type of management was adopted because it is easy to start and terminate, profit belongs entirely
to the owner and the ownership is vested only to one person. The type of organization used in this project is the line type where there is a direct flow of authority from the
top position to the subordinate levels.

Marketing Aspect
The best suited marketing strategy as well as the proper advertisement procedure was revealed in this part.
In Gapan City, there are only few vulcanizing and repair shops offering a business which is something big and unique. This business is different from the
vulcanizing shops shown in pathways of the main roads (Bangketa). The minimum number of vulcanizing stand is five (5) sets and two (2) sets of wheel balancing equipment
are available in the shop, with the rate of increase tricycles in the city, there is a need to install a vulcanizing shop, which is big and has enough space to accommodate at
least five customers at a time. According to Land Transportation Office there are at least 5,200 tricycles registered in Gapan City alone aside from the tricycle
moving/operating in the adjacent town of Gapan like San Isidro, San Leonardo, and Penaranda. In this situation, the researchers believed that there is a big market.
The primary market place of the business of San Vicente, Gapan City other nearby places also the target market. The manager himself will transact with the tricycle
drivers in Gapan and in other nearby places like San Leonardo, San Isidro, and Penaranda, Nueva Ecija wherein there are many existing tricycle driving in the streets of
Gapan for the vulcanizing service and repair.
On the store site the business will simply place a billboards and the numerous poster and banners will be located in different places.
The main marketing strategy to be used is by informing the tricycle drivers about the shop and offering lower prices of the products. There is no need for the proponent
to advertise the shop eagerly because there is a big demand in vulcanizing and repair business in the City.

CONCLUSION
Based on presented information regarding the establishment of Vulcanizing and Repair Shop in Gapan City, it can be concluded that is venture is feasible because
of the following:
That the organization best suited is single proprietorship.
That there is a demand for the proposed project.
That there is more profit to be derived from the business.
That the maintenance of this project is very simple.
That the business is very feasible.
That the business is socially desirable and gives benefit not only to the owner, consumers, but also to the government.
RECOMMENDATIONS
In the light of conclusion, the following are recommended:
Individuals who are interested in Establishing a Vulcanizing and Repair Shop should find good location such as cities and urban areas because that is the place where most
consumers/buyers come.
They should hire qualified and skilled workers in the business so that they can carry out business in order to make the products and services more attractive.
Different marketing strategies should be applied in this business in order to make the products and services more attractive
Capitalization requirements should balance the procurement of materials and equipment in the operation of the said business.
Systematic financial procedures and control system be given more emphasis.