1

Chapter I
Introduction
Laundry is one of the never-ending chores of our mothers since it is one of her

everyday responsibilities. Since our townsfolk settled in the Philippines, laundry

was the first household lesson that a child must learn before she reaches the age

of the womanhood. Men during the early days were too busy with other activities

like games and gambling and some go to war that’s the reason why they do not

have the time to learn basic household chores. They relied mainly on the woman

members of their family since it was the tradition that has been known from one

generation to another.

As time passed by, changes occurred in the laundry process and even on

human lifestyle. Economic depressions and tremendous needs dictated that both

spouses must work to support their family for their daily living. This situation left

the laundry work and other chores suitable for both man and women but still few

men knew how to do washing manually.

One big process in the laundry was when the washing machine was invented.

This made linen washing easier for both men and women. But the idea of washing

clothes as a task of women made men repulsive to wash the family’s clothing. At

this point, the entrepreneur, spotted a market to commercialize laundry service.

Clothing is one of the basic needs of every person. For hygiene purposes,

people regularly change their clothes and creates a pile of dirty ones so they need

to do their laundry on a regular basis. Earlier clothes were washed by hand,

washed in ponds, rivers and then dried and pressed. Nowadays hand washing is
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outdated. In today’s busy world, balancing household chores, studies and quality

time with the family is quite a challenge. Laundry is a much-needed chore to be

done and it imparts advantages to a person who is oblivious of time management.

Laundry business is an easy and convenient business. It does not require a

huge capital or intense management focus. Everyone can start this business right

from their home and make it grow from there. It is a very lucrative business, as not

everyone that puts on clothes has the time to do their laundry. Based on the survey

conducted the reasons why people go to the laundry shops instead of doing it is

because of their tight schedules especially those students who have a lot of

extracurricular activities in school, others say they don’t like to wash their clothes

because it is just a waste of time, and some boarding houses and apartments

prohibits or limits the washing of clothes due to the consumption of water.

PiDel Company introduces the laundry shop business such as “Bubbly

Bubbles Dry Cleaning” which represents the kind of services offered by the

proponents. With the right techniques of washing, a system of efficient-effective

operation and quality of service, the proponents believe that this business is

feasible and has a great opportunity for growth.

This is the reason why there is a chance of making a lot of money because

consumers will definitely seek your services. (Mosende, 2014)

Brief Background of the Study

Laundry shop significantly acts as a great help for those people who do not

have time to do their laundry. The existence of washing machines and dryers in
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most households is no longer a threat to this business, as it sprouts like

mushrooms in different areas of the country. The growth of this business can be

attributed to the fast-pacing movement of the modern world where time is of great

importance. Like all other products and services that are instant in form namely:

instant food, internet connections, online banking, etc. laundry shops provide the

convenience of time with service quality.

According to entrepreneurs, quality and speed are two of the major reasons

why people are bringing their dirty clothes to laundry shops. These two aspects

are very important for a laundry business to grow. It is also a necessity for people

to have their dirty clothes washed in order to keep their everyday wardrobes clean

and free from dirt, sweat, and bacteria.

This is particularly true in tropical countries like the Philippines. The growing

reality of success of laundry businesses in the Philippines gave the proponents an

idea that people are bringing their dirty clothes to laundry shops for reasons of

time, quality, speed and the need for clean clothing regardless of the weather

conditions. People may also embrace the idea of a shop that offers a free pick-up

and delivery with speed and quality with the appropriate price.

Moreover, career-oriented individuals and active teen seldom have time to

wash their clothes. So it would be better to have a place where people can have

their clothes washed with the quality and convenience of time. The proponents

wanted to offer a form of transaction between businesses, which sells the service

exclusively to other businesses, rather than individual consumers.

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Batangas City as an urbanized city in the Philippines has too many business

establishments nowadays. It can be seen that numerous schools and

establishment are spotted around the area urging to look for convenience due to

their busy time. And this gives a positive outlook for some businessmen who just

started in the industry and placed their investment in certain businesses

particularly the laundry business in which is not yet saturated. (Gumban, 2014).

Objectives of the Study

The general objective of this study is to prove the viability of establishing a

Free Pick-up and Delivery Laundry Service in Batangas City. Similarly, the

following are also intended:

1. To determine the market aspect through SWOT analysis, the accessibility of the

product in the market and the potential customers who will avail the service;

2. To determine the technical aspect, the most appropriate equipment, processes,

and the best location for the proposed project;

3. To determine the management feasibility of the project by making an

organizational chart which includes the precise identification of responsibilities and

duties of each individual;

4. To determine the company’s financial position through the profit and loss

projections and the availability of the capital to propose a business;

5. To determine the socio-economic benefits of the proposed business.

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Definitions of Terms

To establish a common frame of reference between the proponents and the

readers of the study and for classifications of terminologies used, the following

terms are defined as theoretical and operational.

Consumers. These are persons who buy goods and services and patronize them

on a regular basis. (Pagoso, et al. 2008). In this study, it refers to those individuals

who will avail the service.

Washing. Washing is a collection of clothes, sheets, and other things which are

waiting to be washed, are being washed, or have just been washed(Mendelson,

2010). In this study, it refers to the process of cleaning dirty clothes through the

use of soap and water.

Drying. It is a mass transfer process consisting of the removal of water moisture

or moisture from another solvent, by evaporation from a solid, semi-solid, or liquid.

To achieve this, there must be a source of heat and a sink of the vapor thus

produced (Mendelson, 2010). In this study, it refers to a process used to make wet

materials dry.

Hand wash. It refers to a kind of service offered by a laundry shop wherein delicate

clothes or any kinds of clothes what a customer wants to be manually washed

(Mendelson, 2010). In this study, this is a process used for delicate and heavily

soiled clothes that need greater care and attention to suit the customer’s needs.

Laundry Shop. It refers to the act of washing and is a special type of garment

clean personal activity to keep and maintain the person’s garment clean
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(Mendelson, 2010). In this study, it refers to the area where the process of laundry

is being done.

Service. Defined as anything offered to the market or duty required or performed

to satisfy others (Pagoso and Young, 2008). In this study, it refers to a valuable

action, deed, or effort performed to satisfy a need or fulfill a demand.it is a type of

activity that is intangible, not stored and does not result in ownership.

Target Market. A fairly group or people or organizations to which or whom a

company wishes to appeal (Go, 2008). In this study, it refers to individuals in the

urban areas of Batangas City which the services is offered.

Scope and Limitations of the Study

The study is subject to business to business in the urban areas in Batangas

City. It focuses mainly on five chapters that are presented in order to achieve a

certain purpose of the study. Those chapters are the market, technical,

management, financial and socio-economic aspects of the business.

The first aspect is the market study which covers all the necessary

techniques and instruments used to determine the demand and supply of the

service. This feasibility study will establish a Free Pick-up and Delivery Laundry

Service. As a laundry service, it will be limited to only accept a minimum of 10 kilos

of laundry. Free Pick-up and Delivery Laundry Service are basically viewed as a

“Bubbly Bubbles Laundry Service” idea but similar to the need of proactive people

to avail fast, convenient and high-quality wardrobe laundry service, the need for

them to have their footwear and wash it in the same manner, is very appealing.
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In the technical business of the study substantiate the simple but high-

quality service process of the proposed business. The processes of the service

include; preparing the workplace and all materials needed, removing and cleaning

the dirt, mixing the cleaning solution, rinsing, drying, packaging and delivering the

clothes. The investment is really on having the appropriate supplies, equipment,

and working environment and of course, extensive training of the staff to provide

a premium service.

The management aspect covers the form of ownership, a general

partnership where the partners are engaged in. it also covers the legal

requirements, organizational structure, and compensation and manpower

requirements. It is limited to the skills, talents, ability and also attributes of the

workers as well as the numbers of workers that are needed.

The socio-economic study of the business discussed the social and

economic impact of business. In this study, the researchers determine the effect

of the business in the society. It will benefit society by generating employment and

income. In addition, additional income will be provided to the government through

business taxes. After considering the various aspects of the proposed business,

the proponents strongly believe that this Free Pick-up and Delivery Laundry

Service is feasible. Competition is remote at this time and opportunities are great,

that with a large market consisting of the service. With the right combination of

effective low-cost marketing, systematic service process, competent management,

and well-trained staff, it is highly feasible that this “Bubbly Bubbles Laundry

Service” business concept is on its way to success.

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Chapter II
Market Study

Conducting a market study is one of the most important aspects of every

feasibility study. Its purpose is to ascertain the market share to the proposed

business under the study through the aid of some drawn procedures.

This chapter deals with the discussion of its methodology, respondents of

the study. The marketing mix which is the 4P’s of marketing: the product,

placement, price, and promotion are also included in the discussion. The

proponents give a thorough discussion about this.

Objectives of the Study

The general objective of the study is to determine the market feasibility of

the Bubbly Bubbles Dry Cleaners in the market. Specifically, it attempts to discuss

the following objectives:

1. To identify the target market of the proposed business;

2. To determine the demand and supply of the product;

3. To determine the SWOT analysis of the study;

4. To establish the desired market share after analyzing the demand and

supply situation; and

5. To formulate the appropriate marketing strategies and programs to

penetrate the market.

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Methodology

Methodology shows detailed information on how it explains and interprets

the study. It includes the research design, respondents of the study, data gathering

instruments, data gathering procedure and statistical treatment of data that is used

to determine the marketability of the proposed service into the target market area.

This explains the instruments that the proponents used such as the formula and

construction of the questionnaire to gather the relevant and factual data and

information regarding the current condition necessary in this study. The proper

implementation of the research method used in this study was precisely the basis

of the decision of the proponents in executing the market study.

Research Design

To determine the marketability of laundry service, the proponents need to

identify the use of the descriptive method of research for facts concerning the

demand and supply of the proposed service. In this distribution of the

questionnaire, the proponents aim to test if the service will be more feasible and

competitive in the market. Another purpose of conducting this process involves the

target market's awareness of the service for the proponents to acquire appropriate

data to be used in this study.

Descriptive method is the collection of both the primary and secondary data. It

is a study designed to depict the participants in an accurate way. It is a type of

research method issue in the study. A descriptive method includes the collection
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of data in order to test the hypothesis or to answer the question concerning the

present status of the study (Cuevas, 2013)

Customer Demographics are defined as including “gender, race, age, income,

disabilities, mobility, educational attainment, home ownership, employment status,

and even location”. These types of classifications can help us to target the right

kind of marketing to the customers we are trying to target (Jacobsen, 2016).

Respondents of the Study

Boarding Houses and Dormitories businesses from the urban area in

Batangas city are the selected subject of the study. The proponents choose their

target market because of the needs of their tenants. On the other way around, the

proponents prepared questionnaires that were distributed to the target market.

Businesses that are offering the related service were considered

respondents of the survey to gather the information regarding the resources of the

related service. The information gathered from the survey is used to identify if the

target market is willing to avail the proposed service.

The respondents of the study are the individuals within the age bracket of

15 (fifteen) and above, male or female, students, workers or families in the

boarding houses and dormitories in Batangas City since the proponents of the

target market were mainly individuals who have the right to decide in availing this

service. In this study, those individuals who belong to the age bracket has the

capability to decide on their clothes. The proponents considered these because

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most of the time when a person is busy and tired they don’t have much time to do

their laundry and they think about what they should do.

In order to determine the demand for the service, feedback from individuals

and related establishment in Batangas City were also taken into consideration.

The number of the total population came from the Business Permit and

Licensing Office (BPLO) as well as the list of related establishments. There is a

letter of request addressed to the proper authorities which were sent by the

proponents to the said office so that they may be allowed to gather the needed

information. The information and response regarding different marketing concepts

and its acceptability were used to identify if the target market was willing to avail

or purchase the service.

Data Gathering Instrument

Primary information is essential in order to conduct a good study. To gather

the facts needed, the proponents used the set of questionnaires that were

validated by the grammarian, industry experts, and faculty experts to ensure that

all relevant data gathered will be effective in determining the demand and supply

of the proposed service. The first set of the questionnaire is intended for the

individuals that resides on boarding houses and dormitories in Batangas City and

the second set is for the related service or establishments in Batangas City.

After the questionnaire was validated, the proponents conducted a pre-

survey or dry runoff the questionnaire in Lipa City which is an area other than the

target area in Batangas City to determine the acceptability of the service. There
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are thirty (30) respondents for consumers and 10 (ten) related establishments were

given questionnaires. The proponents went all together to the respondents of the

study in order to distribute the questionnaire faster. After that, the results were

tallied.

The questionnaire was composed of several parts. The first part

encompasses the respondents' profile; the respondents' name, age, gender, and

their monthly allowance. The second portion includes questions regarding the

consumer’s preferences. The third portion of the questionnaire covers the brief

introduction of the proposed service and willingness of the consumers to support

the service. This part gave the consumers the idea about the proposed service,

and how they would benefit from it.

For the consumer’s questionnaire, respondents were asked to answer the

minimum of ten (10) questions accurately. The respondents' profile includes

related services. Introduction of the proposed service and the willingness of the

respondents to patronize the proposed service. The questions were prepared with

simple and easy questions so that the respondents could easily answer the items

on the questionnaire.

For the related establishment’s questionnaire, it includes the business

establishment’s profile, the question regarding the services, their offerings, their

projected service for the past five years, and their comments and suggestion

regarding the proposed service.

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The proponents also sought different information and asked the different

experts for help in order to achieve good results. In addition, the proponent’s

collected secondary information through internet surfing, research books, and

other related feasibility studies. The information gathered from these sources

helped the proponents obtain reliable and relevant data to support the study.

Data Gathering Procedure

Boarding house/Dormitories service businesses from the urban areas in

Batangas City are the selected subjects of the study. The proponents chose their

target market because they are the potential client of their service. On the other

hand, the proponents prepared questionnaires that were distributed to the target

market.

Businesses that are offering related service were also considered

respondents of the survey to gather information regarding the resources of the

related service. The information regarding the survey is used to know if the target

market is willing to avail the proposed service. The proponents had undergone

different procedures to generate pertinent facts and information regarding the

different elements of the whole proposed venture.

The proponents constructed letters for different government offices,

consumers, and barangays. The proponents conducted their dry run survey with

the 10 laundry shops and 30 Boarding Houses and Dormitories in Lipa City

Batangas as their test respondents. The proponents conducted their actual survey

with eighteen (18) laundry services in Batangas City as the real respondents of
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their study. In order to determine the demand for the service, feedback from one

hundred (100) boarding houses and dormitories and other related establishments

in the Batangas city were considered through the distribution of questionnaires.

After the tabulation of the results, it was analyzed and interpreted. The data

gathered was used to determine the supply and demand analysis of the service.

The total number of the population came from the City planning

Development Office including the list of related establishments. There is a letter or

request addressed to proper authorities that were sent to the different offices in

order to obtain the needed information. The information and response regarding

the different marketing aspects were utilized in order to complete the study.

Statistical Treatment of Data

Statistical Treatment of Data is essential in order to make use of the data in

the right form. Raw data collection is only one aspect of an experiment; the

organization of data is equally important so that appropriate conclusions can be

drawn. This is what statistical treatment of data is all about. (Kalla,2009).

Using the statistical treatment method, proposed service potential and

projected demand and supply would be obtained. Values such as historical and

projected data will be disclosed. It will determine if the consumers have the

capacity to pay for the service and determine if there is a demand for it.

The statistical data that the researchers used was gathered from the

number of the listed establishment of laundries in Batangas City.

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Demand

Demand refers to the number or amount of goods and services desired by

the consumers at various prices in a particular period of time. (Gabay, et.al, 2012).

Demand is the starting point of the life of a business; otherwise, not a single peso

of profit can be justified. It is the primary factor in determining whether a certain

product has market potential.

Major Consumer of the Project

A consumer is a person who buys goods and services and patronizes then

in a regular basis (Pagoso, 2014) Consumers are one of the top considerations in

establishing in business because the business will be successful if the services it

offers will patronize by consumers. Each business has its own services offerings

that will also cater to different consumers. Due to the different needs and wants of

the consumers, the business must formulate strategies like market segmentation

which is necessary to operate the business efficiently and effectively.

This group of the market will describe their needs according to their lifestyle

considering a number of potential influences on buying behavior including the

attitudes, expectations, and activities of consumers.

Historical Demand

Historical demand refers to the amount of a product consumed by the target

market in the past years. In this study, the demand for the last five years of the

related products of Laundry Service was considered. The historical demand is

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obtained by multiplying the total number of the target market of the year by the

percentage of buyers of the related products, and then, multiplying the product to

the average annual demand per pack by a household. The proponents distributed

the survey questionnaires to the boarding houses and dormitories of the subjects

and they also determined the number of dirty clothes that they accumulate on a

weekly basis. The number of questionnaires disseminated was in accordance with

the listed boarding Houses and Dormitory. The information gathered is a useful

tool for the determination of the annual consumption of laundry by the target

market for the past years.

Table 1
Historical Demand Laundry per kilo
Year Historical Demand
2013 15,676
2014 25,155
2015 26,248
2016 28,436
2017 34,633
Refers to exhibit 3

Table 2.1 shows the historical consumption of laundry per kilo. The study

presents a proof that there is a demand for the product. Furthermore, it could be

observed that the trend of the historical demand for related products is increasing.

This implies that there is a probability that the proposed product will be consumed

the way related products are being consumed in the market.

Projected Demand

The projected demand concerns the projected or expected quantity of

demand for the Laundry service during the first five (5) years of business
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operations from 2020 to 2024. In forecasting demand, it is necessary to determine

not only the quantity to be produced annually but also other factors such as credit

availability, income distribution, design and quality preferences, money supply and

many others.

The proponents used the statistical method in coming up with the projected

demand. Although it is not an accurate demand measure, this suggests an idea of

how big the market can be for a business like the one they propose.

Table 2
Projected Demand of Laundry Service per kilo
Year Projected Demand
2020 46,630
2021 50,750
2022 54,870
2023 58,990
2024 63,110
Refers to exhibit 5

The table above illustrates the demand for the kilos of laundry in the next

five (5) years from 2020 to 2024. The trend is increasing which implies a favorable

demand situation for the establishment since the proposed product would have an

increasing consumer demand during its business operations. It also indicates that

based on the list of registered boarding houses and dormitories, laundry service

gains more acceptance and recognition from its target market.

Supply

Supply is defined as the maximum units/quantity of goods or services

producers can offer. (Gabay, et.al, 2012) Another factor to be considered in the

market study is the determination of the supply. If there is demand, of course, there

is also its counterpart, which is supply. And as the demand increase, supply will
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also increase. Some of the determinants of supply are the cost of inputs, change

in technology, other goods and the number of competing firms in the market. The

obtained data from retailer respondents would be used for the supply analysis.

Historical Supply

As an innovative product in the present market, it is vital to consider the

supply of related products for the past years. Increasing supply from the past years

connotes that there is also increasing demand for the product.

Table 3
Historical Supply of Laundry Service per kilo
Year Historical Supply
2013 9,069
2014 21,244
2015 35,241
2016 53,956
2017 80,010
Refers to exhibit 6

The historical supply of laundry service per kilo was obtained based on the

data given by the retailer respondents, but some were merely estimates since

other retailers gave limited information. The historical supply would be the basis

for the estimation of the projected supply. The table shows the increasing supply

of kilos of laundry for the last five years.

Projected Supply

The proponents projected the supply of kilos of laundry service for the first

five (5) consecutive years of Pidels operations. The projection is derived from the

information specified in the historical supply. This would be useful in the analysis

and determination of the market share.

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Table 4
Projected Supply of Laundry Service per kilo

Year Projected Supply

2020 20,591
2021 22,272
2022 23,953
2023 25,634
2024 27,315
Refers to exhibit 8

As seen in the table, the estimated supply of the product increases as the

years pass by. This is in relation to the increasing projection of demand for kilos of

laundry service. This tends the business to gain an increasing and favorable share

in the market.

Demand and Supply Analysis

Supply and demand is a fundamental concept of all economic insights and

the foundation of the majority of modern economics. It is the backbone of the

market economy (Snowdown and Vane, 2005).

For the demand and supply analysis of kilos of laundry, the proponents

gathered information through the use of survey questionnaires and distributing

them to the listed respondents including the 96 boarding houses and dormitories

in Batangas City.

The analysis of the demand and supply determines the feasibility of the

proposed product. This analysis is very important because this identifies whether

the service has the chance of penetrating the market. There is no way for the

service to penetrate the market when the supply exceeds the demand. The
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difference if demand exceeds the supply would be the market gap which the

business desires to fill and satisfy.

Table 5
Market Gap
Year Projected Demand Projected Supply Market Gap
2020 46,630 20,591 26,039

2021 50,750 22,272 28,478

2022 54,870 23,953 30,917

2023 58,990 25,634 33,356

2024 63,110 27,315 35,795

Refers to exhibit 9

Table 2.5 indicates the difference between the projected demand and

supply. This gap represents the unsaturated portion of the market that can be

penetrated. The market gap shown above has an increasing trend from 25,080

kilos of laundry during 2020 to 35,832 kilos of laundry for year 2024. Since the

projected demand is higher than the projected supply, the servicet can penetrate

the market feasibly. This is would be an opportunity for the business to enter the

market and fill the unsatisfied number of demand.

Market Share

Market share is the share percentage of the firm in the market. This is the

percentage of the total market controlled by a company (Farris et.al, 2010). It is

computed by dividing the market gap by the annual sales volume.

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Table 6
Market Share

Year Annual Production Market Gap Market Share

2020 25,080 26,039 .96%

2022 27,448 30,917 .95%

2021 29,096 28,478 .95%

2023 32,472 33,356 .97%

2024 35,832 35,795 1%

Refer to Exhibit 10

The table shows the market share for the proposed product for the first five

years of operation, 2020-2024. As shown in the table, the percentage of the market

share increases as years passed. The higher the total market share, the higher the

business will strive to produce the product with regards to its resources capacity.

However, the projected supply used in the computation of the market gap is still

subject to necessary changes since the data gathered in relation to it was limited

due to the refusal of other retailers to disclose their historical supply.

SWOT Analysis

SWOT Analysis is a very effective way of identifying the strengths and

weaknesses and examining the opportunities and threats to be faced by the

business enterprise. It provides an overview firm’s situations and is an important

component of strategy tightly matched to the company’s situation. Strengths could

help compete with other company with related services while weaknesses are

those which should be taken into consideration to overcome the problems of the

company and improve its strategies on how their services are accepted by their
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target market. Strengths and weaknesses are considered as internal factors while

threats and opportunities are external factors.

Strengths

Strengths are positive factors which will help the company achieve its key

results areas can be used as a basis for developing a competitive advantage. The

company’s strengths are its resources and capabilities that can be used as a basis

for developing a competitive advantage.

The “Bubbly Bubbles Laundry Service” has the following strengths that can

be used to gain an edge from its competitors.

Lack of competition in the area. The “Bubbly Bubbles Laundry Service” the only

business establishment in Batangas City.

Convenience. Taking care of your clothes is not just about making your

clothes look good, which would be reason enough to take care of them. Laundry

pick-up and delivery services came along and made life much easier. The

customer can also view and place their order thru the website. Since convenience

is one of the most important factors when it comes to service.

Reasonable Price. The proponents offered a price which is much affordable

for the customers and much lower than the competitor’s product in the market. The

price is affordable for just Php 40.00 per kilo and you can fully avail their service.

Quality Services - The quality services really matter in Bubbly Bubbles

Laundry Service. It is planned to provide services such as washing, pressing,

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ironing, and folding customer’s clothes and garments. It will be using quality

equipment and types of machinery that could greatly help and make the business

exist. It shall offer affordable cleaning too, making sure that the output will reach

its quality standard.

Weaknesses

Weaknesses are negative factors of the business which may hinder the

attainment of the firm’s objectives that detract from the value offer or place the

business at a competitive disadvantage. Internal attributes resource that works

against a successful outcome. Weaknesses are resource and capabilities that the

firm does not pass but are necessarily resulting in a competitive advantage.

Lack of experience. This is the first time that the proponents would engage

in a business that is why it is why it is clearly evident that supervision should always

be there in all areas of operations.

Expensiveness. Machines and equipment are branded in order to ensure

quality that is why it is expensive, and it also means that maintenance will be quite

expensive as well.

Opportunities

Opportunities refer to a situation where potentials to develop into product or

services or other business opportunities are. (Orcullo,2007). The external

environmental analysis may reveal certain new opportunities for profit and growth.
 24

Increasing working Population. The increasing population growth can be

considered as an opportunity for the business. Population growth can increase the

number of potential customers that create a big demand for the business.

New Technology. The continuous of technology nowadays indicates an

opportunity to innovate the firms marketing strategies, programs and more

especially the services it offers.

The types of machinery and equipment used in the manufacturing process

are more durable and make the production of “Pickup and Delivery Laundry Shop”

easier. The new technology can help the “PiDel Company” to increase production

daily.

Business and Market Expansion. The increase in production can make the

business expand its operation for the next few years. Productivity is the key

success of every business. Market expansion is possible when the business

expands as well as the customers to continue patronizing the services of Laundry

Shop. Due to the expansion, the business can generate higher income and can

provide the firm with the opportunity to penetrate the whole local market and also

the international market.

New Entrant in the Industry. The “Bubbly Bubbles Laundry Service” is a

new entrant in the Laundry service industry. The Free Pickup and Delivery Laundry

service considered as one of the most innovative and unique ideas of all time it is

a place where people can have their clothes washed with quality and convenience

of time. The proponents will encounter difficulties not just penetrating the market
 25

but also the different aspect of the business including financial, technical, and

management aspect. Therefore, the owners need to know and master the way

they do business since the systematic exercise for proficiency requires elaborative

courses.

Threats

Threats include external factor beyond the control and that could place the

strategy or the business itself at risk. It is the negative situation which may dampen

the business position in the industry (Go, 2011).

Competition. Most of the consumers already trust some of the competitors

are their knowledge and experience in dealing with the business.

Change in Economic Condition. The economy of our country is inevitable.

The potential and economic crisis will be a great treat for the enterprise for the lead

to peso devaluation and an increase in the amount of the commodity will greatly

affect the consumption of the consumers.

Marketing Strategies and Programs

Marketing strategy is an asset of stimuli place in the consumer’s

environment designed to influence their cognition, affection, and behavior. It is a

process of choosing and implementing the possible course of action attain the

organization’s long-term objectives and gain competitive advantage. (Karle, 2008).

Marketing Strategies and programs are used to develop a strong reputation to the

customers. The utilization of power and other technologies like social media in

order to be known by the customers by providing the things that they really want.
 26

It is important to be always updated about the changes and trends that may occur

in the field of business.

Marketing is done by a firm in three different levels, namely the company,

customer, and competition or known as the Strategic 3C’s of Marketing. And, in

order to form the marketing strategy, the marketing mix or more popularly known

as the 4P’s of marketing is assembled. The marketing mix is composed of product,

place, price, and promotion. The marketing mix strategy is assembled to reach the

organization’s long term objectives and gain customer satisfaction and competitive

advantage.

For the proponents to introduce this new service, these strategies include

information that would help the people understand the features of the service and

encourage the consumers to avail it. Another is the ability of the proposed service

to be offered at a low price. A great marketing strategy that has a competitive

advantage over its competitors will be the finest tool to keep the business going

and competing.

Service

Service is a series of activities or more or less intangible nature that

normally, but not necessarily, take place in interactions between the customer and

service employees and/or physical resources or goods and/or system of the

service provider, which are provided as solutions to customer problems. According

to Philip Kotler “Service is an action or an activity which can be an offer by a party,

which is basically intangible and cannot affect any ownership. Service may be

related to a tangible product or intangible product (Himansu S M, 2014).

 27

The proponents firm is named “Bubbly Bubbles Laundry Service” by PiDel

Company., which is a Pick-up and delivery of laundry service wherein, the

proponents will team up with the boarding houses and dormitories in Batangas

City. The proponent's service, offer a pick-up and delivery of laundry in there

boarding houses and dormitories every call of the partner establishment and by

the said schedule of the establishments. The tenants of the boarding houses and

dormitories have their own customize bag from the firm for them to know and

analyze their customer. The laundry service is eco-friendly because of water

filtration, which helps to reduce water pollution.

Brand Name

Choosing a brand name for a service is important because it corresponds

to the service identity. Marketing experts select brand names that can

communicate service concepts and hold the position in the mind of the consumers.

A brand is a name, term, symbol, design or combination thereof, that

identifies seller’s products and differentiates them in competitor’s product. A brand

name is a part of a brand which can be spoken including letters, words, and

characters.

Figure 1
Company Logo
 28

(Pride/Ferrell; 2009).The business “Laundry Shop” would introduce and set out in

the market under the firm’s brand name “PiDel Company” which represents the

kind of services offered by the proponents. With the right techniques of washing,

a system of efficient-effective operation and quality of service.

Figure 2
Brand Name

Packaging

Packaging is a marketing activity of creative designing and producing the

appropriate container or wrapper for a product suitable to the target market relative

to a competitor’s product. The responsibility of the company does not end after the

manufacturing process of the product. The enterprise should develop packaging

that will protect the product so that it will reach the consumer condition.

They chose this kind of packaging because of its simplicity and easy to

recognize. The color of the packaging and the logo at the center named “Bubbly
 29

Bubbles Laundry Service “suit the combination of each other. It has the power to

establish an emotional connect. Eye-catching color, fonts, graphics, images and

catchy that can evoke memories and specific feelings in customers. The package

design showcases the perception of laundry service.

This service would introduce and set out the market under the firms brand

name “Bubbly Bubbles Laundry Service “. They named it Bubbly Bubbles simply

used to refer a good or fortunate situation that isolated from reality like a Bubbly

forming in water they and obviously because there are 3 people who started the

company and Bubbly Bubbles means cheerful and lively which suits them and the

purpose of their business.

Figure 3
Packaging
 30

Pricing

Price is considered as the value of the product expressed in money. It is

very important to determine the product price because pricing policy has a

significant role in the attainment of the business objectives and profit maximization.

Most of the customers consider the price before availing the product. Most of the

target customers are the budget conscious market.

Table 7
Cost of Service
Total Direct Cost 15.03
Total of Overhead Electricity 16.97
Consumption
Price 40.00

Place of Distribution

The place of distribution of the product plays a material role in increasing

company sales. The product should be distributed where the customers can easily

avail them. Placement is making product conveniently available to the market

consistent with their purchasing patterns. It refers to the channel of distribution that

the marketing manager’s work on and more goods from producer to the customers.

Proponents decided to employ a direct marketing channel wherein the product will

be distributed from the manufacturer directly to customers.

Direct Channel is the route a product takes, as it travels from the original

service provider, us, to the final consumer. This is a direct channel in which borders

are dealing directly with the service provider. The service provider may hire a

traveling salesman who goes out to the boarding houses and tries to make the
 31

service available to them. The proponents used this kind of channel because since

there are no intermediaries, they get to enjoy higher profit margins on our service.

Many customers appreciate the opportunity to deal directly with the service

provider. They also get the opportunity to be more familiar with the brand, which

could further build their loyalty.

Figure 2.4
Place of Distribution

Laundry Service Boarding Houses/

Dormitory

Promotion

Promotion is defined as the process of introducing the product in order for

it to be known and to give great impact to the consumers. It is important to inform

the target market and bring a positive image of the brand as well as the company

in general through effective promotions and strategic advertising.

Advertising is a form of communication used to persuade the audience to

take some action with respect to products, ideas, or services.

Promotion a message issued in behalf of some product or cause or idea or

person or institution the packaging of a new idea. (Coleman, 2010)

This refers to the process of raising customer awareness of the services

and creating services loyalty. Tarpaulins – to be placed in front of the shop. It will

be posted to the streets where they are many people passing. It will include the
 32

following information: - Business name, address and contact number - Business

logo - Business hours - Business slogan Loyalty Card – when the customers arrive

or join in our business launching.

Pick Up and drop service – to increase more of the willingness of the

customer to avail of the laundry service, the proponents will offer to pick up and

drop service as it shows also in the survey that 98% would like to have this kind of

extra service for the convenience of the customer. Internet Marketing - creating

accounts on social media like Facebook, Instagram, and Gmail. Word of Mouth- to

gather phone calls and social media, when people talk with their friends. Jingle-

this will start in the day of the opening of the business.

To effectively inform and persuade the potential customer for an immediate

consumer of the services, the “PiDel Company” spread out the information of the

business through printed materials like tarpaulin, loyalty cards, pick up and drop

service, word of mouth and jingle. Through these, the company could effectively

boost the awareness of the consumer about the business.

 33

Table 8
Promotional Mix
What Who When Where How Budget

Tarpaulin Proponets 7 days before Public Markets It will be posted Php2,800

the operation and Streets to the streets
where most where they are 8 units
people and many people P 300/unit
vehicle are passing.
passing
through.

Internet Proponents It is available Anywhere as Creating Php500

Marketing 8:00am- long as there is accounts on
5:00pm an internet social media Standard
connection. like Facebook, User(Facebook
Instagram and page)
Gmail. The proponents
will used
Facebook page
to advertise our
service.

Word of Satisfied It is It can be on the Our satisfied

Mouth Customer uncontrollable. gatherings customer will
When cannot phone calls suggests our
determine if and social service their
the satisfied media, when family and
customers are people talks friends.
going to talk with their
about. friends.

Jingle Proponents On the day of PiDel This will start in Php5,000

the proposed Company the day of the
business will “Bubbly opening of the
be introduced. Bubbles business.
Laundry
Service”

Loyalty Proponents Opening Day PiDel When the Php500

Cards Company customers
100% discount “Bubbly arrive or join in Php5,000
in the 12th Bubbles our business
wash. Laundry launching.
Maximum of Service”
10 kilos.

Business Proponents On the day the PiDel This will start Php5,000
Launching proposed Company with ribbon
business will “Bubbly cutting and
be introduced. Bubbles newly
Laundry proposed
Service” business,

Total Php13,800
 34

This refers to raising customer awareness of the services and creating

services loyalty.

1. Tarpaulin – to be placed in front of the shop. It will include the following

information: Business name, address and contact number, business logo,

business hours, and business slogan.

Figure 5
Tarpaulin

2. Loyalty Card– An identity card issued by a retailer to its customers as part of

their consumer incentive scheme, whereby credits are accumulated for future

discounts every time a transaction is recorded.

 35

Figure 6
Loyalty Card

3. Jingle - A short slogan, verse, or tune designed to be easily remembered,

especially used in advertising.

4. Pick Up and drop service – to increase the willingness of the customer to avail

the laundry service, the company will offer to pick up and drop service as survey

revealed that 98% would like to have this kind of extra service for the convenience

of the customer.

5. Internet Marketing - advertising and marketing efforts that use the Web and

email to drive direct sales via electronic commerce, in addition to sales leads from

websites or emails.
 36

Figure 7
Facebook

Figure 8
Instagram
 37

Generalization

The market study determines the ability of the proposed service with its

competition and growth as a business. The market plays an essential role in this

business activity; therefore, the proponents studied its primary targets need and

wants and thrives to satisfy them.

It is important to determine the appropriate respondents in order to know

who will avail or consume the service. The proponents conducted a study in

Batangas City. The list of the boarding houses and dormitories was based from

the record of the Mayor’s Permit Listing Files. Batangas City has 95 boarding

houses and dormitories. The proponent's used survey questionnaires, personal

interviews and personal observation in this study as their methods in gathering

important data to be used in the proposed business. The proponents believed that

the proposed service is affordable to the people from any class which was proven

by the actual observation acquired through the distribution of the questionnaire. In

the distribution of the questionnaire, the proponents have tested if the service will

be more feasible and competitive in the market. The purpose of conducting this

process is to inform the target market about the service and acquire appropriate

data that would be used in this study. The proponents have identified the use of

the descriptive method of research for facts concerning the demand and supply of

the proposed service. In determining the demand for the service, feedback from

the eighty-six (86) boarding houses and dormitories were considered through the

distribution of questionnaires to boarding house/dormitory and related

establishment in the Batangas City. After tabulating the results, data were further
 38

analyzed and interpreted in order to generate the data for demand and supply

purposes of the service.

The SWOT analysis of PiDel Company has indicated that strength and

opportunities are already enough to cover up for the weaknesses and threats of

the business. Marketing mix such as the service, price, placement, and promotion

are also taken into account for the improvement of the business. Strategies include

educating the consumers about the product’s features and persuading them to

avail the service.

 39

Chapter III
Technical Study

The objective of the technical study is to show the technical requirements

of the proposed business are: determine the supplies needed, the working

requirements, its capacity, plant location, plant layout, and its labor requirements,

and to determine the expected production schedule based on capacity.

Objectives of the Study

The general objectives of the study are to determine the technical

soundness of the pick-up and delivery service. In with this, the proponents have

set the following objectives:

1. To describe the service product and the various uses;

2. To determine the time consumed in providing the service process, and the

tools, equipment, and utilities necessary for the production;

3. To determine the supplies needed, the machinery requirements and its

capacity, plant location, plant layout, and labor requirements, and

4. To determine the expected production schedule based on capacity.

Service Description

People today are busier than ever and so free time has become very limited

with hardly enough time on hand washing. And because of this, many people are

thinking of a convenient solution to household responsibility. Pick-up and Delivery

is a kind of a laundry shop but in this service, it is a pick-up and delivery business.

It is a pick-up and drop-off at a place that convenient to the busy professional

workers, students and old ones.

 40

Service Process

The service process of the bubbly bubbles laundry service is first you need

to call to make a schedule for the pick-up your laundry, second is to pick up the

laundry on the schedule, third is wash the dirty clothes, dry and fold the laundry

and deliver within it a day as scheduled.

Fig. 9
Service Process
 41

Service Blueprint

Service is a commercial enterprise that provides work performed in an

expert manner by an individual or team for the benefit of the clients. The typical

service business provides intangible products, such as accounting, banking, and

consulting, cleaning, landscaping, education, insurance, treatment, and

transportation services.

A service blueprint is an operational planning tool that provides guidance

on how a service will be provided, specifying the physical evidence, staff actions,

and support systems/infrastructure needed to deliver the service across its

different channels. A service blueprint is a diagram that visualizes the relationships

between different service components - that people, props (physical or digital

evidence), and progress – that are physical directly tied to touch points in a specific

customer journey (Creelman,2010)

The implementation of the pick-up and delivery of laundry service, has a

service blueprint that is composed of the physical evidence: the tied boarding

houses and dormitories, the caretaker or owner staff that facilitate the laundry, the

delivery service or the staff that picks-up and delivers the laundries, the receiving

area where clothes are received by the laundry shop staff, and the working are

that the where laundries are done, tagging that identifies the right owner of the

clothes, sorting of the garments according to their color, fabric, and stain, and

washing, drying and fold clothes before delivering it back to the tied boarding

houses and dormitories until the owner of the clothes picks it up right at their

doorstep.
 Figure 10
Service Blueprint
42
 43

Capacity Schedule

The capacity schedule shows the capabilities of the company to provide the

service. It identifies how the service can provide at a lesser time, right quantity and

quality, at a maximum capacity of the service with the total of 75 kilos per day and

will increase by three percent (8%) each year. The table below shows the schedule

per kilo in every year

Table 9
Capacity Schedule

Year Daily Weekly Monthly Annually

2020 75 523 2,090 25,080
2021 81 567 2,258 27,096
2022 87 614 2,454 29,448
2023 96 677 2,706 32,472
2024 106 747 2,986 35,832

Production Schedule per kilo

The production schedule will summarize the number of units that will be

produced for years 2020-2024. This presumes that it will increase annually by 8%
 44

because of the assumption of the mastery of work by the workers and due to the

increasing demand on the market.

There will be a (7) seven working days per week, from Monday to Sunday.

This will be 366 working days in a year in total. The daily working hours will be

9hours with a 1-hour lunch break, 30 minutes coffee break which is 15 minutes in

the morning and another 15 minutes in the afternoon. Overtime will be set based

on the necessity for special orders from retailers.

Plant Location

Figure 11
Plant Location
 45

Figure 3.2 Shows the plant location of the Pickup and Delivery. One of the

proponents, namely Mr. Tomas Ebora Sr., offered his place at Gamboa Road

Kumintang Ibaba Batangas City for the Laundry Service. The office is needed for

the compilation of documents, answering the calls of different clients and business

meetings. The contract would be yearly renewed and it would cost Php 8,500 per

month with a couple of months free as stated in the contract.

Plant Size and Layout

Figure 12
Plant Size and Layout
 46

Figure 3.3 shows the Plant Size and Layout of Free Pickup and Delivery.

This is the design of the Laundry and Parking area of the service with a size of 20

sqm.

A carefully planned and organized plant layout is a factor in the efficiency

of the process in manufacturing the proposed product. The workplace is a vital part

of the production process because it is where the majority of the production is

being done. It should be comfortable in nature to make the workers feel ease while

they are working.

Tools and Equipment

Table 10
Tools and Equipment
Description Quantity Unit Cost Total Cost
Commercial 2 Php200,000.00 Php400,000.00
Washing Machine
Fabric Streamer 1 3,000.00 3,000.00
Hangers 5 dozen 50.00 250.00
Basket 3 100.00 300.00
Bucket 2 150.00 300.00
Rubber Gloves 2 100.00 200.00
Weighing scale 2 2,500.00 5,000.00
Storage Box 1 500.00 500.00
Total Php206,400.00 Php409,550.00
Source: Sir Al Perez and Old Market Batangas City

Table 3.2 shows the tools and equipment to be used in the operation of the

service. It indicates the quantity of each equipment, its price per unit and its total

amount. The use of these tools is based on the annual consumption of the service.

A total of Php412, 700.00 is needed to acquire these tools and equipment.

Office Furniture and Fixtures

 47

Table 11
Office Furniture and Fixtures
Description Quantity Unit Cost Total Cost
Clock 1 200.00 200.00
Working Chair 2 300.00 600.00
Office Chair 1 1,500.00 1,500.00
Office Table 1 4,095.00 4,095.00

Ceiling fan 1 1,145.00 1,145.00

Shelves Liner 1 6,495.00 6,495.00
Total 13,735.00 14,035.00
Source: San-Yang Furniture and Handyman

Table 3.3 shows the furniture and fixtures needed by the business. The total

amount of the furniture and fixtures is Php 14,035.00. These types of furniture and

fixtures will greatly help the workers to perform the service. And also to the

customer’s companions while in the queue. These items depreciate substantially

over their long term use, but they are definitely important costs to consider when

valuing a company. The purpose of having these office furniture’s and fixtures are

to be organized inside the workplace for the workers to be comfortable.

Maintenance Supplies

Table 12
Maintenance Supplies
Description Quantity Unit Cost Total Cost
Broom 2 Php 100.00 Php 200.00
Dust pan 2 50.00 100.00
Rags 6 35.00 210.00
Mop with Squeezer 1 600.00 600.00
Dipper 1 20.00 20.00
Fire Extinguisher 1 1,035.00 1,035.00
Trash can 3 200.00 600.00
Total 2,040.00 2,765.00
Source: Old Market Batangas City
 48

Table 3.4 shows the Maintenance supplies needed by the business. The

total amount of maintenance supplies is Php 2,765.00. These maintenance

supplies will greatly help the workers to perform the service as well as the

customer’s companions while they are in the queue.

The table shows the annual consumption of maintenance supplies including those

essential for cleaning the factory. In case of fire, there is a fire extinguisher

available as a safety measure.

Office Supplies

Table 13
Office Supplies
Description Quantity Unit Cost Total Cost
Ball pen 1 box Php 224.00 Php 224.00
Bond paper 1 ream 300.00 300.00
Business receipt 5 pads 50.00 250.00
Calculator 2 piece 300.00 600.00
Folder 10 pieces 12.00 120.00
Stapler 2 piece 50.00 100.00
Record book 2 piece 60.00 120.00
Staple wire 4 box 5.00 20.00
Total 966.00 1,734.00
Source: Formosa Batangas City
Table 3.5 shows the estimated cost of repair and maintenance of laundry

service and tools and equipment. The total amount of office supplies is Php

1,734.00. The office supplies are essential in the operation of the business. This

will be used by the manager to perform his task like dealing with clients and doing

paperwork.
 49

The consumable items are those things which are needed to be replenished

at the end of the year like bond paper and folder while non-consumable items like

calculator, and stapler will be expensed only on the first year of operation.

Direct Materials

Table 14
Direct Materials
Description Quantity Unit Cost Total Cost
Detergents 100 kilos 157.00 15,700.00
Fabric conditioner 30 Gallons 271.00 8,130.00
Bleach 5 Gallons 290.00 1,450.00
Total Php 718.00 Php 25,280.00
Source: Lins
Table 3.6 Shows the estimated cost of direct materials of the laundry

service. The total of the direct materials is Php 25,280.00.

Indirect Materials

Table 15
Indirect Materials
Description Quantity Unit cost Total Cost
Eco bags 3 boxes Php 750.00 Php 2,250.00
Plastic bags 3 boxes 700.00 2,100.00
Total Php 1,450.00 Php 4,350.00
Source: Calipyso

Table 3.5 shows the estimated cost of the indirect materials of the laundry

service. The total of the indirect materials is Php 4,350.00.

Utilities Expense

Table 16
Utilities Expense
Utilities Provider Monthly Consumption
Electricity Meralco 4,500.00
Water Batangas City Water District 2,500.00
Telecommunication Globe 1,500.00
Total 8,500.00
 50

One of the important factors that production must consider is utilities. These

are not only indirect expenses in relation to a manufacturing company but a

necessity for the efficiency of the business operation.

Electricity. In the production of the product, electricity plays a key role. It is

considered as the main source of power. It serves a vital function, operates the

equipment used in manufacturing the product. The enterprise is provided for

Meralco which cost them Php 4,500.00.

Water. Water is one of the most important of this service. It is used for the washing

of the laundries and it is used in the maintenance and preservation of the

equipment tools and the factory itself. Water is supplied by Batangas City Water

District which incurs Php 2,500.00.

Service Vehicle

Table 17
Service Vehicle
Description Quantity Total Price
Mitsubishi L300 2015 1 Php 250,000.00
Sticker (customization) 2 1,600.00
Total Php 251,600.00
Table 3.9 shows the unit price of Mitsubishi L300 in customizing the service

vehicle. In customization, such as sticker, in the vehicle is provided by Automatic

Motors.

Lease and Leasehold Improvement

Table 18
Lease and Leasehold
Improvements Total Cost
Door Lock 1,520.00
Rent Expense 8,000.00
Paint 1,400.00
Window glass and Door 16,800.00
 51

Labor 500.00
Total Php 29,720.00
Source: Alano Glass and Aluminum Shop

The lease and leasehold improvement such as door locks which are

necessary to ensure that the place is safe especially when the store is closed.

Paint is a colored substance that is spread over a surface and dry to leave a thin

decorative or protective coating that is used for the modification of the store.

Window glass and doors are modified parts of the workplace.

Waste Disposal

In the Bubbly Bubbles Laundry Service business, waste is mainly composed

of non-biodegradable materials such as plastics and detergent containing other

waste materials. If non-biodegradable waste like plastic and other thing bothers

the environments, water that contains detergents does the same thing and that is

why worthy to have a strategic plan to dispose waste. The proponents will hire a

sanitary engineer that would design and construct a drainage system for the

business.

Proper waste disposal is necessary for every production process. The

business takes full responsibility for the protection of the environment from the

hazardous element caused by the improper disposal of wastes. The company will

provide trash bags to properly segregate biodegradable, non-biodegradable and

recycle waste. The garbage bag will be collected by the Batangas garbage
 52

collector within the area. It will be collected every Monday, Wednesday, and Friday

from 6:00am until 7:00pm

Direct Labor Requirements

The business will be hiring capable employees to attain its goals and

objectives. Experience personal traits are factors to be considered in selecting the

employee to be hired. Two skilled workers are hired by the Pidel Company for the

process of producing the proposed business. The workers are responsible for

doing different process and steps used in services.

The employees have the rights to receive benefits in case of an anticipated

accident that may arise during their work. This is an essential and important factor

to secure employee’s safety. The essential branch in studying technical aspect is

to be acquainted with the frequency of the time and the movement or activities

done during the production process.

 53

Generalization

The proponents decided to form a general partnership because the

partnership is more suitable for a small number of people who would want to enter

a small business venture, willing to contribute his or her services, capital, and

industrial skills, easy to establish.

There will be a manager, route worker, machine washer and laundry

extractor. The manager who is responsible for planning the personnel policies,

activities, and programs directed towards meeting the goals of the business

organizations.

In order for the firm to operate legally, the business must first register the

name of the firm to the Department of Trade and Industry (DTI), followed by the

acquisition of Barangay Clearance and the application of Mayor’s permit in the

Permits and Licenses Division. Next step will be the confirmation of the application

form with the proper offices for its inspection, endorsement, assessment, and
 54

signing, and the payment of all necessary fees and taxes at the City Treasurer’s

Office, After the confirmations of the application form of necessary office

registration to the Bureau of Food and Drug (BFAD) and last is the registration with

the Bureau of Internal Revenue. (BIR).

Chapter IV
Management Study

This chapter provides information about the management aspect of the

business. Basically, it shows the form of ownership which the business has. This

includes how the business will be managed, the control and supervision matter

and even the start-up cost of the business. It will also provide you with information

about the basic requirements and procedures in registering the business and the

government agencies that the business is related to.

The management study will determine the successful realization of the

business. That’s why the study of the officers, key personnel and manpower

requirements will be a very important matter in this chapter. Business culture which

includes the operating schedule and the day to day monitoring will also be part of

this chapter.

Objectives of the Study

 55

The purpose of the study is to analyze that overall operation of the

organization to determine the most appropriate type of business and discuss how

the organization is to be managed effectively in the most productive way.

This study aims to:

1. Determine the proper form of business organization and ownership to be

adopted;

2. Discuss the initial capitalization and intended contribution of each partner;

3. Determine the different manpower requirements needed in operating the

business; and

4. Discuss the policies and legal requirements that the business must comply

with.

Form of Business Ownership

The business will be under the form of a partnership. The partners,

Charlotte Allison D. Reyes, Maybelyn M. Rivera, and Razel Joy C. Sandoval

agreed to form a general partnership that will operate under the firm name PiDel

Company, establishing a laundry service in Batangas City.

By its contract, their money, property, and skills will be contributed to a common

fund with the intention of dividing the profits among themselves. The proponents

choose to form a general partnership because a partnership is more suitable for

services and capital.

Capitalization
 56

Based on the initial operating cost of Php 900,000.00 the partners

contributed Php 300,000.00 each to cover equipment and other consumable

materials.

Table 19
Partners Contribution
Partners Amount
Reyes, Charlotte Allison D Php 300,000
Rivera, Maybelyn M. Php 300,000
Sandoval, Razel Joy C Php 300,000
Total Php 900, 000.00

Organizational Chart

An organizational chart is a diagram that outlines the internal structure of a

company. An organizational chart is the most common visual depiction of how an

organization is structured. It outlines the roles, responsibilities, and relationships

between individuals within an organization.

Figure 13
Organizational Chart

General
Manager

Route Laundry Extractor/

Worker Machine Washer

 57

Organizational Structure

Every business in order to reach its goal of probability, long term existence

and gaining high productivity must maintain a good organizational structure. Such

structure will serve as a key to the organizational flow of work which the members

of the enterprise may derive their functions and patterns of interactions.

As the books say, the term organization connotes several definitions. According

to Webster’s Dictionary, it is the “executive structure of the business”. It implies

that the organization is the framework or backbone of any business, that it provides

the smooth flow of management direction and control.

The firm has an organizational structure composed of the partners in the

position, one (1) general manager who has overall responsibility for managing the

business, one (1) route worker who has the responsibility to pick up and deliver

the laundry of the customer. The firm also has one (1) machine washer/ laundry

extractor who has the responsibility to fold and press the clean, dry laundry.

Machine washers control the machine settings for each kind of material. This

includes setting the proper temperature, washing speed and water and suds level

and adding the right amount of bleaches and rinses. They perform press service

upon the request of the customer. They also may just fold and stack. Other

finishers work on shirts, ruffled curtains, blankets, or other items that require

special pressing and finishing. To get professional results, they use different forms

designed for certain parts of clothing, such as shirt sleeves, shirt collars, or the
 58

bodies of skirts. They also use hand irons to finish certain items that cannot be

done using the forms. The finished items are then folded or placed on hangers.

PiDel Company sets the job description and specification for the general

manager, route worker, machine washer and laundry extractor operator for proper

recruiting and hiring employees. Organizational policies to the personnel,

production, and suppliers are established in order to create a harmonious

relationship inside and outside the organization.

The firm complied with all the legal requirements that are essential in order to

form a business. And some of them are: securing a business permit, registering

the company in Securities and Exchange Commission, and registering the

business in the Department of Trade and Industry. The proponents presented all

the expenses for all the fees and licenses which were necessary for the

establishment of the business.

Manpower requirement

All business organizations should focus their attention and be concerns

about the effectiveness of their employees. This can be done through staffing.

The function of staffing relates to management of the organizational structure

so that it can operate at present and in the future. Staffing includes the

determination of manpower needs and the discovery of persons to fill these needs.

Manpower is defined as the total number of individuals who are employed in a

company or available for a project assignment or work. In an organization, the

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manpower needed for work and in future is estimated and planned through

different techniques available. This concept is called manpower planning.

If the number of people available in an organization are more than the work it

indicates that the organization has manpower surplus. In this type of organization,

some people will remain without work. This would be an additional cost to the

organization, but sometimes organizations keep some extra manpower with them

just to use them when an unexpected need arises. The manpower surplus

maintained will be different in different industries.

Job Specification

General Manager

 At least 22 years of age

 BS Business Administration graduate

 Must have a resources development knowledge on management of the

employees

 Must have a managerial ability

 Must be industrious, creative and resourceful

 Must be physically and mentally healthy

Route Worker

 High school graduates

 At least twenty-five (25) years old

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Machine Washer/ Laundry Extractor

 High school diploma or equivalent

 Previous experience as a laundry worker

 Night and weekend availability

 High school diploma or equivalent

Job Description

Job Description is a broad, general and written statement of a specific job,

based on the findings of a job analysis. It generally includes duties, purpose,

responsibilities, scope and working conditions of a job along with the job’s title and

the name or designation of the person to whom the employee reports. It usually

forms the basis of Job specification (Kapur, 2012).

General Manager

 Promotes the company’s mission and values.

 Solicits customer feedback.

 Ensures high customer and client satisfaction.

 Participates in lead generation and business development.

 Motivate and encourages employees.

 Generates and presents reports on departmental goals.

 Delegates responsibility

 Clearly, communicate goals to department heads.

 Sets goals for each department.

 Manage and direct overall operations.

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 Maintains employee records.

 Attends and presides over meetings.

 Handles employee relations.

 Determines salary brackets.

 Hires, trains, and terminates workers as needed.

 Manages staff

 Participates in developing policies and procedures.

 Develops budgets and ensure development adheres to it.

 Sets tools and objectives for the department or unit.

Route Worker

 Must have commercial driver's licenses, which require written examinations,

driving tests, and good driving records.

 Applicants should have good eyesight and hearing and be able to lift heavy

objects.

 Must be able to lift up to 50 pounds

 Must be able to stand, walk and stretch for long periods

 Excellent organizational skills

Machine Washer/ Laundry Extractor

 Start washers, dry cleaners, driers, or extractors, and turn valves or levers

to regulate machine processes and the volume of soap, detergent, water,

bleach, starch, and other additives.

 Sort and count articles removed from dryers, and fold, wrap, or hang them.
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 Examine and sort the clothes to be cleaned, according to color, fabric, dirt

content, and cleaning technique required.

 Load articles into washers or dry-cleaning machines, or direct other workers

to perform loading.

 Mix and add detergents, dyes, bleaches, starches, and other solutions and

chemicals to clean, color, dry, or stiffen articles.

 Clean machine filters and lubricates equipment.

 Remove items from washers or dry-cleaning machines, or direct other

workers to do so.

 Operate extractors and driers or direct their operation.

 Inspect soiled articles to determine sources of stains, to locate color

imperfections, and to identify items requiring special treatment.

Compensation

Compensation is a part of every business establishments in return to the

services that are rendered by the employees. Compensations are the total cash

and non-cash payments that an employer gives/pays in exchange for the work they

rendered to the business. It is typically one of the biggest expenses for businesses

with employees. Compensation is more than an employee’s regular paid wages. It

also includes many other types of wages and benefits. The business is categorized

as Barangay Micro Business Enterprise (BMBE). Based on the RA. 9178 BMBE,

refers to any business engaged in the production, processing or manufacturing of

products or commodities including agro-processing, trading, and services. Under

sec 8 of this articles, BSBE shall be exempted from the coverage of the minimum
 63

wage law provided that all employees covered under this act shall be entitled to

the same benefits given to any regular employee such as social security and

healthcare benefits. The salary would be given every 15th and 30th day of the

month for the worker and manager. The basis of the salary of the employees is the

provincial rate.

The company is composed of 3 persons only. There will be one manager,

one machine washer and laundry extractor and one route worker who is on-call

only during service. The general manager has the overall responsibility for

managing both the revenue and cost elements of a company’s income statement,

known as profit &loss (P&L) responsibility will receive monthly salary allowance of

Php15, 000.00 while the other workers are Php9, 000.00 and the route worker will

receive Php3, 000.00.

Table 20
Compensation
Position Daily Monthly Annually
General Manager 1 15,000.00 180,000.00
Route Worker 1 3,000.00 36,000.00
Machine Washer 1 300.00 9,000.00 108,000.00
Total 300.00 27,000.00 324,000.00

Other Benefits

Aside from the compensation received by the employees, the firm will give

13th-month pay. This is per the Labor law and other benefits provided under the

labor code of the Philippines.

Organizational Policies
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Policies establish the rules of conduct within an organization, outlining the

responsibilities of both employees and employers. Policies are in place to protect

the rights of workers as well as the business interests of employers. Depending on

the needs of the organization, various policies and procedures establish rules

regarding employee conduct, attendance, dress code, privacy and other areas

related to the terms and conditions of employment.

Legal Requirement

For the business to start its operation it must be registered in various

government agencies. The following are the requirement necessary for

compliance.

I. Registration of Securities and Exchange Commission when the capital

contribution of each partner, the procedure of non-cash investments, the

public instrument must be recorded with the Securities and Exchange

Commission (SEC). Here are the basic steps to follow:

 Have the proposed business name verified in the verification of

(SEC)

 Submit the following Documents:

1. Articles of Partnership

2. Verification slips for the Business name

3. Written undertaking to change the business name it required;

4. Tax identification number of each partner and/or that of the

partnership;
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5. The registration Datasheet for partnership duly accomplished

in six (6) copies.

6. Other for registration that may be required:

 Pay for registration/filling and miscellaneous; and

 Forward document to SEC for the signature

II. Registration of the business name at the Department of Trade and Industry.

The registration of the business name at DTI will prevent DPC Enterprise

duplication for the business to establish its own identity. The applicant shall

pay an amount of 3,000. An application form shall be filled out and

submitted along with two passport-size pictures, a birth certificate, and three

business name proponents.

III. Acquisition of Barangay Clearance 101 The proposed business must

secure barangay clearance where the industry is to be located for it to be

considered legal or legitimate.

IV. Application for Mayor’s Permit shall be done at the City Mayor’s office

specifically in the Permits and Licenses Division. The requirements that

should be complete are the following:

1. Location sketch of the proposed business;

2. Sworn capital investment of the partners;

3. Certificate attesting to the tax or tax-free exemption, if the proposed

business is exempted from payment of free of tax;

4. Certificate from the officer of Zoning Division conforms to the Zoning

rules and regulations;

 66

5. Tax Clearance, certifying that all tax obligations have been paid;

6. Two (20 passport-size pictures;

7. Presentation of the Community Tax Certificate and receipt for the

payments of Professional tax free, occupational fee, as the case may

be, the applicant is liable thereof;

8. Contract of a lease if the building is rented;

9. Barangay Clearance; and

10. Photocopy of DTI registration form.

V. Confirmation of the application form with the following offices for its

inspection; Endorsement, Assessment, and Signing.

1. City Planning and Development Office;

2. City Engineer’s Office;

3. City Treasure’s Office; and

4. City Health Office.

VI. Payment of all the necessary fees and taxes at the City Treasurer office.

1. Legal Fees

2. Environmental Protection Fee

3. Fire inspection Fee

4. Certification Fee

5. Inspection and Monitoring Fee

VII. Registration with the Bureau of Internal Revenue to be a member od

Barangay Micro Business Enterprise (BMBE). The following requirements

must be secured:
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1. Application form signed by the owner or manager of the entry.

Applying registration (BMBE form 01)

2. One (1) picture of the owner in case of single proprietorship and

manager in case of other types of the business entity;

3. Sworn statement of assets owned and/or to be used the product of

the business in triplicate (BMBE form 01)

4. Tax Identification Number (TIN) of the applicant; and

5. In case of a juridical person, a copy of its article of incorporation of a

corporation.

Table 21
Fees and Licenses

BIR Registration 500.00

DTI Registration 500.00
SEC Registration 1,000.00
BMBE Registration 1,000.00
Mayor’s Permit 1,000.00
Environmental Protection Fee 500.00
Fire Inspection Fee 300.00
Certificate Fee (ENRO) 150.00
Garbage Fee 300.00
TOTAL Php5,250.00
 68

Generalization

The proponents to form a general partnership because a partnership is

more suitable for a small number of people who would want to enter a small

business venture, willing to contribute his or her services, capital, and industrial

skills, easy to establish.

There will be a manager, route worker, machine washer and laundry

extractor. The manager who is responsible for planning the personnel policies,

activities, and programs directed towards meeting the goals of the business

organizations.

In order for the firm to operate legally, the business must first register the

name of the firm to the Department of Trade and Industry (DTI), followed by the

acquisition of Barangay Clearance and the application of Mayor’s permit in the

Permits and Licenses Division. Next step will be the confirmation of the application

form with the proper offices for its inspection, endorsement, assessment, and

signing, and the payment of all necessary fees and taxes at the City Treasurer’s

Office, After the confirmations of the application form of necessary office

registration to the Bureau of Food and Drug (BFAD) and last is the registration with

the Bureau of Internal Revenue. (BIR).

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Chapter V
Financial Study

The financial study is the most crucial and difficult aspect of every feasibility

study. This part assists the proponents to present the overall viability of the

proposed business through available facts and figures that will prove if the

business plan will be profitable or not.

A business entity will operate effectively with the proper appropriation of

capital. It must have an adequate fund to perform their ongoing business

operations and these sources of funds must be assured to maintain its financial

stability.

Thorough enterprise analysis of its financial aspect, the business will be able to

determine the profitability of the proposed project and shall be projected by taking

into account the financial ratios pertaining to liquidity, profitability, and solvency.

Objectives of the Study

This study generally measures the financial position and performance of the

proposed project. Specifically, this study aims to:

1. To determine the ability of the business to compete in the industry

2. To continue earning profits despite the economic condition and financing

transactions that most business often passed through;

3. To furnish detailed figures and projections of financial statement that will

 70

present the development and performance of the business;

4. To make a thorough analysis of the financial stability of the business in all

aspects of liquidity, profitability, and solvency

Total Project Cost

One important aspect of analyzing and interpreting a business is the cost

and expenses that will affect the business operation. An asset is a source

controlled by the enterprise as a result of past events and from which future

economic benefits are expected to flow to the enterprise (Ballada,2010).

The total project cost is based on different cost and expenses needed for the

first year of operation. The proposed business will require Php 1,350, 000.00 to be

used during its operation. This amount is needed to finance the essential

expenditures to be incurred by the business on its commencement process.

Table 22
Pidel Company
Total Project Cost
Fixed Asset Requirement
Service Equipments 654,600.00
Office Furniture and Fixtures 14,035.00
Leasehold Improvements 29,720.00
TOTAL 698,355.00
Operating Expenses
Advertising 2,300.00
Materials and Supplies 6,030.00
Salary 24,000.00
Maintenance 2,765.00
Office Supplies 289.00
Utilities 1,000.00
Transportation Expenses 6,000.00
SSS and Philhealth Contribution 3,978.80
TOTAL 46,362.80
Pre operating expenses
Legal Fees and Licenses 5,250.00
Rental Expenses 14,166.67
TOTAL 19,416.67
 71

Contingencies 135,865.53
TOTAL PROJECTED COST 900,000.00

Initial Capital Requirement

The proponents listed all the essential items that will be needed for the

preliminary operation. This includes all their expenses for two months of operation.

It consists of the acquisition of tools and equipment, furniture and fixtures, raw

materials, indirect materials and other pre-operating expenses of the operation for

the month. The proponents arrived at Php 900,000.00 as initial capital

requirements. The partners Reyes, Charlotte Allison D., Rivera Maybelyn M., and

Sandoval, Razel Joy D. agreed to contribute Php 300,000.00 each in order to raise

Php 900,000.00 which will serve as their initial investment in financing the

operation for the first month of operation of Pidel Company.

Table 23
Initial Capital
Partners Capital Contribution
Reyes, Charlotte Allison D. Php300,000.00
Rivera, Maybelyn M. Php300,000.00
Sandoval, Razel Joy D. Php300,000.00
TOTAL Php900.000.00

Source of Financing

The initial investment of the enterprise will be Php 900,000.00. Each partner

will contribute Php 300,000.00 to raise the amount needed to cover the expenses

for the first month of operation. The source of financing will come from the partners’

personal savings and financial borrowings.

I. Financial Assumptions
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The following assumptions were used by the proponents in the computation

and analysis of the financial capacity and stability of the firm.

1. Initial Capital Requirement:

The business has an initial capital of Php 900, 000.00 which came

from the contribution of each partners in equal amount.

2. Working Days:

There will be six (6) working days in a week, an average of twenty-

four (24) working days in a month and two hundred eighty- eight (288) days

in a year at eight (8) hours a day.

3. Accounting Reporting Period:

The business would adopt the calendar year of operation starting in

January 2020.

4. Receipts :

a. Gross receipts will be on a cash basis.

b. There would be no increase in service price. Effects of inflation will

not be considered in the study.

5. Salary:

a. The Account Manager would receive a fixed amount of Php 15,000

per month, Machine Washer will have Php 9,000.00 fixed salary per

month, and Route Worker will have Php 3,000 fixed salary per

month; and will increase by 4.96% each year due to inflation.

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b. The salary would be increased due to the inflation rate of 4.96%

based on the average inflation figure from the year 2018 alone.

c. Payments of salaries would be done every 15 th and 30th day of the

month. No salaries would be set up at the end of every month.

6. Employee Benefits:

SSS, Phil Health, and Fringe benefits of the workers are part of the

manufacturing expenses.

7. Utilities:

Utilities are assumed to increase by 4.96% every year based on the

average inflation rate from the years 2011-2015.

8. Rent Expense:

a. Rent expense is assumed to be Php 8,500.00 per month and

assumed to be fixed throughout the year and the following years,

ignoring the effects of inflation.

9. Maintenance Expense:

a. Maintenance expense increase is based on the average inflation

rate of 4.96%.

10. Property Plant and Equipment:

a. Acquisition of equipment, furniture, and fixtures is on a cash basis.

No additional properties would be acquired within five years of

operations.

b. The firm will use the straight-line method of depreciation with no

residual value.
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c. Office properties furniture and fixtures would have a (5) five-year

useful life.

11. Partnership Equity:

a. Withdrawal is allowed for the partners in the first year of operation.

All partners are allowed to withdraw 50% of their total share in the

income.

b. Withdrawal is always allowed if the result of the operation is

available.

c. Remaining profits are shared equally by the partners in accordance

with the agreement of the partners as stipulated in the contract.

II. Financial Statement

A financial statement is a document that reports financial information about

an entity to decision makers (Valix and Peralta, 2011).

The financial statements are the means by which the information

accumulated and processed in the financial accounting is periodically

communicated to the user. Without accounting information embodied in the

financial statements, users may not be able to arrive at a sound economic decision

(Ballada,2010).

The objective of a financial statement is to provide information about the

financial position, financial performance, and cash flows of an entity that is useful

to a wide range of users in making economic decisions ( per Philippine Accounting

Standards (PAS) No.1).

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The success of its operations, the policies, and strategies of management, and

insight into its future performance (Cabrera, 2011).

Projected Income Statement

An income statement is a written financial account of a company’s operating

gains or losses for a certain period of time. It summarizes the revenues earned

and expenses incurred for a period (Curuyan, 2005). Information about the

performance of an enterprise, in particular, its profitability, is required in order to

assess potential changes in economic resources that are likely to control to future,

it is also useful in predicting the capacity of the enterprise in generating cash flows

from its existing resource base (Ballada, 2010).

Pidel Company generated an income of Php266, 597.67 for the first year of

operation. On its second year onwards, the company will have a decreasing trend

in profit due to the high rate of depreciation for properties. The cost of operating

increases in the succeeding years because of inflation.

Projected Statement of Changes in Equity

Statement of changes in equity summarizes the changes that occurred in

the owner’s equity (Ballada, 2010).

This statement is now a required statement (per Philippine Accounting

Standards (PAS) No. 1). Changes in an enterprise’s equity between two balances

sheet dates reflect the increase or decrease in its net assets or wealth during the

period.
 76

Projected Cash Flows

The Statement of Cash Flows provided information about the inflows

outflows of cash from its operating, investing, and financial activities. This

statement was useful to project an entity’s future net cash flow (Ballada, 2010).

“Pidel Company” statement of cash flows increased each year. The figures

depicted the company’s liquidity and profitability. Operating activities and financing

activity in the form of investment provided cash flows by the partners. However,

the cash inflow provided by investing activity was through the acquisition of the

company’s fixed asset.

Projected Balance Sheet

The statement of financial positions is commonly known as the balance

sheet that showed the condition and the position of the entity on a particular date

(Valix, 2010). This statement was useful to evaluate financial liquidity, solvency,

and flexibility of a company. Each of the accounts appearing on this statement had

a relationship with other accounts.

Pidel Company statement of financial position for its first year of operations

showed a favorable condition. On its first year onwards the company’s asset was

greater than of the liabilities, which further indicated that the company had the

ability to pay its liabilities.

Notes to Financial Statement

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Notes to financial statements or footnotes are used to report information

that does not fit into the body of the statements in order to enhance the

understanding of the statements. They provide additional information and help

clarify the items presented in the financial statements (Valix, 2011). Each item in

the statement prepared by Pidel Company Establishment was crossed-referenced

to any related information in the note.

III. Financial Analysis

The company’s liquidity, profitability, cash solvency, and growth over time

must be considered and determined in its financial statement analysis.

Financial ratios are used to evaluate the company’s past performance,

present condition, and future business potential. Through this, one will know the

financial strength, effectiveness, and dynamism of the organization.

Ratios

A ratio is a comparison of two significant figures taken from the financial

statement. Ratios are very effective for the reason that there are facts which are

associated items in a financial statement.

It indicates the relationship in fractions, proportion, in decimal or percentage

form of two significant figures taken from a financial statement. It expresses the

direct mathematical relationship between these two or more quantities in the

balance sheet and income statement of the enterprise.

Liquidity Ratio

Liquidity ratio measures the ability of the business to pay for its current

obligation as they fall due (Accounting Basics Concepts and Procedure).

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79
80
81
82
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A. Current Ratio

Current ratio may be defined as the relationship between current assets and

current liabilities. This ratio is also known as "working capital ratio". It is a

measure of general liquidity and is most widely used to make the analysis for

short term financial position or liquidity of a firm. (Cabrera, 2011)

Current Ratio = Total Current Assets/ Total Current Liabilities

Table 28
Current Ratio
Year Current Asset Current Liabilities Current Ratio
2020 667,469.87 2,350.77 283.94
2021 955,160.09 9,147.80 104.41
2022 1,266,068.52 9,973.77 126.94
2023 1,621,323.16 11,036.69 146.90
2024 2,025,392.34 12,222.87 165.71

Table 5.2 shows the current ratio of the company. Pidel Company indicated

that at the year ended 2024 current asset covered current liabilities 283.94 times

up from 2014. The current ratio shows an implication that it could pay its obligations

up to 279.41 times from its first year of operations. The low amount of liabilities

was due to purchases for cash, and the remaining liability constitutes VAT payable

which is payable on the first month of the succeeding year.

Quick Asset Ratio

The quick ratio is designed to measure how well the company can meet its

obligation without having to liquidate or depend too heavily on its inventories

ability to meet its short term debts. Inventories and prepaid expenses are

excluded, which leaves the more liquid assets to be liquidated by current

liabilities (Cabrera, 2011).

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Quick asset ratio = Quick Assets/ Current Liabilities

Table 29
Quick or Acid Test Ratio
Accounts Current Quick
Year Cash Receiveble Quick Assets Liabilities Ratio
2014 667,469.87 - 667,469.87 2,350.77 283.94
2015 955,160.09 - 955,160.09 9,147.80 104.41
2016 1,266,068.52 - 1,266,068.52 9,973.77 126.94
2017 1,621,323.16 - 1,621,323.16 11,036.69 146.90
2018 2,025,392.34 - 2,025,392.34 12,222.87 165.71

Table 5.3 shows the acid test ratio of Pidel Company. The company has a

high acid test ratio of 283.94 in 2014. Just like the impressive current ratio, the

quick ratio also showed a favorable trend, the entity holds no receivable because

all receipts are paid in advance, and on a cash basis of rendition of service.

Working Capital

Working capital is the difference between the current asset and current

liabilities. It is the amount of current asset financed after deducting all current

liabilities (Cabrera, 2011). It signifies the amount of long term capital that revolves

in conducting operations and serves as the lifeblood of the company.

Working Capital = Current Assets – Current Liabilities

Table 30
Working Capital
Year Current Asset Current Liabilities Working Capital
2020 667,469.87 2,350.77 665,119.10
2021 955,160.09 9,147.80 946,012.30
2022 1,266,068.52 9,973.77 1,256,094.75
2023 1,621,323.16 11,036.69 1,610,286.46
2024 2,025,392.34 12,222.87 2,013,169.47

The enterprise has a working capital of Php 665,119.10 for the year 2020.

It will be used for the operations of the establishment. The findings signify that the
 85

company is able to make goods available to customers and pay for its operating

expenses. The only obligation the entity incurs is its government dues for VAT

payment, which is equivalent to only one month.

Working Capital to Assets Ratio

Working capital to assets ratio measures the ratio of working capital in

comparison to total assets (Cabrera, 2011). It signifies the amount of long term

capital that revolves in conducting operations and serves as the lifeblood of the

company.

Working Capital Ratio = Working Capital/Total Assets

Table 31
Working Capital Ratio
Year Working Capital Total Assets Working Capital
2020 665,119.10 1,168,948.44 0.57
2021 946,012.30 1,334,585.99 0.71
2022 1,256,094.75 1,523,441.73 0.82
2023 1,610,286.46 1,756,643.69 0.92
2024 2,013,169.47 2,038,660.20 0.99

The enterprise has a working capital ratio of 0.57 for the year 2020. The

ratio implies that the company can operate the whole business using its current

assets. The ratio still shows an increasing trend and it means that it is favorable

on the entity`s part because the entity does not need to rely on its long term

investments for its operation.

Profitability Ratio

Profitability is the ability of the business to generate profit. Profitability ratio

measures the ability of the business to generate profit in relation to sales,

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investment, assets, equities or common share outstanding. (Cabrera, 2011)

The following are:

A. Net Profit Margin

Net profit margin measures the profitability after considering all revenues

and expenses. It is used in determining the adequacy of net income to cover the

expense to provide the desired profit (Cabrera, 2011).

Net Profit Margin = Net Income/ Net Receipts

Table 32
Net Profit Margin
Year Net Income Net Receipts Ratio (%)
2020 266,597.67 895,714.29 30%
2021 317,681.04 967,714.29 33%
2022 376,059.55 1,051,714.29 36%
2023 464,278.07 1,159,714.29 40%
2024 561,660.66 1,279,714.29 44%

It has a net profit of 30% in the first year of operation that decreases until

five years of operation. The proponents concluded that the project would still be

profitable despite its decreasing trend due to an increase in expenses and effects

of inflation rate without increasing the service fee for its client.

Rate on Return on Assets

The rate of return on assets is a measure of the management’s overall

efficiency in managing its total assets or using its assets to earn the profit.

(Cabrera, 2011)

Rate on Return on Assets = Net Income/ Average of Total Asset

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Table 33
Rate on Return on Assets
Year Net Income Ave. Total Asset Ratio (%)
2020 266,597.67 1,168,948.44 23%
2021 317,681.04 1,251,767.21 25%
2022 376,059.55 1,429,013.86 26%
2023 464,278.07 1,640,042.71 28%
2024 561,660.66 1,897,651.94 30%

It shows the efficiency of the firm’s effort in utilizing its assets in generating

income. Pidel Company rate of return on assets during the first year is 23%. This

rate of return on assets ratio signifies a considerable amount of profit, therefore

the management is successful in generating assets and the management uses its

assets properly to utilized income. The increasing trend was again, due to the

increasing level of income and managed expenses without increasing the service

fee to its client, absorbing the effect of inflation.

Rate of Return on Partner’s Equity

The rate of return on the partner’s equity indicates profitability in the use of

invested capital or the amount of return per peso of the partner’s equity (Cabrera,

2011).

Rate of Return on Partner’s Equity = Net Income/ Average of Total Owner’s

Equity

Table 34
Rate of Return on Partner’s Equity
Ave. Partners
Year Net Income Equity Ratio (%)
2020 266,597.67 1,166,597.67 23%
2021 317,681.04 1,246,017.93 25%
2022 376,059.55 1,419,453.08 26%
2023 464,278.07 1,629,537.48 28%
2024 561,660.66 1,886,022.16 30%
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Each partner is earning 23% during the first year of the operation. It shows

a decreasing trend, which was caused by increasing expenses and effects of

inflation, still, it is an indication that the investments of the partners being placed

into good use, that is generating profits.

Activity Ratios

This measures the liquidity of specific assets like the accounts receivables

and inventories as well as the efficiency of the firm in managing them (Cabrera,

2011).

Asset Turnover

This measures the efficiency of the management to generate sales. It

measures the effectiveness of utilization. (Cabrera, 2011)

Formula:
Asset Turnover= Net Sales (receipts)/ Average Total Assets

Table 35
Asset Turnover
Year Net Receipts Ave. Total asset Asset Turnover
2020 895,714.29 1,168,948.44 0.77
2021 967,714.29 1,251,767.21 0.77
2022 1,051,714.29 1,429,013.86 0.74
2023 1,159,714.29 1,640,042.71 0.71
2024 1,279,714.29 1,897,651.94 0.67

The table shows an asset turnover from 0.81 on 2020 down to 0.77 in 2024

which indicates that the assets are effectively and efficiently used, although the
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asset turnover was on a decreasing trend. The decreasing ratio was caused

primarily by increases in cash. The net receipts are not increasing because the

projected services and fees to clients are assumed stable throughout the projected

periods.

Solvency Ratios

This measure the financial soundness of a business and how well the

company can satisfy its short and long term obligation (Cabrera, 2011).

Debt Ratio

Debt ratio measures the proportion of all assets that are financed with debt.

A high debt ratio shows a greater risk because creditors must be satisfied before

owners in the event of bankruptcy (Cabrera, 2011).

Debt Ratio = Total Liabilities/ Total Assets

Table 36
Debt Ratio
Year Total Liabilities Total Assets Ratio (%)
2020 2,350.77 1,168,948.44 0.20%
2021 9,147.80 1,334,585.99 0.69%
2022 9,973.77 1,523,441.73 0.65%
2023 11,036.69 1,756,643.69 0.63%
2024 12,222.87 2,038,660.20 0.60%

This table shows the stable debt ratio of the firm. On the first year of the

operation, there are only 0.20% liabilities to be paid from the firm’s assets and

increases to 0.60% on the last year On the first glimpse, one may conclude that

the increasing trend is not favorable but the company could immediately pay its

obligation when it falls due.

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Debt to Equity Ratio

Debt to equity measures the vulnerability of the firm’s capital structure in

terms partner’s investment and the firm’s total liabilities or the proportion of

borrowed capital to invested capital (Cabrera, 2011).

Debt to Equity Ratio = Total Liabilities/ Total Equity

Table 37
Debt to Equity Ratio
Year Total Liabilities Total Partners Equity Ratio (%)
2020 2,350.77 1,166,597.67 0.20%
2021 9,147.80 1,325,438.19 0.69%
2022 9,973.77 1,513,467.96 0.66%
2023 11,036.69 1,745,607.00 0.63%
2024 12,222.87 2,026,437.33 0.60%

Pidel Company has a debt-equity of 0.20% in the first year of the operation.

It shows a decreasing trend in the debt and equity ratio, which determines the

riskiness of the business. The decrease in the trend was due to the accumulation

of partnership equity balances, which came from the assumption that the partners

share income and losses equally and that the share in net income shall be

withdrawn at 50% starting on the second year.

Equity Ratio

Equity Ratio indicates the proportion of the assets provided by the partners.

It also measures the partner’s share of the firm’s total assets (Cabrera, 2011).

Equity Ratio = Total Equity/ Total Assets

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Table 38
Equity Ratio
Total Partners
Year Equity Total Assets Ratio (%)
2020 1,166,597.67 1,168,948.44 99.80%
2021 1,325,438.19 1,334,585.99 99.31%
2022 1,513,467.96 1,523,441.73 99.35%
2023 1,745,607.00 1,756,643.69 99.37%
2024 2,026,437.33 2,038,660.20 99.40%

The table shows a 99.80% equity ratio. It is still an indication that the

partner’s share to the firm’s total assets is also increasing every year. One could

conclude that increasing trend is favorable because the entity does not rely on its

credit purchases for it to operate and that the partners` investments are sufficient

to finance the whole operation.

Payback Period

The payback period is the length of time required to recover the amount of

initial investment. It is the time for initial outlay and full recovery of the investment

(Cabrera, 2011).

Table 39
Payback Period
Cost of Cash flows from
Year Investment Operations Balance Period
2014 900,000.00 391,001.12 508,998.88 1.00
2015 439,733.72 69,265.17 1.00
2016 498,112.22 0.14
2017
2018
Payback
Period 2.14
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As shown in the table, the payback period for Pidel Company is 2.14 years.

It means that the partner’s investment is recoverable within an average of 2 years

and 2 months.
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Generalization

The financial study of the proposed business provides a realistically detailed

forecast of the financial aspect of the proposed business after a thorough

investigation of the other aspects of the study. The total project costs for the

proposed business were estimated to be Php 900,000.00 which includes all the

pre-operating costs that are necessary to the start of the operation. The initial

investment of Php 300,000.00 is to be contributed by the partners. This is budgeted

to cover costs and expenses for the first two months of operations such as the

acquisition of the sources of production, the manpower and other requirements as

well as the fixed assets of the firm. Realistic financial assumptions were used to

aid the preparation of the financial statement.

Financial statements were prepared with reference to the data gathered

during the conduct of the study as well as to the other aspects of the study.

Projected Balance Sheet, Income Statement, Statement of Changes in Partner’s

Equity and the Cash Flow Statement were projected for the first five years of the

operation of the firm. With these, the financial position and performance of the firm,

as well as the flow of cash, was evaluated. Furthermore, different financial ratios

were used to better assess the feasibility of the firm. The average inflation rate and

the budgeted increase in the production of the firm were given proper consideration

with respect to items of financial statement will be affected by such.

From the study, it was calculated that the initial investment of the partners

will be recovered in 2.14 years. The net income for the first year of operation is
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Php 266,597.67 and increased in the following years. The result of the financial

study of the firm as a whole supports the feasibility of the proposed business.
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Chapter VI
Socio-Economic Study

This chapter, in general, provides information about the socio-economic

study of the business as well as its environmental impact. This will tackle the

benefits that can be rendered to the customers, the owners and the staff and how

to keep the environment safe from the chemicals that are the main components of

the laundry business.

Socio-economic

The proposed laundry business “Bubbly Bubbles Laundry Service” will bring

satisfaction to customers, who are looking for a laundry shop that will cater to good

services of cleaning their clothes at a reasonable price. The business will help the

customers, who are looking for a laundry shop that will cater to good services for

cleaning their clothes at a reasonable price. The business will help the customers

or individuals to maximize their time for other work and serve comfort to the

customers.

Contribution to the Economy

The proposed business will benefit the economy by providing employment

to every individual especially within the resident covered by the study. This will give

the hired employees and their families their source of income for their living needs.

This business will support local workers. It will also promote the business and also

contribute to the competition which will lower the price of the product but will

maintain the quality of the products.

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Contribution to the Government

As Filipino citizens, the business owners will pay their tax liabilities

mandated by the law. The tax will help the government generate funds for the

improvement of public service and government projects.

Contribution to the Society

Bubbly Bubbles Laundry Service will keep this town marketable to attract

more investors that will help the community for its improvements and

modernization that leads to money placed directly into the community.

Environmental Impact

Environmental impact of cleaning agents is the consequences of chemicals

contained in the products. We can’t deny the fact that our environment is the first

affected by what we are doing especially when it involves upgrading our works

through the help of technology. Simple things like using a car as a means of

transportation can contribute or rather give impact to our environment.

Laundry business like Bubbly Bubbles Laundry Service perhaps gives an

impact to our environment. The machines that we used emit greenhouse gasses

(CO2) that add effect to what we are experiencing nowadays, the "global warming".

Another thing is the used of detergents and bleaches in washing garments.

Although the place is not near the river in which fishes could die, detergents may

still affect our environment. Like lots of fillers used in powdered detergents are

poured in drains causing wastage of useful products like common salt/washing

soda and choking of drainage/sewerage system. Components of detergents like

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sodium sulfate can wreak havoc on the septic system. Synthetic detergents and

our laundry practices are contributing to our ground level water pollution.

The laundry business is aware of its harm to the environment from the chemical

substance that will be used as stated above. Since the proposed business needs

to make sure that it will not cause any harm to the people and the environment, it

has to make sure to treat every water it releases.

The water treatment will use a filtration system for the removal of

contaminants by chemical and physical bonding. The proposed business will make

this process cost friendly and more effective.

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Generalization

Social economics may refer broadly to the use of economics society. More

narrowly, contemporary practice considers behavioral interactions of individuals

and group through social capital and social markets and the formation of social

norms. It specified some of the benefits the country and the fellowmen would get

from the establishment of PiDel Company. Benefits that everyone would want and

service that everyone can be satisfied. The establishment of the firm is one good

contribution to the economy because it can give demands and market shares.

The proponents considered not only the profitability of the proponent service

but also the overall effect on the community. The overall value that somehow new

and fresh idea to the customers and competitors. The operation of the said firm

would decrease somehow the unemployment rate that the country faces right now.