1

Appendix 4: Sample Business Plan

CYBER CAF BUSINESS PLAN
JEDI CAF
2
TABLE OF CONTENT
1. Executive Summary 3
2. Company Summary 5
3. Services 7
4. Market Analysis 8
5. Marketing Strategy 11
6. Management Summary 13
7. Financial Plan 14
3
1. Executive Summary
Jedi Caf, a cyber caf located in Happy Valley, Hong Kong Island, offers a
perfect spot
for the public in social gathering and leisure. It provides customers free
access to the
Internet as well as an area for to meet together in a casual environment
under an
economical manner.
The business intends to obtain finance from external equity in the amount of
USD61,540,
for which the application will be for commencing work on shop renovation,
equipment
purchases, and as operating cash flow. Preliminary capital injection has
already been
secured by the initial owners, Obewon Kinobi and Alex Skywalker, in the

amounts of
USD24,360 and USD15,385 respectively.
Jedi Caf will be incorporated as a limited liability company. The two initial
owners will be
the shareholders and their personal liabilities will be subject to a ceiling at
the amount of
their respective investments.
The finance acquired through this business proposal will allow Jedi Caf to
successfully
open and operate as a cyber caf. A comfortable and innovative environment
is provided
to the customers with a casual atmosphere. Operations in year one will
generate Jedi
Caf a regular customer base that will allow it to be self-maintained in year
two.
1.1 Objectives
Jedi Cafs objectives for the first year of operation include:
The creation of an exclusive, stylish, innovative environment that will
distinguish Jedi Caf from other coffee shops.
The creation of a comfortable and casual environment that will bring people
with different interests and backgrounds together for socialization.
High-quality coffee and bakeries at a reasonable price.
Free access to online services.
1.2 Mission
As Internet has become more popular and grown at an expeditious pace, easy
access has become a part of life. Jedi Caf provides the public free access to
the
Internet, high-quality food and beverages in a comfortable environment.
People

from different backgrounds will come to enjoy the exclusive, stylish, and
innovative
environment that Jedi Caf offers.
1.3 Risks
The risks involved with Jedi Cafs business are:
4
Insufficient demand for the services provided by Jedi Caf in Happy Valley.
The popularity of the Internet stops to grow.
The opening of new cafs in the same area which offers the exact services
that Jedi Caf provides.
5
2. Company Summary
Jedi Caf, soon to be opened at Shing Wo Road in Happy Valley, Hong Kong
Island, will
provide the public free access to the Internet and a special and innovative
environment
for enjoying top quality coffee and bakeries.
Individuals of all ages and backgrounds will find Jedi Caf appealing. The
staffs of Jedi
Caf provide not only top quality service but also helpful instructions to
customers in
computer usage. This educational aspect will attract elderly customers and
youngsters
who do not own computers at home. The easy access location also provides
residents in
the same area convenience to their gourmet and online needs.
2.1 Company Ownership
Jedi Caf will be privately owned by Obewon Kinobi, the founder and CEO,
and

Alex Skywalker, a second shareholder.

2.2 Start-up Summary
Jedi Cafs start-up costs will cover renovation, furniture, computers, coffee
machines and cooking equipment, and running capital to cover expenses in
the first
year.
The equipment provided to Jedi Cafs customers with high-speed connection
to
the Internet forms a large portion of the start-up costs. These costs will
include
computers, two laser printers and a scanner.
Besides, the start-up costs will comprise the coffee machines such as one
espresso
machine, one automatic coffee grinder, and other additional equipment. The
shop
will also require funds for renovation and modification. Breakdown of the
start-up
costs is illustrated as follows:
Start-up Costs USD
Legal Fee 642
Stationeries 642
Tableware 642
Consultants 2,565
Insurance 900
Rent 1,853
Coffee Machines 13,718
Bean Grinder 1,020
Computer Systems (x11), Software, Printer, Scanner 31,167
Internet Lines 1,077

6
Fixtures/Renovation 25,642
Total Start-up Costs 79,868
Start-up Assets
Running Cash 30,770
Start-up Inventory 2,565
Total Assets 33,335
Total Requirements 113,203
2.3 Company Location
A site has been chosen in Shing Wo Road in Happy Valley for the following
reasons:
Nearness to the close-by residents.
Proximity to stylish, upscale restaurants in the same area.
High visibility.
7
3. Services
Jedi Caf will provide free access to the Internet and computer services such
as printing,
scanning to customers. It will also provide customers with a unique and
innovative
environment for enjoying top quality coffee and bakeries.
3.1 Service Description
Jedi Caf will provide its customers free access to the Internet and common
computer software and hardware. Some of the Internet and computing
services
available to Jedi Cafs customers are listed below:
Internet browsers.

 Laser color printing, copying and scanning.

Popular software applications.
Also, top quality food and beverages, and a comfortable environment will
provide
Jedi Cafs customers with a second home, a place to enjoy the benefits of
computing in a comfortable environment.
3.2 Competitive Comparison
Jedi Caf will be the first cyber caf in Happy Valley. It will differentiate itself
from
other ordinary coffee shops in the same area by providing its customers with
free
Internet and computing services.
3.3 Technology
Jedi Caf will invest in high-speed computers to provide its customers with a
fast
and efficient connection to the Internet. The computers will be reliable and
fun to
work with. Jedi Caf will continue to upgrade and modify the systems to stay
with
current technologies.
8
4. Market Analysis
Jedi Caf is facing the opportunity of being the pioneer in the Happy Valley
cyber caf
market. The consistent popularity of coffee, combined with the growing
interest in the
Internet, has been proven to be a winning concept in other markets and will
produce the
same results in Happy Valley.
4.1 Market Segmentation

Jedi Cafs customers can be divided into two groups. The first group is
familiar
with the Internet and desires a progressive and inviting atmosphere where
they can
get out of their offices or bedrooms and enjoy a great cup of coffee. The
second
group is not familiar with the Internet, yet, and is just waiting for the right
opportunity
to enter the online community. Jedi Cafs target market falls anywhere
between
the ages of 15 and 70. This extremely wide range of ages is due to the fact
that
both coffee and the Internet appeal to a variety of people. In addition to these
two
broad categories, Jedi Cafs target market can be divided into more specific
market segments. The majority of these individuals are students and
business
people. See the Market Analysis table below for more specifics.
Market Analysis
2009 2010 2011 2012 2013
Potential Customers Growth
University Students 4% 15,000 15,600 16,224 16,873 17,548
Office Workers 3% 25,000 25,750 26,523 27,319 28,139
Seniors 5% 18,500 19,425 20,396 21,416 22,487
Teenagers 2% 12,500 12,750 13,005 13,265 13,530
Others 0% 25,000 25,000 25,000 25,000 25,000
Total 2.68% 96,000 98,525 101,148 103,873 106,704
4.2 Target Market Segment Strategy
Jedi Caf intends to cater to people who want a guided tour on their first spin

around the Internet and to experienced users eager to indulge their passion
for
computers in a social setting. Furthermore, Jedi Caf will be a magnet for
local and
traveling professionals who desire to work or check their email messages in a
friendly atmosphere. These professionals will either use Jedi Cafs PCs, or
plug
their notebooks into Internet connections.
4.2.1 Market Trends
A market survey was conducted recently with key questions asked to fifty
9
potential customers in Happy Valley. Some key findings include:
40 people said they enjoyed free access to the Internet.
44 subjects use the Internet to communicate with others on a daily basis.
4.2.2 Market Needs
Factors such as current trends, addiction, and historical sales data ensure
that
the high demand for coffee and Internet access will remain constant over the
next five years. Being the first cyber caf in Happy Valley, Jedi Caf will enjoy
the pioneer advantages of name recognition and customer loyalty. Initially,
Jedi Caf will hold a 100 percent share of the cyber caf market in Happy
Valley. In the next five years, competitors will enter the market. Jedi Caf has
set a goal to maintain greater than a 50 percent market share.
4.3 Service Business Analysis
The retail coffee industry in Happy Valley experienced rapid growth from the
1990s
and is now moving into the mature stage of its life cycle. Many factors
contribute to
the large demand for high-quality coffee in Happy Valley. The yuppies is a

main
source of demand for coffee retailers. The climate in Happy Valley is
extremely
favorable to coffee consumption. Current trends in this high-spending
residential
area reflect the popularity of fresh and strong coffee. Happy Valley is a haven
for
coffee lovers.
The popularity of the Internet is growing exponentially. Those who are familiar
with
the Internet are well aware of how fun and addictive going online can be.
Those
who have not yet experienced with the Internet need a convenient, relaxed
atmosphere where they can feel comfortable learning about and utilizing the
current
technologies. Jedi Caf seeks to provide its customers with affordable Internet
access in an innovative and supportive environment.
Due to intense competition, caf owners must look for ways to differentiate
their
place of business from others in order to achieve and maintain a competitive
advantage. The founder of Jedi Caf realizes the need for differentiation and
strongly believes that combining a caf with complete Internet service is the
key to
success. The fact that no cyber cafs are established in Happy Valley,
presents
Jedi Caf with a great opportunities to enter into a profitable niche in the
market.
4.3.1 Competition and Buying Patterns
The main competitors in the retail coffee segment within the same location
are
StarBugs and Cathay Coffee. These businesses target a similar segment to

10
Jedi Cafs (i.e. educated, upwardly-mobile students and business people).
However, Jedi Caf will offer substantial computing services to its customers
which these competitors are not providing at the moment.
4.3.2 Distributing a Service
The dual product/service nature of Jedi Cafs business faces competition on
two levels. Jedi Caf competes not only with coffee shops, but also with
Internet service providers. The good news is that Jedi Caf does not currently
face any direct competition from other cyber cafs in the Happy Valley
market.
Heavy competition between coffee shops in Happy Valley creates an industry
where all firms face the same costs. There is a positive relationship between
price and quality of coffee. Some coffees retail at USD2.6/cup while other,
more exotic beans may sell for as high as USD3.8/cup. Wholesalers sell
beans to retailers at an average of a 50 percent discount. For example, a
pound of Sumatran beans wholesales for USD9 and retails for USD18. And as
in most industries, price decreases as volume increases.
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5. Marketing Strategy
Jedi Caf will position itself as a stylish coffee house and Internet service
provider. It will
serve high-quality coffee and specialty beverages at competitive prices. Due
to the
number of cafs in Happy Valley, it is important that Jedi Caf sets fair prices
for its
products. Jedi Caf will use advertising as its main source of promotion. Ads
placed in
food magazines will help build customer awareness. Accompanying the ad
will be a

coupon for discounted coffee and nice bakeries.

5.1 Promotion Strategy
Jedi Caf will implement a pull strategy in order to build consumer awareness
and
demand. Initially, Jedi Caf has budgeted USD6,410 for promotional efforts
which
will include advertising with food magazines and in-house promotions such as
offering customers free drinks.
Jedi Caf realizes that in the future, when competition enters the market,
additional
revenues must be allocated for promotion in order to maintain market share.
5.2 Pricing Strategy
Determining a fair market for cyber caf is more difficult because there is no
direct
competition from another cyber caf in Happy Valley. Therefore, Jedi Caf has
to
base its prices for coffee and specialty drinks on the retail profit analysis
provided
by our supplier, Jenson Coffee, which has been in the coffee business for over
50
years and has developed a solid pricing strategy.
5.3 Sales Strategy
As a retail establishment, Jedi Caf employs people to handle sales
transactions.
Computer knowledge is a prerequisite for Jedi Caf employees. If an
employee
does not possess basic computer skills when they are hired, they are trained
by our
full-time technician. Our full-time technician is also available for customers in
need
of assistance. Jedi Cafs commitment to friendly, helpful service is one of the

key
factors that distinguishes itself from other cyber cafs.
5.4 Sales Forecast
Cost of Sales: The cost of goods sold for coffee-related products was
determined
by the "retail profit analysis" we obtained from Jenson Coffee. The cost of
bakery
items is 20% of the selling price. The cost of Internet access is USD847 per
month,
paid to PC-Net for networking fees.
12
2009 2010 2011
Unit Sales
Coffee 53,844 64,990 71,490
Specialty Drinks 40,135 48,350 49,706
Baked Goods 20,420 26,344 23,182
Total Unit Sales 114,399 139,684 144,378
Unit Prices USD USD USD
Coffee 2.60 2.60 2.60
Specialty Drinks 3.20 3.20 3.20
Baked Goods 2.60 2.60 2.60
Sales USD USD USD
Coffee 138,063 166,642 183,308
Specialty Drinks 128,639 154,970 159,315
Baked Goods 52,361 67,549 59,443
Total Sales 319,063 389,161 402,066
Direct Cost of Sales USD USD USD

Coffee (based on average) 34,515 41,659 45,827

Specialty Drinks (based on average) 32,161 38,744 39,829
Baked Goods (based on average) 13,090 16,888 14,862
Subtotal Direct Cost of Sales 79,766 97,291 100518
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6. Management Summary
Jedi Caf is owned and operated by Mr. Obewon Kinobi. The company, being
small in
nature, requires a simple organizational structure. Implementation of this
organizational
form calls for the owner, Mr. Kinobi, to make all of the major management
decisions in
addition to monitoring all other business activities.
Personnel Plan
The staff will consist of six part-time employees working thirty hours a week
at USD7 per
hour. In addition, one full-time technician (who is more technologically
oriented to handle
minor terminal repairs/inquiries) will be employed to work forty hours a week
at USD13
per hour. The other shareholder, Alex Skywalker, will not be included in
management
decisions. This simple structure provides a great deal of flexibility and allows
communication to disperse quickly and directly. Because of these
characteristics, there
are few coordination problems seen at Jedi Caf that are common within
larger
organizational chains. This strategy will enable Jedi Caf to react quickly to
changes in
the market.

2009 2010 2011

Total People 9 9 9
USD USD USD
Owner 30,770 33,847 37,231
Part Time 1 10,154 10,154 10,154
Part Time 2 10,154 10,154 10,154
Part Time 3 10,154 10,154 10,154
Part Time 4 10,154 10,154 10,154
Part Time 5 10,154 10,154 10,154
Part Time 6 5,077 10,154 10,154
Technician 27,861 30,647 33,711
Manager 5,129 30,770 33,847
Total Payroll 119,607 156,188 165,713
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7. Financial Plan
The following sections lay out the details of our financial plan for the next
three years.
7.1 Start-up Funding
This business plan is prepared to obtain financing in the amount of
USD61,539.
The supplemental financing is required to begin work on site preparation and
modifications, equipment purchases, and to cover expenses in the first year
of
operations. This amount is planned to be repaid by USD15,385 each year by
four
years.
Owners investments has already been secured as follows:
1. USD24,359 of personal savings from owner Obewon Kinobi.

2. USD15,385 from the second shareholder, Alex Skywalker.

3. USD11,911 in the form of short-term bank loans.
USD
Start-up Expenses to Fund 79,859
Start-up Assets to Fund 33,335
Total Funding Required 113,193
Assets
Inventory 2,565
Cash Balance 30,770
Total Assets 33,335
Liabilities
Short Term Bank Loans 11,911
Funds Needed to Raise 61,539
Total Liabilities 73,450
Capital
Obewon Kinobi 24,359
Alex Skywalker 15,385
Total Planned Investment 39,744
15
7.2 Projected Profit and Loss
Payroll Expense: The founder of Jedi Caf, Obewon Kinobi, will receive a
salary of
USD30,770 in year one, USD33,847 in year two, and USD37,231 in year
three.
Jedi Caf intends to hire six part-time employees in year one at USD7/hour
and a
full-time technician at USD13/hour.

Rent Expense: Jedi Caf is leasing a 400 square foot facility at

USD2,565/month
for a total of 36 months. At the end of the third year, the lease is open for
negotiations and Jedi Caf may or may not re-sign the lease depending on
the
demands of the lessor.
Utilities Expense: As stated in the contract, the lessor is responsible for the
payment of utilities including gas, garbage disposal, and real estate taxes.
The only
utilities expenses that Jedi Caf must pay are electricity and the phone bill
generated by fifteen phone lines; thirteen will be dedicated to broadband and
two
for business purposes.
Marketing Expense: Jedi Caf will allocate USD43,270 for promotional
expenses
over the first year. This amount will be used for advertising in food magazines
in
order to build consumer awareness.
Insurance Expense: Jedi Caf has allocated USD1,847 for insurance for the
first
year. As revenue increases in the second and third year of business, Jedi Caf
intends to invest more money for additional insurance coverage.
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Projected Profit and Loss data is presented in the table below:
2009 2010 2011
USD USD USD
Sales 319,062 389,159 402,065
Direct Cost of Sales 79,766 97,290 100,517
Gross Margin 398,828 486,449 502,582

Expenses
Payroll 119,604 156,185 165,711
Marketing/Promotion 43,270 51,283 55,129
Rent 30,770 30,770 30,770
Utilities 11,693 11,693 11,693
Depreciation 14,309 14,309 14,309
Start-up Cost 8,315 0 0
Insurance 7,693 7,693 7,693
Total Operating Expenses 235,654 271,933 285,305
Profit Before Interest and Tax 3,647 19,940 16,247
Interest Expense 2,981 1,885 1,411
Taxes Incurred 100 2,709 2,226
Net Profit 6,548 24,534 19,884
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7.3 Projected Cash Flow
2009 2010 2011
USD USD USD
Cash Received
Cash from Operations
Cash Sales 319,062 389,159 402,065
Subtotal Cash from Operations 319,062 389,159 402,065
Additional Cash Received
Capital Investment 39,744 0 0
Short Term Bank Loan 11,911 0 0
Long Term Funding 61,539 0 0
Subtotal Cash Received 432,256 389,159 402,065

Expenditures
Expenditures from Operations 375,732 359,504 375,145
Additional Cash Spent
Repayment of Short Term Loan 11,911 0 0
Long-term Liabilities Repayment 15,385 15,385 15,385
Subtotal Cash Spent 403,028 374,889 390,530
Net Cash Flow 29,228 14,270 11,535
Cash Balance 29,228 43,498 55,033
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7.4 Projected Balance Sheet
2009 2010 2011
USD USD USD
Assets
Fixed Assets 57,236 42,927 28,618
Current Assets
Cash 29,228 43,498 55,033
Total Current Assets 29,228 43,498 55,033
Total Assets 86,464 86,425 83,651
Liabilities
Long-term Liabilities 46,154 30,770 15,385
Total Liabilities 46,154 30,770 15,385
Net Assets 40,310 55,655 68,266
Shareholders Equity
Paid-in Capital 39,744 39,744 39,744
Retained Earnings 566 15,911 28,522
Net Worth 40,310 55,655 68,266

TSU ICT 3/IM 213/CS 322 - Principles of Management

TUESDAY, NOVEMBER 13, 2007
Sample FEASIBILITY STUDY - Internet Cafe
INTRODUCTION

In the year 1960, RAND Corporation introduced the first computer network to
the U.S military. They used command-and-control network where there was
only one authority who can convey message which can b3e linked from city
to city, state to state, and base to base. However, in spite of its ability to
transmit the necessary messages to all concerned, its limitation with regards
to its capacity to transmit was not to be denied

Four years later Paul Baran form the same company proposed in public the
first public networks that have no central authority. It was designed to
operate on a get-go transcend were all the nodes in the network would be
equal in status to all the other nodes, each node with its own authority to
originate, pass, and receive messages.

The national physical laboratory in Great Britain set up the first test network
of this principal in 1968. Shortly afterward, the Pentagons Advanced
Research projects Agency funded a larger and more ambitious network nodes
were built in high-speed super computers.

In fall 1969 the first node was installed in UCLA by ARPANET which can
transfer data on a high-speed transmission lines. By 1970 ARPARET grew and
its structure expands easily because it can accommodate many different
kinds of machine.

The original standard for communication was known as the Network Control
Protocol (NCP), but as time passed by and the technique advanced, the NCP
was superseded by a much higher-level, and more sophisticated standard
known as the Transmission Control Protocol (TCP/IP). It converts messages
into streams of packets form the source, then resembles them back into
messages to the destination. Internet Protocol handles the addressing
aspect while seeing to it that the packets are well routed across multiple
nodes and even across multiple networks.

As the 70s and 80s advanced, many social groups found themselves in
possession of powerful computers. The use of network became a public
domain. Its basic technology was decentralized because networks fell into the
digital which came to be known as the Internet.

The powerful and sophisticated access that it provides to specialized date

and communication has speed up the pace of scientific research enormously.
It made a great impact on society than in railways, electronic power and
telephones. It is probably the most important scientific instrument of the late
twentieth century.

In the Philippines, several individual and institution have pioneered in

providing Internet services to people who have natural inclination to
computers by the use of low-speed mode of transmission in the late 80s. It is
after when the leading telecommunication and broadcasting companies step
into the Internet Service Provides (ISP) business that Filipinos finally got the
hand of getting wired in the world through the use of Internet.

The technology of ISP succeeded in keeping and pushing the boundaries that
leads Filipinos into the next millennium which resulted to a dramatic change
in the face of technology communication in the Philippines. Through the use
of the World Wide Web, Students, Businessman and other of the same sort
found an indispensable tool for research and laxation. Using the variety of
websites mailing list, news groups, and chat room, the wired community was
able to find new ways to do old things.

To date, it provides an excellent platform for experimenting with almost all

types of on-line multimedia services that range form video phone applications

to virtual reality environments where participants will interact with each

other.

The researchers of this study decided to put up an Internet caf to provide

information and service to the pu8blic by adopting it in the continuing growth
of our economy that can further boost the progress of our nation.

The Problem

This thesis-feasibility study entitled Establishing an Internet Caf is

primarily conducted to determine the profitability of engaging into an Internet
Caf business. Although, at present there are several and existing businesses
engaged in similar activities, this paper is still necessary to be able to known
if there will be a chance for those aspiring to establish the same
establishment.

Statement of the Problem

The main thrust of these papers is to determine the viability of establishing

an Internet Caf.

Specifically, it sought to answer the following sub-problems:

Marketing Aspect:

What approach should the business ratify in order to compete with the
existing Internet Rentals?

Management Aspect:

How would the business be manage successfully and maintain it?

Technical Aspect:

What latest computer technology should the business acquire in order to

cope up with the continuing demand of existing computer user?

Financial Aspect:

How can the company maximize its profit and at the same time minimize its
cost?

Socio-Economic Aspect:

What are the possible means in which the people as well as the government
will benefit form the proposed business?

OBJECTIVES OF THE STUDY

Marketing Aspect:

To be able to determine the demand and supply of the proposed business in

the market.

Management Aspect:

To be able to promote the most appropriate method for the management in

operating the business.

Technical Aspect;

To be able to acquire the computer system that will meet the expectations
and needs of the computer users.

Financial Aspect:

To be able to determine possible ways of maximizing the companys profit

while minimizing its cost.

Socio-Economic Aspect:

To be able to prove that the proposed business will provide benefits to people
as well as to the government.

SIGNIFICANCE OF THE STUDY

Constructing a business is not an easy task to do. There are a lot of factors to
be considered as well as the step to be followed. Therefore, this study will be
a great help to the society specifically to those where interests lies in the
computer area. Furthermore, this will serve as a reference for future studies
for those students who wish to conduct a paper which is similar to such topic.

As we all know, our country is at the rising stage. This is mainly because of
the numerous business establishments which are being put up, hence if we
can just maintain this scenario in the investment aspect; it is very possible for
us to achieve the concept of the Philippine 2000.

For the researchers, this paper can enlighten their thinking with regards to
the reality of life especially as we walk towards the path of the business
world. Also aside form being informative this research will encourage the
readers to stay abreast to the various developments in the internet which is
after all is considered as the worlds largest library of information on-line.

Assumptions

Before formally conducting the research, the following assumptions were

established:

The initial capital is P 500,000.00.

The location of the business is in TarlacCity.

The adoption of Partnership as the most suitable form of business

organization.

The projection of the established future earnings in the next five years.

SCOPE AND LIMITATIONS

This study aims to establish an Internet Caf business. This study will be
based in management, marketing, technically, socio-economic, and financial
aspect of business.

Managers and owners will be covered as part of the respondents.

The scope of the study shall cover another type of respondent who will be the
future target market. They are students of difference schools who are near
the proposed location the schools that will be covered are Tarlac State
University, Colege of the Holy Spirit, Ecumenical Christian College and other
internet user within the vicinity.

Methods and Procedures

The research methodology used in conducting this thesis-feasibility study is

the descriptive research method. This research method gives a
comprehensive in-depth analysis of the service being studied. It serves as a
fact-finding tool that permits adequate interpretation of the results of the
survey made by the researchers. It is a kind of research method that provides
information about the present situation particularly on the current trend of
the service.

Sources of Data

The primary sources of date used in this study are the questionnaires and
interviews form the customers and owners of Internet Caf and Computer
Rental Shops. These questions and interviews are essential in obtaining valid
and accurate date which is often fraud not found in books, magazines,
periodicals, and others.

The secondary sources of date used in this study include books specifically
computer books, dictionaries, other feasibility studies relate to the topic and
statistical date coming from various government agencies / departments.

Subjects of the Study

The researchers selected the students, employees and owners of different

Internet Caf and Computer Rentals as respondents of this study. This is
because the proponents of this thesis-feasibility believes that those chosen
respondents can give the most appropriate informations answers about the

proposed business in relation to the present condition of the business

industry.

Sampling Technique Used

The sampling technique used by the researchers is the Stratified Random

Sampling Technique. The said technique refers to the process of selecting
random sample sizes form different strata of population used in the study.
This is often times used when the population of the inquiry has class
stratification or are grouped either horizontally or vertically.

The population of the selected schools were broken down into sub-population
in order to get an accurate representative sample size.

Using the Storens formula and a margin of error of 5% the following were
computed.

Storens Formula

n=N

______________

1+nE

n = 1,170

______________

1 + 1,170 (.05)

n = 1,170

______________

1 + (1,170) (.0025)

n = 1,170

______________

3,925

n = 298.09 or 298

Total Sample Size = 300

Breakdown (according to schools)

Tarlac State University - 120 (40%)

College of the Holy Spirit - 90 (30%)
Ecumenical Christian College - 90 (30%)

Instruments Used

The research instruments used to gather necessary date include

questionnaires, interviews and some library techniques.

The use of questionnaires serves as a written reference about the latest and
actual information which are essential for the study. It is far by the most
common instrument in collecting date. It consists of a set of questionnaires
presented in a written form.

The structured questionnaires which serve as guide for the researchers were
used in this thesis-feasibility study.

Other library techniques were also used to gather relevant informations. This
includes the use of related books, magazines and other feasibility studies

found in libraries.

The actual interviews conducted provide the opportunity for the researchers
to get first-hand information form persons who are in the position ton assess
and the same time analyze the present situations.

The observations of some Internet Caf and Computer Rentals were also used
to gain a more in-depth informations regarding the proposed business.

Review of Related Literature

Local Study

The Internet flourishes in libraries and achieves before the rest of the world
noticed it. Limited facilities and computer access on local schools open a
need for other ventures like cafes where students could use the Net for
academic requirements.[1]

The Internet is an important tools in telecommunications, it is not so much a

fad as a phenomenon. In due time, with increasing awareness of its
capabilities, people will be using it with ease as they do it to their telephones,
faxes and video camera.[2]

Internet cafes are nothing new. They are all over key cities Paris, London,
even Bangkok and Singapore. Manila, which became familiar with Internet
only three years ago.[3]

Foreign Study

These days Internet Technology, and access to it, is literally everywhere ---

much so that if you can phone the country you can almost certainly
communicate with it via the Internet.

Europe is one of the first areas to benefit from its trend because it is easily
accessible with both an advanced technological infrastructure and a well
educated work force. Microsoft, for example, recently announced plans to
establish the Microsoft European Research Laboratory in Cambridge in the
U.K. The lab will be something of a coup for the 13th century university town.

Another technology giant, Xerox, has long recognized the advantages to be

gained form the international exchange of ideas. As far back as 1986, Xerox
had established a Cambridge offshoot of its respected Palo Alto Research
Center ---- a Xerox facility that develops electronic and computer technology
recently Centre in Grenoble.

And it is not in Europe that offers such advantages. One company that has
established a broad presence in Asia is IBM. According to IBM, each of its
research facilities specializes in advancing a different niche of technology. For
example, the laboratories in Haifa focus on applied mathematics, computer
Science and engineering, and the Tokyo facility breaks new ground in mobile
computing technology, compilers, and semiconductors, to name a few.

CHAPTER II

MARKETING ASPECT

For the business to succeed, it should be given time and effort. The
proponent of a computer business such as Internet caf must possess th
needed creativity so as to be able to provide quality service to its customers.
The satisfaction of the needs and wants of its customers or target market
must be the main objective of the proposed business.

In every project feasibility marketing aspect is considered the most important

because it requires discreet analysis of he business total demand and supply.
This chapter will discuss the demand analysis, supply analysis, demand and
supply gap analysis, marketing program and projected sales.

DEMAND ANALYSIS

A total of 300 respondents took part on the survey conducted by the

proponents of this business. After gathering and recording all the data, it
shows that 81.67% of the respondents belong to the age bracket of 15-20
years old. The result also shows that 65% of the respondents are male while
35% are female. About 95% are single while the other 5% are married.

With regards to there monthly income, most f the respondents belongs to the
income/allowance bracket of P1,000-3,000. This also indicates that most of
them are students who comprise about 90% of the sample size. About
51.67% of the respondents are willing to spend up 10% of their
income/allowance for computer rentals for hands-on use, wile 35.67% are
willing to spend the same portion of their income/allowance for internet use.
A total of 144 respondents (48.0%) are renting a computer on a once-a-week
basis for hand-on use while 32.67 % are renting a computer on a once-aweek basis for internet use.

Among the services offered the use of the computer for hands-on and
internet purpose have the highest percentage based on the survey results.
Also the respondents consider the ambiance and the type of the computer
hardware/software as the main factors in renting a computer.

About 39.67% of the respondents use the computer on hands-on basis for
more than two hours while 42.33% are using computers for internet use for at
least two hours.

With regards to their monthly income, most of the respondents belongs to the
income/allowance bracket of 1,000-3,000 this also shows that most of our
respondents were students who composes of about 90% of the total
respondents. From the average income of the respondents 51.67% spends
from 1-10% in renting a computer fro hands-on wile 26.67% of the total
respondents spends from 1-10% in renting a computer unit for internet use.
About 48% of the respondents are renting a computer once a week for handson use.

Among the services offered, hand-on Internet use has the highest percent
preferred by he respondents. Also the respondents consider the ambiance
and the computer hardware/software as their main factors in renting.

SUPPLY ANALYSIS

Based on the data gathered from the survey answered by owners of the
computer Rentals and Internet Caf, it shows that 46.15% of the respondents
initial capital belongs to the P300,000-400,000 bracket. About 69.23% of hem
stated that th total demand increase from 1-10% annually.

Most of the seller respondents give priority in providing quality service,

affordable process and good advertising/production in order to stay
competitive in the service market.

MARKET PROGRAM

The marketing program is basically a program consists of the following:

Product, price, place and promotion or sometimes called MARKETING MIX.

OBJECTIVES
The Objectives of the business are the following:

To satisfy the needs of the customers by providing highly-quality service at a

very reasonable price.
To promote the use of the Internet to students and as well as to non-student.
To determine the size of the potential target market in order to effectively
meet the demand and supply gap of the market.
PRODUCT STRATEGY
The proposed business offers renting of computer for hands-on where you
can do your office works ad school projects such as book report, thesis,
assignments, and feasibility study. Internet use is also made available, so that
the customers can do some research works, know different topics and
articles, and even chat with other friends. Computer games and audio video

are also offered.

PRICE STRATEGY
Pricing is considered to be the most critical factor which most often time
affect the marketability of the service offered by the business. Pricing will be
based o cost plus reasonable mark up. The terms of payments will be on cash
basis only.

Rental fees are as follows:

Hands-on/Games/Internet use P 25.00/hr.

Printing Jobs

Colored P 20/page

Laser/Deskjet text only P 5.00

Photo P 75.00 size is 8.5x11

PLACE OF CHANNEL OF DISTRIBUTIN STRATEGY

The place of distribution will be at Romulo Boulevard, Tarlac City near Magic
Star.

The manner of distribution will be from manufacturer to consumers.

PROMOTION STRATEGY
In promoting the business, the researcher intends to do the following:

Post billboards and streamers along the streets to announce the opening of
the store weeks before the data of the opening.

The posting of signboards that state the services offered.

Discount cards will be given to the first 50 customers.

Fliers will be given outside the nearby school to attract possible customers.

Free 2 rental hours for the first 100 customers who will first accumulate 50
hours or rental.

DEMAND AND SUPLY QUANTUM

DEMAND
The population (No. of students =1,287)

Talac State University 579

Ecumenical Christian College 321
College of the Holy Spirit 387
Less: 10% ) portion of population on not included) 129

Net potential Market 1,158

Multiply: Ave. Annual Income/Allowance 2,999.50

Total Ave. Annual Income/Allowance of net

Potential Market 3,473,421

Multiply: Portion of Income/Allowance spent

On computer Rental, internet and other

Computer related services 5%

Total amount spent on computer rentals, internet

And other computer related services 173,671.05 Multiply: twelve (12) months
12

2,084,052.60

Divide: Average selling price 25

Total Demand: 173,671.05

SUPPLY

Ave. Annual Sales 7,200

Multiply: Number of Present owner 15

Total Ave. Annual sales 108,000

Divide: Ave. Selling Price 25

Total Qty. Supplied 4320

DEMAND AND SUPPLY GAP

Demand 173,671.05

Supply 4320

169,351.05

FORECASTING TECHNIQUE

Historical Demand for Computer Services Average Demand / yr.(5%)

2011 173,671.05

2010 164,987.49

2009 156,738.11

2008 148901.20

2007 141,456.14

Computations using Arithmetic Straight line method

Demand in 2007 173,671.05

Demand in 2011 141,456.14

Total Demand Gap (from 2011-2007) 32,214.91

Multiply: Rate of Increase in Demand 10%

Total Increase in Demand 3,221.491

Demand Projections

2007: 141,456.14 + 3,221.491 = 144,677.631

2008: 144,677.631 + 3,221.491 = 147,899.122

2009: 147,899.122 + 3,221.491 = 151,120.613

2010: 151,120.613 + 3,221.491 = 154,342.104

2011 154,342.104 + 3,221.491 = 157563.595

OBJECTIVE

To be able to know the number of workers that will be needed on the

operation of the business.

To be able to determine the benefits and incentives that will be given to the
workers/employee.

o determine the specific type of organization to be put up or established.

To determine the different function of each business partner.

To be able to determine the kinds of training that the management can give
to the workers/employee

PRE-OPERATING PERIOD

Prior to the actual business operation, it is part of the process to fulfill the
necessary pre-operating requirements and the responsibilities such as hiring
and training of persons or workers, providing different equipment and
materials needed in accomplishing documents. The form of organization is
partnership. The total initial capital agreed upon by the partners is
5,000,000.00, where each partner will contribute P 250,000.00.

The following are the names of the partners and their capital contribution

Partners Contribution Amount

Mr. Y Cash P250,000.00

Mr. X Cash P250,000.00

PERSONS INVOLVED IN THE MANAGEMENT

With the proposed business, Mr. Glen Ico will act as the manager. His duties
cover management function such as planning, organizing, staffing, directing
and controlling. A bookkeeper/cashier will be in charge of the different
accounting jobs. A computer assistant is in-charge of assisting the customer.
A computer technician will be in-charge in maintaining the conditions of the
computer.

PROJECT SCHEDULE

Business purpose or objectives are set to be accomplished. Realization of

these objectives can be obtained through proper planning and scheduling of
specific business activities to be undertaker. The proportion of a project
schedule is very important. And the proponents to concretize the various
process/sequences involved are a GANTT chart that will control and monitor
the process.

Areas of consideration: Feasibility Study

Duration: From August December 2007

The feasibility study will be completed within this period to which the
researcher conducted a comprehensive study like interviews and surveys.

Areas of consideration: Putting up of equity

Duration: From January 1-15 2008

A collection of cash contribution from the proponents for the capitalization of

the business will take place within this period.

Areas of consideration: Registration

Duration: From January 16-31 2008

Pre-operating Phase

Articles of the partnership was prepared and signed by all partners which
reflects the following:

The partnership name

The business address

The partnerships goal/objectives

The name and address of the partners

Duration on when partnership will exists

The amount of cash contributed by each partner

Each partner will secure a share of profits based on the contribution plus all
other compensation by way of income

After agreeing with the terms and condition of the purpose, each of them
needs to affix their signature in five(5) copies of the articles of partnership
with the presence of the witness and the notary public.

Operating Phase

The procedure to be done in registering with some agencies who have

regulatory power over the business:

For the registration of the business in the Security and exchange commission
(SEC) certain procedures are to followed:

Fill out all the file copies of information sheet receives from the office

Verify the partnership names in the record section

Once the partnership is approved go to information section for filling and

payments of registration fees.

Payment of filling fees to the cashier

Receiving of the articles of partnership is to be made in the receiving section

together witht the changes in the name of the partnership. SEC General
Information sheet and affidavit of marital consent (if married) in five copies.

Make a follow up as to when you will received the approved certificated of

partnership

The steps in registering in the Department of Trade and Industry are as

follows:

Get a DTI form for application of the business name from the DTI office and
fill up the form.

Pay to the cashier

Fill out the form together with the certified copy of the approved articles of
partnership from the Security and Exchange Commission

After a week, get the certificate of registration for the DTI. The card certificate
entitles the firm to have their business for five years which, it is subject to
renewal.

Certain procedures are to followed to the Bureau of Internal Revenue (BIR)

The steps are to followed when registering to the BIR

Get forms and fill-up then submit

Payment of the registration fee to the cashier

A privilege tax is to be paid. The applicant is required to pay the tax before
___ engaging in the business.

Secure BIR authorization for the printing of the invoice and official receipt for
the partnership

Printing of the forms

Bring the printed receipt to the bureau of Internal Revenue office along with
the authorization to print stamping of the official receipt and invoice booklets.

Secure the books of account such as receipts or cash disbursement book,

minutes book, ledger or journal from any bookstore and register it to the BIR.

The procedure in getting the Mayors Permit is as follows:

Get an application for the city or municipal hall where the business is located
and fill up the information

Get certificates form the municipal office stating that the business is new

Submit to the Mayors Office the application for comments and approval

A fee representing payments for the permit and license to the city treasury

Have a follow-up of the Mayors permit and the municipal license. Usually,
permits and license expire after a year from the date of the issuance unless it
is specified.

Members your business in Social Security System (SSS)

Register to the SSS your Social Security System (SSS) number

Be sure that your employees have their social security number

deduction of the employees share in the SSS and Medicare is to be made

from their monthly salary and remit the deductions together with their
employers share and the employees contribution to the SSS

After securing the forms, register your place of business to the Department of
labor

Check with the Bureau of the standards for the rules and regulations if ever
the partnership is engaged in manufacturing

Areas of consideration: Renovation

Duration: from February-March 2008

Romulo Blvd. Tarlac City is the best location for our business because
university and other schools are near the place and it is very accessible to
the public since it is the center for business and schools. The proponents will
rent the place temporarily until the business is financial stable.

Areas of consideration: Equipment and Supplies

Duration: from March 1-30 2008

The partners will have to canvas the computer equipment, furniture and
other supplies for the Internet business which aims to get the lowest price but
with high quality. The one who will give the better offer is the first priority.

Areas of consideration: Orders and receipts of computer equipment and other

supplies

Duration: March 1-30 2008

Orders of computer and other supplies should be listed for the purpose of
monitoring. Receipts should be issued to determine the mode of payment.

Areas of consideration: Installation of computer equipment and other supplies

Duration: March 2008

Delivery and installation of the equipment to be used by the business for

giving a quality service should be done during this period.

Areas of consideration: Hiring and training of personnel

Duration: April 2008

During this period, the partners will train its employees/workers for the
different jobs assigned.

Areas of consideration: Start of the Operation

Duration: May 2008

The business will start during this period. Its goal is to give quality service at
the most affordable price possible.

OPERATING PERIOD

FORMS OF BUSINES OWNERSHIP

The form of business is partnership. The name of the business firm is GSI
Computer System. The proponents choose the form of partnership because
of the following reasons.

Advantages:

As compared to a sole proprietorship, a greater amount of capital can be

accumulated in a partnership because of the numbers of person involved.

Better management will result in a partnership because of the concerted

efforts and abilities of the partners.

As compared to the corporation, a partnership is supplier and less expensive

to organize, there being only few legal requirements.

The partnerships unlimited liability will serve as protection for the

partnership creditors thus the letter will not be discourage to extent financial
assistance.

Disadvantages:

Any personal rifts, deaths, withdrawal or incapacity of a partner may dissolve

the partnership

Equal profit sharing despite unequal attention of time given by partners.

Because of numbers of person involved, conflicts and disagreement may

arise and may easily affect the operation and success of the business.

ORGANZATIONAL POLICIES

Working day and time

Monday to Sunday

7:00 an -10:00 pm

Payment of salaries/wages

Payment of salary/wages will be on the 8th and 22nd day of every month

INTERNAL ORGANIZATION

MANPOWER REQUIRMENT/JOB ANALYSIS

The success of the business depends on the performance and attitude of its
personnel and employees. This part of management aspect will discuss the
following job analysis for each organizations personnel and employees with

their corresponding qualification.

Job Title: General Manager

Job Description:

He shall implement good internal control of the business

He shall be responsible to direct and lead his subordinates

He shall assign his subordinates their respective tasks

He shall plan the personnel policies, activities and programs directed towards
meeting the goals of the business organization.

Job Specification:

He must a degree holder of any business course or related.

He must be of a good character and must posses a good leadership skills

With or without working experience

He must be at least 23 years of age

He must posses good communication skills

Job Title: Bookkeeper/ Cashier

Job Description:

He/she shall maintain all accounting records

He/she shall maximize profit by the way of controlling asset, cost and
expenses

He/she must have the ability to manage the companys funds.

He/she will be in-charge of the cash register

He/she will be in-charge of supervising the profit of the company

Job Specification:

He/she must be a graduate of a degree course and has knowledge in

accounting

He/she must have enthusiasm in work

With or without working experience

He must be a computer literate

Proficient in Microsoft Application or related software

Job Title: Customer Relation

Job Description:

He/she will be responsible in assuring good quality of service

He/she will be responsible in the development of the service that we rendered

to the customer

Job Specification:

Male or female

He/she must have a good oral communication

Highly proficient in various computer software and familiar with Internet

Job Title: Computer Technician

Job Description:

He will be responsible in the maintenance of the computers and other

equipment

He will be assisting the CRO and the cashier

Job Specification:

Male

He must be a graduate of any computer/technical course. Engineering

graduate is an advantage

He must have at least 2 years experience in trouble shooting and

maintenance of micro computer

Posted by ICEMAN / CYBERPHOBIA at 3:47 PM

5 comments:

Mark Apple Davis said...

Very good feasibility study... But may i asked a quick question? how you will
monitor the number of people renting each day? please send your answer to
my email: markapoldeybis@yahoo.com
October 13, 2013 at 11:37 PM
Keith Barcelona said...
This comment has been removed by the author.
November 14, 2013 at 10:04 PM
Keith Barcelona said...
This comment has been removed by the author.
November 14, 2013 at 10:06 PM
Shane said...

.,hi I'm keith..I'm doing a feasibility study one of the varieties of Filipino
cuisine..ahmm..could you send me please your sample questionnaire
regarding you're FS about the internet cafe..just for guide purposes..your
immediate response is a big help..please send it to my email
shane.chix09@gmail.com
November 14, 2013 at 10:19 PM
marcelus king said...
Good day!Could you share with me your questionnaire to serve as my guide
in creating my own questionnaire? Thanks a lot and God bless!
June 14, 2015 at 9:49 PM
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Assignment # 1 (11-14-07)
Sample FEASIBILITY STUDY - Internet Cafe
FEASIBILITY FORMAT
Syllabus
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ICEMAN / CYBERPHOBIA
Links to TSU www.gsitsu.blogspot.com www.gsiaics.blogspot.com
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