CHAPTER VI

FINANCING ASPECT

One of the things that will concern a business in its pre operating stage is

on how they finance their business to keep it at par with the competitors.

Financing is the act of providing funds for business activities. Financial

institutions and banks are in the business of financing as they provide capital to

businesses, consumers and investors to help them achieve their financial goals.

The use of financing is vital in any economic system as it allows companies to

purchase products out of their immediate reach. Without sufficient funds, the

business will not function properly or will not be able to cope up with the industry

pace in the long run.

This aspect of the study helps the prospective implementors in making

efficient and effective decisions relating to different methods in acquiring a

source of fund for the business. In every business, planning for the allocation of

funds is crucial in order to settle the necessary costs needed for the pre-

operating stages of the company and eventually, for its ordinary course of

business. It should be done with utmost supervision and care to avoid

unnecessary financing transactions that will place the company in disarray.

This chapter shows the different estimated costs of the project that will

help the prospective implementors know where to acquire funds and how to

effectively allocate such for proper utilization.

Sources of Financing

Before the inception of the business, one must have the necessary funds

which will be used by the business. The funding depends on the capital structure

of the company. Since the proposed project will be a sole proprietor, the funds

may be invested by the owner. The source of funding may originate from

personal funds of the owner.

During the early part of the business, the personal savings of the owner is

likely to be the main source of funds. However, if his savings are not enough in

the long run, the implementor may seek the help of different institutions.

ESTIMATED PROJECT COST

Pre Operating Expenses Note Costs
Project Feasibility Cost 1 7,700.00
Permits and Licenses 2 1,880.00
Advertising Expenses 3 10,000.00
Property and Equipment
Furnitures and Fixtures 4 13,837.00
Office Equipment 5 17,900.00
Production Tools and Supplies 6 1,330.00
Estimated Working Capital
Office Supplies 7 3,384.00
8 2,437.00
Indirect Materials 9 998.00
Cleaning Supplies 10 1,411.00
Salaries and Wages 11 6,720.00
Employee Benefits 12 693.00
Utilities Expense 13 3,800.00
Professional Fees 14 1,200.00
Total Estimated Project Cost Php 73,290.00
 Note 1

Project Feasibility Cost

Particulars Total Cost
Experimentation 700.00
Printing 1,000.00
Book Binding 500.00
Transportation 500.00
Snacks 500.00
Miscellaneous 1,000.00
Honorarium 3,500.00
TOTAL Php 7,700.00

Note 2

Permits and Licenses

Particulars Total Cost

DTI Registration 500.00
BIR Registraion 500.00
Barangay Clearance Fee 45.00
Police Clearance Fee 45.00
Fire Safety Evaluation Clearance 100.00
Mayors Permit 600.00
Sanitary Permit 50.00
Community Tax Certification 20.00
Documentary Stamp 20.00
TOTAL Php 1 880.00

Note 3
Advertising Expense
Particulars Total Cost
Flyers 7,500.00
Tarpaulins 2,500.00
TOTAL Php 10,000.00
 Note 4
Furniture and Fixtures
Particulars Qty Unit Unit Cost Total Cost
Furniture and Fixtures - Office:
Office Chair 2 pieces 999.00 Php 1,998.00
Office Table with Cabinet 1 pieces 2,800.00 2,800.00
Furniture and Fixtures -
Production
Rectangular Folding Table - 8 ft. 2 pieces 4,199.82 8,399.00
Monoblock Chair 2 pieces 320.00 640.00
TOTAL Php 13,837.00

Note 5
Office Equipment
Particulars Total Cost
Electric Fan 1,200.00
Telephone 1,200.00
Laptop 15,500.00
TOTAL Php 17,900.00

Note 6
Production Tools and Supplies
Particulars Qty Unit Unit Cost Amount
Stainless Ruler (6 in) 1 piece Php 49.00 Php 49.00
Gloves 1 pair 99.00 99.00
Scissor 1 piece 169.00 169.00
Cutter 1 piece 89.75 89.75
Diagonal Pliers 1 piece 244.75 244.75
Long-nose Pliers 1 piece 229.00 229.00
Round-nose Pliers 1 piece 199.75 199.25
Total Php 1,080.00
 Note 7
Office Supplies
Particulars Qty Unit Unit Cost Total Cost
Bondpaper
* Short 1 ream Php 185.00 Php 185.00
* Long 1 ream 195.00 195.00
Pencil 2 box 84.75 169.50
Ballpen 2 box 60.00 120.00
Calculator 2 pieces 430.00 860.00
Official Receipts 25 pad 10.00 250.00
Stapler 2 pieces 36.00 72.00
Staple Wire 4 box 15.00 60.00
Plastic Fastener 1 box 25.00 25.00
Clip 5 pieces 150.00 750.00
Journal Book 3 pieces 28.75 86.25
Ledger Book 5 pieces 28.75 143.75
10 Column
Worksheet 1 pads 28.75 28.75
Folder
* Long 10 pieces 6.50 65.00
* Short 10 pieces 5.50 55.00
Scissors 3 pieces 54.75 164.25
Cutter 2 pieces 7.00 14.00
Scotch Tape 2 pieces 18.00 36.00
Logbook 1 piece 44.75 44.50
Carton Paper 1 pack 60.00 60.00
TOTAL Php 3,384.00

Note 8
Direct Materials
Particulars Qty Unit Unit Cost Amount
GI Wires (18) 25 rolls Php 44.50 Php 1,112.00
Cactus Plant 49 pieces 25.00 1,225.00
Floral Foam 4 pieces 25.00 100.00
Total Php 2,437.00
 Note 9
Indirect Materials
Particulars Qty Unit Unit Cost Amount
Hook (100 pcs.) 8 packs Php 12.00 Php 96.00
Super Glue 73 pieces 5.00 365.00
Universal String 8 packs 30.00 240.00
Spray Paint 3 pieces 99.00 297.00
TOTAL Php 998.00

Note 10
Cleaning Supplies
Particulars Qty Unit Unit Cost Total Cost
Brooms 3 pieces Php 20.00 Php 60.00
Dust Pan 2 pieces 42.00 84.00
Garbage Can 1 piece 138.00 138.00
Rugs(Big) 5 pieces 15.00 75.00
Cleaning
Detergents 1 gallon 55.00 55.00
Toilet Bowl
Cleaner 2 liters 115.00 230.00
Tissue 3 rolls 56.00 168.00
Sponge 10 pieces 6.00 60.00
Dishwashing Soap 2 pieces 33.00 66.00
Floor Mop 2 pieces 175.00 350.00
Pail 1 piece 50.00 50.00
Brush 3 pieces 20.00 60.00
Toilet Brush 1 piece 15.00 15.00
TOTAL Php 1,411.00
 Note 11

Salaries and Wages

Particulars Estimated Mo. Rate No. of Workers Total Cost

Production Worker Php 6 720.00 1 Php 6 720.00

Note 12

Employee Benefits

Particulars SSS Philhealth Pag-ibig No. of Total Cost

Employees

Production 458.80 100.00 134.40 1 Php 693.20

Worker

Note 13
Utlities Expense
Particulars Total Cost
Water Php 800.00
Electricity 2,000.00
Telecommunication 1,000.00
TOTAL Php 3,800.00

Note 14

Professional Fee

Particulars Total Cost

Bookkeeper Php 1 200.00