PROJECT FEASIBILITY STUDY ON JAXONS SPORTSVILLE

I.

GENERAL INFORMATION

A. Project Title B. Project Proponents

: :

Jaxons Sportsville Maryjane Nazaral Jan Ericson Pronto

C. Project Site/location

Sitio Guiron Barangay Poblacion Sablayan, Occidental Mindoro

D. Project Cost E. Source of funds

: :

Php 200,000 From the family of partners

F. Type of Business G. Project Description

Partnership

The project is a Sportswear Tailoring Shop. The shop is a maker of sports uniforms in basketball, volleyball and other sports. The products are shorts, sandos, jackets, jogging pants and banners which is made from ordinary cloth and rubberized type of lettering and piping.

II.

OBJECTIVES OF THE STUDY:

1. GENERAL OBJECTIVES:
The study aims to determine the viability and feasibility expanding the operations of the existing and operating sportswear shop to cope and accommodate more customers of sports uniforms all throughout the year.

2. SPECIFIC OBJECTIVES
A. To determine the feasibility and viability of expanding the operations of sportswear shop by adding capitalization. B. To make a thorough study on its expansion to accommodate more customers thru acquisition of new machines; C. To develop the existing and operating business by additional machines, sewers and designers;

D. To

develop

the

business

by

getting

more

profit

and

income

through an expansion program in its operations.

III.SIGNIFICANCE OF THE STUDY:

The business on Sportswear Tailoring is existing and operating at present. The present owner is a parent of one of the proponents. As a beneficiary of the business, she has all the knowledge of the business operations and has the skill of sewing these uniforms. The study is very important and significant because it will determine whether such an expansion the additional capital and acquisition of new additional sewing machines would better help in the development of the operations. The study will try to know whether or not it could generate more income and profits by doubling the number of customers which in the past years cannot be accommodate.

IV.SCOPE AND LIMITATION:

The study will focus on the expansion program thru additional capitalization with additional partner in the business. Widening the space of the business, adding more machines and adding more tailors and sewers are also the focus of the study. It will focus on the feasibility and profitability of expanding operations and keeping it with more capital investment.

V.RESEARCH AND SURVEY METHODOLOGY:

Actual research on the data regarding the population of students specifically enrolled in High Schools and Colleges who are regularly using uniforms like jogging pants for their physical education activities. There is an existing list of those who have been customers of the business. This list will be used as the basis of the study. Actual survey and interviews will also be used to know more about the need of these uniforms including the schedules of sports activities especially in the Barangays.

VI.PROJECT FEASIBILITY STUDY COMPONENTS

A.Marketing Aspect:

1. Target market

The primary target market are students of High School and College. Regularly these students are required to have their jogging pants to be used for physical education activities. Once a year they have their intramurals activities in their respective schools, at which they are required to have uniforms in the respective ball games and other sports events. The other target market are the Barangays of Sablayan that are celebrating their fiestas once a year. The Sangguniang Kabataans (SK) take charge of sports activities in their Barangay. In fact, the SK have the yearly funding for this activity. They often have basketball leagues that coincide with the celebration of their anniversary and fiesta. Additional market are individuals who are regularly using jackets, shirts and shorts for their comforts and casual wear.

2.Market Strategy

The business is Sportswear Tailoring Shop which is producing sports uniforms. The products are sando, shorts, jackets, jogging pants and banners used in sports activities. The prices of these uniforms are very competitive and affordable to make the marketing easy. The shop is actually known already in the market because it is an existing and operating business. Because it is an expansion project, it will advertise thru the Radio Natin 103.3 FM Sablayan. The Communication Network reach as far as the town of Sta. Cruz and Calintaan. The proponents will also go to the concerned school and Barangay ahead of time to contact those in-charge in the coming activities. Marketing transactions for the Barangay sports activities are course through the Barangay Chairman and the SK Chairman who is directly in-charge of the said sports festivities.

3. Market Research and Survey

Research and Survey was conducted in eight National High Schools as to the total population of students. The survey includes the number of teachers and non-teaching staff. The total number of students in three(3) colleges and one(1) TESDA ACCREDITED VOCATIONAL SCHOOL including the two(2) Private High Schools in Sablayan. Included also in the survey are the Barangays of Sablayan.

The following are the result of the market research and survey conducted as of October 10, 2011.

RESEARCH AND SURVEY RESULT

TOTAL NUMBER OF STUDENTS IN NATIONAL HIGH SCHOOL (8) EIGHT SCHOOLS 13,245

SABNAHIS CLAUDIO SALGADO STA. LUCIA BURGOS GENERAL EMILIO AGUINALDO ARELLANO PAG-ASA SAN FRANCISCO 123 1,698

TOTAL NUMBER OF TEACHING AND NON-TEACHING STAFF TOTAL NUMBER OF STUDENTS OF COLLEGE/ VOCATIONAL (CDSS, PUP,OMSC,CAPTAIN LAWRENCE) TOTAL NUMBER OF STUDENTS IN TWO(2) PRIVATE HIGH SCHOOLS TOTAL NUMBER OF BARANGAYS IN SABLAYAN

569 22

4. PROJECTED MARKET DEMAND

Based from the research and survey result, the business of Sportswear Tailoring Shop will have a great demand and market. It is expected that there will be more transactions to be expected from the expanded operations. The business has peak seasons of its demand within a year. Based from the actual operations of last year from January to December 2010, the following are the gross sales per month operations: MONTH JANUARY FEBRUARY MARCH APRIL MAY JUNE JULY AUGUST SEPTEMBER OCTOBER NOVEMBER DECEMBER SALES 49,500 11,850 61,650 120,150 12,150 19,800 26,550 34,650 127,700 84,200 58,050 39,600

Based from the survey, the estimated projected demand is at least ten percent(10%) of the total result of the survey as conducted. This will double the productions and sales as there will be additional machines, tailors and capital. The expansion will be expected to give the business more chances of earning and profits.

5.COMPETITION
The business is mainly the maker of sports uniform. At present, there are existing tailoring shop in the area, but only one (1) which is Nazaral Sportswear Shop concentrating on sports uniform. The business is known already in the market. The uniforms made in the shop reached as far as USA and other Asian Countries. These are ordered by Filipinos abroad. The expansion and development are necessary to improve its services. It is necessary to update the operations by researching also designs that fit the modern generation.

B.ORGANIZATION AND MANAGEMENT ASPECT:

The business is a partnership composed of two (2) proponent-partners that equally share in capital investment for the expansion project. The current owner, being the parent of one of the proponents will transfer the management and ownership of the operating business at the value as appraised by the former owners and the present partners.

1. ORGANIZATIONAL STRUCTURE
The following is the organizational structure of the new management of the business as directly operated and managed the partnership:

PARTNERSHIP

Maryjane Nazaral PRODUCTION AND TAILORING

Jan Ericson Pronto MARKETING AND FINANCE

7 TAILORS/SEWERS 1 DESIGNER/ CUTTER MARKETING AIDE

2.FUNCTIONS,DUTIES AND RESPONSIBILITIES

PARTNERSHIP
-the partners are owners of the business and will take charge of the over all management and supervision of the business activities.

PRODUCTION AND TAILORING

-One partner has the knowledge and skill in the actual tailoring and sewing of uniforms. Takes charge of the production and tailoring supervision of the business takes charge directly the activities of the paid tailors.

MARKETING AND FINANCE

-the other partner is to take charge of this position. Takes charge of the marketing,following up of vouchers for payments especially at government transactions, keep custody of all the movies and properties of the business.

MARKETING AIDE
-is hired to help in the marketing, contacting clients and other functions as directed by the partners.

TAILORS/SEWERS/CUTTERS/DESIGNERS
-take charge of the actual designing, cutting, tailoring or sewing of uniforms. They are paid on per piece or per set.

3.COMPENSATION

The partners are to get an allowance of two thousand five hundred pesos (2,500.00) each to offset their personal expenses daily in a month. The tailors, sewers and cutters are paid on at sixty pesos (php 60.00) per set and thirty pesos (30.00) per piece work. The designer is paid on per design at php 300.00. The marketing aide is paid dailyat the rate of two hundred fifty pesos (php 250.00) per day at five (5) days work in a week. All other expenses are part of the operational and administrative expenses in the operations of the business.

C.TECHNICAL ASPECT:

1.PROJECT SITE/LOCATION

The business on Sportswear tailoring Shop is located at Sitio Guiron, Baranagay Poblacion, Sablayan, Occidental Mindoro. The place is to be rented by the business. The building is owned by one of the proponents of the business. The building is to be renovate at which the cost is charged against one (1) year rental of the place. Actual monthly rental will be charged on the second year since.

2. PRODUCT DESCRIPTION
The products are sports uniforms for ball games, athletic games and physical education activities. Most common uniform that is made by the business is the basketball uniform. The following are the main products produced and manufactured by the tailoring shop:

SANDO
upper portion of the uniform as sleeveless shirt where the name of the team at the front is placed and number is placed at its back including the family name of the team.

SHORTS
part of the uniform known trousers which is knee- length which is worn when playing.

JACKET
is a garment like article designed to be placed around the body for some use other than as clothing. For basketball is part of the uniform as complete outfit.

JOGGING PANTS
just like the long pants but little bit loose size to make it comfortable for the sports wearer and use for jogging. Usually covering the shorts.

BANNER
is a piece of cloth with the name of the team with its design.

3. BUSINESS OPERATION
The business is operating as a maker of sports uniforms thus tailoring and sewing. It is using electric powered sewing machines of different times with one (1) machine manually operated. The two (2) activities are production and marketing. Production is the actual measuring, designing, cutting and sewing of sports uniforms. Marketing is the selling of the services of making the sports uniforms to the desired type and design of the customers. There are two (2) kinds of uniforms as to the type of design and materials used. One is the use of ordinary cloth and type and the other one is using rubberized materials. The operation is earning by the services of making and tailoring, at the same time with the provision of all materials used at one package price per set of uniform.

4.TAILORING, MACHINES, EQUIPMENTS AND TOOLS

The building is a residential house of one of the proponents. Part of the building especially the frontage is used for the business where the actual tailoring, making and sewing is done. The repair is part of the costing but will be charged against the first year rental. As indicated, four (4) units of sewing machines of different type and specifications are electrically powered sewing machines. One (1) ordinary machine is manually operated. Other tailoring tools like scissors, cutters, measuring tools and other are provided as part of requirements in the operation of the business.

5. UTILITIES
The business is going to use a generator that can have the capacity of powering even six (6) units of sewing machines. This is use only during brownout. Regular electric and power requirement is subscribe from the Occidental Mindoro Cooperative (OMECO). The water that is use by the business is from the local Water District in the area.

D.FINANCIAL ASPECT

1. TOTAL PROJECT COST

The total project cost is two hundred thousand pesos (php 200,000.00). The amount of investment is a new investment for expansion and development of its services and operation. The financial details of the total project cost are as follows: Cost of Acquisition of Sewing Machines 1 unit Juki-High Speed 1 unit zigzaggeR 1unit Ijamoto Edging 1 unit double piping 1 unit ordinary singer(manual) 11.000.00 20,000.00 14,000.00 15,000.00 4,000.00 __________ php 64,000.00 php 64,000.00

Total

Cost of 1 set generator Cost of capital for cloth Cost of assorted materials Cost of additional tools Cost of repair (building) Cost of operations Contingency Fund

50,000.00 22,000.00 5,000.00 5,000.00 30,000.00 20,000.00 4,000.00 ________

Total Project Cost

php 200,000.00

2. FINANCIAL ASSUMPTIONS

A. The project and business is an existing and operating Sportswear Tailoring Shop; B. The business wants to expand and develop its operation by adding capital and acquiring new sewing machines; C. With the acquisition of new sewing machines it is expected that it could double its operations; D. Actual total sales of the year 2010 is php 656,850-January to December; E. Estimated increase for the first year of operation is twenty percent (20%) of the total sales of the year 2010; F. Ten percent (10%) increase for the second year and every year thereafter; G. Based from the survey, the basis for its increase is that there is an increase of population of students both high school and college especially with addition of new colleges in the town;

H. Estimated average production cost is sixty percent (60%) of the gross sales. I. Actual selling price for a pair/set: Ordinary php 450.00

Rubberized- php 580.00

J.

Direct Cost or Expenses include labor, print, cloth and other materials;

Ordinary - php 250.00 Rubberized-php 350.00

K. Average Production Cost is 60% of the price or sales L. Estimated Gross Sales

Year 1 php 788,220.00 Year 2 php 867,042.00 Year 3 php 953,746.20

M. Estimated Direct Cost at 64%

Year 1 php 472,932.00 Year 2 php 522,225.20 Year 3 php 572,247.72

2. FINANCIAL ANALYSIS

Projected Comprehensive Income Statement in the financial study shows that within the period of three (3) years operation the amount of additional capital of Two Hundred Thousand Pesos (php 200,000.00) can be easily returned. The following are the income that will be generated from the business operation.

TOTAL INCOME FOR 3 YEARS PHP 243,137.60; ROI AND PAYBACK

YEAR

INCOME

ROI

PAYBACK

Year 1 Year 2 Year 3

Php 76,967.84 Php 74,362.63 Php 91,807,13

38.48% 37.18% 45.90%

2.59 years 2.69 years 2.18 years

Average Net Income per year ROI Based on Average Net Income Payback based on Average Net Income

php 81,045.86 40.52% 2.47 years

The following are the formula based in the computation of the rate of return on investment (ROI) and the payback period.

ROI=

NET INCOME TOTAL PROJECT COST

PAYBACK PERIOD=

TOTAL PROJECT COST NET INCOME

CONCLUSION AND RECOMMENDATION

Based from the financial study presented thru the income statement and the actual operations analysis based from the year 2010 income, the business on Sportswear Shop Expansion project is very feasible and viable. The reason why this study is conducted is to know whether or not an additional capital investment will be very beneficial and profitable to the proponents and their beneficiaries. As a whole the expansion is very feasible and there recommended for operation and funding if ever will be asking financing from available financial institutions.

SPORTSWEAR SHOP PROJECTED COMPREHENSIVE INCOME STATEMENT YEAR 1 TO YEAR 3

PARTICULARS

YEAR 1

YEAR 2

YEAR 3

GROSS SALES LESS:DIRECT COST GROSS INCOME LESS : OPERATING EXPENSE ALLOWANCES AND SALARY ELECTRIC AND WATER BILLS FUEL EXPENSES RENTAL EXPENSES PERMIT AND LICENCES TRANSPORTATION REPRESENTATION OFFICE SUPPLIES DEPRECIATION MISCELLANEOUS TOTAL OPERATING EXPENSES: NET INCOME BEFORE TAX TAX 32% NET INCOME

PHP 788,220.00 472,932.00 PHP 315,288.00 PHP 120,000.00 24,000.00 6,000.00 12,000.00 12,000.00 6,000.00 3,600.00 14,900.00 3,600.00 PHP 202,100.00 PHP 113,188.00 PHP 36,220.16 PHP 76,967.84

PHP 867,042.00 522,225.20 PHP 344,816.80 126,000.00 25,200.00 6,300.00 24,000.00 12,600.00 12,600.00 6,300.00 3,780.00 14,900.00 3,780.00 PHP 235,460.00 PHP 109,356.80 PHP 34,994.17 PHP 74,362.63

PHP 953,746.20 572,247.72 PHP 81,498.48 132,300.00 26,460.00 6,615.00 25,200.00 13,230.00 13,230.00 6,615.00 3,969.00 14,900.00 3,969.00 PHP 246,488.00 PHP 135,010.48 PHP PHP 43,203.35 91,807.13

INTRODUCTION

HISTORICAL BACKGROUND

The business on tailoring shop which specializes in sportswear at present came about when the parents of one of the proponents had worked in the shop of the relatives in Kalibo, Aklan. It was in the year 1983,when both the father and the mother of Maryjane worked as tailor and cutter of the said tailoring shop of the relatives in Kalibo. The focus on tailoring pants for men and women, and polo for men.

After two (2) years, they migrated and transferred to Barangay Ligaya, Sablayan, Occidental Mindoro. They brought with them two (2) manual sewing machine and started sewing the same pants for men and women and polo for men. While the tailoring shop was operating, they studied on sewing other type of means by self-study.

It was during the year of 1986, when there was a district meet that happened in Barangay Ligaya when they learned to make sports uniforms being used by the students of Ligaya Elementary School. From that time on, customers were coming to have their uniforms made.

In 1987, they transferred to the town proper renting a house for the family to live there, and to continue the business tailoring sportswear. From that time on, slowly they became expert in uniforms that made them decide to concentrate in sports uniforms. At present, the shop is operating and it is located at Sitio Guiron, Barangay Poblacion, Sablayan, Occidental Mindoro. They are operating with two (2) units of electricity power high speed sewing machines.

SITUATIONER
Based from its history, one of the proponents has been in the business on making sports uniforms. She knows how to sew these kinds of uniforms at which her father and mother know also the designing of uniforms and cutting letterings for it.

Since, they have been in this business ands while the operation is going on they have seen it necessary to improve its services and expand so as to accommodate more customers especially customers that they were not able to get during the past two (2) years of operation due to few machines to operate and use.

With the acquisition of more and new units of sewing machines, it is expected that the services will be improved and faster. The new and modern machines and electricity powered would really help in beeping up its operations, It will be able to accept more and more clients ansd will give chance to have more income and opportunities for jobs for additional tailors to be hired by the shop.

Entering to a partnership will be very beneficial to the current operations. The partnership will be able to make the necessary expansion and develop the physical structure of the shop and thereby its sewing, tailoring and marketing operations.

PROJECT FEASIBILITY ABSTRACT ON JAXONS SPORTSVILLE

I. EXECUTIVE SUMMARY

A. Name of Business B. Business Address

: :

Jaxons Sportsville Sitio Guiron Barangay Poblacion Sablayan, Occidental Mindoro

C. Nature of Business D. Proponents

: :

Services Maryjane Nazaral Jan Ericson Pronto

E. Project Cost F. Brief Description

Php 200,000

The project is a Sportswear Tailoring Shop. The shop is a maker of sports uniforms in basketball, volleyball and other sports. The products are shorts, sandos, jackets, jogging pants and banners which is made from ordinary cloth and rubberized type of lettering and piping.

H. OBJECTIVES

1. GENERAL OBJECTIVES:

The study aims to determine the viability and feasibility expanding the operations of the existing and operating sportswear shop to cope and accommodate more customers of sports uniforms all throughout the year.

2.SPECIFIC OBJECTIVES

A. To determine the feasibility and viability of expanding the operations of sportswear shop by adding capitalization. B. To make a thorough study on its expansion to accommodate more customers thru acquisition of new machines; C. To develop the existing and operating business by additional machines, sewers and designers; D. To develop the business by getting more profit and income

through an expansion program in its operations.

II.

MARKETING ASPECT:

The target markets are students of Hugh School and Colleges within Sablayan who are required to wear uniforms in their physical education activities. They have also regular intramurals every year. The Sangguniang Kabataan (SK) are also part of the target market. The business is an existing tailoring shop for sports uniforms. Its project is an expansion and upgrading its services so that it can be able to accommodate more clients. The shop is already known to be maker of sports uniforms at which customers are regularly coming to the site. With the expansion, the marketing will continue its promotions because it can already accept more customers.

III.

ORGANIZATIONAL AND MANAGEMENT ASPECT:

The business is an operating tailoring shop that specializes on sports uniforms. It is directly managed by the family of one of the partners which is members are sewers, cutters and designers. With the expansion, the business will get additional partner members that has an equal share of its capital and responsibilities. The new partners take the managing and marketing functions at which the former operators are still part of the working crew especially at the side of one of the partners who is member of the former owner.

IV.

TECHNICAL ASPECT:
The business site is located at Sitio Guiron, Barangay Poblacion, Sablayan, Occidental Mindoro. The place is a residence by one of the partners which is rented by the business. The expansion project will make a renovation to make additional space at its front part. The business acquires new sewing machines which is part of the expansion project to accommodate more customers and make the tailoring of uniforms fast.

V.

FINANCIAL ASPECT:

The total project cost is Two Hundred Thousand Pesos (200,000.00) which is shared equally by two (2) partners in a partnership type of business. The amount of investment will be used for acquisition of new sewing machines to upgrade and improve its services and accommodate more clients.With the additional capital investment, the business generates a total net income for three (3) years amounting to Php 243,137.60 at which it has an average net income per year of Php 81,045.86. From its average net income, the rate if return on investment (ROI) is 40.52 % and its payback period is 2.47 years.

The basis for the financial assumptions and projections is the actual 2010 gross sales from the services without yet its expansion. The assumption made was very conservative by increasing it only to 20% from 2010 sales for its expansion. The additional sewing machines will make the business more active.

CONCLUSION AND RECOMMENDATION

Based from the financial study presented thru the income statement and the actual operations analysis based from the year 2010 income, the business on Sportswear Shop Expansion project is very feasible and viable.

The reason why this study is conducted is to know whether or not an additional capital investment will be very beneficial and profitable to the proponents and their beneficiaries. As a whole the expansion is very feasible and therefore recommended for operation and funding if ever will be asking financing from available financial institutions.

JAXONS SPORTSVILLE PROJECTED BALANCE SHEET YEAR 1 YEAR 3

PARTICULARS

YEAR I

YEAR II

YEAR III

ASSETS Current Assets Total current assets Non-current assets Building & eqipments Less: accumulated depreciation Total non-current assets: Total Assets: Liabilities and Equity Liabilities Tax Total liabilities Equity Capital Net income Total equity Total liabilities and equity

Php 179,088.00 Php 179,088.00 Php 149,000.00 14,900.00 _____________ Php 134,100.00 Php 313,188.00

Php 267,124.64 Php 267,124.64 Php 134, 100.00 14,900.00 ____________ Php 119,200.00 Php 386,324.84

Php 382,040.95 Php 382,040.95 Php 119,200.00 14,900.00 ____________ Php 104,300.00 Php 486,340.95

Php 36,220.16 Php 36,220.16

Php 34,994.17 Php 34,994.17

Php 43,203.25 Php 43,203.25

Php 200,000.00 76,967.84 ___________ Php 276,967.84 Php 313,188.00

Php 200,000.00 151,330.47 ____________ Php 351,330.47 Php 386,324.64

Php 200,000.00 243,137.60 ____________ Php 443,137.60 Php 486,340.95

JAXONS SPORTSVILLE PROJECTED CASH FLOW YEAR 1 YEAR 3

PARTICULARS

YEAR I

YEAR II

YEAR III

Cash Inflow Revenues Total cash inflow

Php 788,220.00 Php 788,220.00

Php 867,042.00 Php 867,042.00

Php 953,746.20 Php 953,746.20

Cash outflow Operating expenses Direct cost Php 187,200.00 472,932.00 Php 220,560.00 522,225.20 Php 231,588.00 572,247.72

Tax Total cash outflow Net cash flow Cash balance ,Beg Cash balance,End

-------Php 660,132.00 Php 128,088.00 Php 51,000.00

36,220.16 Php 779,005.36 Php Php Ph 88,036.64 179,088.00 267,124.64

Php

34,994.17

Php 838,829.89 Php 114,916.31 Php 267,124.64 Php 3 82,040.95

Php 179,088.00

TABLE OF CONTENTS

JHALYS DARAKAN MIX

ACKNOWLEDGEMENT DEDICATION
INTRODUCTION PROJECT FEASIBILITY ABSTRACT

ii-iii
iv v-ix

I.GENERAL INFORMATION

Project Title Project Proponents Project site/location Project Cost Source of Funds Project Description

1 1 1 1 1 2

II. OBJECTIVES OF THE STUDY

General objectives Specific Objectives

2 2

III. SIGNIFICANCE OF THE STUDY IV.SCOPE AND LIMITATION V.RESEARCH AND SURVEY METHODOLOGY ` VI.MARKETING ASPECT
Target Market Market Strategy

3 3 3 4
4 4

 Market Research and Survey Projected market demand Competition

5 6 7

VII.

ORGANIZATION AND MANAGEMENT ASPECT

Organizational Structure Functions, Duties and Responsibilities Compensation

8
8 9 10

VIII.

TECHNICAL ASPECT
Project site/Location Location Map Figure 2A Project layout Figure 3A Production Description Sources of Raw Materials Equipment and Tools Utilities

11
11 11 12 13 14 15 16 17 18

IX.

FINANCIAL ASPECT

19

Total Project Cost Financial Assumptions Financial Analysis Profitability Analysis Conclusion and Recommendation

19
20 21 22 23

X.

PROJECTED COMPREHENSIVE INCOME STATEMENT

24

Annex A Annex B Project Cash Flow Annex C Project Balance Sheet

24 25 26