Father Saturnino Urios University

BUSINESS ADMINISTRATION PROGRAM

San Francisco St., Butuan City

Father Saturnino Urios University

In Partial Fulfillment
of the Requirements for the Degree of
Bachelor of Science in Business Administration

By:
James Adam Perez
Shiela Mae Plaza
Rowella Sagragao
Mickael Sanchez
Stephanie Joy Sarra

May 2019
Executive Summary

AIR TRAVEL BUTUAN (ATB) will begin operations this year and
provide adventure and sport/travel packages to people in the
Caraga, specifically the greater Butuan City area. An
opportunity for ATB's success exists because the regional
tourism and Caraga’s travel market industry is growing at
2.02% higher than what they had for the last quarter of 2017
and at around 297,015. ATB is poised to take advantage of
this growth and lack of competition with an experienced
staff, excellent location, and effective management and
marketing.

The Department of Tourism Caraga is optimistic that the

tourist arrivals towards the last quarter of 2018 and the
rest of 2019 will continue to increase as more tourist
prefer the region as a one stop destination for the
different tourism hot spot and Butuan City airport is the
most preferred entry point for most tourist. Over the past
few months, they have observed the increase in the domestic
and foreign tourist arrival in Caraga Region.

Data provided by DOT Caraga Region 13 revealed that the

first quarter of 2018, a total of 303, 014 tourists visited
the region, which is 2.02% higher than what they had for
2017 at around 297,015. DOT Caraga shows that the biggest
contributor in the increase in tourist in the region for the
first quarter has been for those visiting Surigao del Norte
where Siargao Island is located.
 The company's goals over the next three years are:

 Sales of 16, 942,390.50 by year three.

 Develop strategic alliances with service providers
nationally, internationally, and in the Butuan City
area.

In order to achieve these goals ATB needs to focus on the

four key areas of:

 Effective segmentation and targeting of travelers

within the larger travel market.
 Successfully position ourselves as travel specialists.
 Communicate the differentiation and quality of our
offering through personal interaction, media, and
regional marketing.
 Develop a repeat-business base of loyal customers in
order to create sufficient sales.

Out of the 150 respondents, 27% of the people would like to book
their flights in JL Express Travel because most of them are
repeat customers of the said agency because of its affordability
and excellent customer service. 26% of the respondents are
interested to try ATB’s service and also because of its good and
convenient location. 25% of the respondents still prefer Sky
Horizon Tours and Events and the remaining 22% chooses Butuan
Travel and Tours for it offers various types of promo tour
packages.

ATB will be a sole proprietorship owned and operated by Mr. Miko

Sanchez inside SM Butuan. The founder and employees of ATB are
experienced travel industry professionals and are passionate
about the activities ATB will promote and offer. The start-up
cost is low. It is easier and faster to set up. As a travel
agency business, success is very high in percentage due to the
reason that travel and leisure is always on trend and people
need these to relax and unwind.

ATB's total start-up capital requirement is approximately

P2, 000,000.00. Start-up will be financed through the owner's
personal investment. The travel agency market is competitive,
and the franchised technology from Unified Philippines offering
the following:

 UPS Express Ticketing- allows booking of domestic and

international services flights and sea travels, reaching
out the people with convenient and easy transaction in all
of its GPRS Branches nationwide. Discount airfare brokers
have taken advantage of the system by offering tickets
online at discounted rates.
 Travel Insurance- The franchised system provided by Unified
Phil gives the agency and individuals the ability to
perform travel related research, travel insurances.
 Loading Business- through its UPS Express Loading, it
provides a loading business using the Unified System that
load all networks locally and internationally
 UPS Remittance Services or money transfer- provides fast,
secure and convenient online bills payment solutions.

Franchising this system has increased price competition, with

its Computerized Reservation System; the agency-to-customer
transaction increases its speed and efficiency. They have also
increased the start-up costs for travel agencies who wish to be
competitive. Additional trends include caps on agency
commissions by many of the larger airlines, increases in
adventure travel, and reduction of profit margins.

The travel industry is highly fragmented. There are large

national chains, small home-based businesses, consolidators on
the Internet, etc. Membership numbers in some of the travel-
related associations give some indication of the number of
participants in this market.

Locals of Caraga and tourists, has a large concentration of

outdoor recreation enthusiasts. These individuals, couples, and
groups interested in tourist spotting and adventure are ATB's
primary customers. ATB has established relationships with
Unified Phil which provides and are tied-up with travel-related
products and services all over the country and abroad. Major
airlines have been selected as our primary ticket providers in
part because they do not cap the agent's profit on tickets. This
allows us to capture the margin on ticket sales that was for
many years the industry standard. Market research has enabled us
to identify and establish working relationships with service
providers.

ATB has approximately 11 immediate competitors in Caraga, all

are DOT accredited agencies and 3 major competitors inside
Butuan City. ATB is researching the market to identify potential
opportunities for future sales in this rapidly changing
environment. ATB's long-term goal is to establish itself as an
internationally recognized provider of top-of-the-line travel
and tour agency. This goal does not prohibit ATB from
participating in additional segments. It does, however, provide
a corporate focus and a differentiated offering.

ATB's target customers are individuals who want to travel in and out
of the country for relaxation, business matters, or spiritual/self-
actualization and those interested in popular tourist and adventure
seeking activities. ATB's most important target customers,
however, are business people who have travelling engagements, students
who want to unwind and loosen up, adventure-seekers who desire to
explore and discover, travelling alone or with company, those who are
travelling domestically and internationally.

The business has their corresponding responsibilities and

obligations towards the economy, community, government, and
environment. They also provide and stated policies and rules to
comply in order to maintain a harmonious relationship between
customers and the management it, and how to maintain a good
relationship with the public and how to connect with them. They
have also shown the purpose of their project and how will it
help and provide to the economy and community. They also comply
with what requirements should be needed in order to build the
business, as they will comply with the laws and regulations and
to ensure safety in running the business.
 MARKET STUDY

1. Business Description

AIR TRAVEL BUTUAN (ATB) arrange all types of domestic and

international travel, from hotel and resort accommodations to air

and sea transportation, and tour packages. Also provides

individual and group travel to leisure and corporate clients.

Services and products provided by ATB include travel

consultation, pre-arranged tours, custom packages, reservations

for lodging. ATB is a travel business giving you a 24/7 online

services. Act as an agent, selling travel products and services

on behalf of a supplier. Also we can provide assistance with

travel insurance protection, bills payment, remittance service,

and loading system. ATB can position itself as a niche service

provider within the travel and tourism market and offer high

quality travel packages for various travel. And our travel agency

will give well- informed, appropriate advice to clients about

where and when to travel based on their needs.

1.1. Mission

ATB’s mission is to become the foremost provider of

enjoyable and adventure travel to the people coming from

and into Caraga and Butuan City. ATB's employees and owner

are travel enthusiasts themselves as well as seasoned

travel industry professionals. ATB seeks to connect tourist

 and travel newcomers and veterans with service providers,

adventure activities, and accommodations that fit the

client's desires, budget, and skill level. We at AIR TRAVEL

BUTUAN, “Help people travel smart and add value to every

travel spend”.

1.2. Vision

Be the Caraga’s most trusted and innovative travel

agency

1.3. Objectives

 Sales of 16, 942,390.50 by year three.

 Develop strategic alliances with service providers
nationally, internationally, and in the Butuan City
area.
 To offer the traveling services at very reasonable prices.

 To offer an airline ticket including some international

flights.

 To add value to different travelling sector of the society.

 Providing ease and sort of convenience to the customers in

booking their flights.

2. Business Logo

3. Service

Air Travel Butuan is a Philippine travel agency, serving

the growing needs of travel and leisure industry in the
Philippines. The aim is to provide travelers both local and
foreign the privileged to explore the beauty of the Caraga
and Philippines, the country known in the world for their
friendly smile and warm hospitality. Air Travel Butuan is a
highly customer oriented travel agency; with a high
customer oriented focus, our primary goal is to exceed your
expectation.

Our experienced and highly trained information officers

will provide professional business travel advice and
itinerary planning. We prepared to assist and advise you in
every aspect of your travel needs. We can issue the new
generation e-ticketing. We can keep the records of all our
 valuable clients, their meal preferences, seat preferences,
frequent flyer card details etc.

In our Customer Relation Management System which enable us

to give our corporate easy, effective and accurate service.
Not forgetting the market competition and keeping in mind
that every client needs “Best Buy” we are here to offer the
best possible in the market. We are fully equipped with
advanced technology in our front office as well as back
office system.

We offer reasonable prices for travel fares to suit the

taste of Filipinos and foreigners alike. We look forward in
helping you in your journey and travel while in the
Philippines

4. Market Environment

4.1. Butuan is a city in the Agusan del Norte in

the Philippines. Located at the Northeastern part of Agusan
Valley sprawling across the Agusan River is Butuan City,
known for its colorful history and culture.

By Plane:
A domestic airport in Bancasi can get you to Butuan
from Manila (one (45 minutes) either by Cebu Pacific or
Philippine airlines.

By Boat:
You can reach the city from the port in Nasipit, Agusan del
Norte about 27 kms from Butuan city.
 • Cokaliong Shipping lines have ferries to Cebu and Bohol.
 2Go have a ferry one time a week to Manila via Cebu.

AIR TRAVEL BUTUAN has identified one potential location for

office space. This potential location is in the heart of the
City, inside the city’s largest mall, the SM Butuan . Once
successfully established, ATB will be one of approximately
11 travel agencies in Caraga and in Butuan City . ATB will
be one of the best travel specialists in the area.

 An average of 150 people (travelers) passes by the area for

the whole day. Target is to get at least 25% which is 37.5.
 Most are business travelers, leisure travelers, backpackers,
students and tourists.
 There are cars, buses and jeepney stations around the area.
 It is in the heart of the city, just along the nationa hi-
way, near Gaisano Mall Butuan and Robinsons Mall Butuan,
surrounded by private and public schools (high school and
college) public and private hospitals, private and
government offices.

4.1.2. Demand and Supply Factors and Trends

Some people go into different places to find things that they

really want and make them feel contented for a while. In order
for travelling into places is possible, one must need to ask for
the assistance of travel agency, which can suggest and recommend
places that are really relaxing. So those people who are in need
of assistance for that matter we are pleased to help them.
They’re our prospect clients and we want them to experience our
service with so much pleasure. To develop Air Travel Butuan
targeting strategies and marketing efforts, demand analysis
helps the business in order to measure the current demand as
well as project the future demand. The location of our proposed
business is at SM Butuan, J.C. Aquino St., Butuan City,
Philippines. For these reasons, the proponents conducted a
survey around the area of Butuan City with an estimated number
of 150 respondents daily composed of regular and some frequent
travelers.

Demand Study

Do you Love Travelling Purpose of Travel

Yes No Business Trip Short Break Special Occasion

Family Visit Holiday
2%

27% 19%

23%
98% 17%
14%

Usual Booking Period Channel of Booking Tickets

Same Day of Departure Week Before Departure Airline Website
2-4 Weeks before 4-8 Weeks before Travel Agency
2-6 Months before 1 Year before Online Travel Discount Site

3% 10%
6%
25% 29%
9%
15%

38% 65%
 Travel Insurance Inclusion Importance of Travel Agency

Yes No Make tour easier and convenient No Importance

10%

39%

61%
90%

Qualities of a Travel Agency

Safety and Security
Ability to provide best options and prices
Reliable
Aving Money
Accessibility

10%
10%
40%
20% 20%

1. There are 150 respondents

2. 98% of the respondents say they love to travel.

3. 63% prefers to travel by AIR, 20% by SEA and the remaining 17%

by land

4. 50% choose to travel monthly, 26% weekly and 17% yearly

5. 59% prefers Cebu Pacific as the airline of choice, 28% PAL and

11% Airasia and the 2% for Skyjet

6. 27% of the respondents travel for holidays, 23% for special

 occasion, 19% for business trip,17% for family visit and the

remaining 14% is for family occasion

7. 38% of the respondents usually booked their tickets 2-6 months

before the travel dates, 25% book a year before

8. 65% of the respondents prefer to book their tickets through a

travel agency, 29% through an airline website and 6% through

an online travel discount site.

9. 61% prefers to travel without an insurance

10. 40% answered that the qualities that want in a travel

agency is Safety and Security, 20% Ability to provide the best

options and prices, 20% Reliable, 10% Saving money and 10% for

Accessibility.

11. 90% answered that a travel agency make their tour easier

and convenient while 10% answered not.

 ATB SERVICE QUALITY
Excellent Good Poor

10%
29%

61%

From the survey result, there are 150 travelers answered about
the service quality of the business. Only 10% or 15 people
answered poor. Meaning they are not satisfied with the service
we are offering. On the other hand, 61% or 92 people find the
service good and satisfy their travel needs and 43 people or 29%
said that the service was excellent.
 RESPONDENTS WHO PREFER SM
BUTUAN AS THE BUSINESS
LOCATION
Yes No

12%

88%

Based on the survey result most respondents would like to have

business be situated in SM Butuan garnering 83% of 150 while the
remaining 12% don’t want to have a branch in SM Butuan
Therefore, Air Travel Butuan has a high probability if it will
be situated in SM Butuan.
4.4 Target Market

The travel agency offers a quality service to customers who are in

need of assistance regarding their travels. The customers will be
entertained by a hospitable reservation officer in the receiving area
concerning their inquiries. Their reservations will be processed in
the database to find out its availability. Once the transaction is
validated, it will be stored and the necessary information will be
given to the client (i.e. schedule, mode of payment, and etc.). The
place has an accommodating ambiance where customers won’t feel
anxious to express their thoughts.

The service is available to all prospective customers who want to

travel in and out of the country for relaxation, business matters, or
spiritual/self-actualization. The business target market is the
people around Butuan City and its visitors.
TARGET MARKET

Age 18 and above

Gender Male and Female
Occupation Employee, Businessmen, Self-
Employed, Students
Socio-Economic Status Class A to E
Location Butuan City
Description  They are business people who
have travelling engagements;
 They are students who want
to unwind and loosen up;
 They are adventure-seekers
who desire to explore and
discover.
 Travelling alone or with
company.
 Travelling domestically and
internationally
4.3. MARKETING AND POSITIONING PLAN

Despite the competition with another travel companies, we thrive

to offer good-quality travel service to our clients. The firm
maintained the dominance as it is reported and presented to the
market. AIR TRAVEL BUTUAN is a highly customer oriented travel
agency.

AIR TRAVEL BUTUAN should be located near terminal airports and

in major malls in the city so that the tourist and other
potential clients discover them immediately. The company must
put promo ads outside their office and big sign boards, it can
also an advantage to catch the people who pass by their business
location.

The company should put more ticketing office in malls like in SM

malls, Robinsons, because more prospect customers and foreigners
considers mall as the most convenient place in booking plane
tickets.

4.4 MARKET COMPETITORS

In Caraga region alone, in which Butuan City is part of, there

are 11 accredited travel agencies as of March 2018, which
offer variety of tours that people can avail at reasonable
prices. These agencies include Butuan Travel and Tours, Golden
Tara Travels and Tours, Island Vacation Travel and Tours, JL
Express Travel and Services, JVP Int’l Travel and Tours, EDRO
Travel and Tours Booking Outlet, One Corporate Grand Tours,
 Inc., Travel Essentials, Michaelinian Travel and Tours, Rex
Travel Agency, and Sky Horizon Tours and Events.

Prefered Travel Agencies

JL Express Travel and Services Butuan Travel and Tours
Sky Horizon Tours and Events Air Travel Butuan

26% 27%

25% 22%

Out of the 150 respondents, 27% of the people would like to book
their flights in JL Express Travel because most of them are
repeat customers of the said agency because of its affordability
and excellent customer service. 26% of the respondents are
interested to try ATB’s service and also because of its good and
convenient location. 25% of the respondents still prefer Sky
Horizon Tours and Events and the remaining 22% chooses Butuan
Travel and Tours for it offers various types of promo tour
packages.
SWOT
STRENGTHS HOW STRENGTH WILL BE LEVERAGED

1. Quality service to both local and - Strengthen client service

foreign travelers

2. Highly customer oriented travel agency - Continuously develop a good and

3. Client-focused staff quality service

4. One of the friendliest Philippine travel - Put more client focused staff

agency
- Put more friendly and train staff to be
5. Good business location more customer oriented

- Put more offices in malls and business

areas

WEAKNESS HOW WEAKNESS WILL BE MINIMIZED

1. New in the industry - Develop more advertising strategy

2. Less in advertisement - Give promotional incentives to

3. Fewer promoters promoters

OPPORTUNITIES HOW TO CAPITALIZE

1. Profit potential of a good advertising - Continuously develop a good and

campaign and promoters quality marketing strategies

2. Development of new technology - Increase advertisement and provide

3. Increase in tourism growth promos and discounts

4. Increase in loyal customers

 THREATS HOW COMPANY WILL MINIMIZE THREATS

1. New competitors - Put more cheap and reasonable

2. Growth of existing competitors promotional price

3. Threats of terrorist attack - Develop more marketing plans and

4. Unpredictable weather more strategies

5. Recession - Up to date weather forecasts and news

5. Sales Strategies
5.1. Strategic Partnership and Linkages

In order to maintain and improve Air Travel Butuan competitive

advantages, the following business strategies are suggested
for the company to remain competitive in their industry:

1. Continue to develop more highly customer oriented

staffs

The company should have high qualifications when hiring a

customer care employee because this will give advantage to the
company, more new clients will encourage booking their flights
to AIR TRAVEL BUTUAN if the staffs are friendlier than the
other travel and tours company.

2. Develop good advertising campaign and powerful

promotional strategies
Advertising is very important for it is the means of
communicating to offer the products or services of the company
to influence more people to make a purchase.

The company should be aggressive and place TV ads, print ads,

and more internet ads. They can be cost efficient and be more
advantage of the internet and its ability to pass out
information and reach a wide range of geographical area at a
very affordable cost. They can also offer incentives for the
passengers who travel frequently, and give discounts and
freebies for other type of passengers. Offerings packages of
vacation trips and tours for discounts can also be a very good
promotional strategy.

3. Business location
ATB should be located near terminal airports, so that the
tourist and other potential clients discover them immediately.
The company must put promo ads outside their office and big
sign boards, it can also an advantage to catch the people who
pass by their business location.

4. Branch out
The company should put more ticketing office in malls like in
SM malls, Robinsons malls.

5. Internal Diversification
Air Travel Butuan may elect to broaden its geographic base to
include new clients, either within the country or in
international markets. It could pursue an international
diversification strategy by finding new clients for other uses
of their services.
5.2. Distribution Strategy/ Marketing Budget

TIME FRAME PRODUCT OBJECTIVES BUDGET

ACTIVITIES

June- July 2019 Hire qualified and This will give P20,000.00

friendly employee advantage to the

company, more

new clients will be

encourage to

booked their

flights and avail

package tour if

staff are more

friendly

August 2019-September Advertising To be more 20,000.00

2019 campaign popular in print

ads and internet

ads

October-November 2019 Store Opening Opening of the 10,000.00

store along with

the opening of the

SM Butuan
  In our grand launching we are giving 20% discounts for
families and groups (10 pax above).
 We are giving seasonal promos in summer seasons and
Christmas seasons. Giving of Brochures.
 Creation of official website, FaceBook and twitter to be
more accessible.
 Sub-agent to tie up with different schools and universities.
 Attending travel events and conventions.
 Souvenir bags and tumbler that our customers can use when
they are travelling.

5.3. Pricing Strategy

 Domestic Ticketing: P300 commission/person/per way

 International Ticketing: P800 commission/person/per way
 Technical Study

1. Business Model

Air Travel Butuan is a Butuan City based travel and Tour Company
that offers travel and accommodation packages at very affordable
rates for local destinations. Air Travel Butuan is a community-
based online platform for listing and renting local travel
tours. It provides travel-planning services and online booking
reservation for an unforgettable vacation nationwide. Air Travel
Butuan is a full service travel company offering leisure travel
services and advisory, striving for client satisfaction by
providing the highest level of service delivering efficient
detailed oriented travel planning while generating noticeable
savings.

Revenues

1. Establishing strong social media presence

Air Travel Butuan imposes website for this is an effective tool
for establishing your branding, maintain consumer satisfaction
through customer relationship management and even enhancing your
reputation through good public relations.

2. Referrals

Air Travel Butuan establishes referrals for effective increasing

of revenues and for reducing sales expenses and sales cycle.

3. Travel Insurance
Air Travel Butuan believes many travelers are willing to pay for
when planning a trip. As such, Air Travel Butuan offer their
clients insurance that protects them in the event of
cancellation before a departure, trip interruption, flight
cancellation, baggage loss and accidents or unexpected illness.

3. Group Travels

Air Travel Butuan is interested in pursuing this revenue stream

should consider marketing to individuals who share similar
interests, families or companies that may be interested in
sending a top-producing corporate team on an unforgettable
getaway.

4. Services

 National or domestic airline reservations and ticketing

 National or domestic travel packages
 Corporate and group travel arrangements
 Travel consultations
 Vacation planning
 Customize travel itineraries

Automated Reservation

The company have franchised computer software system called UPS

Express Ticketing offered by UNIFIED Philippines that allows
booking of domestic and international services flights and sea
travels, reaching out the people with convenient and easy
transaction in all of its GPRS Branches nationwide. Discount
airfare brokers have taken advantage of the system by offering
tickets online at discounted rates.
This software provides instant information of flights schedules,
class for service and pricing in addition to hotel
accommodations and other services.

2. Location (Vicinity Map)

3. Building

The company will rent out a space inside the SM Butuan

4. Technology

The company franchised technology from Unified Philippines

offering the following:

 UPS Express Ticketing- allows booking of domestic and

international services flights and sea travels, reaching
out the people with convenient and easy transaction in all
of its GPRS Branches nationwide. Discount airfare brokers
have taken advantage of the system by offering tickets
online at discounted rates.
 Travel Insurance- The franchised system provided by Unified
Phil gives the agency and individuals the ability to
perform travel related research, travel insurances,
 Loading Business- through its UPS Express Loading, it
provides a loading business using the Unified System that
load all networks locally and internationally
 UPS Remittance Services or money transfer- provides fast,
secure and convenient online bills payment solutions.

5. Operating Requirement

5.1. Physical Premises Requirement

The office has the size of 3.5x4.0 meters that can accommodate
8-12 persons at the same time. With fully air-conditioned room
that added vibrant to its ambiance.
 5.2. Tools and Equipment

A. Office Equipment and Furniture

OFFICE EQUIPMENT QUANTITY UNIT COST TOTAL COST

 Computer
2 20,000.00 40,000.00
 Computer Software 1 65,000.00 65,000.00
 Printer 1 6,800.00 6,800.00
 Fax Machine 1 11,800.00 11,800.00
 Television 1 33,000.00 33,000.00
 Air Conditioner 1 30,000.00 30,000.00
 Water Dispenser 1 5,000.00 5,000.00
SUBTOTAL 191,600.00
FURNITURE AND
FIXTURE
 Office Table 1 5,100.00 5,100.00
 Clerical Chair 2 1,600.00 3,200.00
 Customers’ chair 2 1,100.00 2,200.00
 Couch 2 12,900.00 25,800.00
 Shelf 2 11,200.00 22,400.00
 Center Table 1 5,000.00 5,000.00
 Table 1 24,600.00 24,600.00
 Mini Vault 1 5,000.00 5,000.00
SUBTOTAL 93,300.00
TOTAL 284,900.00
 A. Utility Requirements

• Electricity-for purposes of estimating expenses, we

separate this cost into a variable component and a fixed
component.

• Water-consumption- is less than 10 cubic meters per month.

• Telecommunication- PLDT Subscription Plan, Postpaid-Globe,

Postpaid-Smart

PROJECTED UTILITIES EXPENSES

UTILITIES MONTHLY YEARLY

Electrical – Fixed 10,000.00 120,000.00

Water 1,000.00 12,000.00

Telecommunication 5,000.00 60,000.00

Total 16,000.00 192,000.00

Total Project Cost

Costs Amount

Leasehold Improvements

Materials 150,000.00

Labor 50,000.00

Overhead 35,000.00 P235,000.00

Office Equipment 191,600.00

Furniture and Fixtures 93,300.00

Office Supplies 12,680.00

Utilities Expenses 192,000.00

Compensation Expense 230,400.00

Initial Operating Expense

Business Registration
20,000.00
Prepaid Rent (12 months)
720,000.00
Marketing and Advertising
20,000.00
Hiring and Training
20,000.00
Store Opening
10,000.00
P790,000.00

Total

Total Initial Cost 1,744,580.00

Cash Reserved for Operations 270,020.00

Total Project Cost P2,000,000.00

6. Services Process

RESERVATION PROCESS

1. A person comes to inquire/reserve a ticket.

2. Fill up customer forms and provide the passenger’s
details.
3. Checking into the system; flight inquiry, fare and
discount if any.
4. Relay to the customer the details of the flight before
confirming the system.
5. Ticket is generated
6. Ticket is confirmed
7. Ask for the payment
8. Print the itinerary receipt
 MANAGEMENT STUDY

This chapter tackles about the entire organizational arrangement

of the business. The management aspect suggests a clear and
precise identification of duties and responsibilities, flow of
authority and manpower level requirement. This contains the
organizational chart and the qualifications of the people
involved the formation of the business organization structure.

1. Form of Business Organization

Air Travel Butuan is a sole proprietorship form of business. A

sole proprietor is composed of one owner and manages by itself,
where the capital, liabilities and profits are equally fixed. It
is also a type of business organization where only the owners
are the one who will implement the management and decision-
making of the business.

2. The Organizational Chart

OWNER MANAGER

INFORMATION OFFICER ACCOUNT OFFICER

 3. Organizational Policies and Procedures

Personnel Policies
• The management will set qualification for the
different job position.
• Every applicant should undergo screening, examination,
and interview.
• After careful selection, those who have been hired
will undergo training and orientation.
• Employees are required to wear their prescribed
uniform.
• Employees are required to always wear their
identification card (ID) in time of work.
• No smoking in the workplace.

• Generally, employee are allowed and paid only for 8

hours of work.
• Employees are required to work on their respective
schedule hour.
• A one-hour break shall be given between the working
hours.
• In case of absent employee/s, the manager will take
the duties and responsibilities
• The officers and employees will be paid every 15th and
30th of the month.
• The cut-off for the computation of payroll is on the
10th and 25th day of the month

Service Policies
• The store will be opened at 8:00 am and will be close
at 4:00 pm.
• Cleanliness inside the company should be maintained.
 • All information critical to the operation of the
business are adequately protected and secured.

Collection Policies
• The payments made by the customers are non-refundable
for the unconsumed/unused tickets.
• Credits are not allowed

Financial Policies
• Loans will be acquired if the company needs additional
cash either for operations expense or purchase of
additional equipment.
• Payment of interest will be made at the end of each
month. It assumed that a legal per annum rate of 12%
is the interest rate and the principal is payable in
one year.

Equipment Policies
• Equipment that is not working will be subject to
repair immediately
• New equipment will be acquired 6 months before the old
asset/s are obsolete or fully-depreciated.
• New equipment will be acquired when the old equipment
are damaged or cannot be repaired.
• Old equipment will be disposed when the equipment is
obsolete or fully-depreciated.
• Old equipment will be disposed when the equipment is
damaged and cannot be repaired
4. Management and Personnel Requirements and Terms of
Reference

Position: Owner Manager

Duties and Responsibilities:

 Managing the business

 Supervising the employees
 Facing and solving customer complaints
 Participates in decision-making
 Supervise the employee

Job Specification:

 At least 25 years old and above

 At least College Level with at least 2 years work
experience with the related field
 Must have pleasing personality
 With good communication skills
 Be able to handle pressure
 Should possess great hospitality skills

Position: Information Officer

Duties and Responsibilities:

 Finds best flight schedule

Job Specification:

 At least 21 years old and above

 Male/Female
 Must be computer literate
 Must be a good listener
  Must have pleasing personality
 Must be flexible

Position: Account Officer

Duties and Responsibilities:

 Assist in entertaining clients

 Receives payment
 Issue receipts, refunds and change to the customers
 Greet the customers
 Should always provide receipt every transaction
 Should count and inform the customer about the amount
received

Job Specification:

 At least 21 years old and above

 Male/Female
 Must be computer literate
 Be able to handle pressure
5. Compensation and Benefits

Position Monthly salary Employment status Benefits

-
Owner Manager - -
9,600.00 SSS, Pag-ibig.
Information Contractual
Phil health
Officer
SSS, Pag-ibig.
Account Officer 9,600.00 Contractual
Phil health

Subtotal 19,200.00
Total Php 230,400.00

6. Legality of Operations; Registration Requirements

Legal and Taxation Aspects

• The business will comply with all the necessary legal

requirements with an estimate cost of P20, 365.00.
• The business will pay an income tax according to the
provisions of NIRC (30% regular corporate income tax).
• The business is also required to pay a value-added tax of
12% on its gross receipts and must file the return not
later than the 25th day following the end of each month or
20th day following the end of each quarter.
 Financial Study

Financial feasibility is one of the most important feasibility

analyses required to carry out a new project. It is a process

through which profitability of the project can be estimated. The

chapter represents the total start–up cost, accounting assumptions

and policies, sources of financing the project, financial

statements with 5 years projection and financial ratios of the

business.

1. Price Assumption/Year

The following are the accounting policies and assumptions of AIR

TRAVEL BUTUAN:

1. The customers will pay upon the confirmation of their tickets.

2. Daily Sales should be deposited on a certain bank the day after.

3. All expenses shall be paid when met.

4. The owner manager shall be responsible for filling tax return.

5. Owner manager will ensure the employees benefits such as SSS,

PHIL Health and PAG-IBIG.

6. AIR TRAVEL BUTUAN should have income statement where financial

performance is assessed by giving a summary of how the business

incurs its revenues and expenses, statement of cash flows to know

outflow and inflow of the money, statement of owner’s equity which

portrays changes in the capital balance and the balance sheet which
is the statement of the assets, liabilities, and capital of a

business.

2. Source of Fund

AIR TRAVEL BUTUAN

Sources and Applications of Funds for Startup

SOURCES OF FUNDS

Owners' Investments
Stakeholders' Equity 2,000,000.00
Total Investments 2,000,000.00

TOTAL INVESTMENTS 2,000,000.00

APPLICATIONS OF FUNDS

Assets Purchases
Office Equipment
Computer 40,000.00
Computer Software 65,000.00
Printer 6,800.00
Fax Machine 11,800.00
Television 33,000.00
Air Conditioner 30,000.00
Water Dispenser 5,000.00
Subtotal 191,600.00
Furniture and Fixture
Office Table 5,100.00
Clerical Chair 3,200.00
Customer's Chair 2,200.00
Couch 25,800.00
Shelf 22,400.00
Center Table 5,000.00
Table 24,600.00
Mini Vault 5,000.00
Subtotal 93,300.00
Total Assets 284,900.00

Startup Expenses (First 3 Months Cash Needs)

Utilities Expenses
Electrical/Fixed 120,000.00
Water 12,000.00
Telecommunication/Internet 60,000.00
Total 192,000.00

Leasehold Improvements
Materials 150,000.00
Labor 50,000.00
Overhead 35,000.00
Total 235,000.00
 Initial Operating Expenses
Business Registration 20,000.00
Prepaid Rent 720,000.00
Marketing and Advertising 20,000.00
Hiring and Training 20,000.00
Store Opening 10,000.00
Total 790,000.00

Compensation Expenses 230,400.00

Office Supplies 12,680.00
Total Expenses 1,744,980.00

Working Capital 255,020.00

TOTAL
APPLICATIONS
OF FUNDS 2,000,000.00
 3. Income Statement

AIR TRAVEL BUTUAN

Income Statement
For The Year Ended December 31, 2020, 2021,
2022

YEAR
YEAR 1 YEAR 2 3
Revenue

Gross Revenue 7,992,000.00 9,590,400.00 11,508,480.00

Net Revenue 7,992,000.00 9,590,400.00 11,508,480.00

Working Capital

Gross Profit 7,992,000.00 9,590,400.00 11,508,480.00

Expenses
Operations

Utilities Expense 192,000.00 192,000.00 192,000.00

Compensation 230,400.00 230,400.00 230,400.00

Office supplies 126,600.00 98,115.00 88,620.00

Less: Depreciation

Office Equipments 191,600.00 163,115.00 153,620.00

Furniture and
Fixture 93,300.00 73,455.00 66,840.00

Prepaid rent 720,000.00 720,000.00 720,000.00

Store Opening 10,000.00 0.00 0.00

Leasehold
Improvements 235,000.00 0.00 0.00

Total Operations 1,798,900.00 1,477,085.00 1,451,480.00

Finance &
Administration

Hiring and Training 20,000.00 10,000.00 10,000.00

Business
Registration 20,000.00 20,000.00 20,000.00
Total Finance &
Administration 40,000.00 30,000.00 30,000.00

Sales &
Marketing
Marketing and
Advertising 20,000 20,000.00 20,000.00
Total Sales &
 Marketing 20,000.00 20,000.00 20,000.00

Total Expenses 1,858,900.00 1,527,085.00 1,501,480.00

Income Before
Taxes 6,133,100.00 8,063,315.00 10,007,000.00

Income Tax
Expenses (Savings) 1,839,930.00 2,418,994.50 3,002,100.00

Net Income 4,293,170.00 5,644,320.50 7,004,900.00

Cumulative Net
Income 4,293,170.00 9,937,490.50 16,942,390.50
 4. Projected Cash Flow Statement

YEAR 1 YEAR 2 YEAR 3

Working Capital 255,020.00 6,502,040.00 14,650,790.00

Cash Inflows

Cash from revenues 7,992,000.00 9,590,400.00 11,508,480.00

Total Cash Inflows 7,992,000.00 9,590,400.00 11,508,480.00

Available Cash Balance 8,247,020.00 16,092,440.00 26,159,270.00

Cash Outflows
Operations

Utilities Expense 192,000.00 192,000.00 192,000.00

Compensation 230,400.00 230,400.00 230,400.00

Office supplies 12,680.00 12,680.00 12,680.00

Office Equipments 191,600.00 163,115.00 153,620.00

Furniture and Fixtures 93,300.00 73,455.00 66,840.00

Prepaid Rent 720,000.00 720,000.00 720,000.00

Store Opening 10,000.00 - -

Leasehold Improvements 235,000.00 - -

Total Operations ₱1,684,980.00 ₱1,391,650.00 ₱1,375,540.00

Finance & Administration

Hiring and Training ₱20,000 ₱10,000 ₱10,000
Business Registration 20,000 20,000 20,000
Total Finance & Administration ₱40,000.00 ₱30,000.00 ₱30,000.00

Sales & Marketing

Marketing and Advertising 20,000 20,000 20,000
Total Sales & Marketing ₱20,000.00 ₱20,000.00 ₱20,000.00

Total Cash Outflows ₱1,744,980.00 ₱1,441,650.00 ₱1,425,540.00

Net Increase in Cash ₱6,247,020.00 ₱8,148,750.00 ₱10,082,940.00

Ending Cash Balance ₱6,502,040.00 ₱14,650,790.00 ₱24,733,730.00

5. Revenue Projections

AIR TRAVEL BUTUAN

Revenue Projections - 3 Years Forecast

YEAR 1 YEAR 2 YEAR 3

Respondents 150
Target
Customers 25%
Commision per person/ way (Domestic) 300
Comminsion per person/way (International) 800

Target Sales per day= 37pax X 600 22,200

Monthly Sales 666,000 ₱7,992,000.00 ₱9,590,400.00 ₱11,508,480.00

TOTAL ₱7,992,000.00 ₱9,590,400.00 ₱11,508,480.00

Assumption: 150 Respondents are frequent travelers who consider booking tickets in Sm
Average n umber of target customers per day is 25% of the
respondents
Minimum commission on a roundtrip ticket is
600 per passenger
Average daily sales on commission remains constant in three
consecutive years
Monthly sales increases to
20% per year.

Legend: Year 1 666,000

Year 2 799200
Year 3 959040
 Regulations and Environmental Issues

1. Waste Disposal and Management Plan

Waste disposal refers to the discharge, deposit, dumping,

spilling, leaking or placing of any solid waste into or in any
land while disposal sites refer to areas where solid waste is
finally discharged and deposited. It is regarded as the least
preferred method of managing solid waste although it plays an
important role in dealing with residual waste. Almost all solid
wastes ended up at dumpsites before the passage of RA 9003.

To ensure the business can contribute for the good of the

community and environment, the business used disposable
materials. Disposable materials are easy to classify and can
cause less pollution. And less pollution is good for the
community. AIR TRAVEL BUTUAN follows the regulations of the city
in terms of proper waste disposal. The waste segregation is
divided into three: biodegradable, recyclable and non-
biodegradable. The management will check every day if the
garbage is properly disposed of. Also, to ensure that the
service will follow this rule every time. They are responsible
to clean the area before and after the operation so that there
will be no garbage scattering around the place. This is to make
the beauty of the undamaged.

2. GOVERNMENT REGULATIONS (PLANS FOR COMPLIANCE)

All businesses, regardless of type, must comply with statutes
(laws passed by legislative bodies) and regulations (rules
enacted by regulatory agencies to carry out the purposes of
statutes). These statutes and regulations can come from all
levels of government; federal, state, and local. Some of these
statutes and regulations apply regardless of the nature of the
business and, of course, a venture engaged in business in more
than one state or local jurisdiction must comply with
applicable laws and regulations from all applicable
jurisdictions.

Air Travel Butuan regulates the rights and duties of people

carrying out business in order to ensure fairness. Ensure the
treatment of employees is fair and consumer. Regulates
dealings between business and its suppliers and ensure a level
playing field for competing business. And it is required to
register the sole proprietor business to (DTI) Department of
Trade and Industry (LGU) Local Government Units where your
business is located (Barangay, Mayor office), and lastly to
the (BIR) Bureau of Internal Revenue.

3. Intellectual Property
Air Travel Butuan is a sole proprietorship it is the most
basic formation a business can undertake. The formation does
not require any registration with the state. A business
contract needs to specify the names of all parties and should
focus on as much detail as possible to name each party. This
includes the use of Employer Identification Numbers and the
proper titles for companies. Other forms of businesses need to
include their title in their company name.

Air Travel Butuan directly linked to the personal finances of

their owners. Neither structure is a legal entity. Sole
proprietors don’t need operating agreements. But only an
Employment Agreement is a contract between an employer and
employee in Air Travel Butuan

A single proprietorship is the simplest form of business

organization in the Philippines. It is not encumbered by the
strict regulatory laws and rules imposed upon corporations and
partnerships.

Government registration of a single proprietorship business is

simple. It is made through the Bureau of Trade Regulation and
Consumer Protection of the Department of Trade and Industry
[DTI].

Single proprietorship, liability of proprietor:

The single proprietor has unlimited liability in the sense
that creditors of his business may proceed not only against
the assets and property of his business but after his own
personal assets and property. Creditors with whom he had
incurred personal debts may also run after the assets and
property of his single proprietorship business. Simply put,
the law does not make any distinction between his personal
affairs and his business transactions. Before the eyes of the
law, they are one and the same, his business being a mere
extension of his person.
 Socioeconomic Impact

The Socio-Economic Impact will clearly state its relevance to

the external aspects of the business. This chapter will discuss
the business responsibilities, obligation towards the
government, customer and economy.
1. Provide opportunities for competent and qualified job
seekers and unemployed individuals.
2. Will help generate income for the government through
payment of taxes.
3. Will help our countrymen by promoting tourism within the
country.
4. Coordinates with various organizations and groups that aim
to protect natural resources.
Final Findings and Recommendations

1. Market Feasibility
The creativity and initiative of the owners made their
business becomes appealing to the market especially those
people who loves to travel. People work so hard and consider
traveling as their form of motivation to de-stress and unwind.
ATB is a travel agency that guarantees quality of service and
affordable travel fares and tour packages. Their target
markets are students, professionals, and workers who are from
and coming in Caraga and most especially in Butuan City.

2. Technical Viability
The services that we are going to offer are of high demand.
Our business offers UPS Express Ticketing allows booking of
domestic and international services flights and sea
travels, Travel Insurance, Loading Business and UPS
Remittance Services or money transfer provides fast, secure
and convenient online bills payment solutions. Machineries
and equipment’s were enumerated as well as other supplies
with its corresponding cost. The project is feasible based
on the different aspect that we consider in operating the
business.

3. Management Model Viability

AIR TRAVEL BUTUAN will be a sole proprietorship owned and
operated by Mr. Miko Sanchez inside SM Butuan. The founder and
employees of ATB are experienced travel industry professionals
and are passionate about the activities ATB will promote and
offer. The owner will be at the same time manager of the
 business and is the overall in charged for the day-to-day
operation of the business. At the present, the business has
the total of 3 employees’ and as the business grows, new
employees will be hired for the minor business operation.
Through an organized organizational structure, there will be a
smooth operation of the business and also based on the
technical know-how of the managers, therefore, the business is
feasible in this aspect.

4. Economic and Financial Model Viability

The initial investment of AIR TRAVEL BUTUAN is P2, 000,000.00
which will be from the sole-owner itself to start-up the
business. There are no other sources of capital aside from his
personal investment. The return of investment is doubled
during the first year and on the succeeding periods.
Therefore, our financial study is feasible.
Annexes
A. Survey Questionnaire
Name (optional): __________________________
Age:
Gender:
Source of Income:

Questionnaire: Encircle the letter that correspond your answer.

1. Do you travel?
A. Yes
B. No

2. Your preference when travelling

A. By Air
B. By Sea
C. By Land

3. How frequent do you travel?

A. Weekly
B. Monthly
C. Yearly
D. Other, please specify? ____________

4. What are your main purposes of travel?

A. Business Trip
B. Visit friends and family
C. Short Break
D. Holiday
E. Special Occasion
F. Other, please specify _______________

5. Which airlines do you usually use?

A. Cebu Pacific
B. Philippine Airlines
C. Skyjet
D. Airasia
E. Cathay Pacific
F. Other, please specify ______________

6. When do you usually book your ticket?

A. On the same day of departure
 B. Within a week of departure
C. 2-4 weeks before
D. 4-8 week before
E. 2-6 months before
F. 6 months-1 year before
G. More than a year before

7. How do you usually book your plane tickets?

A. Directly from the airline website
B. Through an online travel discount site
C. Travel agency
D. Other, please specify : _________________

8. Do you usually add travel insurance?

A. Yes
B. No

9. How often do you pay an additional fee to choose your own seat?
A. Always
B. Most of the time
C. Sometimes
D. Once in a while
E. Never
F.
10. Do you prefer SM Butuan as the business location
A. Yes
B. No

11. How do you rate our service

A. Excellent
B. Good
C. Poor

12. Preferred travel agency in booking your tickets?

A. JL Express Travel
B. Sky Horizon Tours and Events
C. Butuan Travel and Tours
D. Air Travel Butuan

13. How could they improve their service to satisfy your needs?
 AIR TRAVEL BUTUAN
ACCUMULATED DEPRECIATION

YEAR 1 YEAR 2 YEAR 3 YEAR 4 YEAR 5

No.
Cost per of Salvage TOTAL
Depreciation of Unit Units Cost Value Value Lifespan AMOUNT
OFFICE
EQUIPMENTS

Computer 20,000.00 2 40,000.00 4,000.00 5 7,200.00 9,000.00 12,000.00 18,000.00 36,000.00

Printer 6,800.00 1 6,800.00 680.00 5 1,224.00 1,530.00 2,040.00 3,060.00 6,120.00

Fax Machine 11,800.00 1 11,800.00 1,180.00 5 2,124.00 2,655.00 3,540.00 5,310.00 10,620.00

Television 33,000.00 1 33,000.00 3,300.00 5 5,940.00 7,425.00 9,900.00 14,850.00 29,700.00

Air conditioner 30,000.00 1 30,000.00 3,000.00 5 5,400.00 6,750.00 9,000.00 13,500.00 27,000.00

Water Dispenser 5,000.00 1 5,000.00 500.00 5 900.00 1,125.00 1,500.00 2,250.00 4,500.00
Depreciation of
Equipment 126,600.00 22,788.00 28,485.00 37,980.00 56,970.00 113,940.00
FURNITURE &
FIXTURE - -

Office Table 5,100.00 1 5,100.00 510.00 5 918.00 1,147.50 1,530.00 2,295.00 4,590.00

Clerical Chair 1,600.00 2 3,200.00 320.00 5 576.00 720.00 960.00 1,440.00 2,880.00

Customer's Chair 1,100.00 2 2,200.00 220.00 5 396.00 495.00 660.00 990.00 1,980.00

Couch 12,900.00 2 25,800.00 2,580.00 5 4,644.00 5,805.00 7,740.00 11,610.00 23,220.00

Shelf 11,200.00 2 22,400.00 2,240.00 5 4,032.00 5,040.00 6,720.00 10,080.00 20,160.00

Center Table 5,000.00 1 5,000.00 500.00 5 900.00 1,125.00 1,500.00 2,250.00 4,500.00

Table 24,600.00 1 24,600.00 2,460.00 5 4,428.00 5,535.00 7,380.00 11,070.00 22,140.00

Mini-Vault 5,000.00 1 5,000.00 500.00 5 900.00 1,125.00 1,500.00 2,250.00 4,500.00

Depreciation of
Furniture 15,876.00 19,845.00 26,460.00 39,690.00 79,380.00

TOTAL 93,300.00 38,664.00 48,330.00 64,440.00 96,660.00 193,320.00