Feasibility Study

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Chapter I

Project Summary

A. Name of the Enterprise

The name of the firm is FéDi Café is a full-service studio coffee. The Studio features a full

service for photo backgrounds and working environment of not only the professional

photographers, models, beauty lovers but also the people who own cameras and love taking

pictures with moderate price. The coffee section of The Fédi features a coffeehouse with a

dessert bar, drinks and space for working and photographing. Our business model is the

combination of the coffee shop and the studio. It may not be new but there guarantee to be

unique and always renewing. Our project is called FéDi – Fé in “Café” and Di in “Studio”.

B. Location

The proposed location of the business outlet is in the MSU-Main Campus, Commercial

center, Marawi City, where most of the customers or buyers are of much.

C. Descriptive definition of the Project

The main product of the firm are different types of coffee drinks likes shakes or tea.

D. Project’s Long-range objectives

In the long run project will create a gradual innovation to boost the wants and needs of the

customers and so the customer and some around make known to near place. This project will

purposely create job opportunities to the local area.


E. Highlight of the project

The project is confident enough and is optimistic on the projected market demand and

supply. The demand consumption of coffee shows the increasing state number which

encourages the firm to generate and improve more on it.

General Information:

Total Project Cost: Php 15,550,500.00

Equity: Php 8,500,000.00

Proposed loan: Php 7,050,500.00

Loan purpose: used to operate the project acquisition of land, buildings, equipment and raw

materials and supplies.

Term of Loan: 5 years

Interest Rate: 12%

F. Market feasibility

There are three textured of the products produced by the business. Coffee, Iced coffee and

Coffee shake. Those three kinds of coffee have its main divided ingredients which the

condiment’s presence signifies. The different volume of 12oz, 16oz, and 22oz indicates the

prices that were sold at (regular coffer) Php 90.00-Php180.00 and (special coffee) Php

120.00- Php250.00 respectively.

G. Technical feasibility
The products constituents’ give good vibes and have source of vitamins at the same time,

which came from the different coffee flavor. The project starts its production operation from

the preparation of buildings and raw materials. There are various types of equipment and

machineries need for the operation with the stated depreciation.

H. Management feasibility

The types of business that the firm will assume is Partnership. The proposed project will hire

workers for both business outlet and Processing building where in the listed functions and

qualifications for those workers’ requirements.

I. Financial feasibility

The Total Project Cost of this whole operation is Php 15,550,500,00. The amount of owner’s

equity is Php 8,500,000,00 which is 60% of the total Project cost and a 40% proposed loan of

Proposed loan: Php 7,050,500.00 with a 12% interest on the bank and a payback period of 5

years that is acceptable for recovery of the investment. Income tax will be imposed as 30% of

the net income throughout the operation.

J. Socio-Economic feasibility

This project will serve as income-generating activity since the net income of the operation

gradually increases. The project give an open opportunities who are capable to work in the

said qualifications, which the nearby or unemployed had the chance to be a worker of the

said business venture.


Chapter II

Market Study

What makes it more attractive to enter into the coffee business is the low starting cost in

comparison with other businesses. The second thing that makes coffee business very

appealing is that even though it is food service and has the highest gnawing away rate than

any other business, it has a higher profit margin than say in a restaurant and this is an

advantage (Godsmark, Brown, & Arduser, 2004).

According to Abrams & Kleiner (2003), coffee is also a very sexy business, and everyone

always wants to be associated with a certain coffee shop that frequently visit and always tell

their friends about. You would not find people exited like this about when talking about other

retail establishments that they may patronize. Coffee bars are so personal because they are

really the third place for many of us. They are relaxing places that people can even carry their

laptops to and finish off their office work or even meet friends at.

Besides the café market, the photo studio is also a new and potential market which less

focused on working in wedding and photography branch. This would be advantage for

matching a photo studio and a coffee shop to create the FéDi. With the creative design and

premium café quality, the FéDi will make its best effort to create a unique place where

customers can socialize with each other and take their dream photos in a comfortable and

beautiful environment while enjoying the best brewed drinks or coffee and photography

service in MSU-Main Campus, Commercial Center, Marawi City. We will be in the business

of helping our customers to memorize their moment by providing piece of mind through
great ambience, convenient location, friendly customer service, and products of consistently

high quality. The FéDi will invest its profits to increase the employee satisfaction while

providing stable return to its shareholders.

 Objective

- The FéDi’s has established three firm objectives expected to achieve in the next five

years:

- Become selected as the "Best Studio Coffee in the area" by the local photographer and

couple getting married.

- Sales approaching and surpassing Php 8,000,000.00 by the end of the first year.

- Realize a gross margin of at least 30% each year

 Mission

The FéDi will make its best effort to create a unique place where customers can socialize

with each other, take their dream photos in a comfortable and beautiful environment, and

enjoy the best brewed drinks or coffee and photography service in MSU-Main, Marawi City.

We will be in the business of helping our customers to memorize their moment by providing

piece of mind through great ambience, convenient location, friendly customer service, and

products of consistently high quality. The FéDi will invest its profit to increase the employee

satisfaction while providing stable return to its shareholders.

 Keys to success

- The greatest locations - visibility, high traffic pattern, and convenient access.

- The best design – beautiful, seasonal, and special background with wide range of

diversity.
- The best products – freshest materials, modern equipment, premium services, and

consistent flavors.

- The friendliest servers - cheerful, skilled, professional, and articulate.

- The finest reputation - word-of-mouth advertising, and promotion of quality mission.

Chapter III

Technical Study

In a world of business there are many aspects that need to consider aiming to compete as a high

rate to other enterprises take risky efforts. In this present generation obsolete ones are now

outdated. Consumers in this present time to find a spectacular services and food or having

appetizers just to have a good balance of flavor. Enterprises nowadays develop, innovate, and

create different dishes for the consumer’s food preference.

Products

Competing to recent developing business, the projects product will produce several flavors of

coffee and preparation that will be packed thru different volumes. This will be labelled with its

brand name, tag line, and location of the business outlet. The coffee shop serves customers foods

and drinks. Inside the store will be our friendly staff serving to every need for the customers to

enjoy the astonishing inside and outside views. The food will be simple but convenient for the

customers. For fast food, we have sandwiches, burgers, noodles and so on if customers would

like to stay and rest for lunch or dinner.

Services
The business model is the combination of coffee store and studio, which can easily attract

customers in market segmentation. Customers could enjoy drinks in a beautiful view and take

great photos without going anywhere. More specially, the shop has rental clothing services such

as traditional clothes of neighbor countries like Hanbok, Kimono, etc. or the party dress, formal

dress, suit for men and women, etc. The second thing of our product and service is our studios.

The views at the coffee shop may not satisfy professional photographers, models, or beauty

lovers. Thus, for all of those who have cameras and love to take pictures, we will give them even

more beautiful backgrounds with many amazing services with reasonable price, of course.

Reasonable price

The store has competitive price and the FéDi’s desire is providing the best quality with the

acceptable cost. There are 2 options in FéDi Coffee:

The first option is that customers could buy drinks and have the right to take photos in some

certain backgrounds without extra-cost.

The second one is customers could choose service pack of studio and be served free drinks.

Target customers

 Couples getting married

When people get married, they always want to have great photos for their weddings because they

are their wonderful memories which they desire to share with other people. We build customer

satisfaction by meeting their expectations. We provide high quality services in shooting and

editing photos. We also serve free drinks for the wedding combos.

 Photographers
Our business model concentrates on relationships with many studios and photographers in Ho

Chi Minh City. With photographer, every photo is brainchild of them. We connect with them and

their customers to assure that we bring beautiful places for shooting. In order to get good

relationships, they'll get commissions on every customer while cooperating with us.

 People interested in art

Beside the connection with studios and photographers, we also focus on the group of people

interested in art or design. We focus on social network and actively cultivating a "cool" image.

The coffee studio creates an emotional tie with customers. Such engagement starts with the

stores' homey and intimate atmospheres.

 Young generation

Young people today love to take pictures in order to save their beautiful moments. We also have

rental costumes for those who are interested in taking special photos. Our business is creating the

“third place” to go to between their home and work environment by creating this unique and

relaxing place. We also try to create a place which is convenient to study or have group meetings

for students.
CHAPTER IV

Organization and Management Study

The project’s propose to produce and supply commercial coffee products to fill the want and

interest of the customers and customers, and a business opportunity of nowadays it shows that

the demand of the product is continuously in increasing state. The proposed project aids other

individuals that has qualifying functions for the business and is capable of doing so. Its concern

is also to the developing condiments and appetizers of the province of Marawi City and Iligan

City of somehow the projects’ tend to innovate more about condiments.

Form of Ownership

The type of ownership is this proposed project is Partnership. The owner has share of 60% for

total project cost, in which the proposed project would have a loan of 40% for thorough fund for

the operation of the said project.

Project’s Organization

Sale Marketing in
charge

Processing Workers
Chapter V

Financial Study

Major Assumptions:

 It is assumed that costs of direct materials will increase by 5% annually.

 It is assumed that the costs of supplies will increase by 2% annually.

 Direct labor will increase by 5% annually.

 Administrative salary will increase by 5% every two years.

 Other expenses will increase by 2% yearly.

 Other utilities will increase by 5% yearly.

 It is assumed that the selling price of the products will increase by 5% annually.

 Owner will have a share of 60% for total project cost and a 40% loanable amount.

 Income tax will be 30% of the net income throughout the operation.

Sources of Fund

The Total Project Cost of this whole operation is Php 15,550,500,00. The amount of owner’s

equity is Php 8,500,000,00 which is 60% of the total Project cost and a 40% proposed loan of
Proposed loan: Php 7,050,500.00 with a 12% interest on the bank and a payback period of 5

years that is acceptable for recovery of the investment.

Chapter VI

Socio-Economic Study

The proposed FeDi Café will somehow give opportunities to the people nearby who are capable

and welling to work in the processing area where the project is being located. It is advantage to

those who are nearby and wants to have a stable work where their houses is convenient to them.

Every 15 days of the month the wages will be given.

The effective and efficient management of the Fedi Café business will benefit the project through

the revenue generated. For the first ten years of project implementation somehow spreading this

condiment to those curious, interested, and coffee lover diners. In the long run process the

business will derive an average income of Php. 5,500,750.00

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