III.

Major Assumptions in the Study

In this aspect, the proponents also formed different assumptions. These will help them
to plan for their business and estimate their total cost:

The office area is 56 square meters.

The equipment and furniture and fixtures will have a 10% salvage value at the
end of its useful life.

The unit price of office supplies will increase by 2% at the start of each year.
Office supplies ending balance shall be 5% of the total office supplies.

The proponents agreed that the rooms to be used regardless of the number of
clients. Therefore, the electrical consumption of the components in each room
will be treated as a fixed cost only. This cost will be estimated at the end of
each month and will be debited to the account Utility Expenses.

The electrical expenses except the variable cost as treated in Assumption 4 are
considered as fixed and will increase by 2% each year. The total water expense
increase by 1% each year. The charge for telecommunications expense will be
fixed for the next five years.

Ticket selling will be much faster, effective, and efficient because of a new
software program being used.

Even without their personal appearance, prospective clients can acquire our
services through our website wherein information and schedule of flights and
certain order forms will be include and presented.

Profit will rise when future advertisement and daily operations are followed
and done carefully. There will be a 2% inflation rate on advertising costs.

When it comes to issuing passports, clients can already claim their passport
after 5-10 working days.

The proposed business will have 12 months of preparation before the start of
the operation.

The location of the site is clearly visible from the road and pretty accessible for
prospective clients.

Cash reserved for operations is reserved for emergency cash disbursements.

IV. Service Process

Service is the main product of our business Safe and Sound Travel Agency will
cater the needs of both corporate and other leisure travellers. We handle international and
domestic ticketing, visa assistance, and passport documentation.
The focus of our business, Safe and Sound Travel Agency, is on ticketing. Tickets
are not considered as product of the company since the airline companies, in which the
agency works as an intermediary only, issue them. Like any other travel agency, we will
act as a middleman and only takes commission and mark ups from all services we offer.
For example, our service regarding reservations for flight whether it is international or
domestic is done through Computerized Reservation System (CRS).

Operations
Safe & Sound Travel Agency is focused primarily on ticketing. First, in order to
be able to issue those tickets the business must submit a letter of application to the airline
companies that they are dealing with, this is done through fax machine. If the airline
companies sent a letter of acceptance, the business can now be able to get the tickets that
will be issued depending on the reservation and the quantity of customers, which can be
determined from past sales.
Technology makes things easier and faster. Instead of going to an airline company
to apply for an agent, the business will just have to fax it. Through that, obviously saves
time, effort and money. For reservation purposes, rather than going to the agency, the
client can transact through phones or the use of the computer which is more convenient
and also consumes lesser time though going directly to the agency is much more formal.
Technology is not limited to machines and equipment only. Public mass transportation,
such as Light Rail Transit also, helps especially on processing and rendering services.

Automated Reservation
In the field of automation, the airlines have developed computer software system
that provides instant information of flights schedules, class for service and pricing in
addition to hotel accommodations and other services.

These software systems are commonly known as Computerized Reservation

System (CRS). A CRS enables the travel agent who is on-line or connected to the system,
to access all the information through a computer reservation terminal and allows the
agent make remote reservations on airlines by filling in the correct information in the
designated format for a specific airline or supplier of service appearing in the menu of the
software package.

Operational Procedures
A travel agency must be well acquainted with the operational procedures for
domestic ticket selling, international ticket selling, and passport processing.
Domestic ticket selling the operational procedures for domestic ticket selling are as
follows:
1. Client fills out reservation slip: his name, destination, birth date of child or
infant or senior citizen, data of flights, telephone number, preferred time,
etc.
2. Reservation officers look for the available flight through the use of CRS.
Clients choose his desirable time of flight and give price of ticket.
3. If client agrees to purchase the ticket reservation officer processes ticket.
4. Ticket is given to client after giving full payment.
International ticket selling the procedures for international ticket selling are as follow:
1. Customers fill out reservation slip.
2. Reservation officer looks for available date and time of flight and the
Airlines routing in that destination.
3. Reservation officer calls the consolidated travel agency to ask the price of
the ticket. After the necessary adjustment of price, the reservation officer
tells it to the client.
4. If the client agrees, the reservation officer reserves his name in the CRS.
The reservation having confirmed, the client presents the necessary legal
requirements plus his payment.
5. The reservation officer tells the client the date and time he will get his
ticket.

Passporting the following are the procedures for passporting:

1. The client fills out the application form attaching to it 4 pieces of his
passport picture and then pays the processing fee.
2. The clients personal appearance at the Department of Foreign Affairs
(DFA) is scheduled.
3. The client will claim his passport within 8-15 working days after his
appearance at the DFA.
Visa Assistance the following are the procedures for visa assistance:
1. The client fills out the application form and documents required and then pays the
application and processing fee.
2. The clients personal appearance at the embassy is scheduled.
3. The client will wait for his visa to be processed and will be delivered to
him by courier after the Consular Officer has made the decision to issue
the visa.

V. Equipment, Furnitures and Supplies Requirements

Item

Specifications

Office Equipment
Unit
Suppliers Qty
Price

Total
Price

Useful
Life

Salvage
Value

Depreciation

Computer
One Set
HP Pavilion 20b014L AMD E11200

Abenson

P19,000

P76,000

P7,600

P13,680

Online Booking
Software, Online
Payment,
Booking
Automation

PC
Gilmore
Computer
Center

50,000

50,000

5,000

9,000

Abenson

6,800

20,400

2,040

3,672

Panasonic KXFL612 Laser Fax

Machine

PC
Gilmore
Computer
Center

11,800

11,800

1,180

2,124

UA40H5303
40" Smart TV

Abenson

33,000

33,000

3,300

5,940

Abenson

8,000

24,000

2,400

4,320

Computer Software

Printer
HP LaserJet Pro
P1102w

Fax Machine

Television

Air Conditioner
Midea
FP51ARA006H
MNV-NI
.6HP, Manual

Water Dispenser

Hanabishi
H&C DISP
HFSWD 1400

Abenson

Total

5,000

5,000

12

P220,200

500

900

P22,020

P39,636

Furniture and Fixtures

Furniture and Fixtures

Specifications

Suppliers

ARE-OFT-008,

All Right

White

Enterprise

Unit

Total

Useful

Salvage

Price

Price

Life

Value

P5,100

P10,200

P1,020

P1,836

1,600

6,400

640

1,152

1,100

2,200

220

396

Qty

Depreciation

Office Table

Clerical Chair
Alpha Office
Chair Midback
With Arm Fabric
C-609 Black

Office
Warehous
e

Customers chair

Metal, Lift chair

OLX

Couch

Homelegance
9701BLK-2
Dwyer Love

Amazon

12,900

25,800

2580

4,644

11,200

22,400

2,240

4,032

10,000

20,000

2,000

3,600

5,000

5,000

500

900

6,500

6,500

650

1,170

Seat, Black
Vinyl Fabric
Shelf

16 wide x 13
deep x 39.5
high

Pottery
Barn

Reservation Counter
Wooden Office
Furniture

Furniture 4

Reception Desk

Less

Center Table

Glass top,
20 square x
18.5 h

Pottery
Barn

Table
Forged iron
frame,
Antiqued-

Pottery

mirror top,

Barn

36 diameter,
18 high

Mini Vault
Sentry Security

National

Safe #X055

Bookstore

5,000

5,000

Total

P103,500

Office Supplies
2016

2015
Item

Ballpen
Bond Paper
(short)
Cash Register
Tape
Clipboard
Columnar
notebook
Correction
Fluid
Cutter
Expandable
Folder

Desc
Pack

Unit
Price

Qty

Total
Cost

Qty

Total
Cost

2017
Qty

500

900

P10,350

P18,630

2018

2019

Total

Qt

Total

Qt

Total

Cost

Cost

Cost

40

320

326

333

340

346

149

15

2,235

15

2,280

15

2,325

15

2,372

15

2,419

20

40

800

40

816

40

832

40

848

40

865

Pc.

75

150

Pc.

34

12

408

12

416

12

424

12

433

12

442

Pc.

35

175.00

178.50

182.07

185.71

189.43

Pc.

27.75

138.75

Pc.

15

10

150.00

10

153.00

10

156.06

10

159.18

10

162.36

23

23

23

24

24

25

1500

3000

3060.00

3121.20

3183.62

3247.30

(4pcs)
Ream
Roll
(70
mm)

Box
Fastener

(50
pcs)

Fire
Extinguisher

Pc.

Folder (short)

Pc.

30

90

30

92

30

94

30

96

30

97

Glue

Pc.

20

80

82

83

85

87

Highlighter

Pc.

24

120

122.40

124.85

127.34

129.89

Masking Tape

roll

30

150

153.00

156.06

159.18

162.36

13.50

13.77

14.05

14.33

14.61

13.25

66

67

69

70

71

20.75

160

163

166

170

173

19

95

96.90

98.84

100.81

102.83

390

12

4,680

12

4,774

12

4,869

12

4,966

12

5,066

390

12

4,680

12

4,774

12

4,869

12

4,966

12

5,066

89

356

60

12

720

12

734

12

749

12

764

12

779

166

332

338.64

345.41

352.32

359.37

Paper Clip
(33mm)

Pay Slip
Envelope

Pencil
Permanent
Marker
Printers Ink
(black)
Printers Ink
(colored)
Puncher

Box
(25
pcs)
Box
(50
pcs)
Pack
(4pcs)
Pc.
Bottle
(250ml
)
Bottle
(250ml
)
Pc.
Pc.

Record Book

(500
pg)

Rubber Band

Box
(350 g)

Ruler (12)

Pc.

14

56

57

58

59

61

Scissors

Pair

18

72

Scotch Tape

Roll

21

12

252

12

257

12

262

12

267

12

273

Sharpener

Pc.

14.75

59

60

61

63

64

Pc.

74.75

74.75

Stamp Pad Ink

Pc.

27

12

324

12

330

12

337

12

344

12

351

Stapler

Pc.

57.75

173.25

Box

23

12

276

12

282

12

287

12

293

12

299

Stamping
Dater

Staple Wires
(#35)

42

Pack
Time Card

(100

74

296

Pc.

825

825

Pc.

23.75

12

285

12

291

12

297

12

302

12

308

Pc.

12.50

13

pc)
White Board
(2X3ft.)
White Board
Marker
White Board
Eraser
TOTAL

21,786

19,940

20,337.54

20,744.49

VI. Estimate of Total Cost

Presented below is the initial outlay cost needed for the purchase of equipment,
furniture and fixtures, and office supplies along with its depreciation per year.
Equipment and Supplies

Quantity

Unit Cost

Total Cost

Yearly Depreciation

Office Equipment

Computer

P19,000.00

P76,000.00

P13,680.00

Computer Software

50,000.00

50,000.00

9,000.00

Printer

6,800.00

20,400.00

3,672.00

Fax Machine

11,800.00

11,800

2,124

Television

33,000.00

33,000.00

5940.00

Air Conditioner

8,000.00

24,000.00

4,320.00

Water Dispenser

5,000.00

5,000.00

900.00

Furniture and Fixtures

Office Table

5,100.00

10,200.00

1,836.00

Clerical Chair

1,600.00

6,400.00

1,152.00

Customers chair

1,100.00

2,200.00

396.00

Couch

12,900.00

25,800.00

4,644.00

Shelf

11,200.00

22,400.00

4,032.00

Reservation Counter

10,000.00

20,000.00

3,600.00

Center Table

5,000.00

5,000.00

900.00

Table

6,500.00

6,500.00

1,170.00

Mini Vault

5,000.00

5,000.00

900.00

P323,700.00

P58,266.00

Total

20,160.15

VII. Office Location

The proponents of the project decided to strategically place the agency at 5/F
Gateway Tower, Gen. Roxas Avenue cor. Gen. Aguinaldo Avenue, Araneta Center,
Cubao, Quezon City, Philippines. We chose this place because Cubao is known for its
commercial area and at its heart is the well-known Araneta Center. The Araneta Center is
already a major transport hub, with almost a million of people passing by the area every
day. We see it as an advantage that the building itself is situated at a known avenue where
it is also identified as one of the financial and business core in the Metropolitan area.

Figure 3.1 Location Map

VIII. Office Layout

Safe and Sound Travel Agency will be renting a commercial space near our target
market along Cubao, Quezon City. It will subject to renovation to be appropriate in the
management standard operation.
The business shall occupy an area of 56 sq. meters. The project shall have only
one office unit that should be lease. The biggest area is given to the receiving area
because it is where our clients make their reservation or transact other business. They
must be able to sit in a relaxed manner while waiting for their turn to transact business
with us. The other area is allocated for operations like accounting affairs, adjacent to
which is the managers office.

Figure 3.2 Detailed Floor Plan

8m x 7m Office Space

Figure 3.3 Office Layout (Top View)

Figure 3.4 Reception and Booking Area

Figure 3.5 Receiving Lounge

Figure 3.6 Accounting Office (Top view)

Figure 3.7 Accounting Office

Figure 3.8 Managers Office (Top view)

Figure 3.9 Managers Office

IX. Company Logo

Our company logo is made up of:

A circle bordering the logo itself that represents security and assurance for the
customers, which is the primary reason why we come up with the company name;

A figure inside the circle which represents the primary service being rendered by
the firm, and;

Earth colors to inform prospective customers that the company is offering

services for local and international travels.

X. Utility Requirements
Our travel agency office is equipped with electricity and machine needed for
transacting business. Meralco will provide supply for the electricity, PLDT for the
telecommunication services, and Maynilad for water supply.

Projected Utilities Expense

Utilities

2015

2016

2017

2018

2019

Electrical Fixed

P72,738

P74,193

P75,677

77,190

P78,734

Water

2,272

2,295

2,318

2,341

2,364

Telecommunications

37,164

37,164

37,164

37,164

37,164

P116,374

P117,852

P119,358

P120,895

P122,462

Annual Utilities
Expense

The table above shows the projected utilities expense of the business over the
course of five years. The next tables show the detailed computation for the cost of each
utility service.
The table below portray the annual electricity consumption for the business. The
proponents used the following formula to compute the cost of annual electric
consumption:

Where:
AEC

annual electrical consumption

quantity of equipment

kW

power consumption in kilowatts

number of hours consumed per day

2013 rate per kilowatt hour of MERALCO

260

a constant number which represents the total number of the

days the business is expected to be operating for one year
Annual Electricity Consumption Fixed
Wattage

Hours /

Daily

Annual

(kW)

day

Cost

Cost

0.049

P5.19 per kWh

P8.138

P2,116.00

Printer

0.480

P5.19 per kWh

59.789

15,545.00

Fax Machine

0.250

P5.19 per kWh

10.380

2,699.00

Television

0.322

P5.19 per kWh

13.369

3,476.00

Aircondition

1.440

P5.19 per kWh

179.366

46,635.00

0.090

P5.19 per kWh

3.737

972.00

0.020

P5.19 per kWh

4.982

1,295.00

P279.762

P72,738.00

Equipment

Qty

Computer

Water
Dispenser
LED Light
bulb
Total

2.561

Rate per kWh

http://www.meralco.com.ph/customer/page-cusAbout-newsUpdates.html
http://www.cryer.co.uk/brian/misc/how_much_electricity.htm

The next table shows the annual fixed electricity consumption over the next five
years. The proponents assumed that the cost of power consumption will increase by 2%
each year.
Projected Annual Electricity Consumption Fixed
2015

P72,738.00

2016

74,193.00

2017

75,677.00

2018

77,190.00

2019

78,734.00

The next table portrays the projected annual water consumption of the business.
The proponents assumed that the cost of water consumption will increase by 1% each
year.

Projected Annual Water Consumption

Annual Water

Consumption in

Min. Charge

m3 per month

10 cum

2015

Less than 10 m3

P189.34

P189.34

P2272.008

2016

Less than 10 m3

191.23

191.23

2295.00

2017

Less than 10 m3

193.14

193.14

2318.00

2018

Less than 10 m3

195.07

195.07

2341.00

2019

197.02

197.02

2364.00

Year

Less than 10 m

Monthly Bill

Consumption
Cost

http://122.54.214.222/waterrates/RatesTable.asp

The next table illustrates the annual telecommunication expense of the business.
Annual Telecommunication Expense
Subscription Plan

Monthly Bill

Annual Cost

PLDT Subscription Plan

P1,899.00

P22,788.00

Postpaid-Smart

599.00

7,188.00

Postpaid-Globe

599.00

7,188.00

Total

P3,097.00

P37,164.00

The next table shows the projected annual telecommunication expense of the
business. The proponents assumed that these expenses will be constant for the next five
years.
Projected Annual Telecommunication Expense
2014

37,164.00

2015

37,164.00

2016

37,164.00

2017

37,164.00

2018

37,164.00

XI. Project Time Table

Stages involve in establishing a travel agency would include project planning,
business registration, canvassing of machineries and equipment, engineering or
renovating structure and modification of the building, delivery and installation of
machineries, hiring of employees, selecting suppliers, trial run, promotion and finally the
start of the normal operation.
For Safe & Sound Travel Agency, the researchers assumed 12 months time span
for the business to be fully prepared for the public. The planning of the project will be
started on January and assumed to be finish on December. According to travel agencies,
November to January and April to May are their peak season because there are lots of
travellers who come in and out of the country during this period.

Chart 3.1 Gantt Chart

December

November

October

September

August

July

June

May

April

March

February

January

Planning
Business
Registration
Canvassing
Engineering
Structure
Delivery
and
Installation
Hiring

of

Employees
and
Selecting of
Suppliers
Trial

Run

and
Promotion

Chart 3.1 shows the production schedule before the Safe & Sound Travel Agency
starts its normal operation.
1. Project Planning (January 1 March 31)
Conducting surveys, interpretation of data gathered, finding best site for business
and what products to produce.
2. Business Registration (April 1 May 31)
Completion and submission of all necessary requirements needed to get a
business license and permit of the firm.

3. Canvassing (June 1 June 30)

Canvassing of machineries and equipment needed.
4. Engineering Structure (July 1 August 31)
Renovating the business location and building.
5. Delivery and Installation of Machineries, Equipment, and Furniture and
Fixtures (September 1 September 30)
6. Hiring of Employees and Selecting of Suppliers (October 1 October 31)
7.

Trial Run and Promotion (November 1 December 31)

8. Start Of Operation (January 1)

XII. Project Cost

Safe and Sound Travel Agency needs to fulfill necessary requirements for
business permit; to purchase office equipment and office supplies; to pay its utilities
expense; to advertise in order to be known by the public; to pay monthly rentals; and
to pay taxes and licenses before it start the operation. The company should allocate
certain amount for these expenditures.

Schedule of Business Registration

Amount
1. Register the company with the Securities
and Exchange Commission (SEC)
2. Notarize articles of co-partnership and
treasurer's affidavit at the notary

P2,400.00

500.00

3. Register the company with the BIR and

receive

pre-registered

Taxpayer

500.00

Identification Number (TIN)

4. Obtain barangay clearance

250.00

5. Pay the annual community tax and obtain

the community tax certificate (CTC) from

500.00

the City Treasurer's Office (CTO)

6. Obtain the business permit to operate

5,400.00

from the BPLO

7. Buy special books of account at

400.00

bookstore
8. Apply for Certificate of Registration
(COR) and TIN at the Bureau of Internal

115.00

Revenue (BIR)
9. Pay the registration fee and documentary
stamp taxes (DST) at the AAB
10. Obtain the authority to print receipts
and invoices from the BIR
11. Print receipts and invoices at BIR

5,700.00

No charge
3,500.00

12. Have books of accounts and Printers

Certificate of Delivery (PCD) stamped by

No charge

the BIR
13. Register with the Social Security
System (SSS)
14. Register with the Philippine Health
Insurance Company (PhilHealth)

No charge

No charge

15. Register with Home Development

Mutual Fund (Pag-ibig)
16. Yearly accreditation fee
Total

No charge

1,100.00
P20,365.00

TOTAL PROJECT COSTS

Costs
Leasehold Improvements
Materials
Labor
Overhead
Office Equipment

Amount
P200,000.00
150,000.00
80,000.00

P430,000.00
220,200.00

Furniture and Fixtures

Office Supplies
Initial Operating Expense
Business Registration
Prepaid Rent (2 months)
Marketing and Advertising
Hiring and Training
Total
Total Initial Cost
Cash Reserved for Operations
Total Project Cost

103,500.00
21,786.00
P20,365.00
77,600.00
45,000.00
5,000.00
147,965.00
P923,451.00
100,000.00
P1,023,451.00

The cost of leasehold improvements includes the materials needed such as wood,
light bulbs, paint, construction materials among others; the payment for labor of the
workers; and the overhead needed for construction. Other costs needed for the project are
the cost of machinery and equipment, furniture and fixtures, office supplies for one year,
and pre-operating expenses such as registration costs, two month advance for rent,
marketing and advertising costs, and hiring and training costs.
The initial outlay cost for the project is PHP 1,023,451.00. This is the initial
investment needed and PHP 500,000.00 of this will come from a loan charged at 15% per
annum. The remaining balance of PHP 523,451.00 will be equally divided among six
partners. The partners agree that each of them will contribute additional PHP 200,000.00
cash, thus having a total contribution of PHP 1,200,000.00.

The excess of PHP

676,549.00 will be treated as the working capital.

XIII. Waste Disposal

Each and every one of us in the business is responsible for the cleanliness and
orderliness of our office as Filipino citizens. It is a duty incumbent upon us to be
disciplined in the proper disposal of garbage.
Since one of the objectives of our business is to promote tourism, we have to set
an image of cleanliness and environment consciousness, so that our clients will believe
that the Philippines is a clean and beautiful country to visit and be in.

It will be an office policy to recycle used paper and to dispose of old newspapers,
magazines and pamphlets. Old things will be recycled, sold or disposed. Garbage shall be
collected every day at a fix time.
We will see to it that every one of our employees has a health certificate, and that
our business has the necessary sanitary permits from the city government, which will
carry out a sanitary inspection of our office.
Everyone in the office must be healthy, and all our garbage will be disposed
properly.

XIV. Labor Requirement

In an agency limited number of employees is needed. One of the best assets a
company must have is the competent employee that will run and operate the business. In
a travel agency, it is essential to hire clerks, with a good personal relationship since the
front-liners are the one facing the clients. It is vital for them to accommodating so that the
clients will keep coming back to our company.
We will also hire on-call employees. On-call employees are those who render
their service upon call. We will hire on-call computer technicians and electricians.
There will be also an on-call accountant who will visit twice a month to perform
his responsibility in the company.
Also, we will hire the buildings janitor as our part-time utility man. He will clean
our office every other day after office hour.
The security guard of the Gateway building where our office is located will also
serve as our guard.
Employees will be given proper orientation and direction regarding the
objective of the business and for the employee to know what to be done.