1

Chapter 1

INTRODUCTION

Objective of the Study

This study intends to develop a plan that will give the researchers

insights in establishing a successful business in the future. It will also allow

the researchers to apply the knowledge acquired from classroom or any

business so that it enhances necessary skills and abilities in business

development and management. The researchers selected a water refilling

station as subject in study. This study was formulated to let everyone acquire

learning outcomes in business and making profits. Lastly this study aims to

know the following, to know the demand and supply situation of the propose

business, to know the technical aspect and the over-all process of doing this

kind of business undertakings, to come up with the best strategy to entice the

satisfaction of the costumers, to identify the techniques on how the business

can survive considering the presence of so many other indirect competitors in

the proposed area.

 2

Methodology

The research method used in conducting this feasibility study is the

descriptive research method. This method gives a comprehensive analysis of

the proposed business. It serves as a tool that provides adequate

interpretation of the result of the survey made by the researchers. Prior to

that, researchers provide data with the use of these primary sources;

questionnaires and interviews from the customers and owners of the water

refilling stations, these questions and interviews are essential in obtaining

valid and accurate data which is often not found in other sources. Our

secondary source of the data includes other feasibility studies related to the

topic and statistical data coming from the municipality government agencies

and other private organizations.

Scope and Limitation of the study

Though at the first glance it may seems as thought the scope and

limitation of study would be the same, they are actually different. This study

aims to establish a water refilling station business. This proposed business

scope will be based in management, marketing, technical and financial

aspects of the business. On the other hand its’ limitation will be only on the

limited information since some of the existing business related to this proposal

could not give the complete details on the basic preparation on this kind of

business. This study will cover the business future target market. They are the

residents belongs in Villa Clementa Subdivision Brgy. Maniki, Kapalong

Davao Del Norte and also other household consumers within the vicinity.
 3

Chapter 2

EXECUTIVE SUMMARY

Brief Description of the Project

The advancement of technology generally evokes a range of emotions

in people from all walks of life. Some view technology as a great evil that

slowly diminishes our humanity, while others view it as a way to bring the

world closer together and to help solve some of our greatest challenges

(Robert J. Szczerba).

Water is considered to be the one of the basic necessity of human

being and even to the animals. No human will ever survive in this world

without drinking clean water. The most relevant issue that this project will

address is to provide the people with a clean and safe drinking water in every

household. Since most of the water bunks, which is the source of our fresh

drinking water is already polluted due to a drastic change of our ecosystem

and caused by lavish used of our natural resources for industrialization which

is the result of climate change. We have to make use of the technology that

we have to make a solution and for us to be able to survive and face this

problem, the reality of this generation that deters the so called globalization.

Ghanda Kah Water Refilling Station, the proposed business, will also

offer the following: Door-to-door delivery, bulk orders, and walk-in. The target

market would be the residents of the entire area of Villa Clementa

Subdivision, Brgy. Maniki, Kapalong Davao del Norte and other households
 4

within the vicinity of Barangay Maniki, Kapalong. The best location of the

proposed business would be at the market area of Villa Clementa Subdivision

Barangay Maniki, Kapalong because aside from the Elementary school Annex

are near the place, it is also very accessible for the consumers for they don’t

have to go far just to find a water refilling station.

 5

Brief Profile of the Proponents

EDUCATONAL
NAME ADDRESS
BACKGROUND

Prk11b Maniki,
AROMA, ELJOHN BSAT 4th Year
Kapalong Davao del
Norte

LIMOSNERO, KUNIKKA BSA 3rd Year Purok 4 Brgy.

Pintatagan,
Banaybanay, Davao
Oriental

TADINA, CHRISTIAN BSAT 3rd Year Purok Ilocandia,

Mankilam Tagum City
ROY

Purok Malinawon,
ZAMORA, LUZHERY BSAT 3rd Year
Maragusan Davao de
JOYCE
Oro

JAVA, CENDY MAE BSA 3rd Year Santiago Balusong III,

Matina Crossing, Davao
City

Lynville Subd.,
PAULITE, JELYNE BSAT 4th Year Mankilam Tagum City
 6

Projects Contribution to the economy (Socio-Economic Aspects)

In the study of economics the discussion focus on the elements of

wants, needs, scarcity, goods and services, economic choice and the law of

demand and supply. So the proponent comes up in this project to the needs

and want of the ultimate consumers which is the quality and affordability of the

product and service we may offer.

The proposed business will benefit the people as well as the

government in terms of the following:

Employment Generation

The proposed business drives production of new jobs ex. Hiring an

attendant, calling a service of a technician, bookkeeper for preparing income

statements.

Income Generation: (Business & Government Tax)

The economic activity of the proposed business will also generate

revenues for the government in a way of taxes.

Investment Generation

The proposed business may aroused investment generation on other

related business like Bottle retailers, Repair and Maintenance shops and

other related business which also offer product and service that the proposed

business can benefit also.

 7

Environment Contribution

Operating a water refilling station can have implications for the

environment. That is why the proposed business will ensure that its solid

waste materials such as bottles, plastic covers and other materials are

properly recycled. In addition, the business will shut down any equipment

when not in use to save electricity.

 8

Chapter 3

MARKETING PLAN

Description of the Product/Services

In this generation fresh and safe drinking water has a big impact and

contribution to individuals. The proponents decided to propose a business

namely Ghanda Kah Water Refilling Station offers a Door-to-door Delivery of

drinking water, Bulk orders of drinking water and walk-in customers also, at a

very affordable cost.

Comparison of the Services with Its Competitors

Our proposed business Ghanda Kah Water Refilling Station may have

similar features with other water refilling station since both businesses offers

almost the same services but our business, offers quality product and

services to customers by using Standard equipment that uses a rust free

materials which are free from harmful elements and contamination. This

would mean that customers may consume a much safer and cleaner drinking

water.

Talking about the price, our pricing will be based upon those existing

competitors to cope with their pricing strategy. This will not compromise the

business to give the best available safe and fresh drinking water and service

to our customers.
 9

Location

The proponents have decided to put up the business in Brgy. Maniki,

Kapalong Davao Del Norte specifically at Villa Clementa Subdivision. The

proponents have chosen that location since it has the most higher count of

households in the barangay and has a lesser similar competitor in the certain

location.

Market Area

The jurisdiction of the proposed business Water refilling station will

covers the entire area of Villa Clementa Subdivision and the near households

in the area. A mass number of people present there particularly the students,

businesses, workers and the people in the Subdivision. In the chosen area for

the proponents to lessen the expenses, they will just rent the lot and building.

Target Customers

Mainly, the target customers of the proposed business Water Refilling

Station will be those residents of the said subdivision and the other nearby

households within the vicinity of Brgy Maniki, Kapalong Davao Del Norte.
 10

Kapalong College of
Agriculture and
HouseScience Technology
(KCAST)

Town Shell
Square Gasoline
Station

KAPALONG N A T I O N A L H I G H W A Y

7/11 House Julie’s Vulcaniz

KAPALONG POLICE KAPALONG V
Store Bakeshop ing shop
DISTRICT STATION MUNICIPAL I
HOSPITAL HALL Leo Revita Avilla water L
ST
FIRE L House House
Parlor refilling station
STATION A
House C GHANDA KAH
L REFILLING
E STATION
House M
E
N
House House
Gonzaga T
Figure 1
Water Station A House House
Vicinity Map
House
Elementary School
Annex
 11

Historical Demand

Table 1 shows the historical demand of our proposed business in Brgy.

Maniki specifically at Villa Clementa Subdivision. A total of 378 respondents

took part on the survey conducted by the proponents of this business,

computation of population and sample located at annex A. It comprises of

residents of the Subdivision. 78% of respondents are willing to spend for

Door-to-door delivery, Bulk order of drinking water, and walk-in for at least 1

gallon per day, the respondents belong to the 20 - 50 age brackets.

Table 1

Historical Demand

Population Target Average Yearly

Year Market Consumption Demand
78% Daily(Gallon) (240 days)

2016 5,876 4,583 1 1,099,987

2017 6,247 4,873 1 1,169,438

2018 6,823 5,322 1 1,277,266

 12

Projected Demand

Table 2 shows the projected demand for the first three years of

operation. Average percentage increase of 7.77% per annum, under the

projected demand computation.

Table 2

Projected Demand

Year Based Year Increase in Projected

Demand Demand (gallon)

2019 1,277,266 99,206 1,376,472

2020 1,376,472 106,913 1,483,385

2021 1,483,385 115,216 1,598,601

 13

Historical Supply

Based on the data gathered from the survey answered by the owners

and attendants of water refilling station, it shows that the respondent’s initial

capital ranges from 100,000 to 250,000 brackets.

Table 3

Historical Supply

(In Gallon)

Competitors 2016 2017 2018

Avilla Water 122,000 145,000 170,800

Station

124,000 156,400 198,200

Gonzaga Refilling
Station

Total 246,000 301,400 369,000

 14

Projected Supply

Table 4 shows the projected supply for the first three years of

operations. Average percentage increase of 13.96% per annum based on the

computation, under the projected supply computation.

Table 4

Projected Supply

Year Based Year Increase in Projected Supply

Supply (Gallon)

2019 369,000 51,512 420,512

2020 420,512 58,704 479,216

2021 479,216 66,898 546,114

 15

Demand Supply Analysis

Table 5 shows the demand and supply analysis. As presented in the

table it shows that there is still a projected demand gap in the next three

years.

Table 5

Demand supply analysis

Year Demand Supply Unsatisfied

Demand

Historical

2016 1,099,987 246,000 853,987

2017 1,169,438 301,400 868,038

2018 1,277,266 369,000 908,266

Projected

2019 1,376,472 420,512 955,960

2020 1,483,385 479,216 1,004,169

2021 1,598,601 546,114 1,052,487

 16

Market Share

Table 6 shows the computation of the market share. Below we

give an estimated projected market share of 13% out of the total unsatisfied

demand. Based on number of gallon sold per day and the result will be

divided into the number of unsatisfied demand.

Table 6

Market Share

(Water Refilling Station)

Services capacity
Year Unsatisfied Market Share % (in terms of no. of
Demand gallon)

2019 955,960 13% 124,275

2020 1,004,169 13% 130,542

2021 1,052,487 13% 136,823

 17

Projected Service Charge Rate

Table 7 shows the computation of historical charge rates per

gallon have not changed for the last three years. It is assumed that there will

be no change in the years to come.

Table 7

Projected Charge Rate

Particulars Unit Year 2019 Year 2020 Year 2021

measure

Water Refilling Per gallon 20 20 20

Station

Projected Service Income (Water refilling)

Table 8 shows the Projected Income in the water refilling station in the

next three years. As presented in the table, the total service income in the

year 2019 is 2,485,500 in the year 2020 is P 2,610,840, and in the year 2021

is P2,736,460.
 18

Table 8

Projected Service Income (water refilling)

Year Number of Rate per gallon Total Amount

gallon

2019 124,275 20.00 2,485,500

2020 130,542 20.00 2,610,840

2021 136,823 20.00 2,736,460

MARKETING STRATEGY

Pricing Strategy

Pricing is considered to be the most critical factor which most

often time affect the marketability of the service offered by the business.

Pricing will be based on competition. The terms of payment will be on cash

basis only.
 19

Promotional Measures

In promoting the business, the researcher intends to install a 3x6

signage tarpaulin for the business name to make it known in the public

particularly to the clients. A flier will also be distributed to thoroughly advertise

and promote the business. A total of P1,500 is assumed to be incurred in the

initial promotion and in the next succeeding year it is assumed to increase by

5 %.

Table 9

Promotional Budget

Year Amount

2019 P1,500.00

2020 P1,575.00

2021 P1,653.75
 20

Chapter 4

PRODUCTION PLAN

Services Process

The Ghanda Kah Water Refilling Station will open at exactly 8:00 AM

and closes at 8:00 PM. Customer may enter the water station and approach

the cashier/attendant, if the customer is a “walk-in” customer that will mean

the attendant will verify the order and then refill the gallon and after refilling,

the customer will pay and then he may now exit. When the customer wants a

“door-to-door delivery” that will mean that the customer will just simply text or

contact to the cellphone number of the station together with the customers

address, name and quantity of the order. After refilling the bottle or gallon of

the customer it will be sealed by a plastic cover to insure the safety of the

water to avoid contamination. The delivery boy will be the one to collect also

the payment and remit it to the cashier together with the list of the delivered

waters.

The next page shows a figure that demonstrates the flow of service in

the proposed business.

 21

Customer Cashier Delivery

Walk-In

Order Verification Text/call

verification

Refill Checking the Item

for Delivery

Payment Delivery and

Payment
Collection

Exit
Cash Remit

Figure 2

Service Process Flowchart

 22

Tools and equipment

In table 10 shows the tools and equipment that operate the business

needs. The CCTV and the extinguisher are important not just for the business

license purposes but also establish mutual security between the customer and

the business entity itself.

Table 10

Tools and Equipment

Particulars Quantity Unit cost Total cost

Water Tanks 3 P75,000.00 P225,000.00

(peripherals)

Computer Set 1 P14,988.00 P14,988.00

Air condition unit 1 P18,000.00 P18,000.00

Cellular Phone 2 P2,200.00 P4,400.00

CCTV 2 P1,577.00 P3,154.00

Fire Extinguisher 1 P1,300.00 P1,300.00

Side Car 1 P25,000.00 P25,000.00

Motorcycle 1 P80,000.00 P100,000.00

Other peripherals P10,800.00 P10,800.00

 23

Total P402,642.00

Furniture and Fixtures

Table 11 shows the quantity and cost of each item to be needed in our

businesses which are the computer Cubicle, Working table, and monoblock

chair.

Table 11

Furniture and Fixtures

Particulars Quantity Unit cost Total amount

Furniture and fixtures

Computer cubicles 1 P1,500.00 P1,500.00

Working table 3 P2,300.00 P6,900.00

Monoblock Chair 5 P275.00 P1,375.000

 24

Total P9,775.00

Depreciation

Table 12 shows the depreciation expense of the proposed business.

The proponents use the straight line method of depreciation, which is the total

cost over its estimated economic life.

Table 12

Depreciation

Tools and Total cost Life Year 1 Year 2 Year 3

Equipment
Water Tanks P225,000.00 10 22,500.00 22,500.00 22,500.00
(peripherals)
Computer Set P14,988 8 1,873.50 1,873.50 1,873.50
Air condition unit P18,000.00 15 1,200.00 1,200.00 1,200.00
Cellular Phone P4,400.00 4 1,100.00 1,100.00 1,100.00
CCTV P3,154.00 5 630.80 630.80 630.80
Side Car P25,000.00 5 5,000.00 5,000.00 5,000.00
Motorcycle P100,000.00 10 10,000.00 10,000.00 10,000.00
Other peripherals P10,800.00 5 2,160.00 2,160.00 2,160.00

Sub- Total P401,342 P44,464.30 P44,464.30 P44,464.30

Furniture and
Fixture
 25

Computer cubicle P1,500.00 10 150.00 150.00 150.00

Working table P6,900.00 10 690.00 690.00 690.00

Monoblock chair P1,375.000 4 343.75 343.75 343.75

Sub- Total P9,775.00 P1,183.75 P1,183.75 P1,183.75

Accumulated
depreciation P45,648.05 P45,648.05 P45,648.05

Other Non-
Depreciable 1,300.00
Asset

Total P412,417.00 P45,648.05 P45,648.05 P45,648.05

Sources of Equipment

Equipment’s are acquired in Tagum City. The computer units and

CCTV cams will be purchased within the city, furniture will brought at a local

furniture shop downtown, air condition unit will be acquired from exclusive

dealer in Tagum City as well as the fire extinguisher. Open 8:00am-8:00pm

every day and the side car can be purchased at any second hand motorcycle

shop in Tagum City open weekdays from 8:00am-5:00pm.

Terms and Condition of Purchased Equipment

All of the proposed equipment’s are brand new and fully paid in cash

basis upon delivery and installation except for the side car which is a second

hand.
 26

Business Lay-out

The water refilling station will utilize the furnished business establishment

has already painted with apple green color from wall to ceiling and has a tiled

floor. Figure 3 shows the proper business lay-out.

TABLE 13

Building Improvement Cost

PARTICULARS QUANTITY UNIT COST TOTAL COST

Tiles 100 P50.00 P5,000.00

Odorless and Anti-

3 P1,031.00 P3,093.00
bacterial Paint

Jalousie and Window

3 set P2,500.00 P7,500.00
Glass

Plywood 15 P268.08 P4,021.00

White Cement 2 KG P272.00 P544.00

Others P1,000.00 P1,000.00

Total P5,121.00 P21,158.00

 27

Storage Area
0.95

Waiting Area Working Area

4.00

Office

Fire extinguisher

6.00
0.90

Figure 3
Business Layout
 28

Planned Capacity

Presented in the table 13 is the planned capacity for the business

which only has 3 refinery water tanks and faucets as starting numbers of

units. The business will accommodate a capacity of 10 customers per unit in

every hour.

Table 14

Planned Capacity

Hours Days Capacity

12 240 86,400
Capacity
 29

Janitorial and Office Supplies

Presented in Table 14 is the supplies janitorial and office supplies

expense of the proposed business. The supplies are grouped into office

supplies and the store supplies.

Table 15

Janitorial and Office supplies

Particulars Quantity Unit cost Annual cost

Broom 3 70.00 210.00

Dust pan 2 35.00 70.00
Trash can 2 115.00 230.00

Feather duster 2 75.00 150.00

Mop 1 155.00 155.00

Total 815.00
 30

Salaries and Wages

The business will need one attendant that will serve also as cashier

during the operation. Delivery personnel, one license driver and one assistant

for the delivery services. Equipment technicians will be called if ever some

hardware/software malfunction arises or will be visiting every 3 months for

servicing and a bookkeeper for recording transactions every end of the

business year.

Table 16

Salaries and Wages

Particulars No. of worker Rate Total

amount per
year

Attendant/Cashier 1 6,500/month 78,000.00

Delivery Driver 1 7,600/month 91,200.00

Assistant Delivery Boy 1 6,500/month 78,000.00

Total P247,200.00
 31

Projected Salaries

Table 16 shows the total Projected Salaries of the business for the first

three years of operation. Based in the assumption, there will be a P1,000.00

increase annually. In year 1, year 2 and year 3 would be P247,200.00,

P248,200.00 and P249,200.00 respectively.

Table 17

Projected Salaries

Year Amount

2019 247,200.00

2020 248,200.00

2021 249,200.00
 32

Bookkeeper Honorarium

The business will need a bookkeeper for recording transactions every

end of the business year. Table 17 shows the bookkeeper honorarium for the

first three years of business operation. Based in the assumption, there will be

a 5% increase annually.

Table 18

Projected Bookkeeper Honorarium

Year Amount

2019 6,000.00

2020 6,300.00

2021 6,615.00
 33

Cost of Water to Be Purchased

The business will assume to incur in purchasing a fresh water to be

refined worth of P10,000 per month a total of P120,000.00 per year. It is

assumed by the management to increase by 3% annually. The source of the

fresh water is from water services in Davao City.

Table 19

Cost of Water to Be Purchased

Year Amount

2019 P120,000.00

2020 P123,600.00

2021 P127,308.00
 34

Utilities Expense

Table 19 shows the utilities expense of the business. The firm does not

have water bill expense since it can utilize the comfort room of the rented

building; thus, omitting the water expense on daily operation of the business.

The comfort room is just next to the rented space on the internet café making

it accessible to customers. Cost per hour of electricity is based on the data

presented by DANECO Engineering Office. It is assumed that utility runs at

maximum 12 hours a day. The utilities expense increase 5% annually.

Table 20

Utilities Expense

Utility No. of Cost Rate/month Quantity Total

hours per (30 days) monthly bill
Used per hour
day
Air condition 12 hours 15.13 P5,446.80 1 P5,446.80

Computer 12 hours 7.64 P2,750.40 1 P2,750.40

sets
CCTV 24 hours 3.25 P2,340 2 P4,680.00

Fluorescent 12 hours 6.09 P2,192.40 5 P10,962.00

tubes
Others P500.00 P500.00

Total P24,339.20

Utilities
expense per P292,070.40
year
 35

Projected Utilities Expense

Table 20 shows the total Projected Utilities Expense of the business for

the first three years of operation. Based in the assumption, there will be a 3%

increase annually. In year 1, year 2 and year 3 would be P292,070.40,

P300,832.53 and P309,857.50 respectively.

Table 21

Projected Utilities Expense

Year Total cost

2019 P292,070.40

2020 P300,832.53

2021 P309,857.50
 36

Projected Repair and Maintenance Expense

The water refinery equipment on the establishment will be serviced

every year to ensure its effectiveness and prolong lifespan. Table 21 shows

the budgeted amount of services, it is assumed that it will not increase for the

following years.

Table 22

Projected Repair and Maintenance Expense

Year Amount

2019 P5,000.00

2020 P5,000.00

2021 P5,000.00
 37

Business Permit

The filing of business permit will be done prior to the opening to the

opening of the water refilling station. Shown below are the cost associated

with the filing of business permit the data was gathered from Brgy. Maniki,

Kapalong Davao Del Norte.

Barangay clearance P500.00

Mayor’s permit

-tax (business) P1,450.00

-permit P1,220.00

-business plate P350..00

-refuse fee P2,400.00

-health certificate P200.00

-occupational tax P200.00

-inspection fee P250.00

-filing P250.00

-processing P200.00

P6,520.00

BIR P500.00

DTI P500.00

Total P8,020.00
 38

Business Permit Expense

The business permit fee for every year assumed that there will be an

increase of 10% annually.

Table 23

Business Permit

Year Total amount

2019 P8,020.00

2020 P8,822.00

2021 P9,704.20

Rent Expense

The rental fee for the space where the business establish where

amounting to P3,000.00 per month. In table 23 shows the rent expense per

year, it is assumed that there will be an advance payment for the first month

and the other succeeding month will be at the second week of the month. It is

assumed that there will be no increase of rent every year.

Table 24

Rent Expense

Year Rent expense per year

2019 P36,000.00

2020 P36,000.00

2021 P36,000.00
 39

Operating Expenses

Presented in Table 24 are the operating expenses of the proposed

business. The table shows the expenses the business incurs in its business

operations.

Table 25

2019 2020 2021

Marketing Expenses 1,500.00 1,575.00 1,653.75

Salaries and Wages 247,200.00 248,200.00 249,200.00

Bookkeeper
6,000.00 6,300.00 6,615.00
Honorarium

Utilities Expense 292,070.40 300,832.53 309,857.50

Repairs & 5,000.00 5,000.00 5,000.00

Maintenance Expense
Janitorial & Office 815.00 815.00 815.00
Supplies
Business Permits 8,020.00 8,822.00 9,074.20

Rent Expense 36,000.00 36,000.00 36,000.00

Cost of Water to 120,000.00 123,600.00 127,308.00

Be Purchased

Depreciation Expense 45,648.05 45,648.05 45,648.05

Total Operating
762,253.45 776,792.58 791,171.50
Expenses
 40

Chapter 5

ORGANIZATION AND MANAGEMENT PLAN

Form of Business Enterprise

“Ghanda Kah Water Refilling Station” is a sole proprietorship form of

a business. The owners will be responsible on the management of the

business towards success and how they will handle their employees. One

attendant should be hired who is responsible for serving the customer, and

he/she serve the customer 8:00am-8:00pm the bookkeeper is responsible to

keeps the financial statements and other books of accounts, delivery driver

and his assistant will be responsible for the delivery.

Management and Organization Structure

Figure 4 shows the organizational structure. Since organizations can

be viewed as systems, management can also be defined as an action, which

can be design to facilitate the production of useful outcomes for the business.

This view opens the opportunity to manage others by setting up organizational

structure.
 41

Owner/Manager

_ _ _ _ _ _ _ _ Bookkeeper

Cashier/Attendant
& Delivery
Personnel

Figure 4

Management and Organizational Structure

 42

Management Qualifications and Functions

The success of the business depends on the performance and

attitude of its personnel and employees. This part of management aspect will

discuss the following job analysis for its organizations personnel and

employees with their corresponding qualification.

POSITION QUALIFICATIONS FUCNTIONS

 He/she will be
 He/she must have responsible in
a good oral maintaining the
communication. cleanliness of the
establishment.
ATTENDANT/  He/she is at least
CASHIER a high school  He/she will be
graduate responsible in the
development of the
service that the water
 He/she must refilling renderers to the
possess good customers.
analytical skills.

 He/she will be assigned

to be the cashier during
operations.
 43

 He must have a  He will be responsible in

good oral the development of the
communication. service that the water
refilling renderers to the
customers.
DELIVERY  He must be a
DRIVER professional driver  He will be assigned as a
with license. delivery driver and also
as a good service
renderer to the customer.
 He must be at
least a high school
graduate with
good analytical
skill.

 He must have a  He will be responsible in

good oral the development of the
communication. service that the water
refilling renderers to the
DELIVERY  He must be at customers.
ASSISTANT least a high school  He will be assign as a
graduate with payment collector for the
good analytical delivery.
skill.
 He will be the one to
check for the delivery
items in and out.
 He will be the one to
assist for the itinerary of
the delivery to the driver.
 44

Chapter 6

FINANCIAL PLAN

This chapter of the financial aspects shows the financial structure of the

business. The three financial statements are presented in this part. These are

the statement of Cash Flow, Statement of Financial Position (Balance sheet)

and Statement of Comprehensive income (Income Statement in order to

know, the liquidity and its stability if the business operation in other aim of the

study).

Major Assumptions

1. Market share is assumed to be 13% of total unsatisfied demand per year.

2. Projection is computed using the moving average method.

3. It is assumed that the charge rate at P20.00 will be no change in the years to

come.

4. A total of P1,500.00 (promotional budget) is assumed to be the initial

promotion and in the next succeeding year is assumed to increase by 10%.

5. Depreciation is computed using straight line method.

6. Salaries and wages is P247,200.00 and are assumed to increase at least

1,000 for the incoming 3 years to come.

7. Cost of water to be purchased is assumed by the management to increase by

3% annually.

8. Utility is assumed to increase by 5% per year.

 45

9. Repairs and maintenance of the water refinery equipment is 5,000 and in the

next succeeding year.

10. Business permit fee every year is assumed that there will be an increase of

10% annually.

11. Rental fee is assumed no increased every year.

12. The drawing of the owner is 50% of the net income.

 46

INITIAL PROJECTED COST

The initial projected cost of the proposed business Ghanda Kha Water

Refilling Station at Villa Clementa Subdivision, Barangay Maniki, Kapalong

Davao Del Norte needs a total capital requirement of P490,000.00 to start the

business operation.

Pre-operating Expense
Business permit P8,020.00

Initial fixed capital cost

Equipment 402,642.00
Furniture and Fixture 9,775.00 412,417.00

Operating expense (one month)

Marketing Expense 1,500.00
Salaries and Wages 20,600.00
Cost of Water to be Purchased 10,000.00
Utilities Expense 24,339.20
Repairs and Maintenance 419.80
Janitorial Office Supplies 68.00
Rent Expense 3,000.00 59,927.00

Total 480,364.00

Add: Cash on hand 9,636.00

Total investment cost P490,000.00

 47

GHANDA KAH WATER REFILLING STATION

Villa Clementa Subdivision, Maniki, Kapalong Davao Del Norte
STATEMENTS OF FINANCIAL OPERATIONS
For the year ended December 31 Year 2019 – 2021

Year 2019 Year 2020 Year 2021

Revenue
Water Services P 2,485,500.00 P 2,610,840.00 P 2,736,460.00
TOTAL P 2,485,500.00 P 2,610,840.00 P 2,736,460.00
OPERATING EXPENSES
Marketing Expenses 1,500.00 1,575.00 1,653.75
Salaries and Wages 247,200.00 248,200.00 249,200.00
Bookkeeper Honorarium 6,000.00 6,300.00 6,615.00
Cost of Water to be Purchased 120,000.00 123,600.00 127,308.00
Utilities Expense 292,070.40 300,832.53 309,857.50
Repairs and Maintenance 5,000.00 5,000.00 5,000.00
Janitorial & Office Supplies 815.00 815.00 815.00
Business Permits 8,020.00 8,822.00 9,704.20
Rent Expense 36,000.00 36,000.00 36,000.00
Depreciation Expense 45,648.05 45,648.05 45,648.05
Total Operating Expenses 762,258.45 776,792.58 791,801.50

NET INCOME P 1,723,241.55 P 1,834,047.42 P 1,944,658.50

 48

GHANDA KAH WATER REFILLING STATION

STATATEMENT OF CASHFLOWS
Year 2019 – 2021
(Amounts in Philippine Peso)

Year 2019 Year 2020 Year 2021

Cash Flows from Operating Activities

Income before income tax 1,723,241.55 1,834,047.42 1,944,658.50
Noncash adjustments to reconcile income
before income tax to net cash flows
Depreciation Expense 45,648.05 45,648.05 45,648.05
Working Capital Adjustments
Net Cash Flow from Operating Activities 1,769,889.60 1,879,695.47 1,990,306.55

Cash Flows from Investing Activities

Acquisition of Property and Equipment (411,117.00)
Net Cash Flows Used in Investing Activities (411,117.00)

Cash Flows from Financing Activities

Proceeds from Issuance of Capital 490,000.00

Withdrawals From Owner (861,620.75) (917,023.71) (972,329.25)
Net Cash Flows from Financing Activities (594,110.90) (917,023.71) (927,329.25)

Net Increase in Cash 987,151.85 962,671.76 1,017,977.30

Cash at January 01 987,151.85 1,949,823.61

Cash at December 31 987,151.85 1,949,823.61 2,967,800.91

 49

GHANDA KAH WATER REFILLING STATION

Villa Clementa Subdivision, Maniki, Kapalong Davao Del Norte

STATEMENT OF FINANCIAL POSITION

As of December 31 Year 2019 – 2021

Year 2019 Year 2020 Year 2021

ASSETS
Current Assets:

Cash P 987,151.85 P 1,949,823.61 P 2,967,800.91

Non-Current Assets:

Property and Equipment P 412,417.00 P 412,417.00 P 412,417.00

Less: Non-depreciable asset (1,300) (1,300) (1,300)
Accumulated Depreciation (45,648.05) (91,316.10) (136,964.15)
Property and Equipment (Net) P 365,468.95 P 319,800.90 P 274,152.85

TOTAL ASSETS P 1,352,620.80 P 2,269,624.51 P 3,241,953.76

LIABILITIES AND OWNER’S EQUITY

Owner’s Equity:

Capital, beg. P 490,000.00 P 1,352,620.80 P 2,269,624.51

Net Income P 1,724,241.55 P 1,834,047.42 P 1,944,658.58
Withdrawals from Owners P(861,620.75) P (917,023.71) P(972,329.25)
Capital, end P 862,620.80 P 917,023.71 P 972,329.25
TOTAL LIABILITIES AND OWNER’S EQUITY P 1,352,620.80 P 2,269,624.51 P 3,3,241,953.76
 50

ANNEX A

Population and Sample

n= N
[1+N(e)2 ]
n= 6,823
[1+6,823(0.05)2]
n= 6,823
18.0575
n = 378