STI College Koronadal

Business Management Department

City of Koronadal, South Cotabato

CHAPTER I
Background of the Study
Study lounges are enclosed quiet space designed to give students some

spot to study, catch up on assignments, read, and relax or even take a quick nap.

Other terms used for rooms of this nature include den, home office, parlor,

or library. A typical layout might contain services such as wireless network

access, a desk, chair, computer, desk lamps, bookshelves, books, and cabinets

with the file of books and other references that may be used while studying. It

provides a great atmosphere to get into the studious mood since studying

requires a lot of concentration, avoidance from both visual and auditory

distractions for these can severely hamper one's ability to focus and get work

done.

Finding a good place to study can significantly improve the ability to focus,

learn, and retain information. Commonly, comfort, appropriate noise levels,

information access, and lightning are some of the things to be considered when

choosing a study area. While there are other places to be used as a study area,

some have inappropriate characteristics that can distract the concentration.

According to psychCentral.com silence offers profound benefits, many of which

we are not aware of; it’s easier to calm the mind and restore balance and benefit

in brain chemistry by growing new cells in hippocampus region which is a brain

Circle Readers’ Spot

(Group Study Inn) 1
 STI College Koronadal
Business Management Department
City of Koronadal, South Cotabato

area linked to learning, and remembering, thus, silence plays a vital role in active

studying.

The article Study Hacks for Life of the wisdomclub.com discussed the

different common study space used and the pros and cons of each, ‘’Studying in

your room passes most of the qualifications of a good study place unless you

happen to have roommates or noisy neighbors. On the other hand, libraries are

on the top list of the best place to study, however, it usually limits the amount of

time to use the internet, especially for those that need all-day sessions, plus it is

not generally quite during examination periods…’’ .Schools within the city have

their libraries to cater the needs of their students, as of now NDMU houses the

largest school library in Koronadal City with a total area of 2,714 square meters,

and can accommodate 10-12% of the schools’ population, the library holdings

have reached to 80,000 volumes of books and bound periodicals, reference is on

ndmu.edu.ph.

Coffee shop in its nature is quiet, however, it can get really busy and noisy

as many people meet at the coffee shop to chat, plus the choice of lightning may

not be suitable for long-term study. Today, Koronadal is a home for coffee

industry with the growing number of coffee shops in the city, some of the known

shops are Bo’s Coffee, BluGre, The Farm Coffee House, Bean and Grape,

Merc’s Café, Tintin’s Bakery Café, Uchado, and The Coffee Table.

Circle Readers’ Spot

(Group Study Inn) 2
 STI College Koronadal
Business Management Department
City of Koronadal, South Cotabato

Koronadal City the capital city of South Cotabato is the center of finance,

business, education, services and government institution in the province, has 95

public and private primary to secondary schools, 15 (fifteen) colleges, and 1(one)

university. Relatively, the main market of the study lounge is the students in the

locale who need suitable spaces for learning purposes aside from their school

libraries that are accessible even during after-class hours.

Rationale

With a large number of schools here in Koronadal and the libraries

designated in different schools here in the city, the growing population of

students also means a growing demand to cater to their need for a place to

spend their time to study. The library would be already present in the designated

schools but catering to the needs of the student to conduct researches and

references for reading would struggle the students outside the school time. Also,

finding a comfortable place to research is hard. Since Koronadal is one of the

competitive cities in the province and as the capital of the province, it indeed

makes itself to generate more capital for a higher degree of education for the

students. Thus, students would prefer a study place that more comfortable,

relaxing and more sources for their studies. With a large number of schools here

in Koronadal, it will eventually enable a group study spot to equate a good

probability of earning a high-profit margin and establish a high standard and easy

to manage.

Circle Readers’ Spot

(Group Study Inn) 3
 STI College Koronadal
Business Management Department
City of Koronadal, South Cotabato

The proponents will undertake a group study place or a lounge where

comfortable chairs, tables, access WIFI, computer sets and books intended for

educational purposes. This will create an adjusting wheel for the preference of

potential customers as to their expediency and maintained quality educational

services not only for students but to those who are willing to experience the new

venture of relaxation and learning. The proponents intend to indulge in this kind

of project to cater to the diverse need of the population.

The new concept of the educational strategy where students can be with

their friends, groupmates, and classmates will introduce a diverse strategy to

evolve the essence of studying and reading with a comfortable but not disturbing

place, to socialize and be leisured in the process of learning. Peculiarity will set

an edge to lengthen the opportunities in converting potential customers to loyal

customers. This educational strategy will change the perception of the others that

not all place is for a couple or just for relaxation only, it is creating the process of

learning.

Objectives of the Study

This study aims to the viability and sustainability of a group study spot to

appeal to a large number of individuals,

 Describe the profile of the business.

 Identify the target market of the business.

Circle Readers’ Spot

(Group Study Inn) 4
 STI College Koronadal
Business Management Department
City of Koronadal, South Cotabato

 Determine the market industry player in the business.

 To assess the competitiveness, feasibility, and sustainability of the

proposed project.

 Determine the strengths, weaknesses, opportunities, and threats of

Circle Readers’ Spot.

 To establish an opportunity for the business.

Scope and Limitation

The study covers the study of the growing market of the café, libraries,

and lounges within Koronadal City, as well as the feasibility of the proposed

project Circle Readers’ Spot. Another condition where the study was limited is

that only the perspective of the tertiary students from different colleges and the

university was used on the determination of the feasibility, thus not considering

the opinions of the secondary level students.

Methodology

This section is composed of the locale of the study, respondents of the

study, the sampling procedures used, the research instruments, the data

gathering procedures, and the data analysis used.

 Research Design

Circle Readers’ Spot

(Group Study Inn) 5
 STI College Koronadal
Business Management Department
City of Koronadal, South Cotabato

The research design used is descriptive quantitative. It is

descriptive since it describes the aspects of putting up a study lounge. It

provides simple summaries about samples and measures. It is also a

quantitative study because it distinguishes the feasibility of the study

specifically financial management.

 Respondents and Respondents Size

The main target market which was students from tertiary took part

in the research studies for the proposed project in the City of Koronadal.

The study identified three hundred (300) respondents through

convenience sampling.

Locale of the Study

Koronadal City was the locale of the study. The place is composed of 27

Barangay with a total population of 767,355 based on the 2012 National

Statistics Office (NSO) censuses. Koronadal City is also known as the Crown

City of the South, the capital of South Cotabato and regional administrative

center of SOCCSKSARGEN.

Research Instruments

A self-made questionnaire was prepared by the researchers in the

gathering of data needed to identify the different aspects essential to the

proposed project. The first part of the questionnaire contains questions that

Circle Readers’ Spot

(Group Study Inn) 6
 STI College Koronadal
Business Management Department
City of Koronadal, South Cotabato

identify the respondents through demographics and the second part is the

demand of the people for the proposed business and to identify the factors

considered in putting this kind of business in the city.

Data Gathering Procedures

Convenience sampling was used in the process of selecting a respondent

from the target population. A total of 300 students ages 18 up were the

respondents of this study given and were capable and suitable in answering the

questions. Before the data gathering, the researchers prepared ten (10) sets of

questionnaires for the pilot testing and were conducted as a key representative

so that the researches could evaluate and identify errors.

Operational Definition of Terms

Lounge – is a room where people can sit and relax.

Study Lounge – an enclosed quiet space designed to give students some spot

for relaxation and study.

Library – a building, room, or organization that has a collection of books, music,

and information that can be accessed by computer for people to read, use, or

borrow.

Circle Readers’ Spot

(Group Study Inn) 7
 STI College Koronadal
Business Management Department
City of Koronadal, South Cotabato

Coffee shop - is an establishment that primarily serves coffee, related coffee

drinks.

CHAPTER II

INDUSTRY ANALYSIS

The Industry

Service industry contributes in the economic growth of the country,

according to Freund & Weinhold, ''Relationship between the service sector and

the industry has been growing recently, the industry is constituted of different

activities and, as it develops, an increasing number of more sophisticated

activities emerge. These activities require more services and the emergence of

these services cause countries to migrate to the manufacturing of more

sophisticated industrial products. That, in turn, is related to higher income level''.

It indicates the quality of life or standard of living within a certain place.

Thus, most business firms today engage in a service industry that can satisfy the

need or wants of the customers. The City of Koronadal is a fast-growing city in

Mindanao as it is now the center of trade and industry in the region. A service

type of business has remained in high demand to help and provide the needs of

Circle Readers’ Spot

(Group Study Inn) 8
 STI College Koronadal
Business Management Department
City of Koronadal, South Cotabato

the people of South Cotabato. One of these is the accommodation service, this

type of service is growing rapidly through the years, a lot of stay-ins like hotel are

situated around the city that provides lodging services for travelers and tourists

but not particularly for the students to do their school works because of price

rates.

According to the results of the 2016 Annual Survey of Philippine Business

and Industry (ASPBI), it was shown that a total of 30,889 establishments in the

formal sector of the economy were engaged in Accommodation Service

Activities. These accommodation services include hotels, motels, coffee shops,

refreshment stands, bars, and lounges.

Technically, Circle Readers’ Spot will add up to accommodation services

but with a different target market- the students. This will be situated in the center

of the City of Koronadal to provide convenience to its target market.

Industry Player

The Circle Readers’ Spot will be the first kind in the target market

positioning. However, some related service establishments offer relative service

in the site, we identified (1) one direct industry player which is the My Space, and

the indirect industry players are the coffee shops, hotels, and inns registered in

the city of Koronadal.

Key Success Factors

Circle Readers’ Spot

(Group Study Inn) 9
 STI College Koronadal
Business Management Department
City of Koronadal, South Cotabato

These are the competitive emphasis or strategic posture that state

the important elements required for a company to compete in its target markets,

it directly addresses competitive forces and set a direction for the behavioral

expectations of the employees.

Emotional Connection with Clients- refers to build a successful

business; we tend to stick to the basics of supply and demand.

Innovation – creates new products or changes in service that will attract

new customers and income opportunities.

Leadership – effective leadership provides motivation, organization, and

direction, allowing it to reach its full potential.

Customer Satisfaction – refers to the fulfillment of the customers derive

from the business. It is an important step to gain a customer. Providing

and meeting customer demands.

Cost Control – refers to the information about operations to plan for the

future, to control present activities, and to evaluate the past performance

of managers, employees, and related business segments.

Government Policies

A business operation must conform to the government regulations for the

business to operate legally. Businesses must consider all requirements given by

Circle Readers’ Spot

(Group Study Inn) 10
 STI College Koronadal
Business Management Department
City of Koronadal, South Cotabato

the government so that an operation may take place. The establishment must

secure the following.

 Labor Code of the Philippines

 Social security Act of 1997

 National health insurance act of 1995

 Consumer Acts of the Philippines

 Environmental and Safety Precautions

 Business Registration Home Development

 Social Security Law

Also in procuring legal requirements needed, the establishment must follow the

steps indicated below:

 Register the Business Organization

 Obtain the Mayor’s Permit

 Register with the Bureau of Internal Revenue(BIR)

 Register with the Social Security System (SSS)

 Register with the Philippine Health Insurance Corporation (PhilHealth)

 Register with the Home Development Mutual Fund (Pag-IBIG fund

Circle Readers’ Spot

(Group Study Inn) 11
 STI College Koronadal
Business Management Department
City of Koronadal, South Cotabato

Actual and Potential Market Size

Table 1. Total Actual and Potential Market size

Male Female Total

Source: Commission on Higher Education Office Region XII

Table 1 shows the total number of Actual and Potential Market sizes of

colleges and university in Koronadal City as of the school year 2018-2019.

Circle Readers’ Spot

(Group Study Inn) 12
 STI College Koronadal
Business Management Department
City of Koronadal, South Cotabato

Table 2. Target Market Size

Total

Source: Commission on Higher Education Office Region XII

Table 2 shows the target market size of (8) eight different schools that

have the highest population for the school year 2018-2019, the total number of

enrollees compose of both male and female was 19,690.

Market Share of Industry Player

Table 3. Market Share of Industry as to the Number of Customer Serve

Weekly

Circle Readers’ Spot

(Group Study Inn) 13
 STI College Koronadal
Business Management Department
City of Koronadal, South Cotabato

Students Who Average Total Average

Market
Category are Availing Service Service
Share
the Service Availed Availed
Direct
My Space 315 1 315 14.52%
Subtotal 315 315 14.52%
Indirect
Coffee Shops
Infinitea 700 1 700 32.26%
Mr. Tea 469 1 469 21.61%
Brew Project 301 1 301 13.87%
Hotels
Green State 385 1 385 85.48%
Subtotal 1855 1855 85.48%
Total 2,170 2,170 100.00%
Source: Survey and Interview in Different trade Channels as to Industry Player
Table 3 shows the company’s competitor categorized as direct and

indirect industry players. It contains the number of customers they served weekly

as well as the market share of each competitor. It shows that Infinitea has the

highest number of customers served weekly.

Major Industry Player

Table 4. Direct Industry Player

Category

My Space 315 1 315 100.00%

Total 315 315 100.00%

Table 4 shows the company’s competitor categorized as a direct industry

player. It contains the number of customers served weekly as well as the market

share of the competitor.

Circle Readers’ Spot

(Group Study Inn) 14
 STI College Koronadal
Business Management Department
City of Koronadal, South Cotabato

Table 5. Indirect Industry Player

Category

Table 5 shows the indirect industry players and the number of customers it

serves daily, which are also a threat to the business.

Demand

Table 6. The number of Respondents who are willing and not willing to

Experience Circle Readers’ Spot

Circle Readers’ Spot

(Group Study Inn) 15
 STI College Koronadal
Business Management Department
City of Koronadal, South Cotabato

Source: Survey and Interview in Different Colleges as to Target Market

Table 6 shows the result of the survey conducted by the proponents in

8(eight) different colleges and one (1) university. The number of respondents

who are willing and are not willing to try the service is divided from the total

number of respondents. The respondents identified the ratio of students who are

fond of group study, which is 70% per target market size.

Table 7. Potential Demand as to Number of Customers

Total

Total 19,690 13,784 100.00% 300 284 284 13,111

Table 7 shows the 8 (eight) different target markets with their

corresponding actual potential demand with a total of 13,111. The table indicates

Circle Readers’ Spot

(Group Study Inn) 16
 STI College Koronadal
Business Management Department
City of Koronadal, South Cotabato

that the Circle Readers’ Spot demand in the market has a viable number

possible.

Table 8. Potential Demand per Month

Total 19,690 13,784 100.00% 300 284 13,111 3,059 13,111

Table 8 shows the potential demand per month through different colleges

and a university in the target area.

Supply

Table 9. Supply as Number of Direct Industry Player Offer Services Weekly

Category

My Space 315 1 315 14.52%

Total 315 315 14.52%

Circle Readers’ Spot

(Group Study Inn) 17
 STI College Koronadal
Business Management Department
City of Koronadal, South Cotabato

Table 9 shows the list of direct industry players that serve almost the

same service to the business. With the total number of 315 customers served

weekly and total market share of 14.52%.

Table 10. Supply as a Number of Indirect Industry Players Offer Services

Weekly

Category

Total 1855 1855

Source: Survey and Interview in Different trade Channels as to Industry Player

Table 10 shows the indirect industry players of the business. With the total

number of 1,855 customers served weekly and total market share of 85.48%.

Table 11. Demand and Supply Gap

Total Demand per Month 13,111 100%

Total Supply
Direct Industry Player 1350 10.30%
Indirect Industry Player 9301 70.94%
Demand and Supply Gap 2,460 18.77%

Circle Readers’ Spot

(Group Study Inn) 18
 STI College Koronadal
Business Management Department
City of Koronadal, South Cotabato

Table 11 shows the total demand and supply to direct and indirect industry

players. It also shows the difference between the total demand and the total

supply of direct and indirect industry players.

Demographic Profile

Table 12. Demographic Profile

Table 12 shows the demographic profile of the respondents.

Circle Readers’ Spot

(Group Study Inn) 19
 STI College Koronadal
Business Management Department
City of Koronadal, South Cotabato

Table 13. Survey Result

Question Choices Response Ratio

Male 300 198 66%

Female 300 102 34%
18yrs. Old -20 yrs. Old 300 134 44.66%
21yrs. Old -23yrs. Old 300 118 39.33%
24yrs. Old-26yrs. Old 300 44 14.66%
27yrs. Old and above 300 4 1.33%

Yes 300 284 94.66%

No 300 16 5.33%
1 hour - 2 hours 300 162 54%
2 hours - 3 hours 300 86 28.66%
3 hors - 4 hours 300 52 17.33%
Others, please specify 300 0 0.00%
Home 300 199 66.33%
Restaurant 300 69 23.00%
Classmate's house 300 13 4.33%
Library 300 142 47.33%
Café 300 84 28.00%
Yes 300 280 93.33%
No 300 20 6.66%

300 0 0.00%

Php 100 - Php 300 300 203 67.66%

Php 301 - Php 600 300 69 23.00%
Php 6001 - Php 900 300 28 9.33%
Php 901 - Php 1,200 300 0 0.00%

Circle Readers’ Spot

(Group Study Inn) 20
 STI College Koronadal
Business Management Department
City of Koronadal, South Cotabato

CHAPTER III

INTERNAL AND EXTERNAL ANALYSIS

The significance of this chapter is to evaluate the organization's resources

and capabilities. Moreover, to measure and determine the organization's

competency, cost position, and competitive viability in the marketplace.

Furthermore, a better understanding of organizations owns strengths and

weaknesses.

Barriers to Entry

A barrier to entry acts as a deterrent against new competitors. They serve

as a defensive mechanism that imposes a cost element to new entrants. The

following are the barriers to entry that is identified that could hinder the business

to enter the market.

 High Startup Capital Cost – the capital to establish the Circle Readers’

Spot could hinder the entry of the business.

Circle Readers’ Spot

(Group Study Inn) 21
 STI College Koronadal
Business Management Department
City of Koronadal, South Cotabato

 Government regulations – to open a business several legal

requirements and licenses must be obtained. These rigid government

regulations for some areas are examples of typical entry barriers.

- The government regulates many industries for a variety of reasons, which

keep the number of entering competitors down by forcing them to meet

specific requirements.

 Customers – the bargaining power of customers will determine the

degree of competitiveness of an industry. By nature, customers want to

receive the maximum benefits possible by paying the lowest price.

 Geographical Condition – the establishment must be considerably and

favorably located at least in the school reach zone since the students are

the main target market. Consequently, if the location is far-reach by the

school zone it could generate possibilities to create a barrier to entry for

the business.

Circle Readers’ Spot

(Group Study Inn) 22
 STI College Koronadal
Business Management Department
City of Koronadal, South Cotabato

TOWS Matrix

Competitive Advantage

The uprising number of Inn's and group study places today is somewhat

uncontrollably increasing, to work out the plan of not just being competitive but

also unique, the idea of Inn converted into group study place will surely stimulate

greater advantage and potential profit. Circle Readers’ Spot offers an advantage

when it comes to rendering excellent service and providing a new place for study.

Circle Readers’ Spot

(Group Study Inn) 23
 STI College Koronadal
Business Management Department
City of Koronadal, South Cotabato

Clients will be more comfortable and relax, away from the noisy environment and

promote privacy. Internet access and books are made available; they can also

take a nap and rest after they have done the study.

CHAPTER IV

MARKETING PLAN

Service

Generally, the service of the plan aligns with broader business objectives

and strategies. Thus, developing a service is essential to set the business on a

specific course in the market. Wherein, the proponents established the service to

Circle Readers’ Spot

(Group Study Inn) 24
 STI College Koronadal
Business Management Department
City of Koronadal, South Cotabato

measure the specific target market. Our business plan is a place that offers a

service for students to study, research, and access the internet. The desire of the

business plan is for the students to be able to study well and be as rested as

possible in their homes. A group of students can easily access the area because

the building plan is in the center of those schools in a large number of students.

A group study place is a place that students will love to study with their fellow

students.

The service that will offer room for study place with computer sets and

books.

Business Name

The business name “Circle Readers’ Spot” was simply composed by

looking for an absolute definition of a group study place where the students could

ideally be whenever they want to study in a group. The term "Circle" depicts a

group of people who are doing their paperwork-related activities who also need a

quiet place. The term "Readers" is referring to those people who are book lovers

and passionate about reading. The term "Spot" is the place where mostly they

will like, a place that is more comfortable relaxing and quiet. Thus, these

terminologies perfectly blended to cast an ideal name for our business.

Circle Readers’ Spot

(Group Study Inn) 25
 STI College Koronadal
Business Management Department
City of Koronadal, South Cotabato

Furthermore, the name was deliberately criticized by the proponents to

establish a unique and intriguing subject by prompting curiosity to the customer

and will eventually make them remember the name.

Proposed Logo

From the given business objectives and scope, the logo shown below

represents the business.

Figure 1. Business Logo

The logo

presented above is being illustrated by the following symbols and colors:

Images

 Open Book - an open book symbolizes information that is available to

everyone, a symbol for common, everyday knowledge or information

available to all.

Circle Readers’ Spot

(Group Study Inn) 26
 STI College Koronadal
Business Management Department
City of Koronadal, South Cotabato

 Circle - the circle means organizing and honoring the collective wisdom

of the group, an endless loop that means endless learning and

knowledge. We put three (3) circles because 3 is the power number, in

numerology number 3 means enthusiasm, creativity, and optimism.

 Group of Persons – depicts teamwork, persons working collaboratively

to achieve a goal.

Colors

 Color Red - the color of passion, action, ambition, and determination.

 Color Orange - the color of social communication and optimism.

 Color Yellow - the color of the mind and the intellect.

 Color Blue - communication and clarity of mind.

 Color Green – this color helps improve reading ability, reading speed

and comprehension.

 Color Violet – encourages creativity, calms the mind and nerves.

Target Customer Profile

Circle Readers’ Spot

(Group Study Inn) 27
 STI College Koronadal
Business Management Department
City of Koronadal, South Cotabato

The customers’ variety of needs and wants are what all business entities

took into consideration. Wherein the business depends on its products to

produce the service aligns with the standard of customer satisfaction.

The target market of the business is the students at the tertiary level in

Koronadal City. Several schools in the city show a larger number of student's

population and were being identified by the proponents as the primary target

customers. Thus, the table below illustrates the schools with a higher number of

population accordingly.

Table 14. Target Customer Profile

Total

Source: Commission on Higher Education Region XII

Pricing Strategy

Circle Readers’ Spot pricing strategy is based on hour rates. The

minimum time is 1-3 hours per room with a minimum price of 200 pesos.

Circle Readers’ Spot

(Group Study Inn) 28
 STI College Koronadal
Business Management Department
City of Koronadal, South Cotabato

Table 15. Price Rates

Promotional Strategy

A strong promotional strategy will be able to set the business in a

favorable position in the market. Thus, promotional strategies to be employed are

the most positive and effective advertisement. Being a business with industry

specialization through the services of the business will be acknowledged and can

be easily recognized by the customers. The business will be using a different

medium to promote the services offered to utilize social media, tarpaulin, and

flyers. Moreover, the power of word of mouth can be the best promotional

strategy to mobilize the features of the business just for example a sales talk and

customer referrals.

Advertising and Marketing

The business will be using promotional strategies as mentioned. These

advertisements will assist the services offered to be highlighted and attract

customers.

Circle Readers’ Spot

(Group Study Inn) 29
 STI College Koronadal
Business Management Department
City of Koronadal, South Cotabato

 Tarpaulin

The services offered will be put into tarpaulin that will be displayed

in the public and private places especially in front of schools.

 Social Media

There will be a social media account and page as outlets to spread

the message and information about the service offered to accommodate

the concern of the customers.

 Word of Mouth

Responsive sales can be usually determined in the existing

customer base. While on the other hand customer referral comes with an

instant connection to the prospect and removes much anxiety. This

promotional is the most reliable and cheapest form of promotion.

Total Marketing Cost

Table 16. Promotional Budget

Circle Readers’ Spot

(Group Study Inn) 30
 STI College Koronadal
Business Management Department
City of Koronadal, South Cotabato

CHAPTER V

MANAGEMENT PLAN

This section of the business plan tends to provide an opportunity for the

researchers to answer the important question like who is the management

personnel, their background, responsibilities, and skills description. What's more,

this aspect of the business plan includes the form of ownership, organization

structure, business objectives, vision and vision statement, the procedures of the

recruitment process and employee training and organizational policies.

Form of Ownership

The Circle Readers’ Spot is a partnership firm of business which is owned

by 4(four) persons who are responsible and liable for all the debt of the business.

All partners are general partners and are directly involved in the day to day

operation of the business. One will be the general manager, another will be the

supervisor and the other two partners will be assigned in the frontline.

Organizational Structure

It represents the ideal structure of the organization which is known as a

functional structure. The figure will serve as the basis for the organization to

perform its responsibilities. One of the partners will serve as the general manager

who has the authority of command and liable for decision making.

Figure 2. Organizational Structure

Circle Readers’ Spot

(Group Study Inn) 31
 STI College Koronadal
Business Management Department
City of Koronadal, South Cotabato

Figure 2 shows the business’ organizational structure.

Company Objectives

The company objective is a measurable goal or outcome that the

organization desires to achieve. It’s an effective tool that describes the actions

required to accomplish a task. The business aims to create a study lounge that

provides and meets customer satisfaction at an affordable price, to build a

business that generates a return on the capital invested and to sustain the

feasibility of the business.

Core Values

Circle Readers’ Spot

(Group Study Inn) 32
 STI College Koronadal
Business Management Department
City of Koronadal, South Cotabato

Accountability – being accountable and responsible for something

we have done or supposed to do.

Integrity – employees in our business will observe self-respect,

and keep reputation even if not seen by another person, it is our

commitment to honesty and willingness to do what's right.

Commitment to Customers – our business upholds customer

commitment, like collecting feedback to measure the level of trust

our customers feel and to make them feel important.

Honesty and Trust - honesty builds trust. Being true to our word,

keeping our promises, and making sure that we do whatever we

say is all that it takes for customers to see that we are reliable,

dependable, and trustworthy. Honesty and trust are the foundation

of a good relationship in business.

Mission Statement

The Circle Readers’ Spot provides quality and innovative services

to stimulate creativity, intellect, facilitate learning and improve self-value

within our stakeholders.

Vision Statement

Circle Readers’ Spot

(Group Study Inn) 33
 STI College Koronadal
Business Management Department
City of Koronadal, South Cotabato

To be recognized as a place that promotes avenue for intellectual

development known for our quality standard services that create a

welcoming and comfortable environment and foster an atmosphere of

diversity, excellence, and continued growth of our stakeholders.

Manpower Requirements

Table 17. Manpower Requirements

Table 17 shows the manpower needed in business operations.

Circle Readers’ Spot

(Group Study Inn) 34
 STI College Koronadal
Business Management Department
City of Koronadal, South Cotabato

Manpower Qualifications, Duties and Responsibilities

Table 18. Manpower Qualifications, Duties and Responsibilities

Responsible and work-focused

Circle Readers’ Spot

(Group Study Inn) 35
 STI College Koronadal
Business Management Department
City of Koronadal, South Cotabato

Recruitment Process

Figure 3. Recruitment Process

Step 1: Business will use flyers for a posting job vacancy to inform applicants

about job hiring.

Step 2: The applicant will be viewed by the supervisor base on the qualification

of the position.

Step 3: The supervisor will interview the applicants to know about their

background and experiences.

Step 4: The supervisor will hire the applicant/s, then the signing of a contract

between employee and employer.

Circle Readers’ Spot

(Group Study Inn) 36
 STI College Koronadal
Business Management Department
City of Koronadal, South Cotabato

Step 5: The formal orientation of the employee/s, the duties, responsibilities,

company policies, employee compensation, and benefits will be discussed to

them by the person orienting.

Training and Development

After hiring qualified workers, there will be a seminar. The seminar will

tackle the business, the mission and vision do and don'ts of the business, the

time of their daily duties, wages, employee benefits, the uniform and their duties

and responsibilities.

Organizational Policies

The organizational policies will serve as a reminder for the

management and the employees of their right to conduct, outlining duties and

responsibilities. Failure to comply will be subject to evaluation that is probable of

warning for termination or instant termination if there is a higher degree of

offense performed.

Employee Conduct - the adherence to what is the company's condition of

employment is being promoted that which misconduct like harassment,

improper dress code, and inappropriate employee behavior are highly

discouraged.

Circle Readers’ Spot

(Group Study Inn) 37
 STI College Koronadal
Business Management Department
City of Koronadal, South Cotabato

Proper Sanitation - hygiene of employees and cleanliness of the

establishment is highly and strictly implemented and being observed by

the management to impose cleanliness and safety for the customers.

Attendance and Time-out - this aspect of organizational policies set forth

the consequences for failing to adhere to a schedule. Wherein the

business is highly encouraging the timeliness and attendance of the

employees. Thus, the specified time frame for attendance and time-out is

strictly directed to avoid incompetency in the workplace.

Substance Abuse – employees are expected to engage in complete

abstinence from alcohol and drug. Doing so will be punished accordingly.

Table 19. Salary and Compensation

Table 19 shows the salaries and wages of the employees.

Fringe Benefits

Circle Readers’ Spot

(Group Study Inn) 38
 STI College Koronadal
Business Management Department
City of Koronadal, South Cotabato

Table 20. Fringe Benefits

Position

460 100 316.25 876.25 11,500 12,376.25

Supervisor 400 100 275 775 10,000 10,775
Accountant 400 100 275 775 10,000 10,775
Frontline 400 100 266.75 766.75 9,750 10,526.75
400 100 266.75 766.75 9,750 10,526.75
Utility 380 100 257.13 755.13 9,350 10,105.13
Total 2,440 600 1,999.26 4,714.88 6,250

Table 20 shows the total annual fringe benefits of the employees

compose of SSS, Pag-ibig, PhilHealth and their thirteenth-month pay.

CHAPTER VI

OPERATIONAL AND TECHNICAL PLAN

It is a specific plan for these of the organization’s resources in pursuit of

the strategic plan. Thus, this chapter carries technical and operational process,

the operation schedules, planned location, cost of setting up the physical aspect

of the business through perspective layout and the overall budget that which

affects the daily business operation.

Business Location

The business is located at Abad Santos Street, Koronadal City with a total

lot measurement of 250 square meters.

Circle Readers’ Spot

(Group Study Inn) 39
 STI College Koronadal
Business Management Department
City of Koronadal, South Cotabato

Figure 4. Business Location

Source: Google.support.map.com

Plant Size and Layout

The figures shown below are the physical perspective layout of the Circle

Readers’ Spot with a total area of 163 square meters. The dimensional aspect of

the service offering is being illustrated in the figures to ascertain the business

Circle Readers’ Spot

(Group Study Inn) 40
 STI College Koronadal
Business Management Department
City of Koronadal, South Cotabato

plan and to be more realistic. The perspective layout is designed to make the

business operate smoothly.

Figure 5. Circle Reader’s Spot Floor Plan

Circle Readers’ Spot

(Group Study Inn) 41
 STI College Koronadal
Business Management Department
City of Koronadal, South Cotabato

Figure 6. Circle Readers’ Spot Front View

Figure 7. Circle Readers’ Spot Side View

Circle Readers’ Spot

(Group Study Inn) 42
 STI College Koronadal
Business Management Department
City of Koronadal, South Cotabato

Service Process

The service process refers to how a service is provided or delivered to a

customer. Processes involve the procedures, activities, and routines by which a

service is delivered to the customer.

Figure 8: Service Process

Figure 8 shows the complete service process of Circle Readers’ Spot.

Quality Control

Circle Readers’ Spot

(Group Study Inn) 43
 STI College Koronadal
Business Management Department
City of Koronadal, South Cotabato

This is a set of procedures to assures quality service and satisfy the

customers’ needs.

Customers Feedback - gathering complaints and customer survey

responses help the business to identify quality trends over time. Surveys

have the benefit of eliciting customers’ subjective experiences in addition

to gathering quantifiable information about customer satisfaction.

Sales Repeat - the organization will observe the demand of the customer

about the services offered. Also, the behavior on how often the customer

will avail of the service.

Training and Testing - since service quality relies to a great extent on

front-line employees’ skills and knowledge, continuous training and testing

can be even more important. Once there is quality-assurance continuous

improvement of quality in practice.

Operation Schedules

The business will be open 24 hours from Monday to Saturday, and every

Sunday the business will be open until noon.

Table 21. Operation Schedule

Circle Readers’ Spot

(Group Study Inn) 44
 STI College Koronadal
Business Management Department
City of Koronadal, South Cotabato

Machineries and Equipment

Table 22. Machineries and Equipment

Furniture and Fixtures

Table 23. Furniture’s and Fixtures

Circle Readers’ Spot

(Group Study Inn) 45
 STI College Koronadal
Business Management Department
City of Koronadal, South Cotabato

Table 24. List of Books

Circle Readers’ Spot

(Group Study Inn) 46
 STI College Koronadal
Business Management Department
City of Koronadal, South Cotabato

Table 25. Building Construction Cost

Circle Readers’ Spot

(Group Study Inn) 47
 STI College Koronadal
Business Management Department
City of Koronadal, South Cotabato

Table 26. Building Summary Cost

Table 27. Permit and Licenses

Circle Readers’ Spot

(Group Study Inn) 48
 STI College Koronadal
Business Management Department
City of Koronadal, South Cotabato

CHAPTER VII
FINANCIAL PLAN
Financial Plan

This chapter shows the different financial aspects to determine the viability

and profitability of the business plan. The inclusion of this chapter is the sources

of financing, total project cost, financial assumptions, the projected financial

statements monthly and yearly, net profit ratio, (ROI) return on investment,

payback period, breakeven analysis, and the financial analysis.

Sources of Financing

The total project cost of Circle Readers’ Spot is P5, 000,000.00. This will

be funded by the owner of the business. The table below shows the breakdown

of the total project cost. The cash invested is not a loaned amount.

Table 28. Total Project Cost

Working Capital 473,405.50

Fixed Assets
Machineries and Equipment 152,000.00
Furniture and Fixtures 109,357.00
Books 60,687.00
Building 4,204,550.50
Total Project Cost 5,000,000.00

Financial Assumptions

Circle Readers’ Spot

(Group Study Inn) 49
 STI College Koronadal
Business Management Department
City of Koronadal, South Cotabato

The following are the assumptions used in making the financial

statements:

 The business assumes 30 working days in a month.

 All sales are on a cash basis.

 The selling price is assumed to increase by 10% annually.

 All selling costs and expenses are assumed to increase by 5%

annually.

 The straight-line method is used to depreciate the assets.

Table 29. Selling Price

Particulars Year 1 Year 2 Year 3
1 to 3 hours 150.00 165.00 181.50
3 to 7 hours 200.00 220.00 242.00
7 to 12 hours 250.00 275.00 302.50
12 to 24 hours 400.00 440.00 484.00

Table 29 shows the Circle Readers’ Spot selling price which is assumed to

increase 10% annually.

Table 30. Number of Volumes

Particulars Monthly Year 1 Year 2 Year 3
1 to 3 hours 984 11810 11810 11810
3 to 7 hours 738 8858 8858 8858
7 to 12 hours 492 5905 5905 5905
12 to 24 hours 246 2953 2953 2953

The number of volumes has a monthly market share of 40%, 30%, 20%,

and 10% respectively.

Circle Readers’ Spot

(Group Study Inn) 50
 STI College Koronadal
Business Management Department
City of Koronadal, South Cotabato

Schedule

Table 31. Depreciation Schedule

Table 32. Accumulated Depreciation

Particulars Year 1 Year 2 Year 3

Machineries and Equipment 30,400.00 60,800.00 91,200.00
Furniture and Fixtures 21,871.40 43,742.80 65,614.20
Books 20,229.00 40,458.00 60,687.00
Building 420,455.05 840,910.10 1,261,365.15
Total 492,955.45 985,910.90 1,478,866.35

Accumulated depreciation of the assets yearly is assumed to be Php

492,955.45, Php985, 910.90, and Php478, 866.35 respectively. Assets that are

depreciated were replaced after its useful life except building.

Circle Readers’ Spot

(Group Study Inn) 51
 Particulars 1 2 3 4 5 6 7 8 9 10 11 12
Revenue
1 to 3 hours 147,625.62 147,625.62 147,625.62 147,625.62 147,625.62 147,625.62 147,625.62 147,625.62 147,625.62 147,625.62 147,625.62 147,625.62

(Group Study Inn)

3 to 7 hours 147,625.62 147,625.62 147,625.62 147,625.62 147,625.62 147,625.62 147,625.62 147,625.62 147,625.62 147,625.62 147,625.62 147,625.62

Circle Readers’ Spot

7 to 12 hours 123,021.35 123,021.35 123,021.35 123,021.35 123,021.35 123,021.35 123,021.35 123,021.35 123,021.35 123,021.35 123,021.35 123,021.35
Financial Statements

12 to 24 hours 98,417.08 98,417.08 98,417.08 98,417.08 98,417.08 98,417.08 98,417.08 98,417.08 98,417.08 98,417.08 98,417.08 98,417.08
TOTAL REVENUE 516,689.66 516,689.66 516,689.66 516,689.66 516,689.66 516,689.66 516,689.66 516,689.66 516,689.66 516,689.66 516,689.66 516,689.66

Costs and Expenses

Marketing Expenses 153.25 153.25 153.25 153.25 153.25 153.25 153.25 153.25 153.25 153.25 153.25 153.25
Salaries and Wages 56,666.67 56,666.67 56,666.67 56,666.67 56,666.67 56,666.67 56,666.67 56,666.67 56,666.67 56,666.67 56,666.67 56,666.67
Fringe Benefits 5,423.74 5,423.74 5,423.74 5,423.74 5,423.74 5,423.74 5,423.74 5,423.74 5,423.74 5,423.74 5,423.74 5,423.74
Depreciation Expense 41,079.62 41,079.62 41,079.62 41,079.62 41,079.62 41,079.62 41,079.62 41,079.62 41,079.62 41,079.62 41,079.62 41,079.62
STI College Koronadal

Table 33. Projected Monthly Income Statement

Utilities Expense 12,500.00 12,500.00 12,500.00 12,500.00 12,500.00 12,500.00 12,500.00 12,500.00 12,500.00 12,500.00 12,500.00 12,500.00
City of Koronadal, South Cotabato
Business Management Department

Permits and Licenses 437.83 437.83 437.83 437.83 437.83 437.83 437.83 437.83 437.83 437.83 437.83 437.83
TOTAL EXPENSE 116,261.11 116,261.11 116,261.11 116,261.11 116,261.11 116,261.11 116,261.11 116,261.11 116,261.11 116,261.11 116,261.11 116,261.11

INCOME BEFORE TAX 400,428.55 400,428.55 400,428.55 400,428.55 400,428.55 400,428.55 400,428.55 400,428.55 400,428.55 400,428.55 400,428.55 400,428.55
Income Tax Expense 115,637.14 115,637.14 115,637.14 115,637.14 115,637.14 115,637.14 115,637.14 115,637.14 115,637.14 115,637.14 115,637.14 115,637.14

52
NET INCOME 284,791.41 284,791.41 284,791.41 284,791.41 284,791.41 284,791.41 284,791.41 284,791.41 284,791.41 284,791.41 284,791.41 284,791.41
 STI College Koronadal
Business Management Department
City of Koronadal, South Cotabato

Table 33 shows the projected Income Statement of the business within its

first 12 (twelve) months of business operations.

Table 34. Projected Income Statement

Particulars Year 1 Year 2 Year 3

Revenue
1 to 3 hours 1,771,507.41 1,948,658.15 2,143,523.96
3 to 7 hours 1,771,507.41 1,948,658.15 2,143,523.96
7 to 12 hours 1,476,256.17 1,623,881.79 1,786,269.97
12 to 24 hours 1,181,004.94 1,299,105.43 1,429,015.98
TOTAL REVENUE 6,200,275.93 6,820,303.52 7,502,333.87

Costs and Expenses

Marketing Expenses 1,839.00 1,930.95 2,027.50
Salaries and Wages 680,000.00 714,000.00 749,700.00
Fringe Benefits 65,084.88 68,339.12 71,756.08
Depreciation Expense 492,955.45 492,955.45 492,955.45
Utilities Expense 150,000.00 157,500.00 165,375.00
Permits and Licenses 5,254.00 5,254.00 5,254.00
TOTAL EXPENSE 1,395,133.33 1,439,979.52 1,487,068.03

INCOME BEFORE TAX 4,805,142.60 5,380,324.00 6,015,265.84

Income Tax Expense 1,387,645.63 1,571,703.68 1,774,885.07

NET INCOME 3,417,496.97 3,808,620.32 4,240,380.77

Table 34 shows the projected Income Statement within the approximate 3

(three) years.

Circle Readers’ Spot

(Group Study Inn) 53
 Particulars Pre-Operating 1 2 3 4 5 6 7 8 9 10 11 12
Cash, beginning - 473,405.50 799,276.53 1,125,147.57 1,451,018.60 1,776,889.64 2,102,760.67 2,428,631.71 2,754,502.74 3,080,373.78 3,406,244.81 3,732,115.85 4,057,986.88

Operations

(Group Study Inn)

Cash receipts from customers - 516,689.66 516,689.66 516,689.66 516,689.66 516,689.66 516,689.66 516,689.66 516,689.66 516,689.66 516,689.66 516,689.66 516,689.66

Circle Readers’ Spot

Cash paid for -
General operating and administrative
expenses - 13,091.08 13,091.08 13,091.08 13,091.08 13,091.08 13,091.08 13,091.08 13,091.08 13,091.08 13,091.08 13,091.08 13,091.08
Salaries and Wages - 56,666.67 56,666.67 56,666.67 56,666.67 56,666.67 56,666.67 56,666.67 56,666.67 56,666.67 56,666.67 56,666.67 56,666.67
Mandatory benefits 5,423.74 5,423.74 5,423.74 5,423.74 5,423.74 5,423.74 5,423.74 5,423.74 5,423.74 5,423.74 5,423.74 5,423.74
Income taxes - 115,637.14 115,637.14 115,637.14 115,637.14 115,637.14 115,637.14 115,637.14 115,637.14 115,637.14 115,637.14 115,637.14 115,637.14
Net Cash Flow from Operations - 325,871.03 325,871.03 325,871.03 325,871.03 325,871.03 325,871.03 325,871.03 325,871.03 325,871.03 325,871.03 325,871.03 325,871.03
Table 35. Projected Monthly Cash Flow

Investing Activities
Cash paid for
Purchase of property, plant and equipment 4,526,594.50
STI College Koronadal

Net Cash Flowfrom Investing Activities (4,526,594.50)

City of Koronadal, South Cotabato
Business Management Department

Financing Activities
Cash receipts from
Owner's Capitalization 5,000,000.00
Net Cash Flow from Financing Activities 5,000,000.00

Net increase in cash 473,405.50 325,871.03 325,871.03 325,871.03 325,871.03 325,871.03 325,871.03 325,871.03 325,871.03 325,871.03 325,871.03 325,871.03 325,871.03

54
Cash, end 473,405.50 799,276.53 1,125,147.57 1,451,018.60 1,776,889.64 2,102,760.67 2,428,631.71 2,754,502.74 3,080,373.78 3,406,244.81 3,732,115.85 4,057,986.88 4,383,857.92
 STI College Koronadal
Business Management Department
City of Koronadal, South Cotabato

Table 35 shows the projected Cash Flow of the business within its first

(12) twelve months of business operations.

Table 36. Projected Cash Flow

Particulars Pre-Operating Year 1 Year 2 Year 3

Cash, beginning - 473,405.50 4,383,857.92 8,685,433.68

Operations
Cash receipts from customers - 6,200,275.93 6,820,303.52 7,502,333.87
Cash paid for -
General operating and administrative
expenses - 157,093.00 164,684.95 172,656.50
Salaries and Wages - 680,000.00 714,000.00 749,700.00
Mandatory benefits 65,084.88 68,339.12 71,756.08
Income taxes - 1,387,645.63 1,571,703.68 1,774,885.07
Net Cash Flow from Operations - 3,910,452.42 4,301,575.77 4,733,336.22

Investing Activities
Cash paid for
Purchase of property, plant and equipment 4,526,594.50 - - -
Net Cash Flowfrom Investing Activities (4,526,594.50) - - -

Financing Activities
Cash receipts from
Owner's Capitalization 5,000,000.00 - - -
Net Cash Flow from Financing Activities 5,000,000.00 - - -

Net increase in cash 473,405.50 3,910,452.42 4,301,575.77 4,733,336.22

Cash, end 473,405.50 4,383,857.92 8,685,433.68 13,418,769.91

Table 36 shows the projected Cash Flow within the approximate 3 (three)

years.

Circle Readers’ Spot

(Group Study Inn) 55
 Particulars 1 2 3 4 5 6 7 8 9 10 11 12
Assets
Current Assets
Cash 799,276.53 1,125,147.57 1,451,018.60 1,776,889.64 2,102,760.67 2,428,631.71 2,754,502.74 3,080,373.78 3,406,244.81 3,732,115.85 4,057,986.88 4,383,857.92
Total Current Assets 799,276.53 1,125,147.57 1,451,018.60 1,776,889.64 2,102,760.67 2,428,631.71 2,754,502.74 3,080,373.78 3,406,244.81 3,732,115.85 4,057,986.88 4,383,857.92

(Group Study Inn)

Circle Readers’ Spot
Non-Current Assets
Machineries and Equipment 152,000.00 152,000.00 152,000.00 152,000.00 152,000.00 152,000.00 152,000.00 152,000.00 152,000.00 152,000.00 152,000.00 152,000.00
Furniture and Fixtures 109,357.00 109,357.00 109,357.00 109,357.00 109,357.00 109,357.00 109,357.00 109,357.00 109,357.00 109,357.00 109,357.00 109,357.00
Books 60,687.00 60,687.00 60,687.00 60,687.00 60,687.00 60,687.00 60,687.00 60,687.00 60,687.00 60,687.00 60,687.00 60,687.00
Building 4,204,550.50 4,204,550.50 4,204,550.50 4,204,550.50 4,204,550.50 4,204,550.50 4,204,550.50 4,204,550.50 4,204,550.50 4,204,550.50 4,204,550.50 4,204,550.50
Less: Accumulated
Depreciation 41,079.62 82,159.24 123,238.86 164,318.48 205,398.10 246,477.73 287,557.35 328,636.97 369,716.59 410,796.21 451,875.83 492,955.45
Total Non-current Assets 4,485,514.88 4,444,435.26 4,403,355.64 4,362,276.02 4,321,196.40 4,280,116.78 4,239,037.15 4,197,957.53 4,156,877.91 4,115,798.29 4,074,718.67 4,033,639.05

Total Assets 5,284,791.41 5,569,582.83 5,854,374.24 6,139,165.66 6,423,957.07 6,708,748.48 6,993,539.90 7,278,331.31 7,563,122.72 7,847,914.14 8,132,705.55 8,417,496.97

Liability & Equity

Table 37. Projected Monthly Balance Sheet

Partner 1 Capital, beg 1,250,000.00 1,321,197.85 1,392,395.71 1,463,593.56 1,534,791.41 1,605,989.27 1,677,187.12 1,748,384.97 1,819,582.83 1,890,780.68 1,961,978.53 2,033,176.39
STI College Koronadal

Partner 2 Capital, beg 1,250,000.00 1,321,197.85 1,392,395.71 1,463,593.56 1,534,791.41 1,605,989.27 1,677,187.12 1,748,384.97 1,819,582.83 1,890,780.68 1,961,978.53 2,033,176.39
Partner 3 Capital, beg 1,250,000.00 1,321,197.85 1,392,395.71 1,463,593.56 1,534,791.41 1,605,989.27 1,677,187.12 1,748,384.97 1,819,582.83 1,890,780.68 1,961,978.53 2,033,176.39
City of Koronadal, South Cotabato

Partner 4 Capital, beg 1,250,000.00 1,321,197.85 1,392,395.71 1,463,593.56 1,534,791.41 1,605,989.27 1,677,187.12 1,748,384.97 1,819,582.83 1,890,780.68 1,961,978.53 2,033,176.39
Business Management Department

Add: Additional Investment

Add: Loans Proceeds
Total 5,000,000.00 5,284,791.41 5,569,582.83 5,854,374.24 6,139,165.66 6,423,957.07 6,708,748.48 6,993,539.90 7,278,331.31 7,563,122.72 7,847,914.14 8,132,705.55
Add: Net Income
Share of Partner 1 (25%) 71,197.85 71,197.85 71,197.85 71,197.85 71,197.85 71,197.85 71,197.85 71,197.85 71,197.85 71,197.85 71,197.85 71,197.85
Share of Partner 2 (25%) 71,197.85 71,197.85 71,197.85 71,197.85 71,197.85 71,197.85 71,197.85 71,197.85 71,197.85 71,197.85 71,197.85 71,197.85
Share of Partner 3 (25%) 71,197.85 71,197.85 71,197.85 71,197.85 71,197.85 71,197.85 71,197.85 71,197.85 71,197.85 71,197.85 71,197.85 71,197.85
Share of Partner 4 (25%) 71,197.85 71,197.85 71,197.85 71,197.85 71,197.85 71,197.85 71,197.85 71,197.85 71,197.85 71,197.85 71,197.85 71,197.85
Less: Dividends

56
Partners' Liability & Capital 5,284,791.41 5,569,582.83 5,854,374.24 6,139,165.66 6,423,957.07 6,708,748.48 6,993,539.90 7,278,331.31 7,563,122.72 7,847,914.14 8,132,705.55 8,417,496.97
 STI College Koronadal
Business Management Department
City of Koronadal, South Cotabato

Table 37 shows the projected Balance Sheet of the business within its first

12 (twelve) months of business operations.

Table 38. Projected Balance Sheet

Particulars Pre-Operating Year 1 Year 2 Year 3

Assets
Current Assets
Cash 473,405.50 4,383,857.92 8,685,433.68 13,418,769.91
Total Current Assets 473,405.50 4,383,857.92 8,685,433.68 13,418,769.91

Non-Current Assets
Machineries and Equipment 152,000.00 152,000.00 152,000.00 152,000.00
Furniture and Fixtures 109,357.00 109,357.00 109,357.00 109,357.00
Books 60,687.00 60,687.00 60,687.00 60,687.00
Building 4,204,550.50 4,204,550.50 4,204,550.50 4,204,550.50

Total Non-current Assets 4,526,594.50 4,033,639.05 3,540,683.60 3,047,728.15

Total Assets 5,000,000.00 8,417,496.97 12,226,117.28 16,466,498.06

Liability & Equity

_______ Capital, beg 1,250,000.00 1,250,000.00 2,104,374.24 3,056,529.32
_______ Capital, beg 1,250,000.00 1,250,000.00 2,104,374.24 3,056,529.32
_______ Capital, beg 1,250,000.00 1,250,000.00 2,104,374.24 3,056,529.32
_______ Capital, beg 1,250,000.00 1,250,000.00 2,104,374.24 3,056,529.32
Add: Additional Investment -
Add: Loans Proceeds -
Total 5,000,000.00 5,000,000.00 8,417,496.97 12,226,117.28
Add: Net Income
Share of ___________ (25%) - 854,374.24 952,155.08 1,060,095.19
Share of ___________ (25%) - 854,374.24 952,155.08 1,060,095.19
Share of ___________ (25%) - 854,374.24 952,155.08 1,060,095.19
Share of ___________ (25%) - 854,374.24 952,155.08 1,060,095.19
Less: Dividends
Partners' Liability & Capital 5,000,000.00 8,417,496.97 12,226,117.28 16,466,498.06

Circle Readers’ Spot

(Group Study Inn) 57
 STI College Koronadal
Business Management Department
City of Koronadal, South Cotabato

Table 38 shows the projected Balance Sheet within the approximate 3

(three) years.

Financial Ratio and Analysis

Net Profit Margin

Table 39. Net Profit Margin

Particulars Year 1 Year 2 Year 3
Net Income 3,417,496.97 3,808,620.32 4,240,380.77
Revenue 6,200,275.93 6,820,303.52 7,502,333.87
Net Profit Ratio 55.12% 55.84% 56.52%

Circle Readers Spot has an average net profit margin of 55.83%. It

indicates that the firm has a good profitability rate after taking account of all

expenses and income taxes.

Return on Investment

Table 40. Return on Investment

Particulars Net Income

Year 1 3,417,496.97
Year 2 3,808,620.32
Year 3 4,240,380.77
Total Net Income 11,466,498.06
Average Net Income 3,822,166.02
Total Project Cost 5,000,000.00
Return on Investment 76.44%
Circle Readers’ Spot
(Group Study Inn) 58
 STI College Koronadal
Business Management Department
City of Koronadal, South Cotabato

The firm’s average return on investment (ROI) is 76.44% which shows that

the business has a high profitability rate from the total project cost of the

company.

Payback Period

Table 41. Payback Period

Year
1 3,910,452.42 3,910,452.42
2 4,301,575.77 8,212,028.18
3 4,733,336.22 12,945,364.41
TPC 5,000,000.00

Total 1.28
Years
Months 6.24
Payback Period

The length of time required to recover the cost of the investment is 6.24

years. The payback period of a given investment is an important determinant of

whether or not pursue the project, as longer payback periods are typically not

desirable for investment position.

Breakeven Analysis

Circle Readers’ Spot

(Group Study Inn) 59
 STI College Koronadal
Business Management Department
City of Koronadal, South Cotabato

Table 42. Breakeven Analysis

Year 1 Year 2 Year 3

Total Expenses 1,395,133.33 1,439,979.52 1,487,068.03
Breakeven Point in Units
1 to 3 hours 3,720 3,491 3,277
3 to 7 hours 2,093 1,964 1,843
7 to 12 hours 1,116 1,047 983
12 to 24 hours 349 327 307
Breakeven Point in Pesos
1 to 3 hours 558,053.33 575,991.81 594,827.21
3 to 7 hours 418,540.00 431,993.86 446,120.41
7 to 12 hours 279,026.67 287,995.90 297,413.61
12 to 24 hours 139,513.33 143,997.95 148,706.80

Circle Readers' Spot must cater to 3,720, 2,093, 1,116, 349 hours

respectively during its first year of operations for the business to recover all

necessary expenses.

Circle Readers’ Spot

(Group Study Inn) 60