FEASIBILLITY STUDY.doc

CHAPTER 1INTRODUCTION

The entrepreneurial activity is a coffee shop utilizing the ever-famous Kapeng Barako as the primary product. This is also the first attempt to alleviate the status of Kapeng Barako as a sophisticated brew. This feasibility study is a showcase of not only the profitability of such coffee shop once put in a Business district like Makati but also how the Filipino theme is incorporated to set the difference to other coffee shops and helps in the revenue-raising purpose.

The significance of conducting the study is that putting up this entrepreneurial activity is more or less possible in the actual arena. The factors of production can be easily met since most of them are readily available in the market because of their locality. And more than the profits, it is necessary to conduct a feasibility study because it is a show of confidence on our local products which most entrepreneurs and producers alike lack.

The name of the entrepreneurial activity is Coffee Braque. Braque is a coined translation of Barako in the English language. The name sounds sophisticated and rolls off the tongue nicely. It is quite an unfamiliar term which is necessary to draw much attention. Though simple, the name encompasses it all. The logo is composed of rectangles overlapping each other and a sun at its center. The logo shows a Filipino-Reggae theme and exudes the message of chilling in spite of the apparent pressure in the academe or workplace.

On the succeeding chapters, the procedures in undertaking the activity, benefits, production function and managerial plan will be discussed in full length.

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CHAPTER 2PROCEDURES IN UNDERTAKING THE ACTIVITY

2.1 Conceptualization of Entrepreneurial Activity

Coffee Shop Industry is a booming in terms of its market with the influx of young professionals who prefer dealing with clients and holding meetings in coffee shops, the graveyard shift jobs like contact center agents and casino personnel and the coffee drinking teenagers. The group has decided in a democratic way to put a little twist on the well-established coffee shops by employing the ever famed Kapeng Barako as the primary product and the Filipino-inspired ambiance which is an answer to the western coffee sipping stops. It is expected to create that surprise because the consumers are used to the Starbucks, Figaro, UCC and the like which are all westernized.

2.2 Identification of Prospective Clients

It is expected that CONTACT CENTER AGENTS, CASINO PERSONNEL, YOUNG PROFESSIONALS, COFFEE DRINKING TEENAGERS, BUSINESS EXECUTIVES, AND SENIOR CITIZENS are to patronize this entrepreneurial activity. Open on a 24 hour basis to accommodate all the prospective clients at all times.

2.3 Location

Since more than half of our prospective clients belongs to the working class, there is no better location than the CENTRAL BUSINESS DISTRICT in Makati particularly along Ayala Avenue corner V.A. Rufino where there are lots of commercial buildings. This is also the perfect spot since the Makati district is filled with westernized establishment. This is where the Filipino sophisticated ambiance should be introduced.

2.4 Preparation of the needed materials and labor force

The Labor Force

The said undertaking only needs minimal labor force in as much as the Baristas can do multi-tasking which is the common practice among coffee shops. Three baristas, two kitchen crews and a security guard is needed per shift which is equivalent to 8 hours. The Baristas are tasked to prepare the product to be purchased, to take in orders, and to clean the tables and vicinity as well. The kitchen crews are the ones to prepare the pastries and other baked products that Coffee Braque offers. The security guards are to safeguard the establishment and

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entertain possible requests from the clients like assistance in moving the chairs, getting ashtrays, and the like.

The Materials Needed

The coffee beans are to be bought straight from Batangas. It may be viewed as a waste of time, energy and resources but what is at stake is the authenticity and quality. Since the activity wants to give the best local coffee in our country, it must be 100% genuine. The buying is done on a 3 month basis. Other materials needed are in synch with the Filipino-inspired ambiance such as the interior design elements, the furniture, the music, and the utensils. Others include appliances, uniforms, license permit, and location fee, baking products, coffee additives and other necessary materials which are enumerated completely in the schedule of the project cost.

2.5 Cost Projection/ Estimation

The projected cost for the said undertaking is computed to be Php 730,700.00

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CHAPTER 3BENEFITS OF THE CONSUMERS AND PRODUCERS

3.1 BENEFITS OF THE CONSUMERS

The 24 hour basis

This is beneficial for consumers who are taking the graveyard shift contigent to their jobs. Likewise, office goers who prefer taking out coffee in the morning rush are to take advantage of this feature.

Efficient and Flexible Service

Since the coffee shop caters to a diverse market, the type of service rendered has to be flexible. Thus, there is a special lane for takeouts called as the ‘Quickers’ and a regular lane for dine in called as ‘Time Takers.’

The Unique Theme

Since the proposed theme is the edge of Coffee Braque among its contemporaries, it is just appropriate to fully discuss the execution of the Filipino ambiance glistening with sophistication. The shop would be divided into five areas: the socialization area labeled as the ‘Cheezmaxers Lounge,’ the study and laptop area known as the ‘Browburners Zone,’ the business area called as ‘White Collar Room,’ and the senior citizens’ area branded as ‘Young Once’ and the general outdoor smoking area tagged as ‘Yosi Break.’ The establishment is bi-level which can accommodate such divisions. Wood work, which has exquisite appearance but of lower price, is the overall theme. Artworks from aspiring Filipino artists will be put into display as one of the attractions. The names and the design elements all coincide with the Filipino-inspired ambiance.

Suited Location

The proposed location is accessible to the consumers because along Ayala Avenue corner V.A. Rufino commercial buildings like LKG Tower, PLDT Tower, PB Com Tower and Antel Center are just adjacent.

Coffee-On-the-Go

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Is your proposal too taxing that you can’t step out to have a coffee break? Then, you must try Coffee-On-the-Go. This is the latest innovation in the coffee shop industry that only Coffee Braque offers. You can enjoy the pungent aroma of Kapeng Barako in the comforts of your homes and offices. The service is applicable to residences and offices within the vicinity. Only hot drinks are available for delivery with extra charge.

3.2 BENEFITS OF THE PRODUCERS

Instant Attraction/Patronization

Brewing a new taste and new product in the metro, this will be the instant talk of the town. It is the first attempt to sophisticate the utilization of Kapeng Barako in the Philippine archipelago. With the proposed layout and design of the shop, it will further boost that attraction created by the mere usage of a popular type of native coffee beans. Instant Attraction and patronization reap good profits in the short run.

The Research-Oriented Management

Now, the challenge is to prove that the breakthrough is not just a flash in the pan. Thus, the owners will constantly indulge themselves in studies to improve the quality of the products and services rendered once in a while. By always introducing something new and innovative to the competitive market, Coffee Braque will achieve a top billing in the long run.

3.3 OTHER BENEFITS

Showroom for Filipino arts and crafts

Amateur artists are invited to exhibit their crafts as part of the Filipino inspired theme which in a way helps the featured artist to establish his own name considering that business executives are some of the prospective clients. The artist will be allowed to sell his works.

Proliferation of Filipino Products

The producers will be known in the industry as the brave hearts who once put their faith to a local product. It can serve as a good example to those entrepreneurs who are disheartened by the stigma that the market is dominated by westernized ideas and concepts. This is a great turnaround for the local products if the project pushes through. Likewise, we can obtain the needed

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materials in a much lower price since they are all localized. This is a way to optimize our indigenous raw products.

CHAPTER 4PRODUCTION ACTIVITY

4.1 Identification of the Production Activity A capital intensive entrepreneur activity as reflected in the project cost schedule.4.2 Description of the Production Activity and Processing The production activity focuses on the proliferation of new beverages by employing our native coffee bean—Kapeng Barako. The baristas are to be trained to concoct such drinks which are first researched and formulated by the owners themselves. The most difficult part of processing is turning the beans into powder with the aid of a grinder. The rest of the processes are pure procedural.4.3 Discussion of the Production Function

PROJECT COST

Materials Quantity Market Price Total CostHJEspresso Machine 1 20,000 20,000

Blenders 4 950 3800Coffee Maker 3 950 2850

Coffee Grinder 1 15,000 15,000Baking Oven 1 10,000 10,000

Microwave Oven 1 8,000 8,000Airconditioning Unit 2 20,000 40,000

Cash Register 2 10,000 20,000Glass Display Rack 1 8,000 8,000

Building Fee 2 100,000 200,000Refrigerator 1 12,000 12,000

Coffee Cups with Cover

1000 2 2000

Plastic Cups with Cover

3000 4 12000

Stirrer 1000 1 1000Straws 2000 0.50 1000Tissue 100 (stacks) 30 30000

Spoon/Fork/Knife 150 (50 each) 10 1500Plates 50 20 1000

Saucers 50 15 750Ashtrays 10 15 150

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Display Trays 15 30 450Order Trays 25 30 750

Other Kitchen Utensils Not applicable 700 700Office Equipments Not applicable 500 500Paper Bags/ Plastic

Bags1000 pieces 0.25 250

Coffee Beans 5 sacks 450 2250Coffee Additives Not applicable 10000 10000Baking Products Not applicable 10000 10000

Uniforms 30 350 10500Central Stereo/Player 1 15000 15000Amplifiers/ Speakers 4 500 2000

CDs 5 450 2250Seats 65 2,500 162500Tables 20 5,000 100,000

License Permit Not applicable 8000 8000Lighting Units Not applicable 10,000 10,000Wooden Label

Overhangs5 1,500 7500

Menu Acetates 2 1000 2000Miscellaneous

ExpensesNot applicable 7000 7000

Total PhP 730,700

*The project cost schedule contains the overall cost of the materials needed for the entrepreneurial activity and the quantity per material.

4.4 Identification and Discussion of the Projected Cost

Workers’ Salary

Quantity Type of Work Monthly Salary per Person

Total Salary

9 Barista 9,000 810006 Kitchen Crew 8,000 480003 Security Guard 7,000 21000

Total PhP 150,000

*This shows the allocation of the monthly wages of the labor force and the number of persons needed per designation which clearly depicts that the production is not labor intensive but capital intensive in reference to the project cost schedule.

Monthly Fixed Cost

Material CostBuilding Fee 100,000

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Worker’s Salary 150,000Total PhP 250,000

*Fixed Cost which is fixed in value above is on a monthly basis. This will be added with the Variable Cost to obtain the Total Cost.

Monthly Variable Cost

JANUARY

Material CostElectric Bill 13,000Water Bill 3,000

Telephone Bill 1,000Other Expenses 5,000

Coffee Beans 0Coffee Additives 0Baking Products 0

Total 22,000

FEBRUARY

Electric Bill 13,500Water Bill 3,000


Coffee Beans 0Coffee Additives 5,000Baking Products 3,000

Total 30,500

MARCH




Total 32,000

APRIL

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Coffee Beans 2,250Coffee Additives 4,500Baking Products 1,500

Total 32,750

MAY




Total 27,000

JUNE




Total 27,500

JULY




Total 28,750

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AUGUST




Total 27,000

SEPTEMBER




Total 26,500

OCTOBER




Total 29,250

NOVEMBER



Coffee Beans 0Coffee Additives 5,000

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Baking Products 2,500Total 29,500

DECEMBER




Total 31,000

*The monthly variable cost schedules were completed by considering the probable quantity sold projected in the Monthly Revenue Schedule. The miscellaneous expenses labeled as the ‘other expenses’ was determined through allotting a fixed amount for emergency needs and added to such is the expenses for promotional activities and theme designs for certain occasions (i.e. the month of December has the highest denomination for the ‘other expenses’ in as much as lots of promotional activities are to be done plus the extravagant theme designs

Monthly Cost Schedule

Month Variable CostFixed Cost Monthly Cost

January 22,000 250,000 272,000February 30,500 250,000 280,500

March 32,000 250,000 282,000April 32,750 250,000 282,750May 27,000 250,000 277,000June 27,500 250,000 277,500July 28,750 250,000 278,750

August 27,000 250,000 277,000September 26,500 250,000 276,500

October 29,250 250,000 279,250November 29,500 250,000 279,500December 31,000 250,000 281,000

Monthly Cost Graph

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*The Total Monthly Cost Graph and Schedules show the sum of the Variable Cost and the Fixed Cost. The month of April has the highest TMC which can be attributed to the high cost of utilities.

4.5 Profitability

Projected Monthly Revenues

JANUARY

ProductProbable Quantity

SoldSelling Price

Projected Revenues

Black Coffee 1500 65 97500Creamy Black Coffee 1000 75 75000

Frappes (S) 1000 100 100000Frappes (M) 900 125 112500Frappes (L) 700 150 105000Sandwiches 600 50 30000

Cakes 400 75 30000Delivered Black Coffee 300 75 22500

Delivered Creamy Black Coffee 150 85 12750

total 585250 FEBRUARY


SoldSelling Price

Projected Revenues

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total 643750

MARCH


SoldSelling Price

Projected Revenues





total 607750

APRIL


SoldSelling Price

Projected Revenues





total 637000

13

MAY


SoldSelling Price

Projected Revenues





total 660750

JUNE


SoldSelling Price

Projected Revenues





total 677750

JULY


SoldSelling Price

Projected Revenues




14


total 634250

AUGUST


SoldSelling Price

Projected Revenues





total 684000

SEPTEMBER


SoldSelling Price

Projected Revenues





total 683500

OCTOBER


SoldSelling Price

Projected Revenues


Frappes (S) 1000 100 100000Frappes (M) 900 125 112500

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Frappes (L) 800 150 120000Sandwiches 400 50 20000



total 638750

NOVEMBER


SoldSelling Price

Projected Revenues





total 692000

DECEMBER


SoldSelling Price

Projected Revenues





total 697500

Monthly Revenue Graph

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*The Monthly Revenue Schedule and Graph show that in January, the shop generated the lowest revenue. This is because the shop is just starting to establish its name. The month of December gave the shop the highest revenue. In the span of 11 months, the customers are now patronizing Coffee Braque and are considering the shop as a key player in the coffee shop industry. Promotional activities such as items like planners, notepads, and pens are granted in exchange of a particular number of products purchased boost the monthly revenues in the month of December. Occasions, weather conditions, the academic and professional calendars play a big role in the projection of the revenues which will be discussed in full details during the oral defense.

Monthly Projected Profits

Month Monthly CostProject Cost

Total Monthly Cost

Monthly Revenues

Monthly Profit

January 272,000 730,700 1,002,700 585250 -417,450February 280,500 417,450 697,950 643750 -54,200

March 282,000 54,200 336,200 607750 271,550April 282,750 0 282,750 637000 354,250May 277,000 0 277,000 660750 383,750June 277,500 0 277,500 677750 400,250July 278,750 0 278,750 634250 355,500

August 277,000 0 277,000 684000 407,000September 276,500 0 276,500 683500 407,000

October 279,250 0 279,250 638750 359,500November 279,500 0 279,500 692000 412,500

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December 281,000 0 281,000 697500 416,500

Monthly Profit Graph

*It is important to note that during the first two months, the shop reaps negative profits. This is attributed to the Project Cost—the capital in putting up the entrepreneurial activity. On the third month, positive profits are obtained. It can be inferred from the graph that from the third month onward, the profits are relatively close to each other which signifies a pretty stable venture. The month of December gave the highest profit because of a number of reasons. First, the prevailing weather condition gives an upsurge on the sales of hot drinks. Second, promotional activities are done to attract customers to come more often. It can be noted that the coffee delivery service increases the profits by a certain percentage.

Chapter 5MANAGERIAL PLAN

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5.1 Objectives of the Entrepreneurial Activity

Coffee Braque aims to:

a) Sophisticate the use of Kapeng Barako in a westernized dominated marketb) Produce a Filipino equivalent to the usual coffee shopsc) To encourage other producers and entrepreneurs to put their faith on Filipino

products once againd) To be a showroom of starting Filipino artistse) To provide quality goods and services to the consumersf) To provide hassle-free and quick serviceg) To offer something new and innovative (i.e. coffee-on-the-go)h) To indulge in researches to further expand the ranges of products in terms of

palatability, taste and presentation

5.2 Organizational Plan

Since there are only three owners, no organizational plan is needed. The task of general managing, researching, and financial managing are divided among the owners.

5.3 Business Strategy

Promotional activities will be dependent on the month. Every month has a governing theme. Internet advertising, leaflets, flyers and small-sized billboards are the possible means of advertising. Discount cards and freebies will be also included.

5.4 Policies and Provisions

All employees are expected to get a raise after six months. Legal and usual incentives are also granted. Employees are to undergo trainings and seminars,

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Documents

FEASIBILLITY STUDY.doc