Chapter 1

Introduction

Name of the enterprise

The proposed name of the business is “MustArt”. This name was chosen

because of its simplicity, uniqueness and sweetness sound that can be easily

distinguished by the market. The researchers want to attract customers not only

for its remarkable name, but significantly the quality and standard of every printed

shirts that it can produce.

Location of the Business

This establishment is located at #65 Aglipay St. Brgy. Poblacion,

Mandaluyong City. This kind of business is a service type which needs to be

established in a place where it is well populated and should be easy to locate. With

that the researchers have chosen the right and the best location for the said

business.

“MustArt” targets the people of Mandaluyong most especially the

students in the nearby schools/universities.

Descriptive Definition of the Project

Project Long-range Objectives

The main objective of this study is to determine the viability and feasibility of

the proposed venture.

Specifically, objectives from the point of view of the four functional areas of

management are as follows.

1
1. Marketing

a. To identify the demand and supply for the products.

b. To formulate marketing strategies for a successful business operations.

2. Technical

a. To develop the processes involved in operationalizing the project in the

most effective and economical way.

b. To know the production requirement in the establishment of a digital

printing business.

3. Organization and Management

a. To design organizational set-up that is best suited for the proposed

project.

b. To determine the number and qualifications of the people required to

manage the project effectively.

4. Financial

a. To identify the sources and mode of financing of the proposed business.

b. To make an estimate of the amount of initial investment required to

execute the project.

c. To present projected financial statement of the proposed venture for the

next five years.

d. To evaluate the profitabiliy, liquidity and stability of the proposed business

venture.

2
GANTT CHART
PROJECT TIME TABLE AND STATUS
2018
2019
Activities Jun Jul Aug Septem Octob Novem Decem Janu
e y ust ber er ber ber ary
Formation
of
Partnership
Business/Or
ganizational
Planning
Sourcing
and
Acquisition
of Funds
Site
Selection
Secure
Business
Documents
Building
Renovation
Acquisition
of Tools,
Facilities &
Equipment
Purchase of
Raw
Materials
Promotion
Start of
Operation

Table 1.2

3
Nature of Industry

People nowadays live with trends as time goes by. Aside from styles, good

quality is what matters most. People are cached from new brand and designs that

are unique. We are in printing industry and there are many competitors engaged

in the same industry. We are confident with this kind of business even though

there are competitors near us, because we know that we will beat them all

through the use of our latest digital printer.

We are concern about our customers’ need and satisfaction. Our price is

very affordable.

Mode of Financing

MODE OF FINANCING

To start the business, it will require big amount for the capital. The business

will be financed equally in each partner. It can be from different sources that comes

in cash, properties from family, relatives or friends who will support in building that

business.

TABLE 1.3

PROPONENTS SOURCES OF FUND /

CONTRIBUTION

Adayo, Stive G. Personal money

Galvez, Erika A. Personal money

Laureta, Kylle Jae P. Personal money / property

4
 Malicdem, Cristina Family

Investment Cost

The business “MustArt” is a partnership organization. Partnership from Article

1767 of the Civil Code of the Philippines is defined as “a contract whereby two or

more person binds themselves to contribute money, property or industry of dividing

profits among themselves.”

Each one of the partners will contribute certain amount of money. The business

will also have the support coming from a partner’s friend.

To finally start the business, each partner shall contribute an equal amount of

P375,000.00 with a total of P1,500,000.00.

5
 Chapter 2
Marketing Study

A. Product Description

Being different to others make us unique and cool. We are engage in a

digital t-shirt printing business. Statement and personalized shirts nowadays are

really in demand. We offer an instant printed shirt by using a digital printing

machine which is better than the other printing press that only uses heat press

machine. We don’t want our customers to wait for a long period of time. We

assure that our customers will only wait for a maximum of ten (10) minutes. The

machine that we use is the latest t-shirt printer.

We sell a finish printed shirt. The customers could choose the designs that

they want. They may choose the color size and type of shirts they want.

Satisfaction of our customers is always our priority.

Size of the Target Market

The proponents acquired information about the target market through survey
questionnaires. We prepared questionnaires to be distributed to the people of our
target location in order for us to identify demand. As the result of the survey we
conducted, it is said that ninety-two percent (92%) of the target market agrees to
buy the product.

We have selected individuals 200 respondents from age 13 and above. And they
show interest in buying Sapin SaFeet.

Table 2.1
SAMPLE NO. OF STUDENTS
Students (Senior High School and College) 100
Employees 100
Total 200

6
The above table shows the sample survey.
The proponents gathered data by giving questionnaire to selected students and
employees. Most of the respondents show interest in the product.

C. Demand

Demand is the quantity of good that buyers are willing to buy. Before

anyone could establish a business that he desire, he must need to know if there

is demand in whatever kind of business he’s willing to operate.

Mandaluyong City is considered as one of the most progressive place here

in Metro Manila. Modern technology is already spread out all over the City.

D. Supply

The supply is the quantity of goods that sellers are willing to sell. If there is

a demand there should always be a supply. Our business is in printing industry.

Tee shoppe ,DGS printing and Kulay are our direct competitors. They are

accepting t-shirt printing. They need more time to do the printing because they

are using the usual way of printing shirts. Their price is higher compared to us.

Octograpix, R. Macapagal and Pinoy advertising are some of our outside

competitors. They are using heat press and it takes time to do the job. They don’t

accept one time printing because of very expensive cost.

7
 Study of Competitors

Name of Competitors Supply

Tee Shoppe 39,598

DGS printing 47,543

KuLay 40,870

DigiOne printing services 41,997

Primex Printers 45,906

Total 215,914

The table above show the total supply based on the study made by the
proponents to the competitors of the business through an actual interview
and find out the shirts sold annually.

8
 Supply
Name of 2019 2020 2021 2022 2023

competitors

Tee shoppe 39,598 40,390 41,198 42,022 42,862

DGS Printing 47,543 48,494 49,464 50,453 51,462

kuLay 40,870 41,687 42,521 43,371 44,238

DigiOne 41,997 42,837 43,694 44,568 45,459

Primex printers 45, 906 46,824 47,760 48,715 49,689

Total 215, 914 220,232 224,637 229, 129 233,710

The table above shows the projected supply from 2019-2023 with an

assumption of 2% increase in supply annually.

Demand –Supply Analysis

year Projected Projected Unfilled Projected Market

demand supply demand sale share

2019 252,288 215,914 36,374 33,464 13%

2020 257,334 220,232 37,102 36,810 14%

2021 262,481 224,637 37,844 40,491 15%

2022 267,731 229,129 38,602 44,540 16%

2023 273,086 233,710 39,376 48,994 17%

*assumption of 10% increase to projected sales annually.

9
 E. Demand – Supply Analysis

The table above shows the demand and supply analysis of the business. It

shows the unfilled demand after studying the projected demand and projected

supply. This will be use as a basis for projected sales and market share. Through

the 92% survey result, the business proponents realized the 36, 374 unfilled

demand of 2018. The business proponents set up a 10% increase of sales

annually to forecast profit realization. It also shows an increasing market share of

the business which will be enough to compete in the market.

F. Marketing Plans

Occupants

Our target markets are the people who are buying t-shirt specially the

personalized t-shirt.

Product

Our products and services are different from the others because of the digital

machine that we are using. Customers may customize their own design. They

can buy ready to wear t-shirts. T-shirts may vary in color, shape, size and design

according to the customer’s choice. Many buyers look for affordable product

having high quality. The product that we are going to sell is affordable. We are

rendering service with high quality.

10
In competitive situation, we are different in using the printer. Our competitors are

using a heat press machine. It takes so much time to wait and more expensive

material that will use just to print a shirt.

In our business we are using a digital t-shirt printer, where in ten minutes is

enough to wait the finish product. It is much cheaper compare to our competitor’s

price.

Place

The proponents decided to put the business at Rev. F. Aglipay brgy.

Poblacion, Mandaluyong city because it would be very accessible to the target

market whom are we going supply with.

Promotion

In our opening day we are conducting a big discount a ten percent (10%)

discount for the fisrt (1st) fifty (50) customers. Discounts will be offered to

increase and maintain the volume of customers who will buy in bulk.

There are several ways of promoting our business such as giving flyers

and putting tarpaulin in some place. In other cases, the best way to promote our

product to our customer, by personal selling to inform the public that there is such

product.

Pricing

The objective of every business is to maximize profit. The price of our

product is based on what kind of materials we will use. We determine its price

11
after deducting the cost of raw materials, direct labor and factory overhead. The

full cost of product is presented in Table II – D.

Cost of the Product

Prices Unit Price

Dark color Light Color White Average Labor Factory Ink Total Mark Up
Overhead
Direct
Materials:
Round Neck 80 75 65 73.333 10 25 50 158.333 63.333%
Collared 110 100 105 10 25 50 190 61.29%

Sources: m

12
 Chapter 3
Technical Study

Process Flow

Creating

Preparing

Placing

Printing

Packaging

A. Production Process

The figure above shows the production process starting from creating

innovative designs, then preparing the t – shirt(s) to be used after the

preparations is the placing of the t – shirt(s) in the printer and then the printing of

designs on the t – shirt(s) and lastly the packaging of the finish product.

13
 B. Equipment, Machinery, Furniture and Fixture

T-shirt Printer - is the most important equipment in establishing a Digital T-shirt

printing business. It prints any images directly on the textile with nice, bright, and

sharp result. The designs on the t-shirts are waterproof. With our unique software

the operations is quite easy to operate. It is just like a normal inkjet printer. It is

just highly efficient and low cost.

Computer Desktop - it is use to design t-shirts. It can install all the applications

needed in t-shirt printing.

Computer Table – it holds the computer desktop and t-shirt printer.

Divider – it is where the t-shirts are being store/kept.

Cashier’s Table – it is where the customer is being entertained and the files are

stored.

Bench – it is where the customer will sit while waiting for their shirts

Chair – it is where the employee will sit while doing their jobs.

Table III-A Prices of listed assets

Description Quantity Useful life Depreciations Cost
Computer Desktop 1 5 P 4,478.00 P22,390.00
T-shirt Printer 1 5 P 26,000.00 P 130,000.00
Computer Table 1 5 P 190.00 P 950.00
Cahier’s Table 1 5 P 530.00 P 2,650.00
Divider 1 5 P 970.00 P 4,850.00
Chair 2 5 P 198.00 P 990.00
Bench 1 5 P 450.00 P2,250.00
TOTAL P32,816.00 P164,080.00

Source: Alibaba and Ofix

14
Capacity/Scheduling

The maximum capacity of the printer is two hundred (200) t-shirts per day

but it can operate as long as they are inks. For every five (5) ml of ink one

hundred (100) pieces of half bond paper designed t-shirts could be printed and

for every one (1) liter of ink one thousand (1, 000) pieces of whole bond paper

designed t-shirts could be printed.

The employees work eight (8) hours a day, starting from 10:00 am to

8:00pm.

F. Utilities and Other Operating Cost

In establishing a business, the following cost will incurred:

a. DTI Permit – a permit issued by the government specifically DTI that all

the registered business establishment have different names so that they

would have they own identity. P200 is needed for the issuance of the said

permit and additional P15 for documentary stamp tax with the total cost of

P165 and it is renewable every five (5) years.

b. Business Permits and License – it is issued by the government (mayor’s

office) to protect the public interest. It is needed by every establishment to

operate and enjoy certain privileges

Table III - B
The Business Permits and Licenses Fees

Descriptions Price
Electrical permit P100
Business name P60
Badge fee P160

15
 Business permit P2000
Personnel permit for five (5) persons P900
Municipal permit P625
Total P 3,845
Source:

c. Fire Safety Inspection Certificate – issued by the BFP to assure the

public that the establishment building or occupancy has been duly

inspected for fire safety with the findings that it has substantially complied

with fire safety and protection requirements. Fire safety inspection

equivalent to ten percent (10%) of all fees charged by the building official.

d. Taxes – BIR collects taxes to every establishment to help the government

raise funds for the construction of public highways and other projects for

the benefit of the public. P500 is needed for issuance of BIR form.

e. SSS contribution and Philhealth – as an employer it is our duty to give

our employees the benefits that they needed in case of sickness,

maternity, partial/permanent disability, funeral, death, retirement and

health.

f. Electricity – the proposed business would not operate when there is no

electricity P2,000.00 monthly is enough to pay the electrical consumption

of the business.

G. Production Cost

Fashion nowadays include printed t-shirt or t-shirts with slogans which

really in demand. We could see every teens even those young at hearts wearing

16
printed or customized shirts anywhere. Every business has their own materials

for them to operate well. In digital t-shirt printing business, the raw materials that

are needed are as follow:

a. T-shirts – it is where the desired designs are printed, we do have our

own stocks of t-shirts that were supplied to us by Yalex (shirts for less

outlet) located at Aurora Boulevard, New Manila, Quezon City. We see

to it that thirty (30) pieces of shirts were maintain for our safety and

sixty (60) pieces of shirts for our reorder point.

b. Ink – every printed must have inks to be able to print whatever designs

the customer wants. One (1) liter of ink is necessarily maintained for

our safety stocks and three (3) liters is the reorder point.

c. Software – it is the software that gives ability to adjust the ink

saturation, sharpen the image, manipulate color contrast add lettering

effects to your artwork and a variety of other art functions only found in

advance programs. The name of the software is Fast ARTIST 1.5

Image Editing Software.

d. Pretreatment #1 - This is an odorless, non-toxic inkjet pretreatment

designed to be used exclusively with FastINK white textile ink. It will

help white ink appear brighter.

The direct labor cost is seventy-nine thousand two hundred (P79, 200)

yearly; the other cost to produce the product is estimated to be two

hundred fifty percent (250%) of direct labor. The summary of Production

Cost is shown in Exhibit III – B.

17
Store Layout

18
 Chapter 4
Management Study

Basic Consideration in forming the organization

A. Personal consideration

The proponents consider their knowledge and skills to

form the business. Two of the partners have skills in drawing and
graphic designing which will helps in making the designs of the
shirts and have the knowledge to form promotional
advertisements. The other two partners have the skills in
accounting.

B. External consideration

The plan of the business is to set great strategic goal that

would benefit the entire market with the available resources and
monetary budget. The business will acquire the approval of the
BIR to operate the business with taxable transaction.

Manager/ Owner
 He must be efficient leader in order to win workers trust and full

cooperation.

 He must be fair in treating his worker.

 He must be contract and negotiate of the market.

 He must be responsible in supervising his staff and motivate them to

achieve the company/ business objective.

 He must be responsible for the records, files, and keep all the book of

account.

19
Printer/Designer

 Must be knowledge to measure design.

 Must be aware to the latest fashion.

 Must know how to use computer.

 Should be responsible in helping others in their vacant time.

 The working hours is ten (10) hours a day. Six days a week.

Receiver/Cashier

 Must contact and negotiate with the customer.

 Must know to receive and releases stocks.

 Must be responsible for the records, files, and keep all the book of

accounts.

 Must know how to use computer.

 The working hours is eight (8) hours a day. Seven days a week.

 Should be responsible in helping others in their vacant time.

Exhibits IV - A
ORGANIZATIONAL CHART

Managing partners

Printer/Designer Cashier

20
 C. Personnel Requirement

A worker is usually assigned to perform tasks, duties and responsibilities

which may differ from those of other job.

In this kind of business are the numbers of workers are composing by the

following:

Table IV – A
Personnel of the Business

Position Number of workers

Managing partners 1
Printer/designer 2
Receiver/cashier 1
Total 3 workers

D. Qualification Standards

a) Printer/Designer
 18-25 years of age
 College level

 Computer literate/ knows how to use, designs and encode

 With pleasing personality

 Must have good moral character

 Must be industrious and hardworking

b) Receiver/Cashier
 18 – 25 years of age

 College level

 Have a knowledge on how to record a transaction

21
  With pleasing personality

 Must be trust

 Must have good moral character

 Must be industrious and hardworking

Chapter 5
Financial Study

This portion determines the profitability level of the project which is

the generally defined as the relationship of the of the net income after taxes to

the total investment. It is largely based on the available opportunity cost in a

particular period of time and place. It also involves thorough coverage of all the

monetary information of the business. It covers detailed information on the total

project cost, initial capital, sources of financing, financial statements and the

financial analysis. The financial health of the business is assessed in the financial

statements and analysis showing the three important accounting statements such

as income, cash flow and balance sheets. Pertinent financial ratios are also

illustrated describing the overall business liquidity, degree of indebtedness and

profitability. Additional information are also provided such as break even outputs,

sales and prices amount of sales required to earn a certain amount of profit and

the cash payback period.

a. Major Assumption:

22
 The following are the general major assumption that the study makes:

a. Sales - are the revenues by the business. Sales projection is how much

money will be invested into the business, and the potential markets. The

sales of the business are based on the demand and supply discussed in

Chapter II Marketing Aspect. The business is assumed that on the

average twenty one (21) customers per day for the first year of operations.

The revenue projection is presented in Exhibit V – A.

b. Cost of Goods Sold/Cost of Sales-is the cost of inventory that the

business has sold to the customers. The cost of sales is discussed in

Chapter III Technical Aspect. It is presented in Exhibit V – B.

c. Salary, Wages and Benefits – the salaries that the employee received is

discussed in Chapter IV Management Aspect. The supporting computation

are presented in Exhibit IV – A.

d. Rent-the rental cost of the business is two hundred sixty four pesos (P264,

000) per year. It is discussed in Chapter III Technical Aspect.

e. Advertising- the cost for the advertisement of the business is five thousand

(P5, 000) and it is increased by ten percent (10%) for the succeeding

years. It is discussed in Chapter II Marketing Aspect.

f. Supplies – it is the additional materials that are needed by the business. It

is discussed in Chapter III Technical Aspect.

g. Utilities – are the electricity consumed by the business. The estimated

electric consumption of the business is one thousand pesos (P1, 000)

23
 monthly; twelve thousand pesos per year and it is increased by ten

percent (10%) annually. It is discussed in Chapter III Technical Aspect.

h. SSS and Philhealth Contribution – is the only benefit received by the

employees. The business assumed that it is included in Factory Overhead.

It is discussed in Chapter IV Management Aspect. The schedule of SSS

and Philhealth Contribution is presented in the Appendix.

i. Depreciation – the company estimated that the useful life of tools,

equipment and furniture and fixtures is five years. The total depreciation of

the business is thirty two thousand eight hundred sixteen pesos (P32,

816). The supporting computation is presented in Table III– A.

j. Permits, Licenses and Taxes – the permits, licenses and taxes that is

paid by the business is presented and discussed in Chapter III Technical

Aspect.

b. Capital Requirement

1. Pre-Operating Expenses

a. Business Permits, Licenses and Taxes – this is the cost incurred for the

legality of the business. It is discussed in Chapter III Technical Aspect.

The total cost incurred by the business is nine thousand one hundred

thirty five pesos (P9, 135).

b. Advertising – is the cost incurred for the popularity of the business. It is

incurred by the business for them to know the market. It is discussed in

24
 Chapter II Marketing Aspect. The pre-operating advertising cost is five

thousand pesos (P5, 000) and increased by ten percent (10%) for the

succeeding years.

c. Electricity - the estimated electric consumption of the business is one

thousand pesos (P1, 000) and it is increased by ten percent (10%)

annually.

d. Salaries –salaries and wages of the employees are divided in two

segments. The direct labor and the indirect labor. The total cost of salaries

in the pre-operating period is twelve thousand six hundred pesos (P12,

600) per month.

e. Rental Cost – the pre-operating period of rental cost incurred by the

business is twenty two thousand pesos (P22, 000) and forty four

thousand pesos (P44, 000) for the rental deposits, respectively.

f. Office Supplies – the office supplies pre-operating period is three

thousand pesos (P3, 000).

g. Raw Materials – the business have a total of the twenty thousand seven

hundred fifty pesos (P20, 750).

2. Operating Expense

a. Raw Materials – it is the primary materials that use to produced the

product. The total purchases are presented in the Exhibit V – B.

b. Advertising – is the cost that incurred for the promotion of the business.

The advertising cost is five thousand pesos (P5, 000) and increased by

ten percent (10%) for the succeeding years.

25
c. Electricity - the electric consumption of the business is twelve thousand

pesos (P12, 000) per year and it is increased by ten percent (10%) for the

next years.

d. Salaries – the gross salaries that the employee receive is twelve thousand

pesos (P12, 000) for indirect labor. It is increased by ten percent (10%) for

the next years.

e. Permits and licenses – the permits and licenses is renewable yearly. The

total cost that incurred for the permits and licenses is nine thousand one

hundred thirty five pesos (P9, 135).

f. Rental Cost - the rental cost for the year is two hundred sixty four

thousand pesos (P264, 000).

g. Office Supplies – the business incurred for the supplies is ten thousand

pesos (P10, 000) for the first year of the operations and increased by ten

percent (10%) for the succeeding years.

h. Interest Expense – the business has fifty thousand pesos (P50, 000) loans

payable and it has twelve percent (12%) interest per year. The business

has six thousand pesos (6, 000) interest payment.

3. Capital Expenditure/Fixed Assets

The following are the fixed assets needed by the business.

26
 a. Tools and Equipment – it is the equipment that needed by the business. It

is discussed in Chapter V – A. And the pictures of tools and equipment is

presented in Exhibit III – C.

Tools and Equipment

DESCRIPTION QUANTITY UNIT UNIT COST TOTAL COST

COMPUTER 1 SET P22, 390 P22, 390

T-SHIRT PRINTER 1 SET P130, 000 P130,000
TOTAL P152, 390

c. Furniture and Fixture – the furniture and fixtures that are needed that by the

business are discussed in Chapter III Technical Aspect. The summary of Furniture and

Fixture is presented in Table V – B.

Furniture and Fixtures

DESCRIPTION QUANTITY UNIT COST UNIT TOTAL COST

COMPUTER TABLE 1 PIECE P950 P950
CASHIER’S TABLE 1 PIECE P2, 650 P2, 650
DIVIDER 1 PIECE P4, 850 P4, 850
CHAIR 2 PIECE P450 P990
BENCH 1 PIECE P2, 250 P2, 250
TOTAL P11, 690

Preparation of Financial Statements

1. Income Statement – is the formal statement showing the performance of

the business for a year. It is summarizes the sale, cost of sales, and

expenses incurred for a year. The projected Income Statement is

presented in Exhibit V- C.

27
2. Cash Flow Statement – it provides information about the cash receipts

and cash payments of a business for a year. It is a formal statement that

classifies cash receipts (Cash Inflow) and cash payments (Cash Outflow)

into operating, investments and financing activities. The Projected Cash

flow is presented in Exhibit V – D.

3. Balance Sheets – is a statement that shows the financial position or

condition of the business by listing the assets, liabilities and owner equity.

The Projected Balance Sheets is presented in Exhibit V- E.

e. Financial Analysis

The following is the method that uses to analyze the financial statement.

The computation for the Financial Analysis is presented in Exhibit V – F.

a. Net Present Value (NPV )- this refers to the excess of the present value of

cash returns discounted at a chosen cut– off rate bovver the amount of the

investment.

b. Internal Rate Return (IRR) – this refers to the rate of return that a long

term investments.

c. Profitability Index (Benefits/Cost Ratio/Present value Index) – this refers to

the ratio of the present value of cash returns discounted at a chosen cutoff

rate to the investment requirement.

d. Current Ratio – indicates the ability to pay current obligations.

28
e. Net Fixed Asset Turnover Ratio – is a measure of the projects utilization of

fixed assets.

f. Equity Turnover Ratio – measures how effectively would the owner’s net

worth will be used in the project.

g. Gross Profit Margin – equals percent of sales available after deducting

cost of good sold. This percentage is available to cover selling, general

and administrative costs and also earn a profit. It indicates the basic cost

structure of the project and its cost prize position.

h. Operating Profit Margin – relates the projects profit to its net sales. The

variability of this ratio is a prime indicator of the business risk od the

project . A higher ratio implies that the company has a higher level of

fixed costs and therefore inflexible.

i. Payback Period – this refers to the length of period or numbers of years it

would take to recover an investment.

j. Break Even – it is the level of activity (production and sales) at which the

company would be able to avoid a loss. The break even point of the

company is one thousand two hundred one (1, 201) units

29
 Traffic counting
Days Time Passers By Minutes

8:00-8:05a 28 5

Monday 12:00-12:05p 33 5

3:15-3:21p 18 6

8:56-9:00a 25 4

Tuesday 1:24-1:29p 30 5

9:20-9:23a 19 3

Wednesday 1:40-:1:43p 30 3

4:00-4:05p 20 5

8:55-8:58a 19 3

Thursday 11:45-11:49p 29 4

3:30-3:34p 26 4

10:25-10:27a 27 2

Friday 2:10-2:15p 17 5

4:16-4:18p 15 2

9:12-9:16a 20 4

Saturday 3:11-3:15p 25 4

381 64

Population = 381 x 8hrs = 3,048 per day

= 360 – 48 days ( 4sundays*12) – 5 (regular holidays) = 307

= 3,048 x 307

Population = 935, 736

30
Population

Year Population

2019 935,736

2020 954, 451

2021 973,540

2022 993, 011

2023 1,012,871 *assumption of 2% increase

annually

Demand Analysis

Year Demand

2019 252,288

2020 257,334

2021 262,481

2022 267,731

2023 273,086

 Assumption of 2% increase in demand annually

Demand = 381 / 64 x 60 = 357

= 357 x 8 = 2856

= 2856 x 92 % (survey) = 2628

=2628 x 2 = 5256 per week

= 5256 x 4 = 21,024 per month

= 21,024 x 12 = 252 ,288 per year

31
Please be assured that the information you will provide for the researchers will be
treated with strict confidentiality. The identity of the respondents will in no way be
disclosed. Your participation and kind cooperation will be of great help in the
completion of this study. Thank you for sharing your time and effort.
The Researchers

Respondent’s Profile

Name: (Optional) Age:

Address: Sex:
Occupation: Income level:

Instruction: Please encircle your answer.

1. Do you buy T-shirts?

a.) Yes
b.) No

2. Which T-shirts do you prefer to wear?

a.) Round neck
b.) Collared

3. What color do you like most when you’re wearing t-shirts?

a.) Is it plain? or (Please specify the color)
b.) Multi colored design t-shirts

4. Would you prefer to wear

a.) Imitated designs
b.) Personalized designs

5. Which would you prefer?

a.) Cotton d.) Linen
b.) Rayon e.) Wool
c.) Silk f.) Acetate

6. Is 10-minute printing enough for you?

a.) Yes
b.) No (Specify the time you prefer)

32
7. What is the affordable price for you? (Round neck)
(Collared T-shirts)
a.) 270 a.) 310
b.) 310 b.) 300
c.) 250 c.) 330

8. When do you usually buy T-shirts?

a.) Monthly
b.) Weekly
c.) During occasions
d.) Others (Specify)

9. Where do you usually buy T-shirts?

a.) Stall in mall
b.) Market stall
c.) Catalogue

10. What is your preference in choosing T-shirts?

a.) Quality
b.) Price
c.) Brand
d.) Style/design
e.) According to your mood

11. How do you usually buy t-shirts?

a.) Retail
b.) Wholesale

12. What kind of personality do you belong?

a.) Funk/emo/rocker
b.) Sport
c.) Simple
d.) Fashionista
e.) Girly
f.) Other (specify)

33
 Exhibits I – E Results
of Structured Interview
11. How is there a monthly
Questions:
salary?
1. What made you decide to put
Kuya Wilfred
up a t- shirts printing?
1. It is the only jobs I already
2. Where is your business site?
know to do.
3. How long you do spend in this
2. Perfect locations for the
kind of business?
business
4. How many t – shirts do you
3. Fifteen (15) years
produce in one (1) year?
4. Twenty five to thirty thousand
5. What are your marketing
t – shirts.
strategies to expand your
5. I have my own supplier and I
market? 6. Where do you
transact directly to all schools
avail your goods?
here in Cababatuan.
7. What are the agreements 6. I avail t –shirts to Mrs. Emy
do you have in your supplier? tesoro.
8. What are the materials do 7. She I in – charge for the t –
you needed in the printing the t – shirts and only the labor is in

shirts? 9. Do you use Digital t charge to me.

– shirt printer when you print the 8. T – shirts, silk screen, paint

t- shirts? 10. Are you having an and computer for the designs

employee/s? 9. No, silk screen only

34
10. No, 11. Nothing

Structured Interview Guide Questions

1. What are the requirements in renting the space? Is there a contract?

2. What is the agreement for those who wants to rent the space?

3. Are allowing the five (5) years lease agreement? If yes, how is the

payment goes? Monthly, semi – annually, annually?

4. Is the rental payment not fixed?

5. What size is the smallest space available for rent? How much? And what

floor?

6. This past five (5) years, how much is the rental for the space?

7. Are you the one who spend money for the renovation of the space? Or

the one who rent it?

8. What is the agreement for the payment of electric bill?

9. Can I ask the total numbers of customers who cane in the place at the

regular days? In holidays?

10. Are advance payment/ deposits needed? How many months?

35
 Results of Structured Interview
10. Are advance payment/
Questionnaires
deposits needed? How many
1. What are the requirements in
months?
renting the space? Is there a
contract?
Analiza Go
2. What is the agreement for those
1. Letter of interviewed,
who wants to rent the space?
electrical load, picture of
3. Are allowing the five (5) years
equipment. Yes
lease agreement? If yes, how is
the payment goes? Monthly, semi 2. Six months to one year.
– annually, annually?
4. Is the rental payment not fixed? 3. No

5. What size is the smallest space

available for rent? How much? 4. Fix rental
And what floor?
6. This past five (5) years, how 5. Four sq. M., 2nd floor,
much is the rental for the space? fifteen thousand pesos
7. Are you the one who spend approximately.
money for the renovation of the 6. Same
space? Or the one who rent it?
8. What is the agreement for the 7. You will provide the
payment of electric bill? equipment; we will provide

9. Can I ask the total numbers of the space only.

customers who cane in the place

at the regular days? In holidays?
8. Rendered

36
 thousand (40,000) for
9. Estimated twenty five holidays.
thousand (25,000) for 10. Yes, three months
regular days and forty advance refundable.

37
 Production Cost

Direct Materials:

Round neck T-shirts:

Descriptions Quantity Unit Unit Cost Total

Dark color 25 Pieces P 80 P 2,000

Light color 25 Pieces P 75 P 1,875

White 25 Pieces P 65 P 1,625

TOTAL P5,500

Collared T-shirts:

Descriptions Quantity Unit Unit Cost Total

Colored 25 Pieces P 110 P 2,750
White 25 Pieces P 100 P 2,500
TOTAL P 5,250

Ink

Descriptions Quantity Unit Unit Cost Total

Ink 6.667 Litres P 1,500 P10,000
TOTAL P10,000

Direct Labor:

P79, 200 per year

Factory Overhead:

Direct Labor P79, 200

X 250%

Factory Over Head P198, 000

38
 Pictures of Tools and Equipments

T-shirt Printer

39
 Pictures of Raw Materials

T-shirt

40
Inks

Software

Exhibit III – E
Pictures of Finished Products

41
42
 Exhibit IV- B
Compensation Package

SSS / PagIbig /PhilHealth Annual

Salary
No. Of person
Position Rate Monthly Annually
Cashier 1 P500 P2128.75 P25,545 130,455.00
Designer 2 P537 P2167.23 P52,013.52 283, 074.48
Total 3 P77,558.52

Computation:

Cashier

P500 per day

*26 days
P13,000 per month
-P2128.75 Benefits
P10,871.25 net monthly salary
*12

P130,455 net yearly salary

Designer/printer

P537 per day

*26 days
P13,962
-P2167.23 Benefits
P11,794.77 net monthly salary
*12

P141, 537.24 net yearly salary

*2
283, 074.48

43
 Projected Sale

Year Round Unit sales Collar shirt Unit sales total

neck price price
2019 250 310
2020 250 310
2021 250 310
2022 250 310
2023 250 310

Total sales
Year Total
2019 P1, 945, 440
2020 P2, 217, 600
2021 P2, 593, 920
2022 P2, 866, 080
2023 P3, 242, 400

Year 1 Year 2 Year 3 Year 4 Year 5

Employee fringe Benefits 3,699.6 3,849.60 4,250.40 4,599.60 5,150.40
Employer Contribution 6,956.40 7,106.40 7,953.60 8,528.40 9,525.60
Packaging 33,100 35,247 32,474.90 43,467.39 47,875.33
Transportation Cost 15,500 16,500 181,150 19,965 21,961.50
Training Cost 32,400 35,640 39,204 423,124.40 47,436.84
Training Allowance 97,400 107,140 117,854 129,639.40 142,603.34
Other Expense P1510 P1661 P1827.10 2009.81 2210.79
Total P190,066 P207,144 P221,714 P251,334 P276,763.80

44
Computation for Factory Overhead

45
 Watta Shirts
Projected Cost of Sales
For the five (5) – Year Period

Year 1 Year 2 Year 3 Year 4 Year 5

Direct Materials:
Direct materials beg P20, 750 35, 666 P38, 340.95 P41, 015.90 P43, 690.85
Add: Purchases P629, 981.96 P699, 541.76 P819, 381.54 P903, 941.31 P1, 023, 781.09
Total Materials Available P650, 731.96 P735, 207.76 P857, 722.49 P944, 957.21 P1, 067, 471.94
Less: Direct Materials End (P35, 666) (P38, 340.95) (P41, 015.90) (43, 690.85) (P46, 365.80)
Direct materials used P615, 065.96 P696, 866.81 P816, 706.59 P901, 266.36 P1, 021, 106.14
Direct Labor P79, 200 P87, 120 P95, 832 P105, 415.20 P115, 956.72
Applied FOH P190,066 P207,144 P221,714 P251,334 P276,763.80
Total manufacturing cost P892, 265.96 P1, 001, 786.81 P1, 178, 034.89 P1, 270, 219.56 P1, 426, 954.66
Add: finished goods beg - P23, 433 P25, 916.30 P28, 399.60 P30, 882.90
TGAS P892, 265.96 P1, 025, 219.81 P1, 149, 635.29 P1, 298, 619.16 P1, 457, 837.56
Less finished goods end (P23, 433) (P25, 916.30) (P28, 399.60) (P30, 882.90) (P33, 366.20)
Cost of sales 860,898.96 988,647.51 1,131,769.29 1,255,532.26 1,411,343.36

46
 Watta Shirts
Projected Income Statement For
the five (5) Year Period

Pre - operating Year 1 Year 2 Year 3 Year 4 Year 5

Sales P1, 945, 440 P2, 217, 600 P2, 593, 920 P2, 866, 080 P3, 242, 400
Less: Cost of sales (860,898.96) (988,647.51) (1,131,769.29) (1,255,532.26) (1,411,343.36)

1,084,541.04 1,462,150.71 1,610,547.74

Gross profit 1,831,056.64
1,228,952.49
Less: operating
Expense
Advertising P5, 000 P5, 000 P5, 500 P6, 050 P6, 655 P7, 320.50
Electricity P1, 000 P12, 000 P13, 200 P14, 520 P15, 972 P17, 569.20
Employee Fringe Benefits
3,300 3,699.60 3,849.60 4,250.40 4,599.60
Employer 4,634 6,956.40 7,106.40 7,953.60 8,528.40
Contribution
Salaries P12, 600 P72, 000 P79, 200 P87, 120 P95, 832 P105, 415.20
Permit and license P9, 135 P9, 135 P9, 135 P9, 135 P9, 135 P9, 135
Rental Payment P22, 000 P242, 000 P264, 000 P264, 000 P264, 000 P264, 000
Depreciation exp. - P32, 816 P32, 816 P32, 816 P32, 816 P32, 816
Office supplies - P9, 500 P10, 500 P11, 600 P12, 810 P14, 141
Interest expense - P6, 000 - - - -
Total operating Expense P49, 735 396,385.00 425,007.00 436,197.00 449,424.00
463,524.90
Net income before (49, 735) P688, 156.04 P803, 945.49 P1, 019, 043.71 P1, 161, 123.74 P1, 367, 531.74
Tax
Income Tax - (166, 446.81) (201, 183.65) (P265, 713.11) (P308, 337.12) (P370, 259.52)
Net income after tax (49, 735) P521, 709.23 P602, 761.84 P753, 330.60 P852, 786.62 P997, 272.22

47
 Exhibit V – D

Watta Shirts
Projected Cash Flow Statement
For Five (5) Year Period

Pre – Operating Year 1 Year 2 Year 3 Year 4 Year 5

Cash Bal. Beg - P18, 435 P556,798.16 P1,039,879.24 P1,592,086.29 P 2,243,594.81
Cash flow from Operating
Activities
Cash inflows from
Operating Activities
Collection from customer
- P1, 945, 440 P2, 217, 600 P2, 593, 920 P2, 866, 080 P3, 242, 400
Total cash inflow from
operating Activities
- P1, 945, 440 P2, 217, 600 P2, 593, 920 P2, 866, 080 P3, 242, 400
Cash outflow from
operating Activities
Payment for Purchases P20, 750 P907, 181.96 P1, 004, 461.76 P1, 154, 793.54 P1, 272, 894.51 P1, 429, 626.61
Advertising P5, 000 P5, 000 P5, 500 P6, 050 P6, 655 P7, 320.50
Electricity P1, 000 P12, 000 P13, 200 P14, 520 P15, 972 P17, 569.20
Employee Fringe Benefits
3,300 3,699.60 3,849.60 4,250.40 4,599.60
Employer Contribution 4,634 6,956.40 7,106.40 7,953.60 8,528.40
Salaries P12, 600 P72, 000 P79, 200 P87, 120 P95, 832 P105, 415.20
Permit and License P9, 135 P9, 135 P9, 135 P9, 135 P9, 135 P9, 135
Rental Payment P22, 000 P242, 000 P264, 000 P264, 000 P264, 000 P264, 000
Rental Deposits P44, 000
Office Supplies P3, 000 P10, 000 P11, 000 P12, 100 P13, 310 P14, 641
Income Tax
- 200, 188.85 216, 067.67 P257, 062.90 283, 679.11
paid
Interest Expense - P6, 000

48
Total Cash outflow 1,263,316.96 1,552,943.58 1,741,992.18 1,945,584.63 2,156,047.63
from operating
Activities

Continuation of projected cash flow

Net Cash inflow (out 682,123.04 664,656.42 851,927.82 1,086,352.37

flow) from Operating P 117,485 920,495.37
Activities

Cash flow from

Investing Activities

Tools and equipment P 152,392

Furniture and
Fixture
P 11,690

Total cash out flow

from investing P 164,080
activities

cash outflow from

financing activities

Loan Payment P 50,000

Borrowing P 50,000

Investment P 250,000

Withdrawal P200,000 P 200,000 P200,000 P200,000 P200,000

49
Net cash outflow
from financing P 300,000 P 250,000 P200,000 P200,000 P200,000 P200,000
activities

Cash balance
ending
P18,435 P450, 558.04 P915, 214.47 P1,560, 232.28 P 2,282, 800.66 P3, 169, 153.03

Note: Payment for purchases is computed by adding Purchases, Direct Labor and Factory
Overhead

Exhibits V - E

Watta Shirts
Projected Balance Sheets
For the Five (5) Years Period
Pre – Operating Year 1 Year 2 Year 3 Year 4 Year 5
Assets:
Cash P18, 435 P450, 558.04 P915, 214.47 P1,560, 232.28 P 2,282, 800.66 P3, 169, 153.03
Inventory P20, 750 P59, 099 P64, 257.25 P69, 415.50 P74, 573.75 P79, 732
Rent Deposits P44, 000 P44, 000 P44, 000 P44, 000 P44, 000 P44, 000
Office Supplies P3, 000 P3, 500 P4, 000 P4, 500 P5, 000 P5, 500
Tools and Equipment P152, 390 P152, 390 P152, 390 P152, 390 P152, 390 P152, 390

50
Furniture and Fixtures P11, 690 P11, 690 P11, 690 P11, 690 P11, 690 P11, 690
Accumulated Depreciation - (P32, 816) (P65, 632) (P98, 448) (P131, 264) (P164, 080)
Total Assets P250, 265 P688, 421.04 P1,125, 919.72 P1, 743, 779.78 P2, 439, 190.41 P3, 298, 385.03

Liabilities:
Loan Payable P50, 000 -
Income Tax Payable P166, 446.81 P201, 183.65 P265, 712.11 P308, 337.12 P370, 259.52
Total Liability P50, 000 P166, 446.81 P201, 183.65 P265, 712.11 P308, 337.12 P370, 259.52

Owner’s Equity
Capital Balance Beg P200, 265 P521, 974.23 P924, 736.07 P1, 478, 066.67 P2, 130, 853.29
Add/(Deduct): Investment P250, 000
Net Income/(loss) (P49, 735) P521, 709.23 P602, 761.84 P753, 330.60 P852, 786.62 P997, 272.22
Total P200, 265 P721, 974.23 P1, 124, 736.07 P1, 678, 066.67 P2, 330, 853.29 P3, 128, 125.50
Less: Withdrawal (P200, 000) (P200, 000) (P200, 000) (P200, 000) (P200, 000)
Total Owner’s Equity P200, 265 P521, 974.23 P924, 736.07 P1, 478, 066.67 P2, 130, 853.29 P2, 928, 125.50
Total Liabilities and
Owner’s Equity
P250, 265 P688, 421.04 P1,125, 919.72 P1, 743, 779.78 P2, 439, 190.41 P3, 298, 385.03

51
 Exhibits V – F
Financial Analysis

Net Present Value

Present Value of Cash returns discounted at twelve percent (12%)

Year 1 P 682, 123.04 x .893 = P609, 135.87

Year 2 P664, 656.42 x .797 = P529, 731.17
Year 3 P845, 017.82 x .712 = P601, 652.69
Year 4 P922, 568.37 x .636 = P586, 753.48
Year 5 P1, 086, 352.37 x .567 = P615, 961.79
P2, 943, 235
(P300, 000)

P2, 643, 235

Internal Rate of Return:

*Payback Period = Investment of P300, 000

Average cash returns per year = .3571

(P 682, 123.04 + P664, 656.42 +
P845, 017.82 + P922, 568.37 +
P1, 086, 352.37)/5
** Compute the payback period in the present value of an annuity, it between
2.78% and 2.77%.

Profitability Index (PI)

Year 1 Year 2 Year 3 Year 4 Year 5
PV of
annual P609, 135.87 P529, 731.17 P601, 652.69 P586, 753.48 P615, 961.79
Cash
returns
Divide by
P300, 000 P300, 000 P300, 000 P300, 000 P300, 000
Investment
PI 2.03 1.77 2.01 1.96 2.05

Current Ratio

Year 1 Year 2 Year 3 Year 4 Year 5

Current Asset P557, 157.04 P1, 027, 471.72 P1, 678, 147.78 P2, 406, 374.41 P3, 298, 385.03

52
Current
P166, 446.81 P201, 183.65 P265, 712.11 P308, 337.12 P370, 259.52
Liabilities
Current Ratio 8.908
3.347 5.107 6.316 7.804

Net Fixed Assets Turnover Ratio

Year 1 Year 2 Year 3 Year 4 Year 5

Net income P521, 709.23 P602, 761.84 P753, 330.60 P852, 786.62 P997, 272.22
Ave. total
net Fixed P65, 632 P65, 632 P65, 632 P65, 632 P65, 632
Assets
Net fixed
assets 7.949 9.184 11.478 12.993 15.195
turnover

Equity Turnover Ratio

Year 2 Year 3 Year 4 Year 5

Net income P521, 709.23 P602, 761.84 P753, 330.60 P852, 786.62
Ave. Equity P723, 355.15 P1, 201, 401.37 P1, 804, 459.98 P2, 529, 489.40
Equity turnover .721 .502 .417 .337

Gross Profit Margin

Year 1 Year 2 Year 3 Year 4 Year 5

Gross profit P1, 076, 607.04 P1, 218, 296.49 P1, 444, 284.71 P1, 598, 343.74 P1, 817, 928.64

Net sales P1, 945, 440 P2, 217, 600 P2, 593, 920 P2, 866, 080 P3, 242, 400
Gross profit
.553 .549 .557 .558 .561
margin

Operating Profit Margin

Year 1 Year 2 Year 3 Year 4 Year 5

COS + P1, 257, 283.96 P1, 413, 654.51 P1, 574, 876.29 P1, 704, 956.26 P1, 874, 868.26
O.exp
Net Sales P1, 945, 440 P2, 217, 600 P2, 593, 920 P2, 866, 080 P3, 242, 400

53
Operating
.646 .637 .607 .595 .578
Ratio

Chapter VI
Socio – Economic Desirability

Socio – Economic Desirability – the proposed project is hoping to be beneficial

to all for the coming years. The business will continuously achieve its objective.

The study will offer entrepreneurs an attached area of investment:

A. Customers – the most important factor to be considered in service output

will be the customer. The company must always think about the new

trends of design which rides for the satisfaction of their needs, wants and

desires of the customer

B. Employees – the business would require the acquisition of manpower.

And by this means the unemployment rate would be lessen and would

also propagate the generation of income, which would positively influence

the improvement of the standard of living of employed individuals family.

C. Creditors/Supplier – the establishment of this kind of business will

promote the growth of other business firms which will provide the raw

materials and services or which will further process its products.

D. Owners – in establishing this kind of business the benefits of the owner

are they earn income in this business the benefits of the owner are they

earn income in a decent way and they give opportunity for a better life to

other people.

54
E. Community/Society/Church – in the presence of economic crisis, people

think how they earn money to minimize their daily expenses. In

establishing this kind of business here in Cabanatuan City would help the

people to have a decent job that would give them a better opportunity to

earn a living for their family. The establishment of this project would

benefit the consuming public through the lowering of retail prices.

F. Government – this project will benefit local and national government

because it helps in generating income through taxes. It will contribute for

the improvement of Philippine economy.

55