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I. INTRODUCTION
The Calinan of today has gone far from its unrefined beginning to a
flourishing and developing community. Standard of living and the way of life
improved. People have reached the supremacy of sophistication resulting to
higher demand for goods and services to satisfy their needs and wants.
Cultures in politics, health and public services, economic, socio-economic,
and tourism are altered to conform to the undying needs of the society. Even
in the world of education, Calinan has perked up resulting to the existence of
different learning institutions. In connection to this, students, faculty and other
members of the academe, and office employees’ demand for services and
products that are essential to their field of interest hikes. In respond to this,
many businesses have been established to meet such demands. However,
the proponents observed that a one stop shop catering both photocopying
and merchandising of school and office supplies services is of great need to
capture the unsatisfied demand of the prospect customers supported by the
survey conducted showing that 94% and 68% of the respondents believe that
their demands for photocopying services and merchandising services
respectively are not met by the existing businesses.
The proposed business aims to get hold the demands of the students and
faculty of the different schools located in the vicinity of the business’ proposed
location namely: Holy Cross College of Calinan; Calinan National High
School; Lt. Cipriano Villafuerte Sr. Elementary School; and Calinan Central
Elementary School.
A. OBJECTIVE OF THE STUDY
This study aims to determine the feasibility of establishing a
Multipurpose Cooperative in Calinan, Davao City.
This study also aims to merchandise office and school supplies and to
offer photocopying services that the targeted customers would like to
avail.
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It also seeks to determine the size of the prospective market and other
aspects related to the success of the cooperative.
B. SCOPE AND LIMITATIONS
The main focus of this project study is the feasibility of the proposed
Multipurpose Cooperative in Calinan, Davao City. Like most business
proposals, feasibility criteria have major aspects that need to be considered in
arriving at final conclusions and recommendations. The aspects that need to
be factored into this study are divided into project summary, marketing,
organization and management; the technical, financial, socio- economic
aspects, and legal aspects.
Responses to the questionnaire were limited to students, faculty and
members of the academe, and employees, both government and non-
government doing their field of interest near the vicinity of the proposed
location in Calinan. They were considered as the target market since they are
the most likely buyers of the goods and services offered by the proposed
cooperative. Only those who were identified as part of the target market were
considered and given the chance to answer the questionnaires regarding the
establishment of the multipurpose cooperative.
C. SIGNIFICANCE OF THE STUDY
The intention of this study is to aid, guide, and assist the proponents in
determining whether or not to establish the business. This study would help
the Holy Cross College of Calinan Administration in determining the viability
of establishing its Student Multipurpose Cooperative in Calinan.
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D. METHODOLOGY
A project summary should be prepared to present the highlights and the
“capsule view” of the whole project. Moreover, market study is to be
conducted to determine the market demand for the proposed project.
Technical analysis should be done the discuss the nature of the product line,
the technology necessary for the operation and its availability. Inasmuch,
financial projections should be considered to present the overall financial
picture of the first five (5) years of operations of the business. Socio-
economic feasibility likewise should be prepared to discuss the effect of the
project on the society and on the economy as a whole. Finally, management
and organization analysis should also be done to identify the management
structure of the proposed project.
II. PROJECT SUMMARY
A. NAME OF THE ENTERPRISE: Business Students’ Multi-Purpose
Cooperative (BSMPC)
The prospect members of this business organization are the current
Business students as well as the Business Students Alumni of Holy Cross
College of Calinan – College Department who are interested to become
members of the proposed cooperative. With this reason, Business Students’
Multi-Purpose Cooperative (BSMPC), the cooperative’s name, reflects the
field of interest of its corporators and members. However, it does not
necessarily mean that it will exclusively cater its services to the business
students of the said institution only. This cooperative also wishes to serve
other potential customers around its vicinity.
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B. LOCATION: Duyac Street Calinan, Davao City
Duyac Street is the proposed location of the proposed cooperative due to
following reasons:
The location is accessible to the potential customers which include not
only the Holy Cross College of Calinan students and faculty but as well as
the students and teachers of the neighboring schools namely: Calinan
National High School, Calinan Central Elementary School, Lt. Cipriano
Villafuerte Elementary School.
The location is strategically situated to cater the needs of the settlers of
the community where the proposed firm is to be established. The
mentioned settlers could be the students and teachers studying in the city,
office workers, household members who need school and office supplies
and services such as photocopying and merchandising.
The proponents observed that in the proposed location only few
enterprise has existed that will somehow meet the growing demand of the
customers for school and office supplies as well as for photocopying
services in just one stop shop.
Moreover, these are the considered factors which affect the choice of
location:
The sources or the suppliers of merchandise ( Felcris Calinan and NCCC
Supermarket Calinan) to be sold to the prospect customers is located near
to the proposed location- an edge on the enterprise’s part. The proximity
of the suppliers to the enterprise’s location allows the enterprise to
minimize its transportation expenses, freight in and other related
expenses.
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Inasmuch, the human resources (HCCC Business Students Alumni)
needed in running the enterprises are living near the enterprise’s location.
The mode of transportation in reaching out the different suppliers from the
enterprise’s location is tricycle. The suppliers can also be reached through
walking.
Since it is the first operation of the enterprise and because of limited
availability of funds, the proponents decided to lease the existing stall
found in the proposed location.
C. DESCRIPTIVE DEFINITION OF THE PROJECT
The proposed enterprise is in line with government encouraged
undertaking supported by Republic Act No. 9520, also known as the
"Philippine Cooperative Code of 2008", Article 2: Declaration of Policy.- It
is the declared policy of the State to foster the creation and growth of
cooperatives as a practical vehicle for promoting self-reliance and
harnessing people power towards the attainment of economic
development and social justice. The State shall encourage the private
sector to undertake the actual formation and organization of cooperatives
and shall create an atmosphere that is conducive to the growth and
development of these cooperatives.
"Toward this end, the Government and all its branches,
subdivisions, instrumentalities and agencies shall ensure the provision of
technical guidance, financial assistance and other services to enable said
cooperatives to develop into viable and responsive economic enterprises
and thereby bring about a strong cooperative movement that is free from
any conditions that might infringe upon the autonomy or organizational
integrity of cooperatives.
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"Further, the State recognizes the principle of subsidiarity under
which the cooperative sector will initiate and regulate within its own ranks
the promotion and organization, training and research, audit and support
services relative to cooperatives with government assistance where
necessary.
D. PROJECT’S LONG-RANGE OBJECTIVE
In ten (10) years time, after its first operation the enterprise
envisions to eventually buy the lot and the space which the enterprise is
currently leasing, if the owner sells it. The enterprise will acquire additional
photocopy machine and a computer set to intensify the services it offers.
During this time it can be able to generate employment, contribute to the
Calinan’s economic development through paying taxes.
ActionsYear
1Year
2Year
3Year
4Year
5Year
6Year
7Year
8Year
9Year 10
Inauguration / Opening of Business X
Business Operation Proper X X X X X X X X X X
Purchase of one (1) additional colored
photocopying machineX
Additional Business Line X
Store Expansion X
Additional manpower (2 personnel) X X
Increase in Market Share X X X X X X X X
E. FEASIBILITY CRITERIA
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The guidelines to be used in judging the feasibility of the enterprise
are: (1) profitability – the ability of the organization to utilize its assets,
resources to generate a reasonable and sound rate of return; (2) Going
Concern Ability – the capacity of the enterprise to continue its existence
regardless of the instability of the economy and its ability to continuously
serve the community; (3) Socio-economic Impact – the ability of the
business to serve the community where it belongs by job creations, tax
payments, and alleviation of members’ standard of living.
F. HIGHLIGHTS OF THE PROJECTi. History
The project came about because of the major problems of the
HCCC students especially of the college department with regard to
the number of hours that the services of the bookstore, which is
situiated inside the campus, are available. The students find it
inconvenient because every time they have to buy school supplies
the bookstore is not always open.
With regard to the photocopy service of the school, most of the
students find the existing price they are offering burdensome which is
evidently more expensive than that of the prices offered by the same
line of business outside the campus.
As a result, the proponents have decided to propose this
project to establish a one-stop-shop photocopying and
merchandising school supplies services to answer the clamor of the
Holycrossians and to meet the existing demand of other potential
customers.
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ii. Project Timetable and Status
The research project started with the identification of the
proponents and the prospect study. The feasibility study of the
proposed business is expected to be done in less than a year.
During the first month of the entire study the proponents will
identify the type of business, location, history, nature of industry,
mode of financing, investment cost and major assumptions.
Moreover, from first to the sixth month, the proponents will conduct
market, technical, and socio-economic survey, as well as economic
survey for CDA (Cooperative Development Authority) registration. At
some point on the seventh month, the proponents will finalize,
review, and harness the totality of the feasibility study for final
presentation and approval. Supposing that the feasibility study is
approved, on the seventh month the proponents will look into
consideration the preparation of the proposed business site.
Throughout the seventh up to the ninth month, business permit and
CDA registration will be processed. Furthermore, on the ninth to the
tenth month, hiring and training of personnel will occur. Purchase of
machineries and supplies for merchandising and photocopying
services is expected to materialize on the tenth to eleventh month.
Finally, on the twelfth month, the business will commence its
operation.
iii. Nature of the Industry
The proposed project is a cooperative type of business. Its
product lines are photocopying services and merchandising of office
and school supplies. The business aims to meet the existing
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unsatisfied demand of the target customers by providing the
demanded products and services.
iv. Mode of financing
The sources of funds include the paid-in capital of the
corporators, members of the proposed cooperative, and HCCC
College Alumni – Business Department, and borrowings from lending
institution.
The accumulated funds will be used for downpayment in
purchasing the machineries and equipment. Portion of it would be
spent for the purchase of inventories, rental pre-payments, and store
renovation.
The proponents decided to borrow certain amount from
lending institution since the paid-in capital of the expected members
is insufficient to cover up the needed initial investment.
In the case of the machineries and equipments purchased on
account, the obligations will be paid through monthly installments.
The accounts payable due to the lending institution will also be
settled monthly.
v. Investment CostTo make the project operational the required funds should
amount to Php 188,700.
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The Php 188,700 will be allocated to the following:
Quantity Item Unit Price Total2 Photocopying machines Php 40,000 Php 80,000
1 Computer Set 35,000 35,000
2 Electric Fan (Stand Fan) 2,000 4,000
Furniture and Fixtures 13,700
1 Bench 300 300
7 Office Chairs 200 1,400
4 Office Tables 500 2,000
2 Display Shelves 5,000 10,000
Merchandise Inventory
Office Supplies
30,000
5,000
Pre-paid rent (2 months) 3,000 6,000
TOTAL Php 188,700
G. MAJOR ASSUMPTIONSvi. Market Feasibility
There are already existing businesses catering photocopying
services and merchandising of school supplies that are operating in
the place where proposed business is to be established. However,
the proponents found out that they are not efficiently and
satisfactorily meeting the demands of the customers. These
unsatisfied demands now constitute a portion of the total market
share of the proposed business. These unsatisfied demands will be
met by employing marketing strategies such as discounts on volume
sales, value added services, quality controlled products and services,
and promotions.
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vii. Technical Feasibility
The proposed cooperative will cater two lines of business
which are: photocopying services and merchandising of school
supplies. In terms of merchandizing school supplies, the proposed
business will be selling varied supplies in retail.
In addition, during its operations, the business will be using
two photocopying machines, a computer set, stand fans and furniture
and fixtures.
viii. Financial Feasibility
During the first two years of operations, the business
experiences losses because it is still on the process of adjustment.
However, during the succeeding years it has earned reasonable net
surpluses which are indicators of its ability to earn return out of the
invested resources.
Looking into the financial ratios, the business is said liquid
throughout its first five years of operations. In terms of its financing,
the business equity is mostly financed by the members’ investments.
There is a positive relationship between the return on sales and the
fixed asset.
ix. Socio-economic Feasibility
The business operations will give rise to employment and
distribution of income. Equally, the standards of living of the
employed individual as well as his/her family will also improve. More
income in the hands of the people would mean greater demand for
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goods and services. Thus, it does not only benefit the individuals and
families but the entire economy as well, in accordance to the
provisions of the Republic Act 9520 under Article 6 which states that:
“Purposes of Cooperatives. – A cooperative may be organized and
registered for any or all of the following purposes:
“(1) To encourage thrift and savings mobilization among the
members;
“(2) To generate funds and extend credit to the members for
productive and provident purposes;
“(3) To encourage among members systematic production and
marketing;
“(4) To provide goods and services and other requirements to the
members;
“(5) To develop expertise and skills among its members;
“(6) To acquire lands and provide housing benefits for the members;
“(7) To insure against losses of the members;
“(8) To promote and advance the economic, social and educational
status of the members;
“(9) To establish, own, lease or operate cooperative banks,
cooperative wholesale and retail complexes, insurance and
agricultural/industrial processing enterprises, and public markets;
“(10) To coordinate and facilitate the activities of cooperatives;
“(11) To advocate for the cause of the cooperative movements;
“(12) To ensure the viability of cooperatives through the utilization of
new technologies;
“(13) To encourage and promote self-help or self-employment as an
engine for economic growth and poverty alleviation; and
“(14) To undertake any and all other activities for the effective and
efficient implementation of the provisions of this Code.
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x. Management Feasibility
The management structure of the proposed business follows
the typical structure of cooperative organization. In the highest
hierarchy is the general assembly composed of all the members
followed by the board of directors who formulates policies and rules
for the affairs of the cooperative. Under the board of directors are the
officers who directly manage the daily business operations. Lastly are
the staffs who are involve in the daily business transactions.
The salary scales of the mentioned officers are based on the
provisions of Republic Act 9520 or also known as the PHILIPPINE COOPERATIVE CODE OF 2008.
III. MARKET STUDY
A. SERVICE DESCRIPTION
The proposed business project will cater two business lines namely
photocopying services, and merchandising of school and office supplies.
The students, teachers and other members of the academe of the schools
mentioned earlier as well as the people residing within the vicinity of the
proposed business location who need such services are the major
customers.
B. DEMAND ANALYSIS
The target markets are the students, teachers and members of the
academic institutions that the business endeavors to serve. The target
markets are classified according of the type of services they demand.
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Based on the survey conducted out of 150 respondents, 88% said
that they are not satisfied with the services of existing photocopying
services and 58 % of them believed that the existing school and office
supplies centers are not satisfying their needs for such supplies. Meaning,
there are still number of customers that need the service of photocopying
and office and school supplies that would satisfy their demand.
14
In relation to it, 98 % and 92 % of the respondents agreed that
there is still a need for photocopying centers and office and school
supplies center respectively to be opened which will meet the demands
that are not catered by the existing businesses and 100% of them liked it
to be a one stop shop (having photocopying services and merchandising
of office and school supplies in just one store).
Moreover, most of the respondents agreed that the things that they
do not like in the existing photocopying and office and school supplies
centers are the unavailability of the services at all times, unapproachable
store attendants, services and products which are of not good quality and
the imposed products and services’ prices.
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C. SUPPLY ANALYSIS
The direct competitors of the proposed business project are
classified according to the type of services they are offering as well as the
size and location of their existing businesses.
Specifically, the direct competitors whose business sizes are small,
whose locations are near to the target markets and who are of most in
number include the businesses whose establishments are just a couple of
steps away from the target markets’ location. On the other hand, direct
competitors whose business sizes are big, whose locations are a little bit
far to the target markets and who are of least in number include Lilian
Bazaar, Calinan Trading, and Nacario Printing Shop.
The type of market structure existing among the competitors is
competition wherein there are many existing business ventures offering
the same line of businesses which are photocopying and merchandising of
office and school supplies. Thus, the proposed business project must
employ extensive and intensive marketing strategies to cope with the stiff
competition.
As a counterpart to the survey conducted on the demands of the
target customers, the proponents found out that 40% of the interviewed
existing suppliers said that their supply is less than the customers’
demand. This shows that there is still a need for the proponents’ proposed
business to be established in order to capture the unsatisfied demand.
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D. DEMAND-SUPPLY ANALYSISi. Demand-Supply Comparison
The survey shows that the demand and supply do not meet at
a certain point called equilibrium. The demands of the targeted
customers exceed the supplies offered by the existing stores. With
this reason, the proponents see an opportunity of realizing the
proposed business.
E. PRICE STUDYi. Photocopying services (prices based on the existing
businesses):
Output Quality Paper Size
(Bond Paper)
Price per sheet
(In Philippine Peso)
1. Clear Copy Letter 1.00
1.50
Legal 1.00
1.25
1.50
2. Ordinary Copy Letter 0.50
0.75
Legal 0.75
3. Reduced Copy Letter & Legal 2.00
4. Enlarged Copy Letter 1.50 per size
adjustment
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ii. Price Trends (Photocopying Services)
Output QualityPaper
Size
Price Per Sheet
(In Philippine Peso)
Year
2010
Year
2009
Year
2008
Year
2007
Year
2006
1. Clear Copy Letter 1.25 1.00 1.00 1.00 0.50
Legal 1.50 1.50 1.25 1.00 0.75
2. Ordinary
Copy
Letter 0.75 0.75 0.75 0.75 0.75
Legal 0.75 0.75 0.50 0.50 0.50
3. Reduced
Copy
Letter
&
Legal
2.00 2.00 2.00 2.00 2.00
4. Enlarged
Copy
Letter
&
Legal
1.50
per
size
adjust
ment
1.50
per
size
adjust
ment
1.50
per
size
adjust
ment
1.50
per
size
adjust
ment
1.50
per
size
adjust
ment
iii. Responsiveness of Demand to Price Changes
If the supply is held constant the demand for the photocopying
services and office and school supplies relatively increases if the
products and services’ prices decline. Conversely, if the supply is
held constant the demand for the photocopying services and office
and school supplies relatively decreases if the products and services’
prices increase.
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iv. Establishment of Products and Services’ Selling Prices
Output
Quality
Paper
Size
Price Per Sheet
(In Philippine Peso)
Year
2010
Year
2011
Year
2012
Year
2013
Year
2014
1. Clear Copy Letter 1.00 1.00 1.00 1.25 1.25
Legal 1.00 1.00 1.00 1.25 1.25
2. Ordinary
Copy
Letter 0.75 0.75 0.75 1.00 1.00
Legal 0.75 0.75 0.75 1.00 1.00
3. Reduced
Copy
Letter
&
Legal
2.00 2.00 2.00 2.00 2.00
4. Enlarged
Copy
Letter 1.50
per
size
adjust
ment
1.50
per
size
adjust
ment
1.50
per
size
adjust
ment
1.50
per
size
adjust
ment
1.50
per
size
adjust
ment
F. FACTORS AFFECTING THE MARKETThe demands for the services and products of the cooperative are
affected by the following:
i. Population GrowthThe demands for photocopying services and office and school
supplies are affected by the population growth of the students,
teachers and office employees in the area. It is expected that in the
coming years, the population of the students in the aforementioned
schools would increase due to following reasons: a) increased in
tuition fees of the universities in downtown; b) increased in
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transportation, food, lodging expenses of the students studying in
downtown which the parents cannot anymore afford; c) an increasing
population trend in the public schools has been observed for several
years; d) in much the same manner, an increase in the number of
students also means an increase number of teachers; e) increased
number of employees due to the increasing number of offices and
establishments in Calinan.
Thus, the proponents see a direct relationship between the
population growth and the demand for photocopying services and
office and school supplies.
ii. Income Changes
As the income of the target customers increases their possible
demands for such product and services are also expected to
increase proportionately. This is due to the consideration that their
purchasing capacity has substantially increased.
iii. Rural and Urban Developments
The developments in Calinan in terms of its economic, political
and educational aspects pave the way for an increase in employment
and consequently an increase in income resulting to an improved
standard of living. With this regard, the demand for the products and
services that the proposed cooperative is offering is also expected to
rise.
Prices will be affected by inflation. Prices tend to go up
whenever inflation rate increases. As a result the purchasing power
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declines in proportionate to an increase in the prices of goods and
services.
G. MARKETING PROGRAMi. Type of Prevalent Marketing Program
The following are the marketing programs that the cooperative
are going to adopt:
a. Discounts on volume sales
b. Value added services (free delivery, staples, etc.)
c. Quality controlled products and services
ii. Promotions
The end users of the products and services would be aware
by the services of the cooperative through distribution of leaflets. The
end users are likewise be enticed to patronize the cooperative by
giving discounts and promos, by providing them a good customer-
supplier relationship (CSR), and by hitting customer satisfaction.
IV. TECHNICAL STUDYA. PRODUCTS
The proposed cooperative will cater two lines of business which are:
photocopying services and merchandising of school supplies.
In photocopying services the cooperative will use substance 20 bond
papers with sizes – 8X11’(letter) and 8X13’(legal).
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Meanwhile, in merchandising of school supplies, the cooperative will
sell the following products:
Item Item Description
Short Bond Paper 8.5”x11” substance 20
Short Bond Paper 8.5”x11” substance 16
Long Bond Paper 8.5x13” substance 20
Long Bond Paper 8.5x13” substance 16
Construction Paper 8.5”x13”
assorted colors
Construction Paper 8.5”x11”
assorted colors
Construction Paper 9x12”
assorted colors
Colored Paper Short
Assorted colors
Colored Paper Long
Assorted colors
Intermediate Paper Class A
(white sheets)
Intermediate Paper Class B
(dirty white sheets)
¼ and ½
Intermediate paper
Class A and B
Yellow Pad
Paper
Class A
(fine in quality)
Yellow Pad
paper
Class B
(not fine in quality)
Colored Bond Long
Assorted in color
Colored Bond Short
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Assorted in color
Ball Pen Assorted brands and colors
Pencil Assorted brands and numbers
Fasteners Assorted color
CompositionNotebook Assorted leaves
Writing Notebook Assorted Leaves
Big Notebook Assorted Leaves
Thumbtacks
Glue Assorted brands and volume
Paste
Folder Long & Short – Brown
Plastic Folder Long & Short
Assorted Colors
Envelope Long & Short
Brown
Plastic Envelope Long & Short
Assorted Colors
Scissors Assorted Colors
Elementary Paper Grades 1, 2, 3 & 4
Index card Various Sizes
Crayons
Manila paper Various sizes
Scotch Tape Various Sizes
Masking Tape Various Sizes
Graphing Paper
Chalk Assorted Brand and color
Eraser Assorted sizes and designs
Sharpener
Cartolina Assorted Colors and quality
Illustration Board Various Sizes
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Stickers
Silver Dust Assorted Colors
Water Cellophane Assorted Colors
Cript Paper Assorted Colors
Japanese Paper Assorted Colors
Drawing Book Various Sizes
Formal Theme
Informal Theme
Sulating Pangwakas
Clear Book Assorted Colors
Marker Assorted Colors
Permanent Marker Black, Blue and Red
B. MACHINERIES AND EQUIPMENTSThe following are the machineries and equipments that the cooperative is
going to acquire:
Machineries and Equipments Cost Origin
Computer Set Php 35, 000 Local
Photocopying MachinesPhp 80,000
(2 machines)Local
Stand Fans Php 4, 000 Local
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Standard Capacity of each Photocopying Machines and the Desired
Maximum Capacity
Machineries Standard CapacityDesired Maximum
Capacity
Photocopying Machine 1
Expected to last for 10 years
Paper Capacity 2,500 sheets
Maximum
Expected to last for 15 years
Paper Capacity 3,000
sheets Maximum
Photocopying Machine 2
Expected to last for 10 years
Paper Capacity 2,500 sheets
Maximum
Expected to last for 15 years
Paper Capacity 3,000
sheets Maximum
Computer Set Expected to last for 5 years 10 years
Stand Fans Expected to last for 3 years 5 years
C. COOPERATIVE’S LOCATION
The proposed cooperatives location is desirable in terms of its distance to
the market where the business gets its merchandise as well as to its target
customers. Moreover, the location is ideal because the water, transportation
and light necessities are accessible.
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Stand Fan Computer Set Photocopy Machine
Proposed Store Site
VIEW A
26
Proposed Store Site
Holy Cross College of CalinanHoly Cross College of Calinan
VIEW B
D. STORE LAYOUT
27
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E. BUILDING AND FACILITIES
During the first five years of the cooperative’s operation, it opts to lease
the space, the lot and the building where the business operation are to be
conducted
Drainage facilities, road improvement are not of great consideration in this
project.
F. UTILITIESThe cooperative needs electricity and water for its daily operation thus, the
organization has to set up a connection for electricity and water.
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G. WASTE DISPOSAL
The cooperative’s waste could be in the form of crumpled papers, cut-
outs, damaged office and school supplies. Since one of the goals of the
business is to adopt quality control system, the business expects to have
lower quantity of waste of the disposal.
The waste accumulated by the cooperative out of the daily operations
which cannot anymore be recycled shall be placed in a waste bag. Every
week, the business shall throw them at the garbage bins provided by the
government which are eventually collected by the CENRO at a specified
schedule.
However, those wastes that can still be recycled will be used by the
organization to minimize its expenses. Other option would be to sell those
wastes in order to gain something out of them.
H. LABOR REQUIREMENTS
There will be two (2) staffs who will be employed by the cooperative. The
remuneration for the staffs will be based on the present standard minimum
wage. Before the actual business operations, the staff will be trained on
his/her specific job. There would be seven (7) board of directors who will be
compensated according to RA 9520, Chapter IV, Article 46. There will also be
one general manager, one secretary, one treasurer, and one cashier whose
compensation and tenure are fixed by the board of directors
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V. FINANCIAL FEASIBILITYA. MAJOR ASSUMPTIONS
i. Dividend PoliciesUnder Republic Act 9520, Chapter X, Article 86, The net
surplus of every cooperative shall be distributed as follows:
"(1) An amount for the reserve fund which shall be at least ten per
centum (10%) of net surplus: "(2) An amount for the education and
training fund, shall not be more than ten per centum (10%) of the net
surplus: (3) An amount for the community development fund, which
shall not be less than three per centum (3%) of the net surplus: "(4)
An optional fund, a land and building, and any other necessary fund
the total of which shall not exceed seven per centum (7%): "(5) The
remaining net surplus shall be made available to the members in the
form of interest on share capital (dividends) not to exceed the normal
rate of return our investments and patronage refunds: Provided, That
any amount remaining after the allowable interest and the patronage
refund have been deducted shall be credited to the reserve fund.”
ii. Labor and Management Compensation
There will be two staffs who will be employed by the
cooperative. The remuneration for the staffs will be based on the
present standard minimum wage. Before the actual business
operations, the staff will be trained on his/her specific job.
There would be seven board of directors and one general manager.
Under RA 9520, Chapter IV, Article 46 Compensation. – (1) In the
absence of any provisions in the bylaws fixing their compensation,
the directors shall not receive any compensation except for
reasonable per diems: Provided however, That the directors and
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officers shall not be entitled to any per diem when, in the preceding
calendar year, the cooperative reported a net loss or had a dividend
rate less than the official inflation rate for the same year. Any
compensation other than per diems may be granted to directors by a
majority vote of the members with voting rights at a regular or special
general assembly meeting specifically called for the purpose:
Provided that no additional compensation other than per diems shall
be paid during the first year of existence of any cooperative.
"(2) The compensation of officers of the cooperative as well as the
members of the committee as well as the members of the
committees created pursuant to this Code or its bylaws may be fixed
in the bylaws.
"(3) Unless already fixed in the bylaws, the compensation of all other
employee shall be determined by the board of directors.
iii. Method of Depreciation
The method of depreciation that the business will use in
depreciating its machineries and equipment is Straight Line Method
represented by this formula:
Annual Depreciation = Total Depreciation Estimated Useful Life (in years)
Whereas, the business is going to follow the following
formula for computing the amortization:
Original Amount Borrowed = R 1- (1+i)-n
i
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B. TOTAL PROJECT COSTThe table shows the projected project costs:
Fixed Assets:
Quantity Item Unit Price Total
2 Photocopying
machines
Php 40,000 Php 80,000
1 Computer Set 35,000 35,000
2 Electric Fan (Stand
Fan)
2,000 4,000
Furniture and Fixtures 13,700
TOTAL FIXED ASSETS Php 32,700
Current Assets:
Quantity Item Unit Price TotalCash On Hand 15,000
Supplies Inventory
Office Supplies
30,000
5,000
Pre-paid rent (2
months)
3,000 6,000
TOTAL CURRENT ASSETS Php 56,000
Total Project Cost:
Total Fixed Assets Php 132,700
Total Current Assets 56,000
Total Project Cost Php 188,700
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C. SOURCES OF FINANCING THE PROJECT
The sources of funds include the paid-in capital of the corporators and the
members of the proposed cooperative, donated capital from HCCC College
Alumni – Business Department, and borrowings from lending institution.
The accumulated funds will be used for downpayment in purchasing the
machineries and equipment. Portion of it would be spent for the purchase of
inventories, rental pre-payments, and store renovation.
The proponents decided to borrow certain amount from lending institution
since the paid-in capital of the expected members is insufficient to cover up
the needed initial investment.
In the case of the machineries and equipments purchased on account, the
obligations will be paid through monthly installments. The accounts payable
due to the lending institution will also be settled monthly.
D. FINANCIAL STATEMENTS
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