RESHOEVINATION

A PROJECT FEASIBILITY STUDY

Presented to the Faculty

Of the College of Business Education
Saint Columban College, Pagadian City

In Partial Fulfillment
Of the Requirement in ACCOUNTING 309
(STRATEGIC BUSINESS ANAYSIS)

By

MELBERT JOHN M. BRILLANTES

JANICE A. DELA RAMA
DAOMENCIL M. LAGNASON

May 2024
 APPROVAL SHEET

This project feasibility study RESHOEVINATION prepared and submitted by

MELBERT JOHN M. BRILLANTES, JANICE A. DELA RAMA, AND DAOMENCIL
M. LAGNASON in partial fulfillment of the requirements in ACCOUNTING 309 has been
examined and approved by the Committee on Oral examination.

ARTCHELENE D. PEPANIA, CPA,CTT, MBA SHEILA MAY A. FIEL, CHRA,LPT,MBA

Instructor Marketing Adviser

ACE VIRGEL F. BATINGAL, CHRA MA. DEVERSIN D. RAMAS, MBA, MAGC

Technical and Management Adviser Socio-Economic Adviser

MYLENE P. ALFANTA, CPA

Financial Adviser

PANEL OF EXAMINERS

Approved by the Committee on Oral Examination with a grade of _________.

JOAN S. MONDARTE JONALYN B. TINGCANG, LPT, MBA

Member Member

ARTCHELENE D. PEPANIA, CPA, CTT, MBA

Member

Accepted and approved in partial fulfillment of the requirements in

ACCOUNTING 309.

SUSAN M. RAMIREZ, DM
Dean, College of Business Education

May 24, 2024

Final Defense Date

i
 ACKNOWLEDGEMENT

The successful completion of the Reshoevination Feasibility Study owes gratitude

to several invaluable contributors. The proponents would like to express their deepest
appreciation to:

• Firstly, to the Almighty for His unwavering guidance and protection

throughout this endeavor, instilling in them the faith and confidence
necessary for success.
• To their instructor, Ms. Artchelene D. Pepania., for imparting knowledge
and providing guidance for this study to be a success. They appreciate her
unwavering support, consideration, and understanding throughout their
journey.
• To their advisers, Ms. Shiela Mae A. Fiel, Mr. Ace Virgel Batingal, Ms.
Myle Alfanta, and Mrs. Ma. Deversin Ramas for their invaluable guidance
to refine our study.
• To their parents for their constant moral and financial support, unwavering
belief in our abilities, and unconditional love.
• To their friends and significant others for their unwavering support and
assistance during challenging times, prioritizing friendship over
competition.

ii
 DIDICATION

The proponents dedicate this book to their much-loved, significant ones who
diligently contributed their efforts for the fulfillment of this academic endeavor:

Mrs. Emelyn M. Brillantes and Mr. Albert G. Brillantes

Mrs. Miguela A. Dela Rama and Mr. Rolando D. Dela Rama
Mrs. Wenecil M. Lagnason and Mr. Arnold C. Lagnason

iii
 List of Tables

Table No. Page

1 Geographic Segmentation: Barangay Distribution
of the Population in Pagadian City 7
2 Demographic Segmentation: Age Distribution
of the Population of 15 Barangays in Pagadian City 8
3 Psychographic- Market Segmentation 9
4 Historical Covered Barangay Market Segmentation 9
5 Historical Demand 10
6 Projected Demand 11
7 Historical Supply of Shoe Repair Shop in the Market 12
8 Summary of Standard Deviation: Historical Supply 13
9 Projected Supply of Shoe Laundry for Five Years 14
10 Projected Unsatisfied Market 15
11 Market Share Based on Total Projected Demand 16
12 Projected Market Share Based on Plant Capacity 17
13 Service Price of Shoe Laundry 18
14 Estimated Promotion/Advertising Cost 20
15 Annual Service based on Number of Operating Days in Year 29
16 Daily Service Schedule 30
17 Service Machinery and Equipment - Descriptions 35
18 Service Machinery and Equipment 35
19 Office Equipment 38
20 Furniture and Fixture 39
21 Leasehold Improvements 39
22 Summary of Property, Plant, and Equipment 39
23 Direct Materials Leasehold Improvements 40
24 Direct Labor Leasehold Improvements 40
25 Electricity Consumption of Selling and Administrative 41

iv
26 Electricity Consumption of Service Process 42
27 Service Supplies 44
28 Office Supplies 45
29 Summary of Supplies Inventory 46
30 Service Cost Requirements 46
31 Breakdown of Estimated Pre-operating Expenses 47
32 Initial Capital of Partnership 49
33 Pre-operation Training Plan and Budget 54
34 Projected Monthly Salary per type of Employee 55
35 Projected Annual Salaries and Wages of Employees 56
36 Community Engagement Program 61
37 Total Project Cost of Reshoevination 67
38 Partners’ Capital Contributions and Profit/Loss Ratio 67
39 Cost of Capital and Modes of Financing 68

v
 List of Figures

Figure No. Page

1 Business Logo 2
2 Historical Demand Pattern 11
3 Supply Growth Pattern 13
4 Demand Gap 16
5 Channel of Distribution 21
6 Service Process Flow 23
7 Cleaning Process Flow 27
8 Actual Picture of the types of Machine Process 27
9 Aerial View of Project Location 32
10 Actual Picture of Commercial Building 32
11 Plant Layout 33
12 Three-Dimensional Project Layout – Front View 34
13 Three-Dimensional Project Layout – Back View 34
14 Organizational Chart of Reshoevination 50
15 Gantt Chart 57

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 List of Schedules

Schedule No. Page

1 Direct Labor 79
2 Cleaning Supplies 79
3 Depreciation Expense 81
4 Contribution Table 82
5 VAT Payable Computation 83
6 Utilities Consumption 83
7 Partner’s Profit Distribution 86
8 Withdrawals 87

vii
 TABLE OF CONTENTS
PAGE NO.
TITLE PAGE
APPROVAL SHEET i
ACKNOWLEDGEMENT ii
DEDICATION iii
LIST OF TABLES iv
LIST OF FIGURES vi
LIST OF SCHEDULES vii
CHAPTER
I EXECUTIVE SUMMARY 1
Name of the Firm 1
Description of the Industry 1
Logo of the Business 2
Location of the Business 2
Summary of Finding and Conclusions 2
Market Feasibility Summary 2
Technical Feasibility 3
Management Feasibility 4
Socio-Economic Feasibility 4
Financial Feasibility 4
II MARKET STUDY 5
Study of Demand 5
Target Market 5
Market Research 6
Market Segmentation 6
Historical Demand 9
Projected Demand 11
Evaluation of Projected Demand 12
 Study of Supply 12
Competitors 12
Historical Supply 12
Projected Supply 13
Evaluation of Projected Supply 14
Demand-Supply Analysis 14
Demand Gap 15
Market Share 16
Price Study 17
Marketing Strategies and Programs 18
Price Strategy 18
Service Strategy 19
Promotion/Advertisement Strategy 19
Place/Distribution Strategy 20
Channel of Distribution 21
Conclusion of Market Study 21
III TECHNICAL STUDY 22
Service Description 22
Service Process 23
Plant Capacity 29
Service Schedule 30
Plant Location and Layout 32
Machinery and Equipment 35
Leasehold Improvement 40
Utilities 41
Water Supply 41
Electricity 41
Diesel 42
Internet 42
 Repairs and Maintenance 43
Inventory 43
Supplies 43
Waste Disposal System 46
Pre-operating Activities 47
Conclusion of Technical Study 47
IV MANAGEMENT STUDY 48
Business Organization 48
Type of Business 48
Capital Requirement 49
Vision, Mission, and Goals 49
Internal Structure 50
Staffing Requirement 51
Manpower Requirement and Job Description 51
Recruitment and Training Program 53
Recruitment 53
Training Programs 53
Compensation and Other Benefits 55
Project Schedules 57
Conclusion of Management Study 58
V SOCIO-ECONOMIC STUDY 59
Background of the Study 59
Significance for us as Students 59
Significance towards Academe 60
Significance towards the Community 60
Future Plans for the Industry 61
Why did you choose this Business Study
and its Contribution to the Society? 62
Conclusion of Socio-economic Study 62
 VI FINANCIAL STUDY 63
Major Assumptions 63
Total Project Cost 67
Sources of Financing 67
Capital Structure Policy 67
Cost Capital 68
Financial Statements 69
Notes to Financial Statements 73
Financial Schedules 79
Financial Statement Analysis 88
Horizontal Analysis 88
Vertical Analysis 98
Ratio Analysis 102
Breakeven Analysis 104
Project Evaluation Techniques 107
Conclusion of Financial Study 110
REFERENCES 111
APPENDICES 112
APPENDIX
A Communication Letter 112
B Computation of Sample Population and Sample Size 113
C Survey Questionnaire 115
D Survey Result Summary 117
E Projected Demand Computation 123
F Projected Supply Computation 124
G List of Suppliers 128
H Estimated Maximum Output of Shoe Laundry 129
I Computation of Utilities Consumption 130
J Service Cost Requirement 132
K Articles of Partnership 134
 L SSS Contribution Table 138
M Pag-IBIG Contribution Table 139
N PhilHealth Contribution Table 139
O Receipts of Payment 140
P Feasibility Study Receipt 141
CURRICULUM VITAE 142
 Chapter I
EXECUTIVE SUMMARY

Name of the Firm

The name of the business is Reshoevination. It's Pagadian City's first shoe laundry,
offering advanced shoe cleaning services and caring for your shoes with the spa they
deserve. Simply by reading or hearing the name, people can readily recognize the business,
making it a practical name that is easy to remember.

Description of the Industry

The shoe-washing industry in the Philippines has expanded substantially as more

people recognize the importance of regular shoe maintenance. As shoe models change, so
does the shoe-cleaning industry. Shoe laundry shops are rare and can only be found in a
few locations across the country. This provides shoe cleaning services to its customers,
ensuring that their shoes are cleaned professionally and gently without compromising the
shoe's quality.

Sandeep Gajakas launched shoe laundry in Mumbai in 2003. A fire engineering

graduate from the National Institute of Fire Engineering with several qualifications and
extensive experience in the customer service business. Sandeep Gajakas is the founder of
The Shoe Laundry; in 2003, he dared to dream of providing India's first shoe laundry
service. India's first professional footwear laundry and refurbishment service for all kinds
of footwear. It is Sandeep Gajakas' brainchild. Shoe Laundry's clientele has been rapidly
rising as individuals saw the importance of shoe maintenance. Shoe Laundry serves
thousands of consumers around Mumbai (Mahalingam, 2012). There are now only a few
shoe laundry services available in the Philippines, but none in the local city.

In this business, qualified employees use a variety of procedures and instruments

to clean and restore shoes and keep their beauty. Shoe laundry businesses may provide a
variety of services, like stain removal and deodorizing, to meet the different needs of their
clients.

1
Logo of the Business

The logo of the business is simple yet attractive with its

bright sky-blue color, which emphasizes the service that
the business offers to its customers. It has two hands that
glow which derives from the name of the business itself.
This shows how well the business takes care of the shoes
of its customers. The box represents the entity’s shoe
solutions which protect the shoe from the dirt. With its
logo, the service provided is easily understood.

Figure 1: Reshoevination Logo

Location of the Business

The business is in Vincenzo Sagun Street, Purok Sampaloc, Balangasan, Pagadian

City. The location is central to the city, making it convenient for potential clients. The
business stands alongside businesses in several industries, as well as near student and other
potential customers’ boarding houses. It stands near JH Cerilles State College, Yllana
Bayview College, and more.

Summary of Finding and Conclusions

Market Feasibility Summary

Reshoevination is a new business opportunity that influences the growing demand

for specialized shoe maintenance services. The study indicates that the market is
underserved, with options available for customers seeking premium shoe care services. The
business enters the market by offering a range of premium services, including specialized
cleaning and conditioning. Basic shoe cleaning costs 130.00 per pair, and additional
charges will be given for the premium package.

2
 The market analysis indicates that there is significant room for expansion in the
upcoming years, driven by the growing demand for shoe care services. With a high level
of acceptability from the respondents, Reshoevination could have a 5.84% market share in
the first year which could increase by 1.82% after two years. Reshoevination offers a
compelling business opportunity that combines growing demand with no competition. By
executing service and pricing strategies effectively with accurate advertising and
promotion, Reshoevination can establish a successful and profitable business that meets
the needs of consumers seeking shoe care services.

Technical Feasibility

Reshoevination is technically feasible. The location is advantageous because it is

in the heart of the city and is surrounded by several schools, like Yllana Bayview College,
JH Cerilles State College, and more. The placement of machinery and equipment, furniture,
and supplies promotes an efficient and productive workflow of commercial activities. The
machinery and equipment, and supplies required for the service operation are available.

Since the machines are purchased overseas, for repairs and maintenance, Teko has
formed a cooperation with the supplier of shoe washing machines and dryers to ensure that
the devices continue to function properly, which can be reached via an online booking
system. Teko connects businesses with experienced technicians for on-site after-sales
services, offers out-of-warranty services directly to consumers, and provides warranty
services through their partner manufacturers and distributors. Resources are practically
available to satisfy the business's everyday needs for its operations. Reshoevination has a
maximum capacity of 90 pairs of shoes each day.

3
 Management Feasibility

Reshoevination is a collaboration between three business partners that will share

capital and industry allocated to the business in the proportion of 30:30:40. The business
will hire three shoe cleaners, one for each shoe washing machine. Reshoevination will hire
one (1) machine operator who will be assigned to operate the shoe dryer machine. The
labor is given adequate salary and granted SSS, PhilHealth, 13th-month pay, and Pag-IBIG
are among the perks offered. The management plan is designed to ensure quality assurance
and workflow efficiency.

Socio-Economic Feasibility

The socioeconomics study on the shoe laundry business in Pagadian City

emphasizes the need to fill the market gap for specialized shoe cleaning services. It
emphasizes the importance of academic institutions in providing resources and
opportunities for success.

The business organizes community involvement programs such as shoe care

workshops and sponsors local sports events, particularly in Brgy. Balangasan and
donations for elders. The business can positively impact the community by offering a
convenient, affordable solution, encouraging entrepreneurship, and promoting an eco-
friendly environment. Implementing community programs and a clear plan can further
enhance cleanliness, job opportunities, and local economic development.

Financial Feasibility

The Reshoevination is a feasible project with a positive 5.49 Net Present Value
Index and 6.49 Profitability Index. There is an IRR of 42.16% and a payback period of 2
years and 6 months for the shoe laundry industry in this country (Dequina, et. al, 2023, vol.
19 no.1). In contrast, the Payback Period analysis indicates that this business will return on
investment in 1 years and 8 months. Compared to the expected rate of return of 2.79%, the
obtained IRR figure is 90.00% higher. The results show that the shoe laundry industry and
the business financial analysis studies has significant difference. Return on Sales and the
Return on Investment for its first year of operations is at 20.64% and 58.84%, respectively.

4
 Chapter II
MARKETING STUDY

This chapter will discuss the extent to which the proposed project’s service is
necessary or demanded, as well as the marketing strategies, plans, and actions required to
ensure that the project’s output is accepted and will be patronized by the target market. The
marketing viewpoint of this feasibility study will present and analyze the findings on the
city’s shoe laundry demand and supply. This is crucial for determining the business’s
profitability, which is the top priority of this feasibility research project.

Study of Demand

As the market for shoes and footwear accessories is quickly growing, people are
beginning to experience new concerns and dilemmas about their footwear. In theory, the
demand is excellent considering the current population explosion and worldwide footwear
market expansion. In reality, the demand is too low given that the target market is unaware
of the existence or benefits of a shoe laundry shop.

Target Market

Reshoevination is focused on the needs of residents of the selected 15 barangays in

Pagadian City which has a sample size of 398. Currently, the business finds the location
viable since there are no identified competitors established within the city. Customers'
needs will be met by offering them the best cleaning services with modern equipment.
Reshoevination will go all the way to help customers maximize their time when they
patronize the business.

Market Research

To capture the target market’s perception of the proposed service, a comprehensive

market research approach was implemented. This involved conducting an online survey
using Google Forms as well as face-to-face surveys.

5
 Among from these are the residents of Pagadian City particularly in 15 Barangays
such as Balangasan, Banale, Dao, Gatas, Kawit, Lumbia, Napolan, San Francisco, San
Jose, San Pedro, Santa Maria, Santiago, Santo Nino, Tiguma, and Tuburan. The proponents
obtain the population of 15 Barangays from the online platform PhilAtlas.

In addition, Slovin’s Formula is used to calculate the sample size (n) at the
segmented market population size (N) and a margin error (e). The proponents obtained the
appropriate sample size of 398 respondents for the study.

Market Segmentation

Market segmentation entails splitting a huge homogenous market of potential

buyers into easily recognized divisions. Customers are divided into segments based on how
they respond to marketing efforts. Organizations can better tailor their products, services,
and marketing activities to their target audience’s needs and preferences by identifying and
targeting certain segments.

Geographic and demographic segmentation are the options proposed by

proponents. Geographic segmentation divides an audience into groups depending on their
actual location. In this study, respondents are chosen based on the 15 barangays in which
they reside. Demographic segmentation divides the market based on the client's age. The
researchers segmented the individuals based on their age range of 20 to 64. The proponents
use service interest to narrow down the projected demand.

To get the segmented market, the researcher focused solely on the population
between 20 and 64 years old in 15 Barangays. According to the table 2 findings,
approximately 61,751 or (53%) of the total population in these areas is expected to avail
of the proposed service which will serve as the primary basis for the calculation of the
segmented market based on the population projections from 2025-2029. (See Appendix B
for the calculation)

6
Table 1: Geographic Segmentation
Barangay Distribution of the Population in Pagadian City, Year 2023
Barangay Population

Balangasan 15,592

Banale 9,326

Dao 7,133

Gatas 2,271

Kawit 10,652

Lumbia 3,643

Napolan 9,921

San Francisco 2,960

San Jose 8,518

San Pedro 8,478

Santa Maria 4,073

Santiago 2,983

Santo Nino 8,741

Tiguma 12,786

Tuburan 9,613

Total 116,689

Source: PhilAtlas website

7
Table 2: Demographic Segmentation
Age Distribution of the Population of 15 Barangays in Pagadian City, Year 2023
Age Distribution Population Segmented Market

0-9 years 24,539 -

10-14 years 11,858 -

15-19 years 13,152 -

20-24 years 12,616 12,616

25-29 years 10,034 10,034

30-34 years 8,258 8,258

35-39 years 7,691 7,691

40-44 years 6,559 6,559

45-49 years 5,683 5,683

50-54 years 4,863 4,863

55-59 years 3,474 3,474

60-64 years 2,573 2,573

65-69 years 1,810 -

70-74 years 1,144 -

75-79 years 763 -

80 and over 667 -

Total 116,689 61,751

Source: PhilAtlas website

8
Table 3: Psychographic - Market Segmentation
Years Population People Who Are Interested Segmented Market

2019 60,427 85% 51,621.06

2020 60,664 85% 51,823.52
2021 60,810 85% 51,948.24
2022 61,273 85% 52,343.77
2023 61,751 85% 52,752.11

People who are interested to the business are based on question number 11 in the
survey questionnaire. Table 3 shows that eighty-five (85) percent are willing to patronize
a shoe laundry business.

Historical Demand
Market demand analysis is a crucial technique for assessing the potential market
for the business. It ensures that the aforesaid business is marketable. In this instance, the
proponents projected future growth or a decline in demand using demand analysis based
on previous data. The demand can be gathered within the chosen barangay districts within
the scope of Reshoevination, which carries out a sampling survey. Using the findings of
the market segmentation, the proponents have gathered the information below:

Table 4: Historical Covered Barangay Market Segmentation, Aged 20–64

2019 2020 2021 2022 2023

Total 51,621 51,824 51,948 52,344 52,752

In Pagadian City, no other Shoe Laundry Businesses exist in the target area of
operation; this is why the historical demand for individuals to experience getting their shoes
cleaned at a shoe laundry business can’t be determined. For this reason, the proponents
based the historical data on questions number 1 and 5 to calculate the historical demand
for a shoe laundry business.

9
 According to the findings, eighty-four (84) percent of the population are fond of
wearing shoes, and the average number of pairs of shoes they clean each month is 3 per
pair of shoes. The table below shows the summary of our historical demand.

Table 5. Historical Demand

Annual
The Average of Historical
Year Segmented Population Total Shoes Cleaned Demand
Market who are fond (3 pairs of shoes (per pair)
of wearing per month)
shoes

2019 51,621 84% 43,362 36 1,561,021

2020 51,824 84% 43,532 36 1,567,143

2021 51,948 84% 43,637 36 1,570,915

2022 52,344 84% 43,969 36 1,582,876

2023 52,752 84% 44,312 36 1,595,224

TOTAL 260,489 7,877,178

Based on the survey, eighty-four (84) percent of the respondents are fond of
wearing shoes which are considered actual customers. The total population was multiplied
by the percentage of actual customers. The total was multiplied by the average of 3 per pair
of shoes cleaned and twelve months a year. The one (1) percent difference between people
who are interested to the service (85%) and who are fond of wearing shoes (84%) are those
individuals that are only interested in engaging in the service but were not fond of wearing
shoes.

10
 Historical Demand (per pair)

1,595,224

1,582,876

1,570,915
1,567,143
1,561,021

2020 2021 2022 2023 2024

Figure 2. Historical Demand Pattern

Projected Demand

The PhilAtlas website provides information about Pagadian City’s population

ranging in age from 20 to 64. The website mentioned earlier provided data from the
previous five years as well as projections for the next five years’ population of people aged
20 to 64. The proponents calculated the projected demand for shoe laundry in the same
way that historical demand was computed. (See Appendix F)

Table 6: Projected Demand

Year Annual Demand for Shoe Laundry

2025 1,626,652
2026 1,640,661
2027 1,655,081
2028 1,669,937
2029 1,685,231

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 Evaluation of Projected Demand

According to data from the PhilAtlas website, the population of people aged 20 to
64 is growing. As a result, the projected demand indicates an increasing number of
individuals who want their shoes cleaned at the shoe laundry business.

Study of Supply

Competitors

Reshoevination is the first business in Pagadian City that offers a shoe laundry
service. It has no direct competitors in Pagadian City. On the one hand, this implies that
the shoe laundry has a great opportunity to meet community needs for shoe maintenance
and cleaning without facing direct competition. This could result in gaining a larger market
share and strengthening one’s position in the market. It also enables the shoe laundry
business to develop its services to the specific demands and preferences of its target market.
In contrast, shoe laundry is new, giving the firm a challenge to cope.

Historical Supply

The shoe laundry is still new to the Pagadian market and has no historical supply
data available. The proponents used the historical data of the shoe repair shops that are
considered as shoe laundry’s indirect competitors. The computations used estimates that
the shoe repair shop in Pagadian City have provided.

Table 7: Historical Supply of Shoe Repair Shop in the Market

Year Shoe Cleanic Emcar Shoe Total Historical
Repair Shop Supply
2019 2,880 0 2,880
2020 3,240 0 3,240
2021 3,600 3,420 7,020
2022 4,680 3,960 8,640
2023 5,220 4,500 9,720
Source: Actual Interview Supply

12
 Supply Growth Pattern

12,000

10,000

8,000

6,000

4,000

2,000

0
2019 2020 2021 2022 2023
Historical Supply 2,880 3,240 7,020 8,640 9,720

Figure 3. Supply Growth Pattern

The pattern of supply growth of shoe repair shops in Pagadian City shows the past
five years’ inconsistency in service supply.

Projected Supply

Standard deviation in statistics is a measure of dispersion obtained by extracting

the mean’s square root and the observed values’ squared deviation from their mean in a
frequency distribution. There are four methods for calculating standard deviation:
Arithmetic Straight-Line method, Arithmetic Geometric Curve, Statistical Straight Line,
and Statistical Parabolic Curve. Each method will determine the least standard deviation to
know what approach to use from the supply projection: the lower the standard deviation,
the more accurate the estimate. In deriving the annual projected supply, the relevant data
presented above are used.

Table 8: Summary of Standard Deviation: Historical Supply

Arithmetic Straight Line 739.97
Arithmetic Geometric Curve 4,313.97
Statistical Straight Line 684.95
Statistical Parabolic Curve 679.52
Source: Appendix F

13
 The proponents have used the Statistical Parabolic method in projecting the supply
for the next five years (2025-2029), for it has the lowest standard deviation of 679.52
among the methods.

Table 9: Projected Supply of Shoe Laundry for Five Years Using Statistical Parabolic
Year Annual Supply for Shoe Laundry
2025 11,664
2026 13,212
2027 14,657
2028 15,999
2029 17,239
Source: Appendix E

Evaluation of Projected Supply

A projected supply of shoe laundry was obtained using the Statistical Parabolic
Curve (see Appendix F). The table above projects that there will be an increasing service
of shoe laundry for the next five years. One explanation for the rise in shoe repair shops,
according to the survey, is more disposable income for high-quality products.

Growing disposable incomes in cities have led to an increase in the purchase of

high-end shoes that people would rather preserve and fix than replace. Concerning shoe
laundry, people have less time for home tasks like cleaning their shoes because of their
hectic schedules and urban lifestyles. Shoe cleaning services provide an easy way to keep
shoes in good condition without any hassle.

Demand-Supply Analysis

The available quantities are shown in an analysis, which is necessary to control the
market price. Demand and supply analysis is essential, particularly for this project. It is
necessary to aggregate the results and ascertain the unmet demand after calculating the
standard deviation and projecting supply and demand under each projection method.
The supply is obtained using statistical parabolic methods with the lowest standard
deviation, while the anticipated demand is generated as previously said. This will allow the
business’s proponents to assess its viability before moving forward with implementation.

14
 Demand Gap
To meet market demand, the demand and supply gap examines the amount of shoe
laundry that is currently accessible. It provides a clearer picture of the potential limitations
the industry may encounter. Subtracting the projected supply from the projected demand
yields the gap, or unfulfilled market, which represents the market that is available to shoe
laundry. It also illustrates how many people we must serve to meet their demand for shoe
cleaning. The market’s unmet demand for shoe laundry during a five-year period is
displayed in Table 10.

Table 10: Projected Unsatisfied Market

Year Projected Demand Projected Supply Unsatisfied Market

2025
11,664
1,626,652 1,614,988
2026
13,212
1,640,661 1,627,449
2027
14,657
1,655,081 1,640,424
2028
15,999
1,669,937 1,653,938
2029
17,239
1,685,231 1,667,992
Total 1,626,652 72,771 8,204,791

Formula: Unsatisfied Demand = Projected Demand – Projected Supply

15
 1%

99.12%
Demand Gap Supplied Demand

Figure 4. Percentage of Demand Gap

The projected supply only covers 0.88% of the demand. The unsatisfied demand is
99.12% concerning the overall projected demand. There is a relative difference in the
supply and demand of cleaning services. The gap between the two makes way for the shoe
laundry industry to enter. The shoe laundry is an alternative to fill in the supply of the
unsatisfied demand that the shoe repair shop cannot cater to.

Market Share

Each company needs to ascertain its market share since this will form the foundation
of its marketing strategy. It will indicate the size of the market that must be served. Out of
the total market share based on the demand gap, which is 83%, the proponents adopted plant
capacity to supply based on the available resources.

Table 11: Market Share Based on Total Projected Demand

Year Demand Acceptability Market Share Projected Market Share
Gap (per pair of Demand (percentage)
shoes)
2025 1,614,988 84% 1,356,590 1,626,652 83%
2026 1,627,449 84% 1,367,057 1,640,661 83%
2027 1,640,424 84% 1,377,956 1,655,081 83%
2028 1,653,938 84% 1,389,308 1,669,937 83%
2029 1,667,992 84% 1,401,114 1,685,231 83%
Total 8,204,791 84% 6,892,024 8,277,562 83%

16
 The figures shown in the table are based on the result of the proponent’s survey
question “Would you consider using a shoe laundry shop for your shoe-cleaning needs?”
The 84% resulted in a “Yes” in the question, which gave us the acceptance factor for market
share computation.

Table 12: Projected Market Share Based on Plant Capacity

Year Normal Capacity Market Share

2025
23,760 5.84%
2026
23,760 5.79%
2027
31,680 7.66%
2028
31,680 7.59%
2029
39,600 9.40%

The proposed plant consists of 3 machines that can each process thirty (30) pairs of
shoes over a six-hour shift. With 264 days of operations a year, the business can provide
service in the first year up to 23,760 pairs of shoes—5.84% of the overall market.
As a result, market share is calculated by dividing the capacity to supply to the
available market. The sales will increase by the capacity of 7,920 every two years because
of the acquisition of new shoe-washing machinery and additionally due to the business’s
promotional strategies.

Price Study

When setting its service prices, Reshoevination took the service costs into account.
It aimed to pay the fixed operating expenditures with a markup of 195% of the cost.

17
Table 13: Service Price of Shoe Laundry
Service Costs Total Cost Unit Price
Direct Labor Cost 496,080.00 20.88
Service Overhead Cost 990,029.84 41.67

Total Cost 1,486,109.84 62.55

Mark-up on Cost (195%) 121.97

VAT (12%) 7.51

Computed Service Price 129.47

Actual Service Price 130.00

Marketing Strategies and Programs

Price Strategy

The Reshoevination adopts five of several pricing strategies. It varies on factors

such as target market, and the range of services offered. These include Tiered Pricing,
Membership or Subscription Pricing, Bundling and Upselling, Seasonal or Promotional
Pricing, and Cost-Plus Pricing. The price of a service may fluctuate over time, depending
on demand.

● Tiered Pricing
Offer different service packages at various price points to cater to different
customer needs and budgets.
○ Basic Package: P130 for a standard cleaning
○ Premium Package: P199 for deep cleaning, stain removal, and conditioning
○ Deluxe Package: P249 for all premium services plus shoe refresher spray.
● Seasonal or Promotional Pricing
During the back-to-school season, offer a promotion where customers
receive a 15% discount on their first shoe-cleaning service. To attract new
customers and drive sales during specific times of the year.

18
 ● Cost-Plus Pricing
The price is based on the total calculated cost of labor and overhead for each
pair of shoes cleaned. It costs P62.55 to clean a pair of shoes. Adding a 95% markup
for profit would bring the total price to P130. To ensure that the costs and VAT are
covered and make a profit.

Service Strategy

Reshoevination provides a hassle-free shoe-cleaning service to its consumers

throughout the city. Due to people’s hectic schedules, washing their shoes is exhausting.
This service will alleviate the clients’ workload by properly cleaning the shoes. Adequate
shoe washing machines are employed to ensure that clients’ shoes are not harmed or
wrecked; each type of shoe will be cleaned using separate equipment that is appropriate for
its type. Shoes are easily or rapidly destroyed due to a lack of regular cleaning; therefore,
individuals tend to buy shoes frequently, and broken shoes are discarded regardless of their
price or sentimental worth.

Promotion/Advertisement Strategy

Since shoe laundry service is not yet available in the city, it is necessary to inform
the general public about the service being provided and the benefits of the said business,
which will be very beneficial to busy individuals because it will reduce their workloads in
terms of washing their shoes. Reshoevination will wash the shoes with the confidence that
they will not be damaged using innovative machines and a staff who will operate the
machines. The aforementioned machines are not automatic shoe cleaners; therefore,
customers can rest confident that their shoes will not be damaged.

The promotion of the shoe laundry business will be displayed on Facebook ads
since most people have Facebook accounts and stay on these social media platforms for
more than an hour.

Promotional pictures will be hung in the building of the business, and fliers will be
distributed to the general public, especially those who live near the location of the business.

19
 The business’s yearly advertising expenses are displayed in Table 14. In addition,
the business’s first two weeks of advertising costs P141.00 and are included in the pre-
operating expenses. This promotion or advertising aims to inform the general public about
the services provided by using various advertising channels in such a way that it captures
people’s attention.

Table 14: Estimated Promotion/Advertising Cost

Advertising Monthly Cost Total Annual Cost

Facebook Ads
132.00 2,844.00
Tarpaulin and flyers
150.00 1,800.00

Total
282.00 4,644.00

Place/Distribution Strategy

The service is provided within Pagadian City. The strategic location of the
Reshoevination is located in Vincenzo Sagun Street, Purok Sampaloc, Balangasan,
Pagadian City. The building is surrounded by businesses from other industries, as well as
near student and other potential customers’ boarding houses, which gives it an advantage,
as customers can easily access and utilize the services offered. The business is situated in
a busy area of the city where many potential customers can be found in one place.

Channel of Distribution

The Reshoevination will have a price range of P130.00 per pair, for all types of
shoes. Only one marketing channel is to be used, which is a direct marketing channel. The
service provider will offer shoe cleaning services directly to its end users or customers
around Pagadian City. The flow of shoe laundry service is shown below.

20
 Figure 5. Channel of Distribution

Conclusion of Market Study

Reshoevination services are in high demand due to several causes, including busy
lifestyles, the desire to prolong the life of footwear, and growing interest as it is new to the
market. Specialized shoe laundry services serve some markets with no competition, even
though the usual wash of shoes is generally available. This makes Reshoevination stand
out from the market and attracts a certain customer that places a high value on shoe
maintenance.

Reshoevination can take a significant share of the market by entering the market at
the right time and carrying out its strategies effectively. Since it has the potential to enter
the market because it currently has no direct competitors. The business can meet people’s
needs through the application of technological advancements. Expanding the range of
services provided beyond simple cleaning, like providing premium cleaning, can draw in
more clients and increase earnings. Also, there is room for expansion in the upcoming
years, given the size of the market.

21
 Chapter III
TECHNICAL STUDY

The study discusses the service process of the business. This includes the list of
machinery, equipment, and tools that will be used in the operation of the Reshoevination
with their corresponding costs. The study also shows the service specification, raw
materials, the business operational area concept layout, size, and structures to clearly
describe the business operation or flow.

Reshoevination will be a newly established service-oriented business in Pagadian

City that will cater shoe cleaning services to nearby barangays in the city. This study also
includes the process and operational structure of the business which identifies the different
fields of its process.

Service Description

Reshoevination is a laundry business focusing primarily on shoes. With the

combined efficiency of machines and the care of trained manpower, it is committed to
offering top-quality and upkeep services for different types of shoes. The business utilizes
innovative techniques and some eco-friendly cleaning supplies to ensure your shoes receive
the care they deserve.

Economic Uses

● Extended Lifespan:
Reshoevination believes in regularly cleaning and maintaining shoes. It
extends the lifespan of footwear. As shoes are just like clothes, they accumulate
dirt, sweat, and grime over time which as a result can deteriorate the material. So,
it is essential to regularly clean the shoes to remove these contaminants and prevent
them from settling into the fabric, thus helping individuals delay the need for
replacement.

22
 ● Value Retention:
Reshoevination aims to ensure that footwear retains its quality and
appearance over time. Whether it’s sneakers, boots, or other footwear, this service
ensures that shoes maintain their value. By doing so, individuals can protect the
initial investment they made when purchasing them.

● Time-saving:
Reshoevination understands the challenges individuals face in their daily
routines. With that, this service can help save individuals precious time that would
otherwise be dedicated to cleaning their shoes. This time-saving aspect can be
particularly beneficial for busy individuals with hectic schedules who may
prioritize convenience over the time spent cleaning.

Service Process

The service process of the shoe laundry is separated into stages, and each stage
encompasses a vital phase in its service sector cycle. A flow chart is used by the proponents
to show the step-by-step process intended during a regular process period. It is the basis of
how the shoe laundry is processed and delivered to the end-users.

Figure 6. Service Process Flow

23
The general outline of the process:

1. Assessment:

Customers drop off their shoes at the shoe laundry facility. Upon receiving the
shoes, a staff member checks them in and performs a thorough inspection. They note any
existing damage, special cleaning requirements, or customer preferences for the cleaning
process. The staff member will then determine the total amount the customer needs to pay
based on the inspection of the shoes. Additionally, the customer must make payment before
the washing of his shoes may start.

2. Tagging and Documentation:

Throughout the cleaning procedure, the assessment’s findings are recorded for
reference afterward. Particularly, any current damage to the shoes—such as scuffs,
scratches, or loose stitching—is recorded. Next, to monitor its progress and ensure accurate
processing, every pair of shoes is marked with a distinct tag or identification.

3. Pre-treatment:

Before beginning the main cleaning process, shoes should be gently cleaned and
conditioned to prevent cracking. This is done by brushing off extra dirt and applying a shoe
conditioner, resulting in absorption and moisture, leaving the shoes soft and supple, and
prepared for the main cleaning process. Also, shoe conditioners protect shoes from
detergents that can harm or damage the quality of the shoes.

4. Cleaning:
A. Mix Ingredients:
1. Instead of purchasing a shoe cleaner product, Reshoevination creates shoe
cleaning solution that cleans the shoes by combining water, baking soda, and
Clorox disinfecting bleach to create a shoe cleaning solution that can be added to
the shoe washing machine container.

24
2. Reshoevination utilizes a mixture of white vinegar, water, and pure baking soda as
a stain treatment solution to remove any stains from the shoes. The solution is to be
placed in the spray bottle and it is applied directly to the areas that are affected.
Five different smells are mixed with essential oil to deodorize the shoes, depending
on the customer’s preferences.

3. Castile soap is used for stains that will not be erased using stain removal. This is in
liquid form and is to be put in a spray bottle.

B. Remove Shoe Lining Insoles and Lace:

1. Shoe lining insoles and lace are removed
and cleaned separately to eliminate odor
and bacteria buildup.

C. Surface Cleaning:
1. Turn on the water recycling machine to
start brushing the surface with the use of
the shoe surface brush in the machine
which includes the removal of surface dirt,
grime, and stains.

D. Insole Cleaning
1. Once the surface of the shoes has been
cleaned, the inside shoe brush on the
machine is used next to gently brush the
insoles. The fabric surface part is also
scrubbed, focusing on areas with visible
stains or discoloration. Extra care is taken
to avoid saturating the fabric with too much
water.

25
E. Outsole Cleaning
1. The outsole, which is the area of the shoe
where dirt is most likely to build up, is
thoroughly brushed with the machine’s third
sole brush.

2. After the main body of the shoe has been

thoroughly cleaned, the machine’s shoelace
brush is used to clean the shoe’s lace, and the
second sole brush of the machine is used for
the insole.

F. Rinsing
1. After cleaning, the shoes are rinsed with
clean water to remove any remaining
cleaning solution or residue. Excess water is
gently squeezed out, and the shoes are
blotted with a clean towel to absorb
moisture.

2. They are then allowed to dry in a dryer machine.

26
 Figure 7. Service Cleaning Process Flow

Figure 8. Actual Picture of the Types of Machine Brushes

● Machine Function

1. The governor can adjust the number of brushes revolutions.

2. Turn on the shoe-washing cycle, and the water in the pool can be
recycled.

27
 3. To wash with warm water, turn on the heating function.

4. It can be operated by two people at the same time.

1. Drying:
A. Drying Equipment

• For faster drying, a shoe dryer machine is used. A fully automatic dryer
machine is taken to avoid high temperatures that could damage certain
materials.

B. Shape Preservation

• Stuff shoes use shoe trees to help maintain their shape during drying.

2. Detailing/Finishing:
A. Protective Coating

• Waterproofing is added to protect the shoes from dirt, water, and mud that will
damage them. This serves as the final touch on the shoes. It will keep the
shoes clean for a long time, which benefits the customers, for they will only
wash the shoes rarely compared to the usual way of cleaning the shoes.

3. Quality Control and Inspection:

A. Final Quality Check

1. To make touch-ups or corrections to ensure customer satisfaction. Any

missing stains or areas requiring additional cleaning are addressed.

2. Shoes are inspected for any damage that results from cleaning.

4. Packaging and Presentation:

A. To be packaged neatly. This may include placing them in protective shoe
bags or boxes for pickup.

28
 5. Pick-up/Return:
A. To notify customers that their shoes are ready for pickup or delivery.
B. Pickup options may include curbside pickup or in-store collection.

Plant Capacity

Plant capacity is the service capacity that can be provided during a given period.
The proponents will employ Feasible Normal Capacity (FNC) because it is attainable under
normal working conditions. This project suggests a plant of 3 machines with the design
capacity to handle 30 pairs of shoes each machine in a single 6-hour shift.

The shoe laundry processing plant rents vacant space in an area of area of around
115 square meters of space. This includes areas of receiving and sorting shoes, cleaning
stations, drying racks or equipment, storage, and administrative officers. The area would
be enough to place the 3 machines and 1 dryer equipment.

Table 15: Annual Service based on Number of Operating Days in a Year

Machines Daily Weekly Monthly Number of Annual
Capacity Capacity Capacity Operating Service
(per pair) (per pair) (per Days in a Capacity
pair) Year (per pair)

Machine 1 30 165 660 264 7,920

Machine 2 30 165 660 264 7,920

Machine 3 30 165 660 264 7,920

Total 90 495 1,980 23,760

The available operating hours for washing machines each day, which equals 360
minutes (6 hours for the machines to operate and 12 minutes for each pair of shoes), are
used to compute each machine’s daily capacity. The daily capacity of each machine is 30
pairs of shoes.

Where the daily capacity per machine is calculated as the division of the two-time frames.

29
 Daily Capacity per machine = Available Operating (in minutes)
Minutes per pair

Each machine requires 1 manpower to handle the machine, inspect the whole
process, and clean the shoes. The average time it takes for staff to clean a pair of shoes is
12 minutes and 30 pairs of shoes all staff members can handle within a 2-hour time frame.

Reshoevination will only have 1 dryer machine as the proponents foresee that it
will be enough to cater to the daily capacity of 90 pairs. The dryer can handle 32 pairs of
shoes at once which will only take an hour and will run thrice a day.

Service Schedule

Below is the proposed daily service schedule:

Table 16: Daily Service Schedule

Time Batch 1 Batch 2 Batch 3 Responsible
Personnel

8:00 am Staff Member

- Preparation and Customer Drop-off
8:30 am

8:30 am Cleaning and Machine

- Processing Operator
10:30 am

10:30 am Drying
– Process
11:30 am Machine
Operator
10:30 am 11:30 am Detailing Cleaning
- - & and &
12:00 am 12:00 nn Quality Processing
Control Staff
Member
12:00 nn Packagin
- g&
12:30 nn Customer
Pickup

30
12:30 nn
- Lunch Break
1:00 pm

Machine
1:00 pm Operator
1:00 pm - Drying
- 2:00 pm Process &
3:00 pm
Customer Cleaning Staff
Pickup and Member
2:00 pm Detailing Processing
- &
2:30 pm Quality
Control
(30 mins)

2:30 pm Packaging &

- Customer
3:00 pm Pickup

Packaging Machine
3:00 pm Customer & Operator
- Pickup Customer Drying &
4:00 pm Pickup Process Staff
Member

4:00 pm Detailing
- Customer Customer & Staff Member
4:15 pm Pickup Pickup Quality
Control

4:15 pm
- Packaging & Customer Pickup Staff Member
4:30 pm

31
Plant Location and Layout

Our service business will be strategically located in Vincenzo Sagun Street, Purok
Sampaloc, Balangasan, Pagadian City, ensuring accessibility and visibility to our target
market. The area has a size of 115 sqm. Securing a lease contract with the building owner
for the initial five years of operation with an advance monthly payment of P 30,000.00
starting from June 1, 2024. Below are figures gathered from Google Maps and 3D figures
illustrating the proposed location of the business and the building layout.

Figure 9. Aerial View of Project Location

Figure 10. Actual Picture of Commercial Building

32
Figure 11. Plant Layout

33
Figure 12. Three-Dimensional Project Layout – Front View

Figure 13. Three-Dimensional Project Layout – Back View

34
Machinery and Equipment

The following is a list of the service process machinery and equipment, tools, and
supplies used for shoe cleaning. The table below shows the office equipment, furniture,
and fixtures, as well as the tools and materials necessary for the business’s operation.

Table 17: Machinery and Equipment Descriptions

Item Description

Shoe Washing Machine (Semi-

automatic)

This is used to wash shoes. It has six

brushes that cater to the different parts
of the shoe, including the shoelace,
shoe surface, sole, LED lights, and
brush inside the shoe. Operated by 2
people at the same time.

35
Shoe Dryer Machine (Fully Automatic)

Used to dry 32 pairs of shoes at once

for an hour. The shoe-like hanger
generates alternating hot and cold air to
ensure that the shoes will not be
damaged

Sewage & Industrial Wastewater

Treatment System

Used to filter detergents from water

and reuse water obtained from shoe
washing machines.

36
Table 18: Service Machinery and Equipment Cost
Items Unit/s Cost Total Estimated Supplier
Cost Useful
Life
Shoe Washing
Machine
Made
(Semi-Automatic) 67,440 202,320 10
3 In China

Shoe Dryer Machine-

Rotating Drying
Made
Device (Fully 39,320 39,320
1 10 In China
Automatic)

Sewage & Industrial

Ryali
Wastewater Treatment
1 56,880 56,880 Technologie
System 15
s

Generator
1 44,285 44,285 15 Tolsen

Water Storage Tank

1 144,100 144,100 20 MegaTools

Cash Register
Machine 1 20,000 20,000 10 iPrice

Total 506,905

37
Table 19: Office Equipment
Items Unit/s Unit Total Estimated Supplier
Cost Cost Useful Life
Computer Desktop-Set 1 25,000 25, 000 5 years Compro

Water Dispenser 1 7,000 7,000 5 years Unicity

Electric Fan (Ceiling 2 4,000 8,000 10 years Emcor

Fan)
Fire Extinguisher 1 2,500 2,500 10 years Shopee

CCTV 3 500 1,500 5 years Shopee

Fluorescent Tube Light 3 150 450 10 Years Mega Tools

Air Conditioning 1 40,000 40,000 15 years Emcor

Telephone 1 5 years Buen

399 399 Gadgets
Vacuum 1 8years BE
1,299 1,299
Smoke Detectors 3 10 years BE
2,000 6,000
Fire Alarm 1 10 years BE
1,200 1,200

Total ₱ 93,348

38
Table 20: Furniture and Fixtures
Items Unit/s Cost Total Estimated Supplier
Cost Useful Life
Computer Table 1 P 4,500 4,500 7 years Shopee

Clerical Chair 1 P 3,500 P 3,500 7 years Shopee

Bench Chair 1 P 4,000 P 4,000 7 years Shopee

Reception Desk 1 P 3,500 P 3,500 10 years Jecams Inc.

Stainless Steel Shoe 1 P 4,000 P 4,000 10 years Mandaue

Cabinet Foam
Stainless Aluminum 5 P 8,960 P 44,800 10 years Homestore
Table Ph
Wood Table 1 P 8,799 P 8,799 7 years iPrice Ph

Total P 73,099

Table 21: Leasehold Improvements

Items Total Cost
Leasehold Improvements P 179,156

Total P 179,156

Table 22: Summary of Property, Plant and Equipment

Items Cost
Machinery and Equipment P 506,905
Office Equipment P 93,348
Furniture and Fixtures P 73,099
Leasehold Improvements P 176,156

Total Property, Plant and Equipment P 849,508

39
Leasehold Improvement

The business occupies a space on the second story of the building, which has three

ground floors. The projected total cost of leasehold improvements amounted to ₱176,156.

Table 23: Direct Materials Leasehold Improvements

Direct Unit Unit Cost per Total Cost Supplier
Materials Measurement Unit
Glass Door 1 centimeters 4,800 4,800 Mindanao
Glass
Glass 1 meters 106,676 106,676 Mindanao
Partition Glass
Hardie Flex 16 pcs 455 7,280 Savers
Deposit
Metal Studs 51 pcs 230 11,730 Ritemore
Enterprise
Blind Rivets 2 boxes 500 1,000 Mabuhat
hardware

Total 131,486

Table 24: Direct Labor Leasehold Improvements

Direct Labor Labor Cost per Day No. of Days Total Cost

Glass Door-Worker 1 1,200 1 1200

Glass Partition-Worker 26,670 1 26,670

2
Worker 3 600 14 8,400

Worker 4 600 14 8,400

Total 44,670

40
Utilities
Water and electricity play a crucial role in the operations of a shoe laundry business
as they directly impact the quality of service and operational efficiency. Electricity is used
to provide power to the machines essential for cleaning and drying shoes. Water is the
primary medium for cleaning and rinsing shoes. Furthermore, the proponents have
conducted the requisite projections regarding the necessary utilities needed to operate the
business at its full capacity.

Water Supply

Water is the primary agent used to clean shoes in a laundry business. It is essential
for diluting detergents, rinsing off dirt and stains, and restoring the freshness of shoes.
Adequate water supply will be supplied by the Pamana Corporation Pagadian City. A
5,951-liter or 1,572-gallon water tank will be used for everyday use of the business, which
will be changed two (2) times a day. The monthly cost of water is P 8,389.00 and the annual
consumption of P 100,664.00.

Electricity

Table 25: Electricity consumption of Selling and Admin

kWh consumed Total Cost
Item (per month) Cost per kWh (monthly)

Water Dispenser 21.12 12.01 253.65

Vacuum Cleaner 52.8 12.01 634.12

Electric fan 26.4 12.01 317.06

Computer 8.8 12.01 105.68

Fluorescent Light 18.48 12.01 221.94

CCTV 17.28 12.01 207.53

Air Conditioner 352 12.01 4227.52

Total 6,495.97

41
 Electricity is paramount in the shoe laundry business, serving as the primary utility
for some critical aspects of operations such as machine operation. Reshoevination uses
washing machines and dryers that rely on electricity to function. The monthly and annual
costs of electricity are P 15,373.76 and P 184,485.13, respectively. The annual cost
allocated to the service process is P 106,533.50, while P77,951.63 is allocated to selling
and administration.

Table 26: Electricity Consumption of Service Process

kWh consumed Total Cost
Item (per month) Cost per kWh (monthly)

Shoe Washing Machine 475 12.01 5,707.15

Shoe Drying Machine 264 12.01 3,170.64

Total P 8,877.79

Diesel

Electricity is vital for powering machinery. In cases of power interruptions, the

generator will serve as the temporary power source to run the machine. Diesel will be used
to run the generator and ensure continuous operation. The generator being used can operate
for 10 hours and contains 16 liters of Diesel. The Diesel will be supplied by Petron with an
annual cost of P6,904.00.

Internet

The Internet will serve as a vital tool for communication, marketing, operations,
and growth. A stable internet connection supports communication channels and allows
Reshoevination to interact with customers via email, social media, or messaging platforms
for inquiries, feedback, and support. The internet usage of the business will be supplied by
Dito Telecommunity, an unlimited internet for P1,090 per month and P13,080 annually.

42
Repairs and Maintenance

A budget is being allocated to repairs and maintenance of the machines being used
directly in providing the shoe cleaning service. In particular, for the primary equipment
that is in use, the automatic stainless steel shoe washer and dryer. In case of an emergency,
like a blackout, the generator also needs maintenance. For an air conditioner to continue
operating properly and efficiently for the duration of its service life, periodic checkups are
necessary. To avoid viruses and malware and maintain desirable functionality, computers
require routine maintenance. That calculates a total of P5,973.00 in annual repair and
maintenance costs.

Inventory

Supplies

Aside from the Property Plant and Equipment, other supplies and tools are
necessary to start the operations and for the day-to-day consumption and use of the
business. The supplies required for the business’s initial operation would amount to
P731,803.58.00. It comprises service supplies, office supplies, and safety tools and
equipment. The purchase and restocking of these supplies will depend on the business
operations and consumption for the year.

43
Table 27: Service Supplies
Unit
Items Quantity Cost Total Cost Supplier Schedule

Aprons 3 pcs 60.00 180.00 Shopee Annual

Safety Gloves 12 boxes 89.00 1,068.00 Shopee Annual
Hair Net 144 pcs 35.00 5,040.00 Shopee Annual
Non-Slip Shoes 3 pcs 135.00 405.00 Shopee Annual
Paper Towels 60 packs 25.00 1,500.00 Shopee Annual
Safety Goggles 12 pcs 30.00 360.00 Shopee Annual
Shoe Packaging 23,760 pcs 7.00 166,320.00 Shopee Annual
Shoe Racks 1 pcs 2,000.00 2,000.00 Shopee Annual
Clorox
Disinfecting 561 bottles 249.00 139,753.70 Clorox Ph Annual
Bleach
Nine Life
Pure Baking Soda 356 bottles 110.00 39,204.00 Annual
Ph
Shoe Essential Oil 7 bottles 1,129.00 8,047.51 Shopee Annual
Angelus
Shoe Conditioner 535 bottles 129.00 68,963.40 Annual
Direct
Shoe Refresher Arm and
604 bottles 159.00 96,046.78 Annual
Spray Hammer
Made in
Water Proofing 594 bottles 50.00 29,700.00 Annual
China
Shoe Trees 180 pcs 40.00 7,200.00 Shopee Annual
White Vinegar 220 bottles 600.00 131,825.63 Heinz Annual
Castile Soap 214 bottles 159.00 34,000.56 Shopee Annual
Number Tags 1 pack 189.00 189.00 Shopee Annual

Total P 731,803.58

44
Table 28: Office Supplies
Unit
Items Quantity Cost Total Cost Supplier Schedule

Record Book 2 pcs 75 150 Shopee Annual

Calculator 1 pcs 200 200 Shopee Annual

Ballpen 120 pcs 10 1200 Shopee Annual
Pencil 12 packs 119 1,428 Shopee Annual
Long Bond Paper 2 reams 110 220 Shopee Annual
Short Bond Paper 2 reams 50 100 Shopee Annual
Scissors 2 pcs 32 64 Shopee Annual
Stapler 1 pcs 75 75 Shopee Annual
Puncher 1 pcs 45 45 Shopee Annual
Calendar 1 pcs 40 40 Shopee Annual
Telephone 1 unit 399 399 iPrice Ph Annual
Savers
1 unit 1,299 1,299 Annual
Vacuum Appl.
Mop 1 pcs 196 196 Shopee Annual
Duster 2 pcs 39 78 Shopee Annual
Mat 4 pcs 89 356 Shopee Annual
First Aid Kit Box 1 pc 350 350 BE Annually
Bandages 3 rolls 80 240 BE Annually
Disinfectant 2 bottles 130 260 BE Annually
Assorted
1 set 2,300 2,300 BE Annually
Medicine

Total P7,027

45
Table 29: Summary of Supplies
Items Total Cost
Service Supplies P 731,803.58
Office Supplies P 7,027.00

Total P 738,830.58

Table 30: Service Cost Requirements

Service Cost Total Cost Unit Cost
Direct Labor:
Shoe Cleaners 374,400.00 15.76
Dryer Machine Operator 121,680.00 5.12
Factory Overhead:
Service Supplies 731,803.58 30.80
Water Supply 100,664.15 4.24
Electricity 106,533.50 4.48
Diesel 6,903.94 0.29
Depreciation- M & E 40,113.33 1.69
Repairs and Maintenance 4,011.33 0.17
Total 1,486,110.00 62.55

Waste Disposal System

The business will utilize a combination of recycling and composting to dispose of

its waste. Recycling is intended for plastic bottles of chemicals and other plastic items.

Composting paper towels, tissues, cleaning cloths, and the chemicals used to clean shoes.

Biodegradable, non-biodegradable, and recyclable wastes must be separated in the

appropriate trashcans and collected by the city of Pagadian’s garbage compactor trucks

twice every week.

46
 A water treatment system is to be implemented wherein it uses an activated carbon

water filtration to break down contaminants or chemicals and detergents being used and

remove them from the water. Recycling comes after, water that can be recycled will be

used for toilet purposes, cleaning the machinery, and cleaning the floor. For water that

cannot be reused will go directly to the septic tank. The water filtration machine cost

P56,880.00.

Pre-operating Activities

Table 31: Breakdown of Estimated Pre-operating Expenses

Feasibility Study Cost P 10,000
Training of Personnel P 21,000
Initial Advertising P 141
Business Permit P 5,992
Community Programs P 8,750

Total P 45,833

Conclusion on Technical Study

With the technical study conducted and presented in this chapter, Reshoevination
appears to be feasible. The service is clearly defined, and the location offers accessibility
and visibility, essential for attracting customers. Resources are practically available for the
daily operation of the business. The operational process, equipment procurement, and
logistic setup which includes plans for receiving, processing, and returning customers’
shoes are meticulously planned to ensure smooth operation. In addition, the maximum
normal capacity of the Reshoevination is 23,760 annually.

47
 Chapter IV
MANAGEMENT STUDY

Management plays a crucial factor in assessing a project or venture proposal’s

feasibility and likelihood of success. In the context of feasibility analysis, management
study includes evaluating the operational procedures, leadership, strategic planning,
organizational structure, and resource allocation required for the project’s implementation
and continued management. The purpose of this feasibility study part is to assess the
managerial skills, procedures, and frameworks needed to guarantee effective resource
management, sound decision-making, risk reduction, and project goal attainment.

Business Organization

Type of Business

Reshoevination operates as a general partnership, jointly owned, and managed by

Melbert John Brillantes, Janice Dela Rama, and Daomencil Lagnason. They hold unlimited
personal liability for the debts, obligations, and liabilities of the partnership. This implies
that creditors can pursue the personal assets of any partner to satisfy the partnership’s
financial obligations. Additionally, Profit and losses are shared among the partners through
the profit and loss ratio 3:3:4. This profit-sharing arrangement reflects the agreed-upon
distribution of financial rewards and risks among the partners. It ensures fairness,
transparency, and alignment with the principles of equality among partners.

Capital Requirement

Reshoevination’s initial investment will be accumulated through the partnership of

Melbert Brillantes, Janice Dela Rama, and Daomencil Lagnason. The capital of each
partner’s contributions will determine their portion of the profit or loss wherein for this
project, the partners shall contribute cash following the profit/loss ratio: 3:3:4.

48
Table 32: Initial Capital of the Partnership
Partners Initial Investment Profit/Loss Ratio
Melbert Brillantes 290,250.25 30%
Janice Dela Rama 290,250.25 30%

Daomencil Lagnason 387,000.33 40%

Total 967,500.82

Vision, Mission, and Goals

Vision

To become the leading destination for shoe care service, recognized locally for our
dedication to preserving the beauty and lifespan of footwear while setting new standards
of service quality in the industry within the community.

Mission

We at Reshoevination are dedicated to modernizing footwear maintenance. Our

mission is to revolutionize the way people care for their shoes by offering top-quality
cleaning services powered by advanced technology. Through our innovative approach, we
restore shoes to excellent condition, thus enhancing their longevity and ensuring customer
satisfaction.

Goals

● Customer Satisfaction

We are committed to consistently delivering superior service experiences that

exceed our customers’ expectations. By actively listening to our customers’ feedback and
continuously improving our services, we aim to maintain our reputation as the preferred
choice for shoe care needs.

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 ● Specific Profit Goal

We want to provide specific profit goals to help measure the progress of our
business on its income rather than suffering from losses. Through specific profit goal five
focus, motivate employees and set targets for our business to work harder.

Internal Structure

Figure 14. Organizational Chart of Reshoevination

50
Staffing Requirements

Manpower Requirement and Job Description

One of the factors that have an impact on a successful business is choosing the right
employees for the right job. It is important to choose critically and wisely by selecting
those employees who are responsible and willing to perform reciprocal obligations. Below
are the needed employees in this proposed business.

1. Partners
Three people comprise the partnership: Melbert John Brillantes, Janice Dela
Rama, and Daomencil Lagnason. They are jointly owned and managed and operate
as a general partnership. They are responsible for providing Reshoevination’s
overall strategic direction and leadership. Establishes long-term objectives, spots
chances for expansion, and speaks on behalf of the business to outside parties. In
charge of managing every aspect of the business and making important decisions.
2. Managing Partner
Two managers make up the Managing Partner. It was agreed upon that two
of the partners shall be personally involved in the business undertakings because of
their known skills and expertise. This shall also lessen the necessity to hire
additional personnel for those positions, which will entail less cost. The partners
elect Mr. Brillantes to be the operation manager, responsible for supervising all
Reshoevination operations, and Ms. Dela Rama to be the finance manager in
budgeting and financing. The operations manager doesn’t need to work; a weekly
visit will do. He can coordinate the business’s daily activities with the responsible
staff members.
3. Service Employees
A. Cleaner
Job Description
• The one who is responsible for cleaning the shoes in the washing machine
and the one who will operate the machine.

51
 Qualifications
• An individual between the ages of 18 and 40.
• Employees who can manage repeated jobs and stand for extended periods.
• Those who are outstanding at managing their time; and
• A minimum of a high school graduate or its equivalent, as well as
hardworking, responsible, and trustworthy.

B. Dryer Machine Operator

Job Description
• The one who’s responsible for operating the dryer machine and at the
same time, will be the one who puts on those shoes that are already
washed.
Qualifications
• An individual between the ages of 18 and 40.
• A physically fit employee.
• A person who is outstanding at managing their time; and
• A minimum of a high school graduate or its equivalent, as well as
hardworking, responsible, and trustworthy.

4. Cashier
Job Description
• Take charge of accurately and efficiently processing transactions while
offering excellent customer service.
• Who can offer receipts, deal with cash, credit cards, and other payment
methods, and help clients with inquiries or issues.
Qualifications
• The minimum educational requirement is a high school diploma or
equivalent. While not necessary, prior retail or customer service
experience is preferred.
• Possesses outstanding interpersonal and communication skills.

52
 • Who are familiar with cash register systems and possess basic computer
skills; and
• Be able to manage money and use machinery for processing payments.

Recruitment and Training Program

The business shall employ responsible and competent personnel to be designated
important positions in the business by making the necessary initiatives to make sure that
operations can be done most efficiently and effectively possible.

Recruitment

Management will start the conduct of the recruitment process by taking into account the
following steps:

1. Job Postings: Post job vacancies on numerous venues such as online job boards,
local newspapers, industry-specific websites, and social media platforms. Outline
the employment qualifications, tasks, and responsibilities.
2. Conduct interviews to evaluate individuals’ abilities, experience, and fit for the
positions. Technical tests or practical activities to measure their competence in shoe
cleaning techniques, customer service, or problem-solving skills.

Training Programs

Management needs to build and develop competence and skills through the conduct
of the necessary training for their personnel, especially since the business model is new
and the machinery and equipment used are most likely to be unfamiliar to some in the
locality.

Management shall aim to provide the necessary competencies and skills related to
the production process by taking into account the following factors:

1. Provide a robust onboarding process to familiarize new hires with the company
culture, policies, and processes. Introduce them to their tasks and responsibilities
and give any training materials that are required.
53
 2. Technical instruction: Provide specialized instruction in areas such as how to mix
ingredients for shoe cleaning solutions, how to clean, paying particular attention to
how the brush in the machine is used, quality control, packing, safety measures,
and how to operate the equipment. Internal training sessions, external trainers, or
online courses can all be used to accomplish this.

To provide the hired personnel with the necessary skills and expertise to undertake
their respective duties in the production of the products a pre-operation training plan is
established. Table — shows the proposed pre-operation training plan with corresponding
budgetary requirements.

Table 33: Pre-Operation Training Plan and Budget

Training No. of No. of Budget per Total
Program Participants Days pax (per day) Budget

Mixing Ingredients 2 5 350 P3,500.00

Cleaning Processing 4 5 350 P7,000.00

Quality Control 2 5 350 P3,500.00

Packing 2 5 350 P3,500.00

Equipment 2 5 350 P3,500.00

Operation

Grand Total P21,000.00

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Compensation and Other Benefits

Reshoevination will provide benefits and compensation to performed jobs. Fair

compensation and benefits can lead to greater job satisfaction, thus helping to motivate
employees and work effectively. The employees are given 6 working hours in a day and
are given 1 day’s rest a week. The business shall give compensation to employees based
on the minimum wage, which is P 381, and increase it based on their jobs. The increase
was P 400 for the cleaners and the others will have the same rate, which is P 390. Thus,
Reshoevination shall provide the employees with the right benefits as they work in the
business such as Social Security System (SSS), PhilHealth, Pag-IBIG, and 13th month pay.

Table 34: Projected Monthly Salary per type of Employee

Employees Gross SSS PhilHealth Pag-IBIG 13th Net
Salary Contribution Contribution Contribution Month Monthly
Pay

Cleaners 9,600 432.00 480.00 192.00 9,600.00 8,496.00

Machine
Operator 9,360 421.20 468.00 187.20 9,360.00 8,283.60

Cashier
9,240 421.20 468.00 187.20 9,240.00 8,163.60

TOTAL
28,200 1,274 1,416 566 28,200.00 24,943.20

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Table 35: Projected Annual Salaries and Wages of Employees
Number of
Employees Employees Net Monthly Salaries Net Annual Salaries

Cleaners 3 25,488.00 334,656.00

Machine Operator 1 8,283.60 108,763.20
Cashier 1 8,163.60 107,203.20

Salaries and Wages 5 41,935.20 550,622.40

SSS Contribution 2,991.60

PhilHealth Contribution 2,884.00

Pag-IBIG Contribution 1,327.60
13th Month Pay 47,400.00

TOTAL 54,603.20

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Project Schedule

Jan Feb Mar Apr May Jun Jul Aug Sept Oct Nov Dec
TASK NAME
123412341234123412341234123412341234123412341234
Brainstorming and Concept Development
Making of Feasibility Study
Partnership Formation
Government Agency Registration
Location Selection (including space rental)
Space Renovation
Purchase of Machineries and Equipment
Hiring of Personnel
Purchase of Service Supplies
Setting up of the Facility and Equipments
Training of Personnel
Advertising
Preparation for the Opening

Figure 15. Gantt Chart

57
Conclusion of Management Study

To ensure that operations are always productive and efficient, the business’s
proponents have outlined all internal organizational structures, policies, and authority
hierarchies. He expected employees are expected to follow the rules and guidelines stated
in the management policies and schedules and must perform their tasks with utmost
productivity. The proponents have also made sure that the expected staff will stay with the
business over the long term by plotting the best salary and compensation benefits. As a
result, Reshoevination will be operating in the long run because of its efficient and effective
management supervised by the three partners.

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 Chapter V

SOCIO-ECONOMIC STUDY

Socioeconomics is the study of how economic activity affects social life. The
purpose of a socioeconomic study is to conduct an effect assessment and promote socio-
economic development, typically through increases in measures such as employment
levels. It provides insights into how labor markets work and identifies ways to increase
employment, improve working conditions, and lower unemployment. Evaluating public
policy is another important part of socioeconomic study.

Background of the Study

In our local community of Pagadian City, we’ve observed a significant gap in the
market for businesses that specifically focus on cleaning shoes. While there are traditional
laundry services available that offer general cleaning services for clothing, linens, and other
fabric-based items, these traditional laundry services typically do not specialize in cleaning
shoes. This gap in the market presents a clear opportunity for a dedicated shoe laundry
business to step in and meet the needs of the community. By offering professional cleaning
services tailored specifically for footwear, such a business can address the shortcomings of
existing options.

Significance for us as Students

Conducting a feasibility study as a student helps individuals decide whether a

project or idea is worth pursuing. By analyzing the good and bad parts of the idea, students
learn to think critically and make informed decisions, thereby avoiding wasting time and
resources on something that might not succeed. When working together to gather
information, analyze data, and present findings, students face challenges such as
disagreements and time management issues. However, through collaboration, proponents
learn to communicate effectively and work together as a team. Proponents develop
research, analytical, and communication skills, as well as the ability to manage their time
and work as a team. Additionally, they cultivate critical thinking skills, learning to weigh
the pros and cons of their ideas and make informed decisions.
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Significance towards Academe

Academe helps students with their feasibility studies by giving them resources and
opportunities for success. Students can work on group projects, utilize research facilities,
and be mentored by experienced academics. Students use research and feedback to
strengthen their ideas, develop critical thinking skills, and analyze evidence to inform their
research. Experts in a variety of sectors, including finance, marketing, operations, and
human resources, offer advice and insight to students as they write their papers. The
financial adviser assists students in creating a complete financial plan, identifying revenue
streams, and calculating expenses. Academic institutions prepare well-rounded and
capable individuals to face real-world difficulties by providing access to industry experts,
developing soft skills, and preparing for future jobs. Finally, academic institutions prepare
students to succeed in their feasibility studies and beyond.

Significance towards the Community

Within the community, the establishment of a shoe laundry business can have
significant positive impacts. By providing a convenient and affordable solution for shoe
maintenance, we address a common need among residents.

● Availability of easy shoe services not available in the locality

This study can provide a convenient solution for busy individuals and professionals who
may not have the time due to a hectic schedule to clean their shoes regularly. This can save
them both time and effort, allowing them to focus on other aspects of their lives.

● Encouraging Entrepreneurship

This will enable entrepreneurs to penetrate the market with a new industry that doesn’t
exist yet in the current market, a shoe laundry service. This will give them opportunities
and provide strategies that can be used to mitigate the risks of the proposed business.

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 ● Eco-friendly environment while doing shoe laundry.

The use of eco-friendly detergents, machines, and cleaning methods will help to create a
cleaner and healthier environment in the city. Reducing wastewater by using a water
treatment system wherein the used water will be filtered, and after the process, it will be
used in the comfort room, to mop the floor, and to clean the machines.

The following are the community programs that will be implemented by the business
quarterly:

Table 36: Community Engagement Programs

List of Persons Venue Expected Budget/Cost
Activities Involved Outcome

Information ● Business Balangasan ● Brand P1,250.00

Drive on Shoe Partners Covered Visibility
Sanitization ● Speakers Court ● Generate
and Cleanliness from Sales
DOG

Sponsor Local ● Business Balangasan ● Brand P 2,500.00

Sports Event Partners Covered Visibility
Court ● Generate
Sales

Elderly Support ● Business Balangasan ● Brand P 5,000.00

through Partners Covered Visibility
Donation of Court
Items

Total P 8,750.00

Future Plans for the Industry

A future plan is essential for businesses because it ensures clear direction,

objectives, and mission alignment, which promotes teamwork. It facilitates strategic
decision-making by taking into account market trends, consumer needs, and competition,
as well as optimizing resource allocation and risk reduction.

61
 It also encourages business growth, adaptability, staff engagement, investor
confidence, and effective risk management, which all contribute to the shoe laundry’s long-
term success and improvement.

Why did you choose this Business Study and its contribution to the Society?

We chose this business study because we recognized a clear gap in the market for
specialized shoe cleaning services. As stated above, while traditional laundry services are
available, they often lack the expertise and focus needed to effectively clean shoes. By
addressing this gap, a shoe laundry business can provide professional cleaning services
tailored specifically for footwear, meeting the specific needs of the community. It can
contribute to society by filling this gap, offering a valuable service that enhances
cleanliness and hygiene. Additionally, by creating job opportunities and supporting local
economic development, the business can contribute to the overall well-being and prosperity
of Pagadian City.

Conclusion on Socio-economic Study

In conclusion, the socioeconomics study on the shoe laundry business in Pagadian

City highlights the significance of addressing the gap in the market for specialized shoe
cleaning services. By conducting a feasibility study, students can develop critical thinking
skills, learn to work together as a team, and make informed decisions. The study
demonstrates the importance of academic institutions in providing resources and
opportunities for success, as well as their role in preparing students for real-world
challenges.

The shoe laundry business has the potential to positively impact the community by
providing a convenient and affordable solution for shoe maintenance, encouraging
entrepreneurship, and promoting an eco-friendly environment. The implementation of
community programs, such as information drives and sponsorships, can help generate sales
and visibility for the business. Furthermore, a future plan is essential for the business to
ensure clear direction, objectives, and mission alignment, which promotes teamwork and
strategic decision-making.

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 Chapter VI
FINANCIAL STUDY

The financial aspect of the project feasibility study is a quantified summary of the
marketing, technical, management, taxation, and legal phase of the project study and it
expresses all available financial information and possible outcomes of the project in peso
terms for the projections in the next five years. It serves as a crucial step in the
determination of the project’s economic viability, its main purpose is to guide decision-
makers to understand the potential costs and benefits that may arise in relation to the
investment project.

This Chapter provides a comprehensive examination of the proposed project’s

financial performance and cost and revenue analysis by considering market factors,
competitors, and pricing.

Major Assumptions

The financial projections presented are prepared with the best of management’s
knowledge, skills, and beliefs, the expected financial position, results of operations, and
cash flows for the projected period. These projections are reflective of management’s keen
judgment. There will usually be differences between the projections that may not be
indicative of the actual because of various factors and circumstances and those differences
may be material.

The key financial assumptions relative to the study are as follows:

A. Operations

1. The business’ operating days shall be one (1) full year. Regular employees are
given one rest day after every six consecutive working days.
2. All transactions made by the customers shall be payable in cash only.
3. The capacity will increase by 7,920 pairs of shoes every two years because of the
acquisition of new shoe-washing machinery.

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B. Balance Sheet

1. The cash shall consist of Cash on Hand and a commercial checking account which
is Cash in Bank.
2. In order to reduce the amount of cash the business has on hand the time deposit is
set at 300,000 for the first year and will increase by 500,000 after two years. It is
the business’s cash investment in the BPI Bank, with an interest rate of 5%.
3. The inventories will be made up of cleaning supplies, of which 15% will remain
unused at the end of the year. Office supplies, the annual cost of which is fully
expense.
4. The cost of leasehold improvements of the commercial building shall be
capitalized.
5. Depreciation of all property, plant, and equipment except land shall use the straight-
line method of depreciation. The Machinery and Equipment shall be depreciated
for a period of ten (10) years while other assets shall be depreciated based on their
normal useful life as presented in the notes to financial statements. No salvage value
is assumed in the computation of annual depreciation.
6. The payment of the last month of Compulsory Benefits shall be payable and carried
out to the next period.
7. The line-item trade and other payable shall consist of mandatory contributions,
VAT payable, and income tax payable.
8. No salaries payable shall be accrued at year-end. The settlement of the salaries will
be every 15 days, which is every 15th and 30th day of the month.
9. Liability accounts pertaining to statutory contributions shall be recognized on the
month that they are incurred and paid on their respective deadlines on the following
month.
10. Utilities payable shall also be recognized on the month that they are incurred.
11. Income taxes payable shall be recognized every quarter (March 31, June 30, and
September 30 of every year) and shall be reconciled for the annual income tax
payable for the April 15 deadline of the succeeding year.

64
12. The equity accounts are composed of the partners’ capital balances and drawing
accounts.
13. The profit and loss sharing ratio of partners shall be based on their respective capital
contributions after payment of salaries to managing partners.
14. Two of the partners shall provide management and financial service support to the
business and shall be compensated with an annual salary based on the projected net
income for the year as part of the partnership agreement. The salaries of operation
and financial officer are ₱ 70,000 and ₱ 50,000, respectively based on their share
in profit.
15. The partners shall withdraw equal to sixty (50) percent of the net income which is
expected to increase for the projected 5 years to reduce the risk of maintain large
amounts of cash balance. The partners shall withdraw equal to their corresponding
profit and loss ratio out of the allocated amount to be withdrawn.
16. The purchase of additional PPE shall be made as the business grows as presented
in the study for the projected 5 years.

C. Income Statement

1. The method of reporting for the income statement is absorption costing.

2. The market share is based on the capacity of the plant. Capacity is increased by
increments of 7,920 every two years.
3. All sales shall be on cash sales.
4. Sales are assumed to increase proportionately with the increase in capacity.
5. The study assumes that all services rendered within a year are acquired within the
same period.
6. The price for shoe laundry is ₱ 130.00 per pair of shoes and it will increase ₱ 20.00
every two years based on the increase of costs.
7. The staff labor force shall be paid with the prevailing minimum wage rate in
consonance with W.O. No. RIX-21 of Department of Labor and Employment,
Region IX.
8. Minimum wage earners shall be exempted from withholding taxes.

65
9. Statutory contributions are paid on their respective due date as prescribed by law.
10. Periodic maintenance shall be done at least once a year. Repairs and maintenance
expenses shall be ten (10) percent of the depreciation expense of fixed assets
incurred annually and are subject to increase with an increment of 2% every two
years.
11. Utilities and advertising expenses shall be adjusted every year depending on the
impact of the projected inflation rate.
12. VAT Payable for the month is paid the succeeding month. The study assumes that
25% of Annual business taxes (VAT) are still payable by year-end.
13. The regular corporate income tax (RCIT) is twenty (20) percent of the annual net
income before tax. This aligns with the Corporate Recovery and Tax Incentives for
Enterprises or CREATE Act that was implemented last March 27, 2021.

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Total Project Cost

Table 37: Total Project Cost of Reshoevination

Sub-Total Total
Leasehold Material Cost 131,486.00
Improvements Labor Cost 44,670.00 176,156.00
Machinery (Refer to technical study) 506,905.00
Office Equipment (Refer to technical study) 93,348.00
Office Furniture & Fix (Refer to technical study) 73,099.00
Initial Working Capital Cash 967,500.82
Pre-Operating Expenses Feasibility Study Cost 10,000.00
Training of Personnel 21,000.00
Initial Advertising 141.00
Business Permit 5,992.00
Community Programs 8,750.00 45,833.00
Total Project Cost 1,862,891.82

Sources of Financing

Capital Structure Policy

The proponents have agreed that the beginning capital of the partnership which is
₱ 967,500.82 will be financed exclusively through partners’ equity.

Table 38: Partners’ Capital Contributions and Profit/Loss Ratio

Partners Initial Kind of Partner Profit/Loss
Investment Ratio
Melbert Brillantes 290,250.25 Managing/Capitalist 30%
Partner
Janice Dela Rama 290,250.25 Managing/Capitalist 30%
Partner
Daomencil 382,000.33 Capitalist Partner 40%
Lagnason

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 Cost Capital
The cost of capital consists of the leasehold improvements, machinery and
equipment, office equipment, furniture and fixtures, supplies, initial working capital, and
pre-operating expenses. These shall form part of the partners’ equity balance. The project
costs and modes of financing are as follows:

Table 39: Cost of Capital and Modes of Financing

Asset/Expense Cost Modes of Financing
Classification
Service Supplies 121,967.26 Partners’ Equity

Utilities 48,675.54 Partners’ Equity

Salaries and Wages 91,770.40 Partners’ Equity

Advertising 774.00 Partners’ Equity

Office Supplies 4,313.62 Partners’ Equity

Additional Cash 700,000.00 Partners’ Equity

Total 967,500.82

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Financial Statements

A. Projected Statement of Financial Position

Reshoevination
Statement of Financial Position
As of December 31, 2025-2029
Note Year 0 2025 2026 2027 2028 2029
ASSETS
Current Assets:
Cash 4 72,109.82 164,480.38 540,207.39 849,204.73 1,660,323.67 2,496,511.69
Unused Cleaning Supplies 5 109,770.54 109,770.54 146,251.27 146,251.27 182,731.99
Pre-Operating Expense 45,883.00
Total Current Assets 117,992.82 274,250.92 649,977.93 995,456.00 1,806,574.93 2,679,243.68

Non-Current Assets
Property, Plant, and Equipment 6 849,508.00 781,555.81 713,603.61 713,091.42 645,139.22 683,947.03
Time Deposit 7 300,000.00 300,000.00 800,000.00 800,000.00 1,300,000.00
Total Non-Current Assets 849,508.00 1,081,555.81 1,013,603.61 1,513,091.42 1,445,139.22 1,983,947.03

TOTAL ASSETS 967,500.82 1,355,806.72 1,663,581.54 2,508,547.42 3,251,714.16 4,663,190.71

Current Liabilities:
Trade and Other Payables 8 103,684.28 103,684.28 205,483.42 205,483.42 331,152.84
Total Current Liabilities 103,684.28 103,684.28 205,483.42 205,483.42 331,152.84

Partner’s Equity
M. Brillantes, Capital 290,250.25 392,636.73 501,969.18 741,919.20 981,869.22 1,384,611.36
J. Dela Rama, Capital 290,250.25 382,636.73 481,969.18 711,919.20 941,869.22 1,334,611.36
D. Lagnason, Capital 387,000.33 476,848.97 575,958.90 849,225.60 1,122,492.30 1,612,815.15
Total Partner’s Equity 967,500.82 1,252,122.44 1,559,897.25 2,303,064.00 3,046,230.74 4,332,037.87

TOTAL LIABILITY AND

PARTNER’S EQUITY 967,500.82 1,355,806.72 1,663,581.54 2,508,547.42 3,251,714.16 4,663,190.71

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 B. Projected Statement of Comprehensive Income

Reshoevination
Statement of Comprehensive Income
For the years ended December 31, 2024-2029
Note Year 0 2025 2026 2027 2028 2029
Service Revenue 9 2,757,857.14 2,757,857.14 4,242,857.14 4,242,857.14 6,010,714.29
Cost of Service 10 (1,384,553.03) (1,384,553.03) (1,799,576.72) (1,799,576.72) (2,229,336.39)
Gross Profit 1,373,304.11 1,373,304.11 2,443,280.42 2,443,280.42 3,781,377.90
Interest Income 11 - 12,000.00 32,000.00 32,000.00 52,000.00
Total 1,373,304.11 1,385,304.11 2,475,280.42 2,475,280.42 3,833,377.90
Less: Expenses
Pre-Operating Expenses 45,883.00
Selling and Administrative Expenses
Salaries and Wages- Cashier 120,120.00 120,120.00 120,120.00 120,120.00 120,120.00
Compulsory Benefits Deductions 12 5,464.80 5,464.80 6,568.80 6,568.80 7,672.80
Internet Expense 13,080.00 13,080.00 13,080.00 13,080.00 13,080.00
Business Permit 13 5,992.00 5,992.00 5,992.00 5,992.00 5,992.00
Rent Expense-Bldg. 360,000.00 360,000.00 360,000.00 360,000.00 360,000.00
Advertising Expense 14 4,644.00 4,644.00 4,644.00 4,644.00 4,644.00
Supplies Expense 7,027.00 7,027.00 7,027.00 7,027.00 7,027.00
Repairs and Maintenance- S&A 15 1,962.51 1,962.51 2,355.02 2,355.02 2,747.52
Depreciation – S&A 16 19,625.13 19,625.13 19,625.13 19,625.13 19,625.13
Utilities Expense 17 77,951.63 77,951.63 77,951.63 77,951.63 77,951.63
Total Selling and Administrative Expenses 661,750.07 661,750.07 615,867.07 617,363.57 617,363.57
Net Income Before Tax 711,554.04 769,437.04 1,857,916.86 1,857,916.86 3,214,517.83
Less: Income Tax Expense (20%) (142,310.81) (153,887.41) (371,583.37) (371,583.37) (642,903.57)
Net Income After Tax 569,243.23 615,549.63 1,486,333.48 1,486,333.48 2,571,614.26

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 C. Projected Statement of Changes in Partners’ Equity

Reshoevination
Statement of Changes in Partner’s Equity
As of December 31, 2025-2029
2025
Brillantes Dela Rama Lagnason Total
Capital Beginning 290,250.25 290,250.25 387,000.33 967,500.82
Add: Share in Net Income (Schedule 7) 204,772.97 184,772.97 179,697.29 569,243.23
Less: Withdrawals (Schedule 8) 102,386.49 92,386.49 89,848.65 284,621.62
Capital Ending 392,636.73 382,636.73 476,848.97 1,252,122.44
2026
Brillantes Dela Rama Lagnason Total
Capital Beginning 392,636.73 382,636.73 476,848.97 1,252,122.44
Add: Share in Net Income (Schedule 7) 218,664.89 198,664.89 198,219.85 615,549.63
Less: Withdrawals (Schedule 8) 109,332.45 99,332.45 99,109.93 307,774.82
Capital Ending 501,969.18 481,969.18 575,958.90 1,559,897.25
2027
Brillantes Dela Rama Lagnason Total
Capital Beginning 501,969.18 481,969.18 575,958.90 1,559,897.25
Add: Share in Net Income (Schedule 7) 479,900.05 459,900.05 546,533.39 1,486,333.48
Less: Withdrawals (Schedule 8) 239,950.02 229,950.02 273,266.70 743,166.74
Capital Ending 741,919.20 711,919.20 849,225.60 2,303,064.00
2028
Brillantes Dela Rama Lagnason Total
Capital Beginning 741,919.20 711,919.20 849,225.60 2,303,064.00
Add: Share in Net Income (Schedule 7) 479,900.05 459,900.05 546,533.39 1,486,333.48
Less: Withdrawals (Schedule 8) 239,950.02 229,950.02 273,266.70 743,166.74
Capital Ending 981,869.22 941,869.22 1,122,492.30 3,046,230.74
2029
Brillantes Dela Rama Lagnason Total
Capital Beginning 981,869.22 941,869.22 1,122,492.30 3,046,230.74
Add: Share in Net Income (Schedule 7) 805,484.28 785,484.28 980,645.71 2,571,614.26
Less: Withdrawals (Schedule 8) 402,742.14 392,742.14 490,322.85 1,285,807.13
Capital Ending 1,384,611.36 1,334,611.36 1,612,815.15 4,332,037.87

71
 D. Projected Statement of Cash Flow
Reshoevination
Statement of Cash Flow
As of December 31, 2025-2029
Year 0 2025 2026 2027 2028 2029
Net Income 569,243.23 615,549.63 1,486,333.48 1,486,333.48 2,571,614.26
Add: Depreciation 67,952.19 67,952.19 67,952.19 67,952.19 67,952.19
Non-Operating Income (12,000.00) (32,000.00) (32,000.00) (52,000.00)
Total Cash Inflow 637,195.43 671,501.83 1,522,285.68 1,522,285.68 2,587,566.46

OPERATING ACTIVITIES
Increase (Decrease) in Inventories (109,770.54) - (36,480.73) - (36,480.73)
Increase (Decrease) in Pre-operating Expenses (45,883.00) (45,883.00) 45,883.00 - -
Increase (Decrease) in SSS / Pag-IBIG / PhilHealth 5,464.80 5,464.80 - 1,104.00
Increase (Decrease) in VAT Payable 36,762.98 - 33,821.61 - 40,934.33
Increase (Decrease) in Income Tax Payable 61,456.51 66,873.52 -
Net Cash (Used/Provided from Operation) (45,883.00) (45,883.00) 676,992.18 671,501.83 1,587,604.08 1,522,285.68

INVESTING ACTIVITIES
Leasehold Improvements (176,156.00)
Acquisition of Machineries (506,905.00) - (67,440.00) - (106,760.00)
Acquisition of Office Equipment (93,348.00) - - - -
Acquisition of Furniture and Fixtures (73,099.00) - - - -
Time Deposit (300,000.00) (500,000.00) (500,000.00)
Interest Income 12,000.00 32,000.00 32,000.00 52,000.00
Net Cash (Used/Provided from Investing) (849,508.00) (849,508.00) (300,000.00) 12,000.00 (535,440.00) 32,000.00

FINANCING ACTIVITIES
Initial Investment 967,500.82 - - - - -
Withdrawals (284,621.62) (307,774.82) (743,166.74) (743,166.74) (1,285,807.13)
Net Cash (Used/Provided from Financing) 967,500.82 967,500.82 (284,621.62) (307,774.82) (743,166.74) (743,166.74)

Net Cash Flow 72,109.82 92,370.56 375,727.01 308,997.34 811,118.94 836,188.02

Add: Cash, beg. 72,109.82 164,480.38 540,207.39 849,204.73 1,660,323.67
CASH END 72,109.82 164,480.38 540,207.39 849,204.73 1,660,323.67 2,496,511.69

72
Notes to Financial Statements

Note 1 – General Information of the Business

Reshoevination provides shoe cleaning services to people living in the city, especially those ages 20-64 which are the target
market of the business. Since the business is yet to exist in the market, it has a lot of challenges, which require strategie s that
will surely help the business attract customers and overcome challenges. It has neither a direct nor indirect competitor. It has
three (3) business partners, which consist of one (1) capitalist and two (2) capitalist/managing partners. One partner is the
operating manager, and the other is the financial manager, offering their respective expertise in the partnership.

The financial performance shows a good result, as the profit continuously increases as the years pass. It shows no loss even
in the first year of its operation, which is good. As with the income statement, the cash flows also show an increasing cash
balance as the years pass by. The business is located at RT Lim Street, Prk. Sampaloc, Balangasan, Pagadian City are surrounded
by a lot of schools. Uses a semi-automatic shoe washing machine that requires one operator or cleaner per machine, which
equates to 3 cleaners in all.

Note 2 – Compliance with Philippine Financial Reporting Standards

The financial statements have been prepared in compliance with the Philippine Financial Reporting Standards and rules
and regulations of the Philippine Securities and Exchange Commission. The accounting policies adopted in the preparation of
financial statements have been applied on a consistent basis.

73
Note 3 – Significant accounting policies.

Measurement Basis – The financial statements have been prepared based on historical cost.

Inventories – Inventories are measured at acquisition cost.

Interest Income- Interest income is treated as investing activities.

Pre-operating expenses – Such expenses are charged to expenses in the year incurred.

Property, plant, and equipment – Property, plant, and equipment are recorded at cost. The straight-line method is used in
recording depreciation based on the estimated useful life of all depreciable assets.

Employee benefits – The entity maintains a defined contribution plan which provides benefits including Pag-IBIG, SSS,
and PhilHealth covering all regular employees.

Income taxes – Income taxes comprise current tax expense for the present year which is the amount of income taxes payable
in respect of the taxable profit for the period.

Currency – The financial statements are presented in Philippine peso currency.

Note 4 – Cash
Year 0 2025 2026 2027 2028 2029
Cash End 72,109.82 164,480.38 540,207.39 849,204.73 1,660,323.67 2,496,511.69
Cash in Bank 300,000.00 300,000.00 800,000.00 800,000.00 1,300,000.00
The proponents decide that the cash in bank is being deposited into the Bank of the Philippine Islands (BPI). The deposit
as time deposit with an interest of 5% (see Appendix O). The cash in bank is in the form of time deposit in the amount of 300,000
for 2025 to 2026, 800,000 for 2027 to 2028, and 1,300,000 for year 2029.

74
Note 5 – Unused Cleaning Supplies
Year 0 2025 2026 2027 2028 2029
Total Supplies 731,803.58 731,803.58 975,008.44 975,008.44 1,218,213.30
Cleaning Supplies Used (Schedule 2) 622,033.04 622,033.04 828,757.17 828,757.17 1,035,481.30
Unused Cleaning Supplies 109,770.54 109,770.54 146,251.27 146,251.27 182,731.99

Note 6 – Property, Plant, and Equipment

Year 0 2025 2026 2027 2028 2029
Leasehold Improvements 176,156.00 176,156.00 176,156.00 176,156.00 176,156.00 176,156.00
Less: Accumulated Depreciation - 8,213.73 16,427.47 24,641.20 32,854.93 41,068.67
CA, Leasehold Improvements 176,156.00 167,942.27 159,728.53 151,514.80 143,301.07 135,087.33

Machinery and Equipment 506,905.00 506,905.00 506,905.00 574,345.00 574,345.00 681,105.00

Less: Accumulated Depreciation - 40,113.33 80,226.67 120,340.00 160,453.33 200,566.67
Carrying Amount, Mach. And Equip. 506,905.00 466,791.67 426,678.33 454,005.00 413,891.67 480,538.33

Office Equipment 93,348.00 93,348.00 93,348.00 93,348.00 93,348.00 93,348.00

Less: Accumulated Depreciation - 11,423.84 22,847.68 34,271.53 45,695.37 57,119.21
Carrying Amount, Furniture & Fix. 93,348.00 81,924.16 70,500.32 59,076.48 47,652.63 36,228.79

Furniture and Fixtures 73,099.00 73,099.00 73,099.00 73,099.00 73,099.00 73,099.00

Less: Accumulated Depreciation - 8,201.29 16,402.57 24,603.86 32,805.14 41,006.43
Carrying Amount, Office Equip. 73,099.00 64,897.71 56,696.43 48,495.14 40,293.86 32,092.57
TOTAL PPE 849,508.00 781,555.81 713,603.61 713,091.42 645,139.22 683,947.03

Note 7 – Time Deposit

Year 0 2025 2026 2027 2028 2029
Time Deposit 300,000.00 300,000.00 800,000.00 800,000.00 1,300,000.00

75
Note 8 – Trade and Other Payables
Year 0 2025 2026 2027 2028 2029
SSS Premium Payable 2,138.40 2,138.40 2,570.40 2,570.40 3,002.40
PhilHealth Premium Payable 2,376.00 2,376.00 2,856.00 2,856.00 3,336.00
Pag-IBIG Contribution Payable 950.40 950.40 1,142.40 1,142.40 1,334.40
Income Tax Payable 61,456.51 61,456.51 128,330.03 128,330.03 211,961.12
VAT Payable (Schedule 5) 36,762.98 36,762.98 70,584.59 70,584.59 111,518.92
TOTAL TRADE AND OTHER PAYABLES 103,684.28 103,684.28 205,483.42 205,483.42 331,152.84

Note 9 – Service Revenue

Year 0 2025 2026 2027 2028 2029
Annual Service Revenue 23,760.00 23,760.00 31,680.00 31,680.00 39,600.00
Selling Price 130.00 130.00 150.00 150.00 170.00
Service Revenue 3,088,800.00 3,088,800.00 4,752,000.00 4,752,000.00 6,732,000.00

Note 10 – Cost of Service

Year 0 2025 2026 2027 2028 2029

Direct Labor (Schedule 1) 496,080.00 496,080.00 620,880.00 620,880.00 745,680.00
Service Overhead:
Cleaning Supplies Used (Schedule 2) 622,033.04 622,033.04 828,757.17 828,757.17 1,035,481.30
Water Supply (Schedule 6) 100,664.15 100,664.15 160,532.83 160,532.83 197,089.81
Electricity (Schedule 6) 106,533.50 106,533.50 129,362.11 129,362.11 190,238.40
Diesel 6,903.94 6,903.94 6,903.94 6,903.94 6,903.94
Depreciation- M & E (Schedule 3) 40,113.33 40,113.33 40,113.33 40,113.33 40,113.33
Depreciation- Leasehold Improvements 8,213.73 8,213.73 8,213.73 8,213.73 8,213.73
Repairs and Maintenance 4,011.33 4,011.33 4,813.60 4,813.60 5,615.87
Total Service Overhead 888,473.03 888,473.03 1,178,696.72 1,178,696.72 1,483,656.39
Cost of Service 1,384,553.03 1,384,553.03 1,799,576.72 1,799,576.72 2,229,336.39

76
Note 11 – Interest Income
Year 0 2025 2026 2027 2028 2029
Time Deposit - 300,000.00 800,000.00 800,000.00 1,300,000.00
Interest Income Rate - 0.05 0.05 0.05 0.05
Interest Income - 15,000.00 40,000.00 40,000.00 65,000.00
Withholding Tax - 0.8 0.8 0.8 0.8
Total - 12,000.00 32,000.00 32,000.00 52,000.00

Note 12 – Compulsory Benefits Deductions

Year 0 2025 2026 2027 2028 2029
SSS Premiums Expense 2,138.40 2,138.40 2,570.40 2,570.40 3,002.40
PhilHealth Premiums Expense 2,376.00 2,376.00 2,856.00 2,856.00 3,336.00
Pag-IBIG Premiums Expense 950.40 950.40 1,142.40 1,142.40 1,334.40
Total Compulsory Benefits Deductions 5,464.80 5,464.80 6,568.80 6,568.80 7,672.80

Note 13 – Business Permit

Year 0 2025 2026 2027 2028 2029
Regulatory Fees/Charges 5,462.00 5,462.00 5,462.00 5,462.00 5,462.00
Documentary Stamps-BIR 30.00 30.00 30.00 30.00 30.00
Barangay Business Clearance Fee 500.00 500.00 500.00 500.00 500.00
Total Business Permit 5,992.00 5,992.00 5,992.00 5,992.00 5,992.00

Note 14 – Advertising Expense

Year 0 2025 2026 2027 2028 2029
Facebook Ads 1,260.00 1,260.00 1,260.00 1,260.00 1,260.00
Facebook Image Advertising 720.00 720.00 720.00 720.00 720.00
Facebook Video Advertising 864.00 864.00 864.00 864.00 864.00
Tarpaulin 1,800.00 1,800.00 1,800.00 1,800.00 1,800.00
Total Advertising Expense 4,644.00 4,644.00 4,644.00 4,644.00 4,644.00

77
Note 15 – Repairs and Maintenance- S&A

Year 0 2025 2026 2027 2028 2029

Office Equipment 1,142.38 1,142.38 1,370.86 1,370.86 1,599.34
Furniture and Fixtures 820.13 820.13 984.15 984.15 1,148.18
Total Repairs and Maintenance- S&A 1,962.51 1,962.51 2,355.02 2,355.02 2,747.52

Note 16 – Depreciation Expense

Year 0 2025 2026 2027 2028 2029
Office Equipment 11,423.84 11,423.84 11,423.84 11,423.84 11,423.84
Furniture and Fixtures 8,201.29 8,201.29 8,201.29 8,201.29 8,201.29
Total Depreciation Expense- S&A 19,625.13 19,625.13 19,625.13 19,625.13 19,625.13

Note 17 – Utilities Expense

Year 0 2025 2026 2027 2028 2029
Water Dispenser 3,043.81 3,043.81 3,043.81 3,043.81 3,043.81
Vacuum Cleaner 7,609.54 7,609.54 7,609.54 7,609.54 7,609.54
Electric fan 3,804.77 3,804.77 3,804.77 3,804.77 3,804.77
Computer 7,609.54 7,609.54 7,609.54 7,609.54 7,609.54
Fluorescent Tube Light 2,663.34 2,663.34 2,663.34 2,663.34 2,663.34
CCTV 2,490.39 2,490.39 2,490.39 2,490.39 2,490.39
Air Conditioner 50,730.24 50,730.24 50,730.24 50,730.24 50,730.24
Total Utilities Expense – S&A 77,951.63 77,951.63 77,951.63 77,951.63 77,951.63

78
Financial Schedules

Schedule 1- Direct Labor

2025 2026 2027 2028 2029

Number of Shoe Cleaners 3 3 4 4 5

Salaries of Shoe Cleaners 374,400.00 374,400.00 499,200.00 499,200.00 624,000.00

Number of Machine Operator 1 1 1 1 1

Salaries of Machine Operator 121,680.00 121,680.00 121,680.00 121,680.00 121,680.00

Total Direct Labor 496,080.00 496,080.00 620,880.00 620,880.00 745,680.00

Schedule 2- Cleaning Supplies

2025-2026
No. of
ml used No. of pairs bottles Working Monthly Annual
per pair Ml per cleaned Capacity Needed days (per Usage of Usage of
Detergents of shoe Bottle (per bottle) (per pair) (per day) month) Bottles Bottles
Shoe Conditioner 9.00 400.00 44.44 90.00 2.03 22.00 44.55 534.60
Clorox Disinfecting Bleach 30.00 1,270.00 42.33 90.00 2.13 22.00 46.77 561.26
Pure Baking Soda 30.00 2,000.00 66.67 90.00 1.35 22.00 29.70 356.40
White Vinegar 35.00 3,785.00 108.14 90.00 0.83 22.00 18.31 219.71
Castile Soap 9.00 1,000.00 111.11 90.00 0.81 22.00 17.82 213.84
Essential Oil (lemon etc.) 0.15 500.00 3,333.33 90.00 0.03 22.00 0.59 7.13
Water Proofing 10.00 400.00 40.00 90.00 2.25 22.00 49.50 594.00
Shoe Refresher Spray 3.00 118.00 39.33 90.00 2.29 22.00 50.34 604.07

79
 2027-2028
No. of pairs No. of bottles Working Montly Annual
ml used per Ml per cleaned (per Capacity Needed (per days (per Usage of Usage of
Detergents pair of shoe Bottle bottle) (per pair) day) month) Bottles Bottles

Shoe Conditioner 9.00 400.00 44.44 120.00 2.70 22.00 59.40 712.80

Clorox Disinfecting Bleach 30.00 1,270.00 42.33 120.00 2.83 22.00 62.36 748.35

Pure Baking Soda 30.00 2,000.00 66.67 120.00 1.80 22.00 39.60 475.20

White Vinegar 35.00 3,785.00 108.14 120.00 1.11 22.00 24.41 292.95

Castile Soap 9.00 1,000.00 111.11 120.00 1.08 22.00 23.76 285.12
Essential Oil ( lemon and
etc.) 0.15 500.00 3,333.33 120.00 0.04 22.00 0.79 9.50

Water Proofing 10.00 400.00 40.00 120.00 3.00 22.00 66.00 792.00

Shoe Refresher Spray 3.00 118.00 39.33 120.00 3.05 22.00 67.12 805.42

2029
No. of
ml used No. of pairs bottles Working Monthly Annual
per pair Ml per cleaned Capacity Needed days (per Usage of Usage of
Detergents of shoes Bottle (per bottle) (per pair) (per day) month) Bottles Bottles
Shoe Conditioner 9.00 400.00 44.44 150.00 3.38 22.00 74.25 891.00
Clorox Disinfecting Bleach 30.00 1,270.00 42.33 150.00 3.54 22.00 77.95 935.43
Pure Baking Soda 30.00 2,000.00 66.67 150.00 2.25 22.00 49.50 594.00
White Vinegar 35.00 3,785.00 108.14 150.00 1.39 22.00 30.52 366.18
Castile Soap 9.00 1,000.00 111.11 150.00 1.35 22.00 29.70 356.40
Essential Oil (lemon, etc.) 0.15 500.00 3,333.33 150.00 0.05 22.00 0.99 11.88
Water Proofing 10.00 400.00 40.00 150.00 3.75 22.00 82.50 990.00
Shoe Refresher Spray 3.00 118.00 39.33 150.00 3.81 22.00 83.90 1,006.78

80
Schedule 3- Depreciation Expense
Depreciation allocated for
Service Operation Cost Useful Life 2025 2026 2027 2028 2029
Shoe Washing Machine 202,320.00 10 20,232.00 20,232.00 20,232.00 20,232.00 20,232.00
Shoe Dryer Machine 39,320.00 10 3,932.00 3,932.00 3,932.00 3,932.00 3,932.00
Sewage & Industrial Wastewater
Treatment Systems 56,880.00 15 3,792.00 3,792.00 3,792.00 3,792.00 3,792.00
Generator 44,285.00 15 2,952.33 2,952.33 2,952.33 2,952.33 2,952.33
Water Storage Tank 144,100.00 20 7,205.00 7,205.00 7,205.00 7,205.00 7,205.00
Cash Register Machine 20,000.00 10 2,000.00 2,000.00 2,000.00 2,000.00 2,000.00
Total 506,905.00 40,113.33 40,113.33 40,113.33 40,113.33 40,113.33

Depreciation allocated for

Selling and Admin Cost Useful Life 2025 2026 2027 2028 2029
Computer Desktop-Set 25,000.00 5 5,000.00 5,000.00 5,000.00 5,000.00 5,000.00
Water Dispenser 7,000.00 5 1,400.00 1,400.00 1,400.00 1,400.00 1,400.00
Electric Fan 8,000.00 10 800.00 800.00 800.00 800.00 800.00
Fire Extinguisher 2,500.00 10 250.00 250.00 250.00 250.00 250.00
CCTV 1,500.00 5 300.00 300.00 300.00 300.00 300.00
Fluorescent Tube Light 450.00 10 45.00 45.00 45.00 45.00 45.00
Air Conditioning 40,000.00 15 2,666.67 2,666.67 2,666.67 2,666.67 2,666.67
Telephone 399.00 5 79.80 79.80 79.80 79.80 79.80
Vacuum 1,299.00 8 162.38 162.38 162.38 162.38 162.38
Smoke Detectors 6,000.00 10 600.00 600.00 600.00 600.00 600.00
Fire Alarm 1,200.00 10 120.00 120.00 120.00 120.00 120.00
Total Office Equipment 93,348.00
Computer Table 4,500.00 7 642.86 642.86 642.86 642.86 642.86
Clerical Chair 3,500.00 7 500.00 500.00 500.00 500.00 500.00
Bench Chair 4,000.00 7 571.43 571.43 571.43 571.43 571.43
Reception Desk 3,500.00 10 350.00 350.00 350.00 350.00 350.00
Stainless Steel Shoe Cabinet 4,000.00 10 400.00 400.00 400.00 400.00 400.00
Stainless Aluminum Table 44,800.00 10 4,480.00 4,480.00 4,480.00 4,480.00 4,480.00
Wood Table 8,799.00 7 1,257.00 1,257.00 1,257.00 1,257.00 1,257.00
Total Furniture and Fixtures 73,099.00 8,201.29 8,201.29 8,201.29 8,201.29 8,201.29
Total 19,625.13 19,625.13 19,625.13 19,625.13 19,625.13

81
Schedule 4- Contribution Table
2025-2026
Position Monthly Salary SSS Contribution PhilHealth Contribution Pag-IBIG Contribution
EE ER EE ER EE ER
Cleaners (3) 28,800.00 1,296.00 720 1,440.00 720 576.00 720
Machine Operator 9,360.00 421.20 234 468.00 234 187.20 234
Cashier 9,240.00 421.20 231 468.00 231 187.20 231
Total 47,400.00 2,138.40 1,185.00 2,376.00 1,185.00 950.40 1,185.00
Monthly Payable 3,323.40 3,561.00 2,135.40

2027-2028
Position Monthly Salary SSS Contribution PhilHealth Contribution Pag-IBIG Contribution
EE ER EE ER EE ER
Cleaners (4) 38,400.00 1,728.00 960 1,920.00 960 768.00 960
Machine Operator 9,360.00 421.20 234 468.00 234 187.20 234
Cashier 9,240.00 421.20 231 468.00 231 187.20 231
Total 57,000.00 2,570.40 1,425.00 2,856.00 1,425.00 1,142.40 1,425.00
Monthly Payable 3,995.40 4,281.00 2,567.40

2029
Position Monthly Salary SSS Contribution PhilHealth Contribution Pag-IBIG Contribution
EE ER EE ER EE ER
Cleaners (5) 48,000.00 2,160.00 1200 2,400.00 1200 960.00 1200
Machine Operator 9,360.00 421.20 234 468.00 234 187.20 234
Cashier 9,240.00 421.20 231 468.00 231 187.20 231
Total 66,600.00 3,002.40 1,665.00 3,336.00 1,665.00 1,334.40 1,665.00
Monthly Payable 4,667.40 5,001.00 2,999.40

82
Schedule 5- VAT Payable Computation
VAT Payable 2025 2026 2027 2028 2029
VAT Output 330,942.86 330,942.86 509,142.86 509,142.86 721,285.71
VAT Input 183,890.95 183,890.95 226,804.49 226,804.49 275,210.02
Total VAT Payable 147,051.91 147,051.91 282,338.37 282,338.37 446,075.69
Machinery & Equipment 72,144.86 72,144.86 79,370.57 79,370.57 90,809.14
Supplies 79,160.42 79,160.42 105,218.08 105,218.08 131,275.75
Utilities (excluding water supply) 20,505.97 20,505.97 22,951.89 22,951.89 29,474.35
Water Supply 12,079.70 12,079.70 19,263.94 19,263.94 23,650.78
Total VAT Input 183,890.95 183,890.95 226,804.49 226,804.49 275,210.02

Schedule 6- Utility Consumption

2025-2026
No. of
No. of Total Monthly Annual
Watts Hours KWH the Rate
Days KWH Consumption Consumption
Item
Electricity allocated for
Service
Shoe Washing Machine 1,200 6 22 158.40 3 475.20 12.01 5,707.15 68,485.82
Shoe Drying Machine 2,000 6 22 264.00 1 264.00 12.01 3,170.64 38,047.68

Electricity allocated for

Selling and Admin
Water Dispenser 120 8 22 21.12 1 21.12 12.01 253.65 3,043.81
Vacuum Cleaner 600 4 22 52.80 1 52.80 12.01 634.13 7,609.54
Electric fan 75 8 22 13.20 2 26.40 12.01 317.06 3,804.77
Computer 300 8 22 52.80 1 52.80 12.01 634.13 7,609.54
Fluorescent Tube Light 35 8 22 6.16 3 18.48 12.01 221.94 2,663.34
CCTV 12 24 30 8.64 2 17.28 12.01 207.53 2,490.39
Air Conditioner 2000 8 22 352.00 1 352.00 12.01 4,227.52 50,730.24
Total Utilities Expense 184,485.13

83
 2027-2028
No. of
No. of Total Monthly Annual
Watts Hours KWH the Rate
Days KWH Consumption Consumption
Item
Electricity allocated for Service
Shoe Washing Machine 1,200 6 22 158.40 4 633.60 12.01 7,609.54 91,314.43
Shoe Drying Machine 2,000 6 22 264.00 1 264.00 12.01 3,170.64 38,047.68

Electricity allocated for Selling andAdmin

Water Dispenser 120 8 22 21.12 1 21.12 12.01 253.65 3,043.81
Vacuum Cleaner 600 4 22 52.80 1 52.80 12.01 634.13 7,609.54
Electric fan 75 8 22 13.20 2 26.40 12.01 317.06 3,804.77
Computer 300 8 22 52.80 1 52.80 12.01 634.13 7,609.54
Fluorescent Tube Light 35 8 22 6.16 3 18.48 12.01 221.94 2,663.34
CCTV 12 24 30 8.64 2 17.28 12.01 207.53 2,490.39
Air Conditioner 2000 8 22 352.00 1 352.00 12.01 4,227.52 50,730.24
Total Utilities Expense 207,313.74

2029
No. of
No. of Total Monthly Annual
Watts Hours KWH the Rate
Days KWH Consumption Consumption
Item
Electricity allocated for Service
Shoe Washing Machine 1,200 6 22 158.40 5 792.00 12.01 9,511.92 114,143.04
Shoe Drying Machine 2,000 6 22 264.00 2 528.00 12.01 6,341.28 76,095.36

Electricity allocated for Selling and Admin

Water Dispenser 120 8 22 21.12 1 21.12 12.01 253.65 3,043.81
Vacuum Cleaner 600 4 22 52.80 1 52.80 12.01 634.13 7,609.54
Electric fan 75 8 22 13.20 2 26.40 12.01 317.06 3,804.77
Computer 300 8 22 52.80 1 52.80 12.01 634.13 7,609.54
Fluorescent Tube Light 35 8 22 6.16 3 18.48 12.01 221.94 2,663.34
CCTV 12 24 30 8.64 2 17.28 12.01 207.53 2,490.39
Air Conditioner 2000 8 22 352.00 1 352.00 12.01 4,227.52 50,730.24
Total Utilities Expense 268,190.03

84
Water Supply
2025 – 2026
Daily Consumption (in liters 120 Liters per barrel 159
No. of Cleaned shoe per day (in pair) 72 No. of Barrels 10
Liters (per pair pf shoe) 30 Total Liters (10 Barrels) 1,590
Total Liters used per day 2,280 Required Monthly Liters 59,280
Working Days (per month)
26 No. of Barrels Required (per 10 Barrels) 37
Monthly Water Consumption (in liters) 59,280 Minimum cost (10 Barrels) 225
Months per year 12 Monthly cost of Water 8,389
Annual Consumption (in liters) 711,360 12
Total Water Consumption 100,664

2026 – 2027
Daily Consumption (in liters 756 Liters per barrel 159
No. of Cleaned shoe per day (in pair) 96 No. of Barrels 10
Liters (per pair pf shoe) 30 Total Liters (10 Barrels) 1,590
Total Liters used per day 3,636 Required Monthly Liters 94,536
Working Days (per month)
26 No. of Barrels Required (per 10 Barrels) 59
Monthly Water Consumption (in liters) 94,536 Minimum cost (10 Barrels) 225
Months per year 12 Monthly cost of Water 13,378
Annual Consumption (in liters) 1,134,432 12
Total Water Consumption 160,533

2029
Daily Consumption (in liters 864 Liters per barrel 159
No. of Cleaned shoe per day (in pair) 120 No. of Barrels 10
Liters (per pair pf shoe) 30 Total Liters (10 Barrels) 1,590
Total Liters used per day 4,464 Required Monthly Liters 116,064
Working Days (per month) 26 No. of Barrels Required (per 10 Barrels) 73
Monthly Water Consumption (in liters) 116,064 Minimum cost (10 Barrels) 225
Months per year 12 Monthly cost of Water 16,424
Annual Consumption (in liters) 1,392,768 12
Total Water Consumption 197,090
85
Schedule 7- Partners’ Profit Distribution
Account Titles 2025
0.30 0.30 0.40
M. Brillantes J. Dela Rama D. Lagnason Total
Salary 70,000.00 50,000.00 - 120,000.00
Net Share after Partner’s Salary 134,772.97 134,772.97 179,697.29 449,243.23
Total Share in Profits 204,772.97 184,772.97 179,697.29 569,243.23

Account Titles 2026

Salary 70,000.00 50,000.00 - 120,000.00
Net Share after Partner’s Salary 148,664.89 148,664.89 198,219.85 495,549.63
Total Share in Profits 218,664.89 198,664.89 198,219.85 615,549.63

Account Titles 2027

Salary 70,000.00 50,000.00 - 120,000.00
Net Share after Partner’s Salary 409,900.05 409,900.05 546,533.39 1,366,333.48
Total Share in Profits 479,900.05 459,900.05 546,533.39 1,486,333.48

Account Titles 2028

Salary 70,000.00 50,000.00 - 120,000.00
Net Share after Partner’s Salary 409,900.05 409,900.05 546,533.39 1,366,333.48
Total Share in Profits 479,900.05 459,900.05 546,533.39 1,486,333.48

Account Titles 2029

Salary 70,000.00 50,000.00 - 120,000.00
Net Share after Partner’s Salary 735,484.28 735,484.28 980,645.71 2,451,614.26
Total Share in Profits 805,484.28 785,484.28 980,645.71 2,571,614.26

86
Schedule 8- Withdrawals

Account Titles 2025

0.5 0.5 0.5
M. Brillantes J. Dela Rama D. Lagnason Total
Net Income 204,772.97 184,772.97 179,697.29
Allowance for Withdrawal 102,386.49 92,386.49 89,848.65
Withdrawal 102,386.49 92,386.49 89,848.65 284,621.62

Account Titles 2026

Net Income 218,664.89 198,664.89 198,219.85
Allowance for Withdrawal 109,332.45 99,332.45 99,109.93
Withdrawal 109,332.45 99,332.45 99,109.93 307,774.82

Account Titles 2027

Net Income 479,900.05 459,900.05 546,533.39
Allowance for Withdrawal 239,950.02 229,950.02 273,266.70
Withdrawal 239,950.02 229,950.02 273,266.70 743,166.74

Account Titles 2028

Net Income 479,900.05 459,900.05 546,533.39
Allowance for Withdrawal 239,950.02 229,950.02 273,266.70
Withdrawal 239,950.02 229,950.02 273,266.70 743,166.74

Account Titles 2029

Net Income 805,484.28 785,484.28 980,645.71
Allowance for Withdrawal 402,742.14 392,742.14 490,322.85
Withdrawal 402,742.14 392,742.14 490,322.85 1,285,807.13

87
Financial Statement Analysis (5-year Analysis)

A financial statement analysis in a feasibility study offers crucial information on the performance, viability, and overall
condition of a project or business enterprise’s finances. Analysts can evaluate the company’s historical, present, and future
financial status by closely studying financial statements such as the cash flow statement, balance sheet, and income statement.

A. Horizontal Analysis

Statement of Financial Position

ASSETS Year 0 2025 Increase (Decrease) Percentage

Current Assets:
Cash 72,109.82 164,480.38 92,370.56 128%
Unused Cleaning Supplies - 109,770.54 109,770.54 0%
Pre-Operating Expense 45,883.00 - (45,883.00) -100%
Total Current Assets 117,992.82 274,250.92 156,258.10 132%
Non-Current Assets:
Property, Plant, and Equipment 849,508.00 781,555.81 (67,952.19) -8%
Time Deposit - 300,000.00 300,000.00 0%
Total Non-Current Assets 849,508.00 1,081,555.81 232,047.81 27%
TOTAL ASSETS 967,500.82 1,355,806.72 388,305.90 40%

LIABILITIES AND PARTNER’S EQUITY

Current Liabilities:
Trade and Other Payables - 103,684.28 103,684.28 0%
Total Current Liabilities - 103,684.28 103,684.28 0%
Partner’s Equity 967,500.82 1,252,122.44 284,621.62 29%
TOTAL LIABILITIES AND EQUITY 967,500.82 1,355,806.72 388,305.90 40%

88
ASSETS 2025 2026 Increase (Decrease) Percentage

Current Assets:

Cash 164,480.38 540,207.39 375,727.01 228%

Unused Cleaning Supplies 109,770.54 109,770.54 - 0%

Pre-Operating Expense - - - 0%

Total Current Assets 274,250.92 649,977.93 375,727.01 137%

Non-Current Assets:

Property, Plant, and Equipment 781,555.81 713,603.61 (67,952.19) -9%

Time Deposit 300,000.00 300,000.00 - 0%

Total Non-Current Assets 1,081,555.81 1,013,603.61 (67,952.19) (0.06)

TOTAL ASSETS 1,355,806.72 1,663,581.54 307,774.82 23%

LIABILITIES AND PARTNER’S EQUITY

Current Liabilities:

Trade and Other Payables 103,684.28 103,684.28 - 0%

Total Current Liabilities 103,684.28 103,684.28 - 0%

Partner’s Equity 1,252,122.44 1,559,897.25 307,774.82 25%

TOTAL LIABILITIES AND EQUITY 1,355,806.72 1,663,581.54 307,774.82 23%

89
ASSETS 2026 2027 Increase (Decrease) Percentage

Current Assets:

Cash 540,207.39 849,204.73 308,997.34 57%

Unused Cleaning Supplies 109,770.54 146,251.27 36,480.73 33%

Pre-Operating Expense - - - 0%

Total Current Assets 649,977.93 995,456.00 345,478.07 53%

Non-Current Assets:

Property, Plant, and Equipment 713,603.61 713,091.42 (512.19) 0%

Time Deposit 300,000.00 800,000.00 500,000.00 167%

Total Non-Current Assets 1,013,603.61 1,513,091.42 499,487.81 49%

TOTAL ASSETS 1,663,581.54 2,508,547.42 844,965.88 51%

LIABILITIES AND PARTNER’S EQUITY

Current Liabilities:

Trade and Other Payables 103,684.28 205,483.42 101,799.13 98%

Total Current Liabilities 103,684.28 205,483.42 101,799.13 98%

Partner’s Equity 1,559,897.25 2,303,064.00 743,166.74 48%

TOTAL LIABILITIES AND EQUITY 1,663,581.54 2,508,547.42 844,965.88 51%

90
ASSETS 2027 2028 Increase (Decrease) Percentage

Current Assets:

Cash 849,204.73 1,660,323.67 811,118.94 96%

Unused Cleaning Supplies 146,251.27 146,251.27 - 0%

Pre-Operating Expense - - - 0%

Total Current Assets 995,456.00 1,806,574.93 811,118.94 81%

Non-Current Assets:

Property, Plant, and Equipment 713,091.42 645,139.22 (67,952.19) -10%

Time Deposit 800,000.00 800,000.00 - 0%

Total Non-Current Assets 1,513,091.42 1,445,139.22 (67,952.19) -4%

TOTAL ASSETS 2,508,547.42 3,251,714.16 743,166.74 30%

LIABILITIES AND PARTNER’S EQUITY

Current Liabilities:

Trade and Other Payables 205,483.42 205,483.42 - 0%

Total Current Liabilities 205,483.42 205,483.42 - 0%

Partner’s Equity 2,303,064.00 3,046,230.74 743,166.74 32%

TOTAL LIABILITIES AND EQUITY 2,508,547.42 3,251,714.16 743,166.74 30%

91
ASSETS 2028 2029 Increase (Decrease) Percentage

Current Assets:

Cash 1,660,323.67 2,496,511.69 836,188.02 50%

Unused Cleaning Supplies 146,251.27 182,731.99 36,480.73 25%

Pre-Operating Expense - - - 0%

Total Current Assets 1,806,574.93 2,679,243.68 872,668.75 48%

Non-Current Assets:

Property, Plant, and Equipment 645,139.22 683,947.03 38,807.81 6%

Time Deposit 800,000.00 1,300,000.00 500,000.00 63%

Total Non-Current Assets 1,445,139.22 1,983,947.03 538,807.81 6%

TOTAL ASSETS 3,251,714.16 4,663,190.71 1,411,476.56 43%

LIABILITIES AND PARTNER’S EQUITY

Current Liabilities:

Trade and Other Payables 205,483.42 331,152.84 125,669.42 61%

Total Current Liabilities 205,483.42 331,152.84 125,669.42 61%

Partner’s Equity 3,046,230.74 4,332,037.87 1,285,807.13 42%

TOTAL LIABILITIES AND EQUITY 3,251,714.16 4,663,190.71 1,411,476.56 43%

92
Total Asset
Over time, the total assets have increased gradually, and the growth percentage has increased noticeably from 40% to
43%. This demonstrates that the business is appropriately maintaining its fixed assets despite minor fluctuations in asset value.
The business’s financial status will benefit from both general business expansion and an increasing asset base, as indicated by
everything mentioned above.

Total Liabilities and Partners’ Equity

There have been substantial increases in the percentage of liabilities in some years (up to 61%), this may be a sign of
higher short-term debts. Throughout the years, Partner’s capital has grown steadily, from 29% to 42%. This suggests that the
business’s finances are getting stronger since the business is making money and/or drawing in new investments. Overall, the
financial analysis shows a stable and improving trend in the business’s financial position.

93
Statement of Financial Performance

2025 2026 Increase (Decrease) Percentage

Service Revenue 2,757,857.14 2,757,857.14 - 0%
Cost of Service (1,384,553.03) (1,384,553.03) - 0%
Gross Profit 1,373,304.11 1,373,304.11 - 0%
Interest Income - 12,000.00 12,000.00 0%
Less: Expenses
Pre-Operating Expenses - - - 0%
Selling and Administrative Expenses
Salaries and Wages 120,120.00 120,120.00 - 0%
Compulsory Benefits Deductions 5,464.80 5,464.80 - 0%
Communication Expense 13,080.00 13,080.00 - 0%
Business Permit 5,992.00 5,992.00 - 0%
Rent Expense-Bldg 360,000.00 360,000.00 - 0%
Advertising Expense 4,644.00 4,644.00 - 0%
Supplies Expense 7,027.00 7,027.00 - 0%
Repairs and Maintenance- S&A 1,962.51 1,962.51 - 0%
Depreciation – S&A 19,625.13 19,625.13 - 0%
Utilities Expense 77,951.63 77,951.63 - 0%
Total Selling and Administrative Expenses 661,750.07 615,867.07 (45,883.00) -7%
Net Income Before Tax 711,554.04 769,437.04 57,883.00 8%
Less: Income Tax Expense (20%) (142,310.81) (153,887.41) (11,576.60) 8%
Net Income 569,243.23 615,549.63 46,306.40 8%

94
 2026 2027 Increase (Decrease) Percentage
Service Revenue 2,757,857.14 4,242,857.14 1,485,000.00 54%
Cost of Service (1,384,553.03) (1,799,576.72) (415,023.68) 30%
Gross Profit 1,373,304.11 2,443,280.42 1,069,976.32 78%
Interest Income 12,000.00 32,000.00 20,000.00 167%
Less: Expenses
Pre-Operating Expenses - - - 0%
Selling and Administrative Expenses
Salaries and Wages 120,120.00 120,120.00 - 0%
Compulsory Benefits Deductions 5,464.80 6,568.80 1,104.00 20%
Communication Expense 13,080.00 13,080.00 - 0%
Business Permit 5,992.00 5,992.00 - 0%
Rent Expense-Bldg. 360,000.00 360,000.00 - 0%
Advertising Expense 4,644.00 4,644.00 - 0%
Supplies Expense 7,027.00 7,027.00 - 0%
Repairs and Maintenance- S&A 1,962.51 2,355.02 392.50 20%
Depreciation – S&A 19,625.13 19,625.13 - 0%
Utilities Expense 77,951.63 77,951.63 - 0%
Total Selling and Administrative Expenses 615,867.07 617,363.57 1,496.50 0%
Net Income Before Tax 769,437.04 1,857,916.86 1,088,479.81 141%
Less: Income Tax Expense (20%) (153,887.41) (371,583.37) (217,695.96) 141%
Net Income 615,549.63 1,486,333.48 870,783.85 141%

95
 2027 2028 Increase (Decrease) Percentage
Service Revenue 4,242,857.14 4,242,857.14 - 0%
Cost of Service (1,799,576.72) (1,799,576.72) - 0%
Gross Profit 2,443,280.42 2,443,280.42 - 0%
Interest Income 32,000.00 32,000.00 - 0%
Less: Expenses
Pre-Operating Expenses - - - 0%
Selling and Administrative Expenses
Salaries and Wages 120,120.00 120,120.00 - 0%
Compulsory Benefits Deductions 6,568.80 6,568.80 - 0%
Communication Expense 13,080.00 13,080.00 - 0%
Business Permit 5,992.00 5,992.00 - 0%
Rent Expense-Bldg. 360,000.00 360,000.00 - 0%
Advertising Expense 4,644.00 4,644.00 - 0%
Supplies Expense 7,027.00 7,027.00 - 0%
Repairs and Maintenance- S&A 2,355.02 2,355.02 - 0%
Depreciation – S&A 19,625.13 19,625.13 - 0%
Utilities Expense 77,951.63 77,951.63 - 0%
Total Selling and Administrative Expenses 617,363.57 617,363.57 - 0%
Net Income Before Tax 1,857,916.86 1,857,916.86 - 0%
Less: Income Tax Expense (20%) (371,583.37) (371,583.37) - 0%
Net Income 1,486,333.48 1,486,333.48 - 0%

96
 2028 2029 Increase (Decrease) Percentage
Service Revenue 4,242,857.14 6,010,714.29 1,767,857.14 42%
Cost of Service (1,799,576.72) (2,229,336.39) (429,759.67) 24%
Gross Profit 2,443,280.42 3,781,377.90 1,338,097.48 55%
Interest Income 32,000.00 52,000.00 20,000.00 63%
Less: Expenses
Pre-Operating Expenses - - - 0%
Selling and Administrative Expenses
Salaries and Wages 120,120.00 120,120.00 - 0%
Compulsory Benefits Deductions 6,568.80 7,672.80 1,104.00 17%
Communication Expense 13,080.00 13,080.00 - 0%
Business Permit 5,992.00 5,992.00 - 0%
Rent Expense-Bldg. 360,000.00 360,000.00 - 0%
Advertising Expense 4,644.00 4,644.00 - 0%
Supplies Expense 7,027.00 7,027.00 - 0%
Repairs and Maintenance- S&A 2,355.02 2,747.52 392.50 17%
Depreciation – S&A 19,625.13 19,625.13 - 0%
Utilities Expense 77,951.63 77,951.63 - 0%
Total Selling and Administrative Expenses 617,363.57 618,860.07 1,496.50 0%
Net Income Before Tax 1,857,916.86 3,214,517.83 1,356,600.97 73%
Less: Income Tax Expense (20%) (371,583.37) (642,903.57) (271,320.19) 73%
Net Income 1,486,333.48 2,571,614.26 1,085,280.78 73%

Over the years, the business has shown strong financial performance, with steady revenue growth and increasing
profitability. Net income expands significantly in 2027 and 2029 (141% and 73%, respectively), continuing its consistent upward
direction. This demonstrates the business’s ability to translate increases in revenue into higher profits. The substantial increases
in net income every after two years indicate highly successful periods because of price increase and fixed expenses.

97
 B. Vertical Analysis
Statement of Financial Position

ASSETS 2025 Percentage 2026 Percentage 2027 Percentage

Current Assets:

Cash 164,480.38 12% 540,207.39 32% 849,204.73 34%

Unused Cleaning Supplies 109,770.54 8% 109,770.54 7% 146,251.27 6%

Pre-Operating Expense - 0% - 0% - 0%

Total Current Assets 274,250.92 20% 649,977.93 39% 995,456.00 40%

Non-Current Assets:

Property, Plant, and Equipment 781,555.81 58% 713,603.61 43% 713,091.42 28%

Time Deposit 300,000.00 22% 300,000.00 18% 800,000.00 32%

Total Non-Current Assets 1,081,555.81 80% 1,013,603.61 61% 1,513,091.42 60%

TOTAL ASSETS 1,355,806.72 100% 1,663,581.54 100% 2,508,547.42 100%

LIABILITIES AND PARTNER’S

EQUITY

Current Liabilities:

Trade and Other Payables 103,684.28 8% 103,684.28 6% 205,483.42 8%

Total Current Liabilities 103,684.28 8% 103,684.28 6% 205,483.42 8%

Partner’s Equity 1,252,122.44 92% 1,559,897.25 94% 2,303,064.00 92%

TOTAL LIABILITIES AND EQUITY 1,355,806.72 100% 1,663,581.54 100% 2,508,547.42 100%

98
 ASSETS 2028 Percentage 2029 Percentage
Current Assets:
Cash 1,660,323.67 51% 2,496,511.69 54%
Unused Cleaning Supplies 146,251.27 4% 182,731.99 4%
Pre-Operating Expense - 0% - 0%
Total Current Assets 1,806,574.93 56% 2,679,243.68 57%
Non-Current Assets:
Property, Plant, and Equipment 645,139.22 20% 683,947.03 15%
Time Deposit 800,000.00 25% 1,300,000.00 28%
Total Non-Current Assets 1,445,139.22 44% 1,983,947.03 43%
TOTAL ASSETS 3,251,714.16 100% 4,663,190.71 100%

LIABILITIES AND PARTNER’S EQUITY

Current Liabilities:
Trade and Other Payables 205,483.42 6% 331,152.84 7%
Total Current Liabilities 205,483.42 6% 331,152.84 7%
Partner’s Equity 3,046,230.74 94% 4,332,037.87 93%
TOTAL LIABILITIES AND EQUITY 3,251,714.16 100% 4,663,190.71 100%

The total assets increase gradually over time, increasing in 2028 and 2029. As a percentage of total assets, current
liabilities have remained low over time, averaging between six and seven percent. At 94% to 93%, the partner’s equity regularly
makes up a large portion of all liabilities and equity. This suggests a strong financial standing and a significant degree of
ownership by partners. Overall, the balance sheet’s financial analysis in vertical analysis shows an equitable and expanding
financial position. It demonstrates the business has good liquidity, solid asset and liability management, and a strong equity
foundation.

99
Statement of Financial Performance

2025 Percentage 2026 Percentage 2027 Percentage

Service Revenue 2,757,857.14 100% 2,757,857.14 100% 4,242,857.14 100%
Cost of Service (1,384,553.03) -50% (1,384,553.03) -50% (1,799,576.72) -42%
Gross Profit 1,373,304.11 50% 1,373,304.11 50% 2,443,280.42 57%
Interest Income - 0% 12,000.00 0% 32,000.00 1%
Less: Expenses
Pre-Operating Expenses 45,883.00 - -
Selling and Administrative Expenses
Salaries and Wages 120,120.00 4% 120,120.00 4% 120,120.00 3%
Compulsory Benefits Deductions 5,464.80 0% 5,464.80 0% 6,568.80 0%
Communication Expense 13,080.00 0% 13,080.00 0% 13,080.00 0%
Business Permit 5,992.00 0% 5,992.00 0% 5,992.00 0%
Rent Expense-Bldg. 360,000.00 13% 360,000.00 13% 360,000.00 8%
Advertising Expense 4,644.00 0% 4,644.00 0% 4,644.00 0%
Supplies Expense 7,027.00 0% 7,027.00 0% 7,027.00 0%
Repairs and Maintenance- S&A 1,962.51 0% 1,962.51 0% 2,355.02 0%
Depreciation – S&A 19,625.13 1% 19,625.13 1% 19,625.13 0%
Utilities Expense 77,951.63 3% 77,951.63 3% 77,951.63 2%
Total Selling and Administrative Expenses 661,750.07 24% 615,867.07 22% 617,363.57 15%
Net Income Before Tax 711,554.04 26% 769,437.04 28% 1,857,916.86 44%
Less: Income Tax Expense (20%) (142,310.81) -5% (153,887.41) -6% (371,583.37) -9%
Net Income After Tax 569,243.23 20.6% 615,549.63 22.3% 1,486,333.48 35.0%

100
 2028 Percentage 2029 Percentage
Service Revenue 4,242,857.14 100% 6,010,714.29 100%
Cost of Service (1,799,576.72) -42% (2,229,336.39) -37%
Gross Profit 2,443,280.42 57% 3,781,377.90 62%
Interest Income 32,000.00 1% 52,000.00 1%
Less: Expenses
Pre-Operating Expenses - -
Selling and Administrative Expenses
Salaries and Wages 120,120.00 3% 120,120.00 2%
Compulsory Benefits Deductions 6,568.80 0% 7,672.80 0%
Communication Expense 13,080.00 0% 13,080.00 0%
Business Permit 5,992.00 0% 5,992.00 0%
Rent Expense-Bldg. 360,000.00 8% 360,000.00 6%
Advertising Expense 4,644.00 0% 4,644.00 0%
Supplies Expense 7,027.00 0% 7,027.00 0%
Repairs and Maintenance- S&A 2,355.02 0% 2,747.52 0%
Depreciation – S&A 19,625.13 0% 19,625.13 0%
Utilities Expense 77,951.63 2% 77,951.63 1%
Total Selling and Administrative Expenses 617,363.57 15% 618,860.07 10%
Net Income Before Tax 1,857,916.86 44% 3,214,517.83 53%
Less: Income Tax Expense (20%) (371,583.37) -9% (642,903.57) -11%
Net Income After Tax 1,486,333.48 35.0% 2,571,614.26 42.8%

The business is growing, according to the financial analysis, with increasing revenue, stable gross profit margins, and
increasing profitability over time. Over the course of the period, net income after taxes has also grown significantly, with major
gains in 2027 and 2029. This implies that the business makes more money for its partners.
101
Ratio Analysis

• Liquidity Ratio
2025 2026 2027 2028 2029
Current Ratio = Current Asset 274,250.92 649,977.93 995,456.00 1,806,574.93 2,679,243.68
Current Liability 103,684.28 103,684.28 205,483.42 205,483.42 331,152.84
= 2.65 6.27 4.84 8.79 8.09

The Current Ratio stayed noticeably higher from 2025 to 2026, which demonstrating the business’s strong ability to meet
short-term obligations and hold onto cash. Then, the Current Ratio decreased from 4.84, then rise to 8.79. These differences
probably result from adjustments to the business’s control of assets and liabilities plans, which may be brought about by changes
to the business’s operations.

2025 2026 2027 2028 2029

Current Assets –
Acid Test Ratio = Inventories 164,480.38 540,207.39 849,204.73 1,660,323.67 2,496,511.69
Current Liabilities 103,684.28 103,684.28 205,483.42 205,483.42 331,152.84
= 1.59 5.21 4.13 8.08 7.54

The acid-test ratio or quick assets ratio shows inconsistent increase number but the business is still liquid enough to meet
currently maturing obligations since the quick assets are still higher than the current liabilities.

• Profitability Ratio

2025 2026 2027 2028 2029

Return on Investment = Net Profit After Tax 569,243.23 615,549.63 1,486,333.48 1,486,333.48 2,571,614.26
Original Investment 967,500.82 967,500.82 967,500.82 967,500.82 967,500.82
= 58.84% 63.62% 153.63% 153.63% 265.80%

102
 The ROI significantly improves starting in 2027 to 2029. This suggests strategic adjustments or operational
improvements that were successful and significantly increased profitability. By 2029, the ROI has increased to 265.80%,
demonstrating excellent profitability. This suggests profitable business and effective strategic management.

2025 2026 2027 2028 2029

Return on Asset = Net Profit After Tax 569,243.23 615,549.63 1,486,333.48 1,486,333.48 2,571,614.26
Average Total Assets 1,839,557.13 2,341,484.90 3,340,338.18 4,505,987.87 6,289,047.79
= 30.94% 26.29% 44.50% 32.99% 40.89%

The ROA trends demonstrate the business’s rising efficiency in turning a profit from its assets; this is especially evident
after 2027. The business shows data that, although with some delay, large investments or increases in total assets are
eventually followed by rises in net profit.

2025 2026 2027 2028 2029

Return on Sales = Net Income After Tax 569,243.23 615,549.63 1,486,333.48 1,486,333.48 2,571,614.26

Net Sales 2,757,857.14 2,757,857.14 4,242,857.14 4,242,857.14 6,010,714.29

= 20.64% 22.32% 35.03% 35.03% 42.78%

When comparing the data from 2025 to 2029, it is evident that the business’s ROS is trending upward. The business’s return
on equity (ROS) grew substantially from an inadequate 20.64% to an outstanding 42.78% by 2029. This expansion shows that
the business is profitable and efficient over the course of five years, and it also implies that the market is salable.

103
 2025 2026 2027 2028 2029
Revenue – COGS-
Profit Margin = Opex- Taxes X 100 1,373,304.11 1,373,304.11 2,443,280.42 2,443,280.42 3,781,377.90
Revenue 2,757,857.14 2,757,857.14 4,242,857.14 4,242,857.14 6,010,714.29
= 49.80% 49.80% 57.59% 57.59% 62.91%

The increasing profit margin percentages over the years show that the business is getting more proficient at turning a
profit from its revenue. Strong operational success is demonstrated by the steady rise in revenue and profit margin.

2025 2026 2027 2028 2029

Return on Equity = Net Profit After Tax 569,243.23 615,549.63 1,486,333.48 1,486,333.48 2,571,614.26
Partners’ Equity 1,252,122.44 1,559,897.25 2,303,064.00 3,046,230.74 4,332,037.87
= 45.46% 39.46% 64.54% 48.79% 59.36%

The rising return on equity (ROE) over time suggests that business has become more proficient at utilizing its equity
basis to produce profits. The substantial increases in ROE observed in 2027 and 2029 indicate that, during those years, profit
growth is surpassing equity growth, indicating periods of strong profitability to the equity base. An increase in equity without a
matching gain in profit or decrease in profitability is what caused the reduction in 2026 and 2028.

Breakeven Analysis

Variable Costs: 2025 2026 2027 2028 2029

Service Supplies 26.18 26.18 26.16 26.16 26.15
Water Supply 4.24 4.24 5.07 5.07 4.98
Electricity – Service 4.48 4.48 4.08 4.08 4.80
Electricity – S & A 3.28 3.28 2.46 2.46 1.97
Diesel 0.29 0.29 0.22 0.22 0.17
DL 20.88 20.88 19.60 19.60 15.68
Total Variable Cost 59.35 59.35 57.59 57.59 53.75

104
Fixed Cost:
Salaries and Wages 120,120.00 120,120.00 120,120.00 120,120.00 120,120.00
Compulsory Benefits Deductions 5,464.80 5,464.80 6,568.80 6,568.80 7,672.80
Communication Expense 13,080.00 13,080.00 13,080.00 13,080.00 13,080.00
Business Permit 5,992.00 5,992.00 5,992.00 5,992.00 5,992.00
Rent Expense-Bldg. 360,000.00 360,000.00 360,000.00 360,000.00 360,000.00
Advertising Expense 4,644.00 4,644.00 4,644.00 4,644.00 4,644.00
Supplies Expense 7,027.00 7,027.00 7,027.00 7,027.00 7,027.00
Repairs and Maintenance 5,973.85 5,973.85 5,973.85 5,973.85 5,973.85
Depreciation 59,738.46 59,738.46 59,738.46 59,738.46 59,738.46
Total Fixed Cost 582,040.11 582,040.11 583,144.11 583,144.11 584,248.11

23,760.00 2025-2026
Units Units Price Amount Percentage
Sales 23,760.00 121.97 2,897,914.18 100%
Less: Variable Cost 23,760.00 59.35 1,410,166.26 48.66%
Contribution Margin 23,760.00 62.62 1,487,747.92 51.34%
Less: Fixed Cost - 582,040.11
Profit 905,707.82

BEP (Units) = FC 582,040.11

UCM 62.62
= 9,295.44

BEP (Pesos) = FC 582,040.11

CMR 51.34%
= 1,133,728.54

105
 31,680.00 2027-2028
Units Units Price Amount Percentage
Sales 31,680.00 140.67 4,456,512.78 100%
Less: Variable Cost 31,680.00 57.59 1,824,387.68 40.94%
Contribution Margin 31,680.00 83.08 2,632,125.10 59.06%
Less: Fixed Cost - 583,144.11
Profit 2,048,980.99

BEP (Units) = FC 583,144.11

UCM 83.08
= 7,018.67

BEP (Pesos) = FC 583,144.11

CMR 59.06%
= 987,334.97

39,600.00 2029
Units Units Price Amount Percentage
Sales 39,600.00 160.86 6,370,214.82 100%
Less: Variable Cost 39,600.00 53.75 2,128,545.08 33.41%
Contribution Margin 39,600.00 107.11 4,241,669.74 66.59%
Less: Fixed Cost - 584,248.11
Profit 3,657,421.63

BEP (Units) = FC 584,248.11

UCM 107.11
= 5,454.51
BEP (Pesos) = FC 584,248.11
CMR 66.59%
= 877,434.17
106
 Reshoevination is increasing profitability by successfully enhancing its pricing power and efficiency, as evidenced by an
increase in contribution margin. Combining growing sales and contribution margins with constant fixed expenses leads to higher
overall profitability.

Both the BEP in units and the BEP in pesos have decreased over time. The declining BEP indicates that as the
contribution margin increases, fewer units must be sold to meet fixed expenses, which is evidence of Reshoevination’s growing
efficiency and profitability. All things considered, the business is well positioned for future growth, with increasing profitability
and efficient cost-reduction strategies.

Project Evaluation Techniques

Payback Period: Year Net Cash Inflows Cash to Date Investment Payback Period
1 637,195.43 637,195.43 1.00
2 671,501.83 1,308,697.26 967,500.82 0.49
3 1,522,285.68 2,193,787.51
4 1,522,285.68 3,044,571.36
5 2,587,566.46 4,109,852.14

In years 1.49

Payback Reciprocal = 1 1.00

Payback Period 1.49

= 0.67

107
 With a 1.49-year payback period, the business anticipates recovering its initial expenditure in about 1 year and 8 months.
This very short payback period is a good sign for a speedy return because it implies that the investment is likely to start making
money quickly. The payback period for the shoe laundry industry in this country is 2 years and 6 months (Dequina, et. Al, 2023,
vol. 19 no.1). Therefore, the shoe laundry industry and the proposed business project have significant difference since the
business mixed different detergents to form cleaner solutions that can lessen the cost of the cleaning supplies.

The payback reciprocal of 0.67, or 67%, indicates that an annual return of around 67% is anticipated from the
investment. This figure denotes a potentially high-yield investment and gives a general approximation of the annual return rate.

Net Present Value: Year Net Cash Inflows Present Value Factor PV of Cash Inflows
1 637,195.43 0.972877618239 619,913.17
2 671,501.83 0.946490860071 635,570.34
3 1,522,285.68 0.920819773631 1,401,750.75
4 1,522,285.68 0.895844948198 1,363,731.93
5 2,587,566.46 0.871547499515 2,255,187.08
Total PV of Cash Inflows 6,276,153.28
Less: Cost of Investment 967,500.82
Net Present Value 5,308,652.46

NPV Computation:
Net Cash Inflows (2025-2029) 6,940,835.07
Less: Cost of Investment 967,500.82
Net Present Value 5,973,334.25
Total (Cost of Investment/Net Cash Inflows) 13.94%
NPV Discount Rate (Total/5yrs) 2.79%

108
 The estimated earnings (in present value terms) exceed the initial investment, as shown by the positive net present value
(NPV) of 5,308,652.46. This indicates that the investment is probably going to be beneficial and will benefit the business.
Net Present Value Index = Net Present Value 5,308,652.46
Cost of Investment 967,500.82
= 5.49

The business is expected to generate for every peso invested, with an NPV Index of 5.49. The business study appears to
be both profitable and generating a sizable surplus, as indicated by the index of 5.49 – higher than 1.0, which makes it a desirable
investment.
Profitability Index = Present Value of Cash Inflows 6,276,153.28
Cost of Investment 967,500.82
= 6.49

A project with a PI of 6.49 is anticipated to produce 6.49 pesos in present value terms for every peso invested. This shows
that the business study is very profitable, returning more than twice as much as the original expenditure. The business is
considered financially feasible since its net present value (NPV) is positive and has a PI greater than 1.0. A PI of 6.49 in this
instance points to a highly desirable investment opportunity since it is not only recovering its initial investment but also provides
a substantial profit in present value terms.

Internal Rate of Return: Net Cash Inflows Present Value Factor PV of Cash Inflows
Cost of Investment (967,500.82)
Year 1 637,195.43 0.526954440 335,772.96
Year 2 671,501.83 0.277680982 186,463.29
Year 3 1,522,285.68 0.146325226 222,748.80
Year 4 1,522,285.68 0.077106728 117,378.47
Year 5 2,587,566.46 0.040631733 105,137.31
IRR Rate 90% Total PV of Cash Inflows 967,500.82
Less: Cost of Investment 967,500.82
Net Present Value 0.00
109
 The project’s estimated annualized rate of return is indicated by the 90% IRR. Given the high rate, there is a significant
chance of profitability. The business study is favorable since its internal rate of return (IRR) is much higher than either t he
needed rate of return or the business’s cost of capital. Reshoevination is financially feasible and should be considered since the
business’s required rate of return is less than 90%. Due to its higher IRR than the required rate, the project is more feasible.
The industry’s internal rate return (IRR) for shoe laundry in this country is 42.16% (Dequina et.al., 2023, vol.19 no.1).
As a result, the project’s IRR and the industry has significant difference because the project’s IRR is higher than industry of shoe
laundry. The IRR is high because the business creates its own shoe cleaner solutions instead of purchasing ready made products
that makes the business incurred lesser costs.

Conclusion of Financial Study

Reshoevination is a feasible business based on the computations and financial statements from the preceding pages since
there will be an increase in net income every two years and the capital requirement may be recovered after 1 year and 8 months
of operation. Given the increasing cash flows annually, Reshoevination appears to be a good source of income based on the
financial statements. Hence, Reshoevination is a feasible business.

110
References
Dequina, et. al, (2023), vol. 19 no. 1. A Project Feasibility Study on Establishing Instawash
Laundry Shop with Pick-up and Delivery Service in Brgy. Milagrosa, Calamba
City. Philippine E-Journals. https://ejournals.ph/article.php?id

Mahalingam, ET Bureau, (2012). How Sandeep Gajakas built unique shoe-laundry

business in Mumbai & why he rebootd his strategy. The Economic Times/Rise.
https://economictimes.indiatimes.com/small-biz/entrepreneurship/how-sandeep-
gajakas-built-unique-shoe-laundry-business-in-mumbai

111
 APPENDICES
Appendix A: Communication Letter

May 15, 2024

Eamon B. Siyluy
OIC-Permits and Licenses Division
FS. Fajares Avenue, Pagadian City

Dear Sir,

Greetings of peace!

We are one of the students enrolled in the course Acctg 309: Strategic Business Analysis
at Saint Columban College. As part of our requirement, we are currently conducting a
feasibility study on the potential establishment of Shoe Laundry Business in Pagadian City.

In line with this, we would like to request your office to provide a data concerning the
number of shoe repair shops in Pagadian City for the year 2019 to 2023. Your positive
feedback would greatly contribute to the success of or study. Rest assured the data will be
treated with utmost confidentiality.

Thank you and Godspeed!

Sincerely,

Daomencil M. Lagnason
Student

Noted:

Artchelene Pepania, CPA, MBA Susan M. Ramirez, DM

Strategic Business Analysis Instructor Dean, College of Business Education

112
 Appendix B: Computation of Sample Population and Sample Size

The table below shows the PhilAtlas data for the total population of 15 barangays
in Pagadian City in 2015.

Table A-1: Total Population of 15 Barangays in Pagadian City, 2015.

Barangay Population (2015) Annual Growth Rate

Balangasan 14,384 0.90%

Banale 8,099 1.58%

Dao 5,818 2.29%

Gatas 2,245 0.13%

Kawit 8,381 2.70%

Lumbia 4,988 -3.43%

Napolan 8,128 2.24%

San Francisco 3,243 -1.01%

San Jose 7,443 1.51%

San Pedro 7,717 1.05%

Santa Maria 5,158 -2.59%

Santiago 3,292 -1.09%

Santo Nino 8,470 0.35%

Tiguma 12,401 0.34%

Tuburan 9,450 0.19%

Total 109,217
Source: PhilAtlas Website

Based on Table A-1, using the formula below, we can calculate the projected
population of each barangay in 2023. Adding all will result in a total projected population
of 115,739 in 2023.

113
 P = P0 x (1 + r)t

Where,

● P = Total Population after time

● P0 = Starting Population
● r = Growth Rate
● t = Total number of Year

Table A-2: Segmented Market of the Projected Population of 15 Barangay in Pagadian

City.

Year Projected Total Population Segmented Market

(53.79%)

2019 112,240 60,376

2020 113,070 60,283

2021 113,930 61,285

2022 114,819 61,764

2023 115,739 62,258

2024 116,689 62,769

2025 117,670 63,297

2026 118,682 63,841

2027 119,725 64,403

2028 120,800 64,981

Sample Size

Using the Slovin’s formula, we can now calculate for the sample size (n) at segmented
market population size (N) of 62,258 and a margin error I of 0.05.

n = N / (1+Ne2)

Therefore, the sample size for the market research is 398 respondents.
114
 Appendix C: Survey Questionnaire

Name(Optional): ____________________________ Age: ____ Occupation: ______________

Thank you for participating! Your insights in this brief survey will greatly contribute to our
understanding of the Shoe Laundry Business. Your responses are confidential and appreciated.
1. Are you fond of wearing shoes?
 Yes
 No
2. How many pairs of shoes do you have?
 1-2
 3-4
 5-6
 More than 6
3. Check the type of shoes you have.
 Leather Shoes
 Sport Shoes
 Rubber Shoes
 Sneakers
 Boots
 Other: ____________
4. How do you often clean your shoes?
 Daily
 Weekly
 Monthly
 Rarely
 Never
5. How many times do you wear your shoes before washing them?
 1
 2
 3
 4
 More than 4

115
6. Have you ever heard of shoe laundry shops?
 Yes
 No
7. If yes, where did you hear about it?
 Family
 Friends
 Social Media
 Local Advertisement
 Online Search
 Other: _____________
8. Would you consider using a shoe laundry shop for your shoe-cleaning needs?
 Yes
 No
9. How much would you be willing to pay for a pair of shoes to be cleaned at a shoe
laundry shop?
 50-100
 101-150
 151-200
 More than 200
10. If shoe laundry shops were available in your area, how often would you like to get
your shoes cleaned up?
 Daily
 Weekly
 Monthly
 Rarely
 Never
11. If there will be a shoe laundry shop in the city, are you willing to patronize it?
 Yes
 No

116
 Appendix D: Survey Results Summary

Are you fond of wearing shoes?

Yes 336
No 62

No
Yes No 15.58%

Yes
84.42%

Figure C.1. Respondents who are fond of wearing shoes

How many pairs of shoes do you have?

1-2 88
3-4 130
5-6 93
More than 6 87

32.66%,130

22.11%,88 23.37%,93
21.86%,87

1-2 3-4 5-6 More than 6

Figure C.2. How many pair of shoes does the respondents has

117
 Check the type of shoes you have.
Leather Shoes 168
Sports 150
Rubber 236
Sneakers 236
Boots 63
Others 82

59.30%,236 59.30%,236

42.21%,168
37.69%,150

20.60%,82
15.83%,63

Leather Shoes Sports Rubber Sneakers Boots Others

Figure C.3. Type of shoes the respondents has.

How often do you clean your shoes?

Daily 20
Weekly 149
Monthly 129
Rarely 90
Never 0

37.44%,149
32.41%,129

22.61%,90

5.03%,20
0.00%,0

Daily Weekly Monthly Rarely Never

Figure C.4. Frequency of shoes cleaning.

118
 How many times you wear your shoes before
washing them?
1 15
2 62
3 118
4 102
More than 4 101

29.65%,118
25.63%,102 25.38%,101

15.58%,62

3.77%,15

1 2 3 4 More than 4

Figure C.5. Frequency of wearing shoes before cleaning them.

Have you ever heard of shoe laundry shop?

Yes 99
No 299

Yes No
Yes
24.87%

No
75.13%

Figure C.6. Service Awareness of Respondents.

119
 If yes, where did you hear about it?
Family 39
Friends 43
Social Media 57
Local Advertisement 12
Online search 37
Other 7

14.32%,57

10.80%,43
9.80%,39 9.30%,37

3.02%,12
1.76%,7

Family Friends Social MediaLocal AdvertisementOnline search Other

Figure C.7. Answer of the question “Where did you hear about it? Select that all apply.

Would you consider using a shoe laundry shop for

your shoe-cleaning needs?
Yes 335
No 63

No
Yes No 14.57%

Yes
85.43%

Figure C.8. Respondent’s Service Consideration.

120
 How much would you be willing to pay for a pair of
shoes to be cleaned at a shoe laundry shop?
50 – 100 135
101 – 150 135
151 – 200 76
More than 200 52

33.92%,135 33.92%,135

19.10%,76
13.07%,52

50 - 100 101 - 150 151 - 200 More than 200

Figure C.9. Amount that a buyer is willing to pay.

If shoe laundry shops were available in your area,

how often would you like to get your shoes cleaned
up?
Daily 20
Weekly 153
Monthly 142
Rarely 55
Never 28

38%,153
36%,142

14%,55
5%,20 7%,28

Daily Weekly Monthly Rarely Never

Figure C.10. Result of question “If shoe laundry shops were available in your area, how
often would you like to get your shoes cleaned up?”
121
 If there will be a shoe laundry shop in the city, are
you willing to patronize it?
Yes 340
No 58

No
Yes No 14.57%

Yes
85.43%

Figure C.11. Result of the question “If shoe laundry shops were available in your area,
how often would you like to get your shoes cleaned up?”

122
 Appendix E: Projected Demand Computation

Table D.1. Market Segmentation

Years Population Service Awareness Interest Based Segmented Market

2019 43,440 26% 82% 9,261.41
2020 43,761 26% 82% 9,329.85
2021 44,094 26% 82% 9,400.84
2022 44,438 26% 82% 9,474.18
2023 44,794 26% 82% 9,550.08

Average Percentage

Service Awareness Aware 11.33 25.63%

Not Aware 32.89 74.37%

Interest Based Interested 32.75 82.39%

Not Interested 7.00 17.61%

Table D.2. Survey results of the 398 respondents

Age Distribution Service Awareness Interest Based

20-24 30.00% 91.25%

25-29 29.69% 87.50%

30-34 19.23% 90.38%

35-39 26.53% 89.80%

40-44 16.67% 78.57%

45-49 33.33% 72.22%

50-54 22.58% 80.65%

55-59 28.00% 76.00%

60-64 15.79% 63.16%

123
 Appendix F: Projected Supply Computation

Arithmetic Straight Line

Projected Values: Yc = a + Yi – 1

Where: a = Yn – Yc
N–A
Yc = Initial Value N = Number of Years

Yn = Final Value Yi = Value of the year

past

Table F.1. Historical Value: Arithmetic Straight Line

Step 1 Step 2
YEAR Y a + Y–1 = Yc Y – Yc (Y-Yc)2
2019 2,880 - + - = - - -
2020 3,240 1,710 + 2.880 = 4,590 -1,350 1,822,500
2021 7,020 1,710 + 4,590 = 6,300 720 518,400
2022 8,640 1,710 + 6,300 = 8,010 630 396,900
2023 9,720 1,710 + 8,010 = 9,720 - -
TOTAL 2,737,800

𝑌𝑛−𝑌𝑐 9,720−2,880 2,727,800

a= = = 𝟏, 𝟕𝟏𝟎 SD = = 547,560 = √547,560 =
𝑁−1 5−1 5

739.97

Table F.2. Projected Value: Arithmetic Straight Line

YEAR a + Yi – 1 = Yc
2024 1,710 + 9,720 = 11,430
2025 1,710 + 11,430 = 13,140
2026 1,710 + 13,140 = 14,850
2027 1,710 + 14,850 = 16,560
2028 1,710 + 16,560 = 18,720

124
Arithmetic Geometric Curve
Projected Values: Yc = Yi + 1
1+r
Where: Yi + 1 = Value for the year ahead
r = Average rate of increase

Table E3: Historical Values: Arithmetic Geometric Curve

Step 1 Step 2
YEAR Y % Yi + 1 (1 + r) Yc Y – Yc (Y – Yc)2
Increase
(decrease)
2019 2,880 - 9,601 ÷ 1.0041 = 9,562 -6,682 44,642,502.77
2020 3,240 12.50% 9,601 ÷ 1.0041 = 9,601 -6,361 40,460,860.90
2021 7,020 116.6% 9,601 ÷ 1.0041 = 9,640 -2,620 6,866,635.29
2022 8,640 23.08% 9,601 ÷ 1.0041 = 9,680 -1,040 1,081,873.56
2023 9,720 12.50% - ÷ 1.0041 = - - -
TOTAL 31,500 164.74% 93,051,863

3.240−2,880 7,020−3,240
2020 = = 12.50% 2021 = = 116.67%
2,880 3,240
8,640−7,020 8,640−9,720
2022 = = 23.08% 2023 = = 12.50%
7,020 9,720
93,051,863
𝑆𝐷 = = 18,610,372.51 = √18,610,372.51 = 4,313.97
5

Table E.4.Projected Values: Arithmetic Geometric Curve

YEAR Yi – 1 1+r Yc
2024 9,720.00 1.0041 9,760.03
2025 9,760.03 1.0041 9,800.23
2026 9,800.23 1.0041 9,840.59
2027 9,840.59 1.0041 9,881.12
2028 9,881.12 1.0041 9,921.82

125
Statistical Straight Line
Projected Values: Yc = a + bx
Where: a = ƩXY – Bʃx
n n
b = n ƩXY – ƩX ƩY
n ƩX2 – (ƩX)2
Table E.5: Historical Values: Statistical Straight Line
Step 1 Step 2
YEAR Y X X2 XY a a + b(x) = Yc Y-Yc (Y-Yc)2
2019 2,880 1 1 2,880 576 576 + 1,908(1) 396 156,816
= 2,484
2020 3,240 2 4 6,480 576 576 + 1,908(2) -1,152 1,327,104
= 4,392
2021 7,020 3 9 21,060 576 576 + 1,908(3) 720 518,400
= 6,300
2022 8,640 4 16 34,560 576 576 + 1,908(4) 432 186,624
= 8,208
2023 9,720 5 25 48,600 576 576 + 1,908(5) -396 156,816
= 10,116
TOTAL 31,500 15 55 113,580 2,345,760

176,235,684−(423,878)(15) 31,500
𝑎= 𝑎= = 6,300 𝑎 = 6,300 − 5,725 𝑎 = 576
5 5

567,900 −472,500 567,900 −472,500

𝑏= 𝑏= 𝑏 = 1,908
5 (55)−(15)2 275−225

Statistical Parabolic
Projected Values: Y = a + bx + cx2
Where: a = (ƩX4) (ƩY) – (ƩX2) (ƩX2Y)
n(ƩX4) – (EX2)2
b = ƩXY
ƩX2
126
 c = n(ƩX2Y) – (ƩX2) (ƩY)
n(ƩX4) – (ƩX2)2

Table E.6. Projected Values: Statistical Parabolic

YEAR Y X X2 X4 XY X2Y Step 1 Step 2
a+b(x)+c(x2) Yc Y- (Y – Yc)2
= Yc
2019 2,880 - 4 16 -5,760 11,520 6,402.86 + 2,381.14 499 248,858.45
2 1,908(-2) +
(-51.43(4))
=
2020 3,240 - 1 1 -3,240 3,420 6,402.86 + 4,443.43 - 1,448,240.33
1 1908(-1) + 1,203
(-51.43(1))
=
2021 7,020 0 0 0 - - 6,402.86 + 6,402.86 617 380,865.31
1908(0) + (-
51.43) =
2022 8,640 1 1 1 8,640 8,640 6,402.86 + 8,259.43 381 144,834.61
1908(1) + (-
51.43(1)) =
2023 9,720 2 4 16 19,440 38,880 6,402.86 + 10,013.14 -293 85,932.73
1908(2) + (-
51.43(4)) =
TOTAL 31,500 10 34 19,080 62,280 2,308,731.43

34(176,235,648)−(10)(352,507,200) 1,071,000−622,800 448,200

𝑎= 𝑎= 𝑎= 𝑎=
5 (34)−(10)2 170−100 70

6,402.86
19,080
𝑏= = 1,908
10
5(352,507,200)−(10)(176,235,648) 311,400−315,000 −3,600
𝑐= 𝑐= 𝑐= 𝑐=
5 (34)−(10)2 170−100 70
−51.43
Table E.7. Projected Values: Statistical Straight Line
YEAR a (+) b (x) (+) c X2 (=) Yc
2024 6,402.86 (+) 1,908 3 (+) -51.43 9 (=) 11,664
2025 6,402.86 (+) 1,908 4 (+) -51.43 16 (=) 13,212
2026 6,402.86 (+) 1,908 5 (+) -51.43 25 (=) 14,657.14
2027 6,402.86 (+) 1,908 6 (+) -51.43 36 (=) 15,999.43
2028 6,402.86 (+) 1,908 7 (+) -51.43 49 (=) 17,238.86

127
Table E.8. Summary of Standard Deviation: Historical Supply

Arithmetic Straight Line 739.97

Arithmetic Geometric Curve 4,313.97
Statistical Straight Line 684.95
Statistical Parabolic Curve 679.52

Table E.9. Projected Supply of Shoe Laundry for Five Years Using Statistical

YEAR Annual Supply for Shoe Laundry

2024 11,664
2025 13,212
2026 14,657
2027 15,999
2028 17,239

Appendix G: List of Suppliers

List of Suppliers

Tools, Machinery and Equipment

1. Made in China – Online store

2. Ryali Technologies – Online store

3. Tolsen – Online store

4. Mega Tools – Online store

5. Iprice – Online store

6. BE – Pagadian City

128
Office Supplies and Equipment

1. Compro – Pagadian City

2. Emcor – Pagadian City

3. Unicity – Pagadian City

4. Shopee – Online store

5. Mandaue Foam – Online store

6. Homestore PH – Online store

Laundry Supplies

1. Shopee – Online store

2. Clorox PH – Online store

3. Nine Life PH – Online store

4. Angelus Direct – Online store

5. Arm and Hammer – Online store

6. Made in China – Online store

7. Heinz – Online store

Appendix H: Estimated Maximum Output of Shoe Laundry

Table F.1. Annual Plant Capacity

Available Working in minutes 360
Divided by minutes per machine 12
Capacity per machine 30
x no. Of machine 90
Total capacity per day 90
x operating oplan 264
Total Annual Capacity 23,760

129
 Appendix I: Computation of Utilities Consumption

Table G.1. Cost of Electricity Attributed to Service

Items Watts Hours No. of KWH No. of Total Rate Monthl Annual
days items KWH y Consu
Consu mption
mption
Shoe 1200 6 22 158.4 3 475 12.01 5,707.1 68,485.
Washing 5 82
Machine

Drying 2000 6 22 264 1 264 12.01 3,170.6 30,047.

Machine 4 68

TOTAL 106,533
.50

Table G.2. Cost of Electricity Attributable to Selling and Administrative

Items Wa Hours No. KWH No. of Total Rate Monthly Annual
tts of items KWH Consum Consump
days ption tion
Water 120 8 22 21.12 1 21.12 12.01 253.65 3,043.81
Dispenser
Vavuum 600 4 22 52.8 1 52.8 12.01 634.13 7,609.54
Cleaner
Electric Fan 75 8 22 13.2 2 26.4 12.01 317.06 3,084.77
Computer 300 8 22 52.8 1 52.8 12.01 634.13 7,609.54
Flourescent 35 8 22 6.16 3 18.48 12.01 221.94 2,663.34
Tube Light
CCTV 12 24 22 8.64 2 17.28 12.01 207.53 2,490.39
Air 200 8 22 352 1 352 12.01 4,227.52 50,730.24
Conditioner 0
TOTAL 77,951.63

130
Table G.3. Summary of Electricity Costs
Cost of electricity – Service 106,533.50

Cost of electricity – Selling and Administrative 77,951.63

TOTAL 184,485.13

Table G. Cost of water

Liters per barrel 159
Multiply by No. of barrels 10
Total liters (10 barrels) 1,590
Divide by required monthly liters 59,280
No. of barrels required ( per 10 barrels) 37
Mutliply by Minimum cost (10 barrels) 225
Monthly cost 8,389
Annual cost (12 months) 100,664
Table G.5. Cost of Deisel
Est. Hour of power 131nterruption – Annual 72

Hours of operation (16 liters) 10

Times to fuel 7.2

Full tank – Generator (in liters) 16

Total liters to be used – Annual 115.2

Diesel per liter 59.93

Diesel Cost – Annual 6,903.94

131
 Appendix J: Service Cost Requirement

Table H.1. Direct Labor

Position No. of Amount Basis Annual Wages and

Personnel Salaries
Need

Shoe Cleaners 3 P 9,600 Monthly (includes 374,400

13th month pay)

Dryer Machine 1 P 9,360 Monthly (includes 121,680

th
Operator 13 month pay)

TOTAL 496,080

Table H.2. Depreciation Expense

Item Cost Unit Useful Life Annual

Depreciation

Shoe Washing 67,440 4 10 20,232

Machine

Shoe Dryer Machine 39,320 1 10 3,932

Generator 44,177 1 15 2,952.33

Sewage & Industrial 56,880 1 15 3,792

Waste Water
Treatment

Cash Regiter Machine 20,000 1 10 2,000

Water Tank 12,000 1 20 7,205

Total 40,113.33

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Table H.3. Computation for Repairs and Maintenance
Items Annual Repairs and
Depreciation Maintenance
Shoes Washing Machine 20,232 10% 2,023.20
Shoe Dryer Machine 3,932 10% 393.20
Sewage & Industrial Waste 3,792 10% 379.20
Water Treatment System
Generator 2,952.33 10% 295.33
Water Storage Tank 7,205 10% 720.50
Cash Register Machine 2,000 10% 200.00
TOTAL 4,011.3

133
 Appendix K: Articles of Partnership

ARTICLES OF PARTNERSHIP

OF

JDM PARTNERSHIP

KNOW ALL MEN BY THESE PRESENTS:

That we, the undersigned partners, all of legal age, residents and citizens of the
Philippines, have on this day voluntarily associated ourselves together for the purpose of
forming a general partnership under the following terms and conditions and subject to
existing and applicable laws of the Republic of the Philippines:

AND WE HEREBY CERTIFY:

ARTICLE I. Partnership Name: That the name of this partnership shall be JDM
Partnership and shall transact business under the said company name.

ARTICLE II. Business Purpose: That the purpose/s for which this partnership is
formed is/are:
1. Establish a shoe laundry business industry in the community;
2. Be recognize in the market;
3. Provide shoe cleaning services for convenience;
4. Seek to cultivate a habit of regular shoe maintenance among
residents; and
5. Start the expansion of the shoe laundry industry in the Philippines.

ARTICLE III. Principal Place of Business: That the principal place of business
of this partnership shall be located at RT Lim Street, Purok Sampaloc, Balangasan.,
Pagadian City.

134
 ARTICLE IV. Term of Existence: That this partnership shall have a term of 20
years from and after the original recording of its Articles of Partnership by the Securities
and Exchange Commission.

ARTICLE V. Partners’ Circumstances: That the names, nationalities and

complete residence addresses of the partners are as follows:

Name Nationality Complete Residence Address

Melbert John M. Brillantes Filipino San Carlos, Tukuran
Janice A. Dela Rama Filipino Santa Maria, Pagadian City
Daomecil M. Lagnason Filipno Santa Maria, Pagadian City

ARTICLE VI. Capital Contributions: That the capital of this Partnership shall
be the amount of one million nine hundred fifty-three thousand one hundred forty-two (P
1,953,142.60), Philippine Currency, contributed in cash by the partners, as follows:

Name Amount Contributed

Melbert John M. Brillantes 585,942.78
Janice A. Dela Rama 585,942.78
Daomencil M. Lagnason 781,257.04

That no transfer of interest which will reduce the ownership of Filipino citizens to
less than the required percentage of capital as provided by existing laws shall be allowed
or permitted to be recorded in the proper books of the partnership.

ARTICLE VII. Sharing Ratios: That the profits and losses of this partnership
shall be divided and distributed proportionately on the ratio of the capital contribution of
each partner.

135
 ARTICLE IX. Management: That this partnership shall be under Janice A.
Dela Rama and Melbert John M. Brillantes, as General Managers, who shall be in charge
of the management of the affairs of the company. He shall have the power to use the
partnership name and in otherwise performing such acts as are necessary and expedient in
the management of the firm and to carry out its lawful purposes.

ARTICLE X. Undertaking to Change Name: That the partners undertake to

change the name of this partnership, as herein provided or as amended thereafter,
immediately upon receipt of notice or directive from the Securities and Exchange
Commission that another corporation, partnership or person has acquired a prior right to
the use of that name or that the name has been declared as misleading, deceptive,
confusingly similar to a registered name, or contrary to public morals, good customs or
public policy.

IN WITNESS WHEREOF, we have hereunto affixed our signatures this 1st day
of April, 2024, at Pagadian City

MELBERT JOHN M. BRLLANTES JANICE A. DELA RAMA

TIN TIN

DAOMENCIL M. LAGNASON
TIN

136
 ACKNOWLEDGEMENT

REPUBLIC OF THE PHILIPPINES)

City of Pagadian ) S.S.

BEFORE ME, a Notary Public, for and in Philippines, this 31ST day of April 2024,
personally appeared the following persons:

Name TIN/ID/Passport No. Date & Place Issued

Janice A. Dela Rama Pagadian City
Melbert John M. Brillantes Pagadian City
Daomencil M. Lagnason Pagadian City

Known to me and to me known to be the same persons who executed the foregoing
Articles of Partnership constituting of 4 pages, including this page where the
acknowledgement is written, and they acknowledged to me that the same is their free and
voluntary act and deed.

WITNESS MY HAND AND SEAL on the date and place above written.

NOTARY PUBLIC
Doc. No.
Page No.
Book No.
series of 2024.

137
Appendix L: SSS Contrition Table

138
Appendix M: Pag-IBIG Contribution Table

Appendix N: PhilHealth Contribution Table

139
Appendix O: Bank of the Philippines Islands Time Deposit- Interest Rate

140
Appendix P: Feasibility Study Receipt

141
 CURRICULUM VITAE

Personal Information:

Name: Melbert John M. Brillantes

Date of Birth: February 19, 2002
Address: San Carlos, Tukuran, Zamboanga del Sur
Civil Status: Single

Educational Background:

Elementary: Tukuran Central Elementary School

Junior High School: Tukuran Technical Vocational High School
Senior High School: Tukuran Technical Vocational High School
College: Bachelor of Science in Accountancy
Saint Columban College
School Membership:

Member, Junior Philippine Institute of Accountants (JPIA)

(2023-2024)

142
Personal Information:

Name: Janice A. Dela Rama

Date of Birth: February 21, 2003
Address: Sta.Maria, Pagadian City, Zamboanga del Sur
Civil Status: Single

Educational Background:

Elementary: Ben Sagun Memorial Elementary School

Junior High School: Zamboanga del Sur National High School
Senior High School: Zamboanga del Sur National High School
College: Saint Columban College

School Membership:

Member, Junior Philippine Institute of Accountants (JPIA)

(2023-2024)

143
Personal Information:

Name: Daomencil M. Lagnason

Date of Birth: May 19, 2003
Address: Mama, Dumalinao, Zamboanga del Sur
Civil Status: Single

Educational Background:

Elementary: Mama Elementary School

Junior High School: Zamboanga del Sur National High School
Senior High School: Zamboanga del Sur National High School
College: Bachelor of Science in Accountancy
Saint Columban College

School Membership:

VP-Sponsorship, Junior Philippine Institute of Accountants (JPIA)

(2023-2024)
Choreographer, Kalinaw Dance Ensemble (KDE)
(2023-2024)

144