Pamantasan ng Lungsod ng Maynila

General Luna cor. Muralla St., Intramuros, Manila

College of Accountancy

A Feasibility Study on Establishing a Computer Rental Shop

DigiSurf

Submitted by:

Angie S. Rosales

Rhea Daphne A. Daniel

BSA III-I

Submitted to:

Dr. Erlinda Cayao

August 22, 2016

 TABLE OF CONTENTS

Topic Page

INTRODUCTION .............................................................................................................. 1
I. Background of the Study ........................................................................................ 1
II. Name of the Business.............................................................................................. 3
III. Location .................................................................................................................. 3
IV. Statement of the Problem ........................................................................................ 3
V. Scope and Limitations............................................................................................. 4
MANAGEMENT ASPECT ................................................................................................ 6
Form of ownership....................................................................................................... 6
Steps in business registration ....................................................................................... 7
Company’s Vision and Mission Statements .............................................................. 11
Organizational Chart.................................................................................................. 12
Labor Requirements .................................................................................................. 13
Compensation and Benefits of the Employees .......................................................... 14
Internal Control.......................................................................................................... 18
Company Policies, Rules and Regulations ................................................................ 19
MARKETING ASPECT ................................................................................................... 23
Service Description.................................................................................................... 23
Target Market ............................................................................................................ 23
Market Segmentation ................................................................................................. 24
Promotional Mix ........................................................................................................ 26
SWOT Analysis ......................................................................................................... 26
Print advertisement .................................................................................................... 28
TECHNICAL ASPECT .................................................................................................... 29
Company logo............................................................................................................ 29
Services ...................................................................................................................... 30
Operating Process ...................................................................................................... 31
Business Operations .................................................................................................. 32
 Equipment .................................................................................................................. 33
Furniture and Fixtures ............................................................................................... 34
Supplies Inventory ..................................................................................................... 34
Intangible Asset ......................................................................................................... 35
Plant Location ............................................................................................................ 35
Structures ................................................................................................................... 36
Utilities ...................................................................................................................... 36
FINANCIAL ASPECT ..................................................................................................... 37
Financial Assumptions .............................................................................................. 37
SOCIO-ECONOMIC ASPECT ........................................................................................ 38

TABLE OF FIGURES

Figure 1. Company’s Organizational Chart ...................................................................... 12

Figure 2. Labor Requirements .......................................................................................... 14

Figure 3. Operating Process .............................................................................................. 31

Figure 4. Equipment.......................................................................................................... 34

Figure 5. Furniture and Fixtures ....................................................................................... 34

Figure 6. Supplies Inventory ............................................................................................. 35

Figure 7. Intangible Asset ................................................................................................. 35

 INTRODUCTION

I. Background of the Study

Not all people own a gadget or a device that is capable to be used for

internet services. That is why not all people also receive the benefits of advanced

technology. As a result, entrepreneurs came to an idea to establish an internet café

for these kinds of people.

An Internet café, also known as a cybercafé, is a place which provides

internet access to the public, usually for a fee which rate is time-based. These

businesses usually provide snacks and drinks, hence the café in the name. Before,

a café is known to be a place where people spend their time sitting around with a

coffee and snack on their table while either reading some sort of works or

engaging with someone in a serious talk. However, because these things can now

be done through high-tech devices, internet and computers entered the picture.

The convenience of having some engagements with someone or even reading

literary works was not only improved, but added up to needs of those people who

have no access to the internet.

The first internet café in the world was built in South Korea on March

1988 and it was called Electronic Café. It had two 16bit computers connected to

online service networks through telephone lines. After three years, the online café

phenomenon reached the United States and several internet cafés were built and

established all over the world. Even in the Philippines, small internet cafés could

be noticed anywhere particularly in those areas surrounded by universities and

recruitment agencies.
 2

Upon a research, there are numerous types of internet cafés that can be

considered in establishing one. There is the traditional internet café which has

multiple user terminals (often 20 or more) setup in a commercial retail space, with

a staff member taking manual payments. Most traditional internet cafes have

fairly cheap, low-spec computers, which are often simply left installed on a

desktop with minimal physical security. These internet cafes usually also offer

add-on services such as faxing, photocopying, laminating, CD/DVD burning,

phone calls, food and drinks, and much more. Gaming cafes, on the other hand,

often have 30 to 50 user terminals setup in commercial retail space. These are

almost always staffed and often run gaming competitions and tournaments with

cash or other prizes. There are also self-serve internet cafés often found in

locations with high passing foot traffic, standalone internet kiosks, information

and advertising-based kiosks, wireless hotspots, DSLAMs and in-room internet

systems.

Putting up an internet café is not as easy as to sari-sari stores. The process

is complicated though the set-up is often provided by Internet Café builders as a

package. When one plans to raise a business like this, he has to ponder over many

considerations to ensure profitability in the future. Establishing an internet café

today may not seem a different thing considering its increasing number for the

past years. Even its profitability may not be anticipated accurately because of

several competitors. But upon considering its large market, which matters the

most, the researchers have decided to make a feasibility study on establishing an

internet café that will surely benefit students and professionals.

 3

II. Name of the Business

The name of the business will be DigiSurf Computer Shop. Its name is

consisted of two words, Digi and Surf. The first word Digi represents the

business’ printing and photocopying services while the second word Surf refers to

another service being offered which is internet surfing.

People remember the business by its name and its offered services. With

this in mind, the name DigiSurf was created in aim to be recognized and be easily

remembered by its prospective customers.

III. Location

DigiSurf Computer shop will be located at the Ground floor of ECJ

Building along Victoria St., Intramuros, Manila

IV. Statement of the Problem

At the end of this study, the proponents aim to provide an answer to the

following identified questions:

For management aspect:

 What are the pre-operating activities to be undertaken by the business?

 What specific form of business organization will best fit the nature of the

proposed business?

 What are the duties and skills required from employees?

 What is the remuneration plan and policies to be abided by employees?

For marketing aspect:

 Who will be the target market of the business?

 4

 What kind of services will be offered by the business and the strategy to

be used to advertise those offerings?

 What effective pricing technique will be used to meet the purchasing

power of the customers?

For technical aspect:

 What name of the business can be used to strikingly attract the customers?

 What is the workplace layout that will allow employees to carry out their

duties effectively and efficiently?

 What are the necessary utilities and equipment to be used?

For financial aspect:

 How much investment will be needed to establish the business?

 What mode of financing will be employed?

 What is the projected revenue to be earned and projected expenses to be

incurred at the end of the year?

 Will the business bring in enough revenue to cover operating expenses?

 Will the business reach the break-even point, or will have to either lose

money or make profit?

For socio-economic aspect:

 How will the general public benefit from the proposed business?

 Will this proposed business contribute to economic growth as a whole?

V. Scope and Limitations

This study aims to analyze the different aspects to consider in setting up a

business which include management, marketing, technical, financial and socio-

 5

economic aspect in order to evaluate the feasibility of establishing a computer

rental shop or sometime called internet café. For management, the processes in

establishing a business and the proper internal organization structure were

discussed. For marketing, the target market of the business and the services to be

offered were described. Even the strengths, weaknesses, opportunities, and threats

were also elaborated. For technical, the plant location was designated and the

equipment needed was listed. For financial aspect, the investment needed to put

up this business was simplified together with the projections of income that may

be derived. Lastly, for socio-economic, details about the possible contributions of

this proposed business on the community were detailed. On the other hand, to

make this study more understandable, some areas of study were excluded. These

are profile of each prospective customer, history of the business location, and the

functions of the Government agencies who set rules on which businesses should

comply with.
 6

MANAGEMENT ASPECT

The success of any business depends heavily on the effectiveness of its

management. Good managers need to make the right decisions and ensure the business is

able to grab any opportunities open to it, and at the same time, protect the business by

acting against any threats to its welfare.

Management refers to a set of functions designed to get things done through and

with people through efficiency in resources utilization to effectively attain predetermined

goals. In this aspect, DigiSurf will be able to present its effective and efficient

management structure designed to attain its goals.

Form of ownership

The owners decided to form a general partnership consisting of two general

partners. Partnership is a form of a business entity owned by two or more persons called

partners who have agreed to contribute money, property, and industry to a common fund

with the intension of dividing the profits among themselves. General partners contributed

equal share to form the total capital for the business and agreed to divide the

responsibility for management and liability equally, as well as the shares of profit or loss

according to their internal agreement written on the Articles of Partnership.

Forming a Partnership has the following advantages:

 Businesses as partnerships do not have to pay income tax; each partner files the

profits or losses of the business on his or her own personal income tax return. This

way the business does not get taxed separately.

 7

 Easy to establish.

 There is an increased ability to raise funds when there is more than one owner

 Wider pool of knowledge, skills, and contacts.

 Improved management with more than one owner.

Steps in business registration

A. SEC Registration

1. Verification and reservation of the proposed partnership name.

a. If proposed name is allowed by the system, the reservation and

confirmation notice is printed and given to the applicant

2. Payment of Reservation Fee

a. After payment, you will get a Name Verification Slip, which is submitted

together with the other requirements:

 Articles of Partnership

 Registration Data Sheet

 Affidavit of a partner undertaking to change partnership name

 Certificate of Bank Deposit

3. If requirements were submitted completely, the registrant may proceed to the

payment of filing fee and file application.

4. After receipt of the application, CPRD staff generates the Certificate of

Recording of the Articles of Partnership bearing applicant`s SEC registration

no. and Unified Registration Report (URR)

 8

5. Presentation of Official Receipt to Releasing Unit. The Asst. Director reviews

the application and forwards it for approval of the CRMD Director.

B. DTI Registration

Registration of business name is optional for partnership using their

partnership name. However, partnership name must register such business name.

1. A certified true copy or photocopies of the Articles of Partnership, by laws,

respectively, and the Registration Certificate duly approved by the Securities

and Exchange Commission (SEC) must be submitted.

2. If the partnership is fully owned by an alien or the capital of which is more

than 40% owned by aliens, the SEC certificate must specify that it is in

accordance with the Foreign Investment Act of 1991.

3. In case there is an increase of capital, submit certificate issued by the SEC.

C. Mayor’s Business Permit

Steps for Securing a Business Permit (for New Business in Manila)

1. Application and submission of requirements

a. Barangay Clearance

b. Certificate of SEC Registration / Articles of Partnership (for

Partnership)

c. Authorization Letter of owner with ID

d. Lease Contract / Tax Declaration

e. SSS (Certification / Clearance)

f. CTC (Community Tax Certificate-CEDULA)

 9

2. Assessment of business tax and regulatory fees

3. Payment of license and regulatory fees

4. Release of Business Permit

D. BIR Registration

1. Documentary Requirement for Partnership

a. Copy of SEC Registration and Articles of Incorporation/Articles of

Partnerships, as the case may be;

b. Copy of Mayor’s Business Permit or duly received Application for

Mayor’s Business Permit, if the former is still in process with the LGU

2. Documentary Requirement to new Authority to Print

a. BIR form 1906 together with the following:

 Job order

 Final & clear sample of Principal & Supplementary

Receipts/Invoices

3. Documentary Requirement to new Registration of Book of Accounts

a. New sets of books of accounts

4. Procedures

a. Accomplish BIR Form 1903 and submit the same together with the

documentary requirements to the RDO having jurisdiction over the

place where the head office and branch, respectively.

b. Pay the Annual Registration Fee (P500.00) at the Authorized Agent

Banks (AABs) of the concerned RDO.

 10

c. Pay Documentary Stamp Tax (DST) (loose DST / BIR Form 2000* for

DST on Contract of Lease, etc.). Present proofs of payment.

d. Submit requirements for ATP and registration of books of accounts.

e. Attend the taxpayer’s initial briefing to be conducted by the RDO

concerned for new registrants in order to apprise them of their rights

and duties/responsibilities.

f. The RDO shall then issue the Certificate of Registration (Form 2303)

together with the “Ask for Receipt” notice, Authority to Print and

Books of Accounts.

 Deadlines

Partnerships, Associations, Cooperatives, Government Agencies and

Instrumentalities (GAIs) shall accomplish and file the application before or

upon filing of any applicable tax return, statement or declaration as required

by the Code, as amended

E. SSS Registration

Companies hire employees to run their business. Employers should also

register their businesses and employees with the SSS. An employer who does not

report employees, temporary or provisional employees is violating the Social

Security (SS) Law. Registering employees ensures that, as an employer, you are

lawfully remitting your employer’s contribution to the agency for the benefits of

your employees. SS benefits include disability pension, retirement, funeral

benefit, sickness allowance, loans and other benefits.

 11

F. Phil Health Registration

As required by the new National Health Insurance Act (RA 7875 / RA

9241), all employers are required to register their employees with Phil Health and

remit to the agency their share of contribution. Aside from being mandatory, this

is also to ensure that employees are adequately covered by health insurance that

will aid them in hospitalization costs and other health care needs.

G. Pag-ibig Fund Registration

By virtue of RA 7742, SSS members earning at least 4,000 Philippine

Pesos a month must be registered with HDMF (the agency that administers the

Pag-Ibig Fund). Like SSS and Phil Health, employers must also register their

business and remit their employers’ share of contribution for employees to the

agency. HDMF works towards providing Fund members with adequate housing

through an effective saving scheme.

Company’s Vision and Mission Statements

Vision

To become the most trusted computer rental shop in Intramuros, known

for its excellent information, communication and technology services, with a

friendly and comfortable atmosphere at a reasonable price for students.

Mission

DigiSurf formulated the following mission statements to attain its goals:

 12

 To provide an affordable access to the resources of the Internet and

other online services.

 To provide a place with a comfy ambiance where customers can enjoy

while surfing.

 To deliver consistent service to satisfy customers’ needs.

Organizational Chart

To have an efficient and properly functioning business, tasks are divided into

different personnel. Creating a structure with clearly defined roles, functions, scopes of

authority and systems help make sure each person are working together to accomplish

everything the business must do.

Owners

General Manager

Cashier Computer Service

Technician Attendant 1

Service

Attendant 2

Figure 1. Company’s Organizational Chart

 13

Labor Requirements

Positions Qualifications Functions

• Age 25-35 years old, Male/ • Monitors, reviews and

Female reports on all marketing
• Business or marketing-related activity and results
degree or equivalent • Determines and manage the
professional qualification marketing budget
General
• Experience in all aspects of • Delivers marketing activity
developing and maintaining within agreed budget
Manager
marketing strategies • Develops pricing strategy
• Technical marketing skills
• Proven experience in
customer and market research
• • Experience with relevant
software applications
• 18- 23 years old, • Accepts payments
Male/Female • Makes change
• Must be at least a college • Provides information
Cashier • Fills out forms
level preferably business
• Provides receipts for goods
related courses and services.
• With experience as a cashier
for at least 6 months
• 18-25 years old, Male/Female • Supports the customer needs
• College level preferably at all times.
Service computer related courses • Attentive to the requests and
• With pleasing personality complains of customers as
Attendant well as
• Helps in maintaining
cleanliness and orderliness
of the place.
• 23-30 years old, Male/Female • Tests and installs computers
• College graduate preferably hardware systems,
computer related courses • Connects PCs in a network
• Extensive and diversified and sets up peripheral
Information. Technology equipment, hardware
Computer
experienced. components and allied
• In-depth knowledge on devices.,
Technician
troubleshooting. • Checks performance-related
• Strong communication and issues and network support
interpersonal skills. problems,
• • Responds to complaints
and queries, provides
technical advice, and solves
 14

employees’ technical
problems by phone or in
person.

Figure 2. Labor Requirements

Compensation and Benefits of the Employees

A. Social Security Systems (SSS) Contributions

Republic Act No. 8282, otherwise known as the Social Security Act of

1997, refers to the social security system in the Philippines that is initiated,

developed and promoted by its Government. The social security system is aimed

at providing protection for the SSS member against socially recognized hazard

conditions, such as sickness, disability, maternity, old age and death, or other such

contingencies not stated but resulted in loss of income or results to a financial

burden.

Benefits under the Employees' Compensation program include:

1. Medical services, appliances and supplies provided to the afflicted member

beginning on the first day of injury or sickness, during the subsequent period

of disability, and as the progress of recovery may require.

These benefits, however, are limited to the ward services only of an accredited

hospital and physician ward services, consist of all the services an in-patients

would ordinarily receive in a hospital.

2. Rehabilitation services, consisting of medical, surgical and hospital treatment.

The SSS also provides as soon as practicable, a balanced program of remedial

treatment for handicapped members.

 15

3. Income cash benefit for:

a. Temporary total disability or sickness.

An income cash benefit equivalent to 90 per cent of the average

daily salary credit with a minimum of P10 and a maximum of P200

(effective Nov. 1, 1996).

It is payable for a period not longer than 120 consecutive days. If

the injury requires more treatment, the period may be extended up to 240

days. If it persists after this period, the injury will be considered as

permanent total disability.

This benefit is advanced by the employer every regular payday.

The amount legally paid by the employer is reimbursed 100 per cent by

the SSS in the form of check or thru the bank.

b. Permanent total disability (loss of two limbs, permanent complete

paralysis of two limbs, etc.).

This benefit is a monthly pension paid for as long as the injured

lives plus 10 per cent for each of the five dependent children beginning

with the youngest and without substitution.

The monthly pension is guaranteed for five years but will be

suspended if the employee is gainfully employed, recovers from

permanent total disability, or fails to present himself/herself for

examination at least once a year upon notice by the SSS or fails to submit

a quarterly medical report certified by the attending physician as required

under Section 5, Rule IV of the EC law. The minimum monthly income

 16

benefit is P2,000. Beginning Jan. 1, 1991, a permanent total disability

pensioner is also given a supplemental allowance in addition to the

monthly pension. This allowance will provide additional financial

assistance to meet the extra needs arising from the disability. Effective

May 1, 1993, the supplemental allowance is P575 a month.

Upon the death of an EC permanent total or permanent partial

disability pensioner, the SSS will pay to the primary beneficiaries 100 per

cent of the monthly pension. In addition, the dependents will be paid the

dependent’s pension. If the deceased pensioner has no primary

beneficiaries, the SSS will pay to the secondary beneficiaries the

remaining balance of the five-year guaranteed period, excluding the

dependent’s pension.

c. Permanent partial disability (such as loss of one thumb, finger, leg).

A monthly pension is provided to the member equivalent to the

pension for permanent total disability but limited to the number of months

designated by law for a particular disability. The minimum monthly

pension is P2,000. However, if the period of permanent partial disability

pension is less than a year, the benefit may be paid in lump sum.

d. Death.

A monthly pension is provided to the deceased member's primary

beneficiaries, plus 10 per cent of such benefit for each of five dependent

children, subject to some limitations. In the absence of primary

beneficiaries, the secondary beneficiaries are entitled to the monthly

 17

pension but not to exceed 60 months. The minimum monthly pension for

the death benefit is P2,000.

Under the EC program, a funeral benefit of P10,000 will also be

paid to any person who actually shouldered the burial expenses of the

deceased member.

B. Contribution to National Health Insurance Program (NHIP)

The employee and his/her employer(s) are to contribute for the medical

insurance of the said employee in accordance to the Republic Act 7835 on

Medicare Program which is administered by the Philippine Health Insurance

Corporation (Phil health). Monthly employee contribution depends on the

employee's actual monthly salary. The contribution schedule is provided by Phil

health. (See: Phil health Premium Contribution Schedule)

C. Contribution to Home Development and Mutual Fund (HDMF)

The employer(s) is required to contribute per month not less than P100.00

to the employee's Home Development and Mutual Fund. In accordance to the

periodic remittance schedule provided by HDMF, the employer(s) will remit this

contribution, in addition to that of the employee's, which is to be deducted from

his/her payroll.

D. The 13th Month Pay

As mandated by the Presidential Decree No. 851, the employee shall

receive a bonus salary equivalent to one (1) month, regardless of the nature of

his/her employment, not later than December 24 of every year.

 18

E. Service Incentive Leave

Book III, Chapter III of the Labor Code of the Philippines covers the

employee's benefit for Service Incentive Leaves. According to Article 95, an

employee who has rendered at least one year of service is entitled to a yearly five

days service incentive leave with pay. (See: Article 95, Conditions of

Employment)

Internal Control

DigiSurf have the following internal controls necessary to prevent mishandling of

funds and to safeguard against loss, and also to protect employees from inappropriate

charges of mishandling funds by defining responsibilities in the cash handling process.

Non-current Assets

 Laptop computers and data projectors are popular targets for theft, so lock them to

a desk.

 Once any asset is purchased, it should be recorded on an asset register with all

relevant details. (This helps with the accounting as well.)

 Establish an asset register. It is important that you maintain a proper asset register

and that you review your physical assets regularly against this register,

investigating any missing items.

Cash

 Cash and similar items shall be safeguarded at all times. Physical access shall be

restricted to authorized personnel and owner.

 Owners should review the cash register regularly but not at predictable intervals
 19

 All cash must be stored in a locked drawer.

 At the end of each day, any cash should be remitted to the owners.

 Combinations and passwords of the locked drawer should be given to as few

people as is necessary.

 Combinations and passwords should be changed periodically, at least annually, or

when someone leaves the department.

Company Policies, Rules and Regulations

Owners expect all employees to abide by the rules of conduct and general safety

at all times while working. Employees who violate any company rule or regulation will

be disciplined fairly, consistently and in proportion to the seriousness of the

circumstances.

A. General conduct and job performance rules

The following list includes the major items deemed sufficient cause for

disciplinary action:

1. Unauthorized possession of company property, or of the property of a fellow

employee.

2. Willful destruction of company property or the property of a fellow employee.

3. Deliberate misuse or unauthorized use of company supplies, materials,

machines or tooling.

4. Fighting with, threatening or attempting bodily injury to another employee on

company premises.
 20

5. Visiting, loitering, loafing, lounging or sleeping during scheduled working

time, or leaving one’s work area during working time without permission of

one’s supervisor, except for scheduled breaks.

6. Unexcused absenteeism or tardiness.

7. Interfering with another employee’s efforts to meet work standards.

8. Violation of sanitary or safety rules.

9. Intoxication during working hours, including bringing intoxicating beverages,

marijuana or other hallucinogenic drugs on company property, the consuming

of the same on company property, or any other violation of the company’s

substance abuse policy.

10. Tampering with or mishandling any mechanical equipment.

11. Unauthorized disclosure of confidential information.

B. General safety rules

Safety rules are primarily for employee protection. Injuries impose severe

burdens on employees and their families. They often result in loss of pay and can

lead to permanent disability or disfigurement.

1. Waste and trash containers must be used to keep work areas clean and orderly.

2. All water, oil, or grease on the floor must be removed immediately.

3. All gasoline and other flammable liquids must be stored in approved and

properly labeled safety containers at all times.

 21

4. All standard safety procedures must be followed. When starting, stopping or

changing the speed of machinery, operators must ensure proper clearance of

other individuals, debris and materials.

5. Hands and feet must not be placed in moving machinery.

6. Machines appearing to be electronically or mechanically unsafe must not be

operated. Under such circumstances, such equipment must be locked or

tagged out, and the employee must notify his or her supervisor immediately.

7. When repairing or adjusting equipment, employees must follow safe operating

procedures, such as the proper use of lockouts and safe buttons. Further, the

power source to such equipment must be locked or tagged out.

8. Employees must familiarize themselves with all firefighting and evacuation

procedures. Employees should further familiarize themselves with all exits

proximate to their work area. Access to firefighting equipment must be kept

clear.

9. The use of all fire extinguishers, regardless of type, must be reported to the

employee’s supervisor and exchanged for a full extinguisher.

10. Employees must be aware of the location of safety showers and eye wash

stations. Such areas should be free of any obstructions.

11. No smoking is allowed in any facility, except in specifically posted smoking

areas.
 22

12. Tools, personal safety and other equipment should be maintained in good

serviceable condition.

13. Disorderly conduct, running or horseplay on company premises is prohibited.

14. All work-related injuries and accidents (including those involving company

vehicles) regardless of their severity, must be reported immediately to the

employee’s supervisor.

15. All injured employees are required to report for treatment as requested by a

doctor or medical provider. Employees will not be permitted to return to work

without written approval of a doctor or medical provider.

16. All caution signs must be observed.

C. Disciplinary Actions

Upon breech of the company rules, the following disciplinary actions will

be administered:

1st Warning - Verbal Warning.

2nd Warning - Written Warning.

3rd Warning - Suspension or Permanent Dismissal/Termination

All notices shall be explained to any employees, regarding violations.

Copies shall be distributed to all applicable parties and personnel records.

 23

MARKETING ASPECT

Service Description

DigiSurf will be the name of this proposed business whose goal is to cater the

market’s need of computer rental and printing services. The business got its name from

the idea of the proponents to make it be heard exceptionally when compared with names

of other computer rental shops. Through this business name, the proponents believe that

the business will be easily recognized by customers who would always want the comfort

as they receive the service from the business.

Like what was stated in the previous parts, the business will be rendering five

specific services. These are computer rental, printing, photocopying, and projector rental.

These services will be provided in the usual manner by employees who will be trained to

accommodate all the customers coming despite their increasing number.

Target Market

Upon considering the demographic aspect of the location specifically Intramuros,

the proponents intended to set students as their target market. Most of these students are

from surrounding universities like the Pamantasan ng Lungsod ng Maynila, Lyceum of

the Philippines University, Manila High School, and those who are training for maritime

occupation. Tourists and travellers are also included as target market knowing that

Intramuros is one of tourist destinations in the Philippines.

It should also be noted that all proposed services of this business are not limited to

abovementioned market. Anyone who is in need of the services that will be offered may
 24

visit the place of the business and avail them. These people may be those local residents

around the business location who do not have personal computer at home.

Market Segmentation

The target market selected comprise mostly of people whose ages range from 15

to 45 years old but the highest usage comes from those with ages ranging from 19 to 30

years old. Most of the users come irregularly or one-off and their reasons for visiting

internet cafés commonly include mailing, internet surfing, and printing. Considering

these distinguishing characteristics that might be different among users, the proponents

have made market segmentation to gain knowledge of what quality of service is

appropriate for each segment that will be determined.

Based on previous studies regarding feasibility of establishing an internet café, the

following segments have been defined:

 Time-sensitive customers

This segment is consist of customers who choose computer rental shops

because they urgently need its services and it would be impractical to go back

home or find other shops that will fulfill their demand. This includes students who

suddenly needed a photocopy of their documents or printed copy of their files,

and travellers who had unexpected errands that have to be done over the internet.

Because they lack enough time, DigiSurf Computer shop has to serve them with

swiftly but enthusiastically as if there is no time pressure. Since the manner of

accommodation will be on a first come-first serve basis, these people will not be
 25

prioritized over the other customers but the employees will make sure that each

customer will be served fairly.

 Price-sensitive customers

These customers are those who choose computer shops based on the price

of its services though they still consider the quality. These customers include

those students who look for a cheap printing cost because they have so many files

to print or so much to papers to photocopy. Due to this matter, this proposed

business has sworn to make its services be obtainable at a reasonable price so that

the loss that might come from offering at lesser cost will be offset by additional

profit from increase in customers.

 Quality-sensitive customers

Customers of this segment are believed to be those who go to computer

shops because its services are rendered with utmost quality. For example, in terms

of printing services, computer shops use high-quality bond papers and state of the

art printers in order to satisfy the needs of customers. In the case of photocopying,

computer shops employ fast-working photocopiers to maximize time of

photocopying. That’s why this proposed business will acquire and utilize high-

quality materials and equipment to guarantee this utmost quality being described.

 Convenience-sensitive customers

Included in this segment are those customers who do not personal

computer at home and relies only on their internet-capacitated phones. However,

use of phones for an activity like making a spreadsheet or a Powerpoint

presentation is impractical. There are also cases where the internet connection at
 26

home is not that fast and reliable. Because of these problems, people would rather

go to internet shops for convenience or easy access of these services which they

could not obtain at home.

Promotional Mix

General Strategy

One of the most effective promotional strategies today among various

businesses is the power of word of mouth. Here, the object of the promotion is the

customers themselves and their perception about the business based on its products

and services. Provided this fact, the firm’s advertising and operating activities will

revolve around an objective to impose on customer’s perception that the business is

offering quality services with reasonable prices.

Specific Strategies

1. The business logo is created to be suggestive, remarkable, and different from

competitors for it to be remembered easily by prospective customers.

2. Leaflets or flyers containing significant information about the business will be

distributed at the location where the target market settles.

3. A tarpaulin as part of print advertisement will be displayed in front of the business

to make customers be aware of the services it renders.

SWOT Analysis

1. Strengths

 Knowledgeable and approachable staffs

 27

 Comfortable and friendly ambiance

 High-quality and modern equipment

 Affordable hourly computer rent

 Computers are installed with various games for entertainment

 Shop is installed with CCTV cameras for security

2. Weaknesses

 Can only accommodate 15 customers at the same time

 Operating/opening time is limited

 Limited use of internet

3. Opportunities

 Growing population of internet users

 The location is surrounded with different universities

4. Threats

 Increasing local competitors

 Updating software and hardware components of a computer is costly

 Rapid change in technology

 28

Print advertisement
 29

TECHNICAL ASPECT

The aim of this study is to determine the combination of services to be rendered

and other associated factors including labor requirements, workplace layout, equipment

to be employed and electric supply that will guarantee an operation at a minimum cost

and maximum profit.

Company logo

This is the company logo of DigiSurf which clearly shows the main instrument

that people use when they are in an internet café. That is the computer. With the use of

computer, people are able to surf through social media and search engines and from there,

they create documents and decide to print those. That is when this proposed business

enters the picture and renders these services to customers.

 30

Services

1. Typing

Typing is one of the services that will be offered together with internet

surfing. This will be rendered by installing in each computer a software called

Microsoft Office in which customers can type documents, create presentations,

and layout newspaper contents. The price is not determinable because it is up to

customers if they would like to have this service as they avail internet surfing.

2. Digital print

This is the main service that the business is offering to its target market.

To be able to render this, the business will buy and use printers of high quality so

that unexpected interruptions would not happen. Digital printing will be offered at

a charge that is most affordable to customers. The price will be in a per-page basis

and the customer is allowed to do the printing by himself.

3. Computer rent for Internet surfing

This service is common to all internet cafés. However, for this business,

internet surfing will only include Google searching, social networking, and

downloading. Gaming and watching videos with malicious content will not be

allowed to protect the welfare of the customers. The charge on this service will be

in per-hour basis at a competitive price.

4. Photocopying

This service is expected to be rendered in smoothest way possible. There

will be no limit as to how many papers can be photocopied, therefore, if the

customer wishes to have a book be photocopied, employees of the business see no

 31

reason to disobey. The charge for this service is fixed per page. The price will be

competitive to entice more customers.

Operating Process

Figure 3. Operating Process

The above illustration shows what the operating process will look like as the

business actively participates in the market.

With the use of it labor, machineries, and utilities, the business will render

services to each customer in accordance to their demand. This service can be typing,

printing, internet surfing, or photocopying. As the business provides these services, it is

expected to incur operating expenses like for rent and utilities used up. After services

have been provided, it is time for customers to make their payment which is the price of

the service. These payments are the revenue of the business from which expenses are

deducted to come up with the profit or loss for the period.

 32

Business Operations

Number of days in a year 365

Less: Number of legal and special holidays 12

Total 353

Less: Allowance for contingencies 14

Total working days 339

DigiSurf Operating Schedule

OPERATING
DAYS OPENING CLOSING
HOURS
Monday 7:00 am 10:00 pm 15 hrs.
Tuesday 7:00 am 10:00 pm 15 hrs.
Wednesday 7:00 am 10:00 pm 15 hrs.
Thursday 7:00 am 10:00 pm 15 hrs.
Friday 7:00 am 10:00 pm 15 hrs.
Saturday 7:00 am 10:00 pm 15 hrs.
Sunday 7:00 am 10:00 pm 15 hrs.
Total Operating Hours per Week 105 hrs.

The operation of the business will start from seven in the morning until 10 in the

evening, giving a total of 15 operating hours. The opening time presented is ahead of the

opening time of competitors so that it can be easily known by customers. Also, this

schedule is based on the fact that classes usually start at 7 in the morning and there are

students who might need the services of the business just before their class starts. It can

be also be noted that the proponents provided an allowance for contingencies that

represent unexpected operating interruptions.

 33

Equipment

Below is the list of required equipment, corresponding brand, quantity needed,

and the associated amount.

QUANTI
DESCRIPTION UNIT COST TOTAL COST
TY
Printers
 HP LaserJet Pro P1102 1 P14,997 P14,997
Printer(CE651A)
 HP Deskjet Ink Advantage 1 5,245 5,245
1015 Single-Function Inkjet
Printer P
Headset 3
 A4TECH HS-66 I-CHAT 15 320 4,800
HEADSET
Web Camera
 A4TECH PK-635G ANTI- 15 580 8,700
GLARE 16MP W/MIC
USB WEBCAM
Computer set
 Internet Café Package with 15 19,800 297,000
freebies:
- Win Slim Keyboard
- Win Optical Mouse
- Amplified 3D Stereo
Speaker
- 500W AVR
- Installation, Cabling,
- Router and Switch/Hub
- Network Cables
Fan
 Hanabishi ROTATOR FAN 2 1,398 2,796
16R
Air conditioner
 Carrier Split Type Basic 1 30,500 30,500
1.5HP
Xerox machine
 WorkCentre 3225 1 15,000 15,000
Monochrome All-in-One
Printer
Generator
 HONDA EG1000 1 21,000 21,000
Surveillance camera
 34

 Tenda C50s 1.3MP HD 3 1,999 5,997

720P IRCUT PTZ Night
Vision Surveillance IP
Camera
TOTAL P406,035

Figure 4. Equipment
Furniture and Fixtures

DESCRIPTION QUANTITY UNIT COST TOTAL COST

Computer chair 20 P399 P7,980
Customized computer table and
front desk 1 4,865 4,865
Light bulb 3 225 675
Emergency light 2 300 600
Wall design 1 2,000 2,000
Decorations 1 5,999 5,999
Fire extinguisher 1 599 599
Cash vault 1 1,099 1,099
Wall clock 1 235 235
Sofa set 1 3,250 3,250
TOTAL P27,302

Figure 5. Furniture and Fixtures

Supplies Inventory

DESCRIPTION QUANTITY UNIT COST TOTAL COST

Bond papers
 Long (500 sheets/ream) 10 reams P256.00 P2,560
 Short (500 sheets/ream) 10 reams 216.00 2,160
 A4 (500 sheets/ream) 5 reams 26.00 130
 Colored (500 sheets/ream) 5 reams 148.00 740
Photo papers
 Glossy 25 sheets 5.60 140
 Matte 25 sheets 4.80 120
Logbook 1 pc. 81.00 81
Stapler 2 pcs. 122.00 244
Staple wire (5000 pcs/box) 5 boxes 40.00 200
Scissors 2 pcs. 19.00 38
Ballpen 3 pcs. 21.00 63
Calculator 1 pc. 136.00 136
 35

Broom and dustpan 1 pc. 105.00 105

Trash can 1 pc. 100.00 100
Feather dust 2pcs. 60.00 120
Mop 1 pc. 250.00 250
Powder soap 6 pcs. 60.00 360
Air freshener 1 pc. 175.00 175
TOTAL P7,722

Figure 6. Supplies Inventory

Intangible Asset

DESCRIPTION QUANTITY UNIT COST TOTAL COST

PC Software 1 P11,994 P11,994
Software licenses 21 4,500 94,500
TOTAL P106,494

Figure 7. Intangible Asset

Plant Location

In choosing the location of the business, the proponents considered the visibility

and accessibility of the site where the business is to be put up. With this, the proponents

have chosen ECJ Building along Victoria Street in Intramuros as the best location.

Intramuros is the walled part of Manila, a meters away from Manila de Bay.

There are six universities within Intramuros namely: Pamantasan ng Lungsod ng

Maynila, Lyceum of the Philippines University, Colegio de San Juan de Letran,Manila

High School, Colegio de Santa Rosa and Mapua Institute of Technology. Government

offices such as the the Dept. of Labor and Employment, The Immigration Department,

The Bureau of Internal Revenue and Overseas, Welfare Administration are also situated

here.
 36

Structures

DigiSurf will be occupying 476 sq. ft of the ground floor of ECJ Building and this

space will be divided into two areas: one for the computer room and the other for storage

room.

 Computer room

This room will cover 404 sq. ft. of the shop. Front desk and waiting

are in this area. Customized computer tables for 14 desktop will be placed

here. The front desk can be found on the left side of the room and will serve as

the payment counter and center of inquiries from customers. To make a lively

atmosphere in the room, sound system will be installed and the decoration on

walls of this room shall be eye catching.

 Storage room

This room will cover 32 sq. ft of the shop. This is where spare parts of

equipment and other things that comprise the supplies inventory will be

placed.

Utilities

The main sources of the business for its utilities would be the PLDT and

MERALCO since it will surely consume electricity and internet connection due to the

nature of operation it will engage in.

 37

FINANCIAL ASPECT

Financial Assumptions

B. Economic Entity Assumption

A business enterprise is a separate and distinct entity from the person or

people who own and run it. Consequently, a business must keep its own record

from the point of view of a business and not to be merged with the personal

transactions of the owners.

C. Going Concern Assumption

The business entity will continue operating indefinitely for a period of

time sufficient to carry out its contemplated objectives, plans, contracts, and

commitments unless the liquidation of the entity is eminent.

D. Monetary Unit Assumption

Money is the common denominator in measuring economic activity. There

is no attention given to inflation or deflation and assumes that the monetary unit

remains stable regardless of fluctuation in money value.

E. Periodicity Assumption

The life of the enterprise is divided into several periods. Thus, when a

financial report is prepared, it is important to indicate the date when it was

prepared and the time period it covers.

F. Accrual-basis Assumption

The net-profit of the business of a business enterprise is the difference between

the revenues and expenses for an accounting period and not the difference

between cash receipts and cash disbursements.

 38

SOCIO-ECONOMIC ASPECT

Establishing a computer rental shop is not only beneficial to the owner itself, but

also to the members of the community where it is located. Since it will be located at a

place surrounded by big universities, it will be helpful for students who are in need of

computers urgently to do their school requirements, wherein the fee is also student-

friendy since the hourly rent is very affordable. They can also print or photocopy their

files if they want to.

Not everyone in their houses have their own computer, things that can access the

internet, or the internet itself. The local residents will also benefit from the computer

shop. Since it will be set on their area, it will be only steps away from them and they

don't have to go away to look where they can rent a computer. Each computer is installed

with different games including those that can be played in group. They can invite their

friends to enjoy playing together at the shop.

Intamuros is known in the Philippines for its walls and historical places inside

that is why lots of tourists or travellers go there every day. If they urgently need to access

the internet, the computer rental shop will be a big help for them.