FS Aug 16

MUEBLES Repair and Restoration Services
Poblacion Barangay 9, Lipa City, Batangas
A Feasibility Study Paper Presented to the Faculty of the
College of Engineering and Computing Sciences
BATANGAS STATE UNIVERSITY
Lipa City
In Partial Fulfillment of the Requirements of the Degree of
Bachelor of Science in Industrial Engineering
By:
Layco, Joanne Marie S.
Mercado, Anne Gelleen A.
Reyes, Errol John R.
August 2018
APPROVAL SHEET
This project feasibility entitled “MUEBLES Repair and Restoration at
Poblacion Barangay 9, Lipa City, Batangas” prepared and submitted by
JOANNE MARIE S. LAYCO, ANNE GELLEEN A. MERCADO and ERROL JOHN
R. REYES in partial fulfillment of the requirements for the degree of BACHELOR
OF SCIENCE IN INDUSTRIAL ENGINEERING is hereby accepted.
LEOVEN A. AUSTRIA, MSIEM, CIE

Adviser
Approved by the panel on oral examination with a grade of ____________.
MICHAEL C. GODOY, Ph.D., PIE

Chairman
MARICEL M. LACBAY, CIE RODERICK A. CABAEL, MBA

Member Member
Accepted and approved in partial fulfilment of the requirements for the

Degree of Bachelor of Science in Industrial Engineering.
August 2018 NORA G. DIMAANO, Ph.D.

Dean of Colleges
ACKNOWLEDGMENT
The researchers would like to express the deepest appreciation and
sincerest gratitude to the following persons who had contributed to make this
feasibility study possible:
To Batangas State University, for providing them quality education of
higher learning and valuable experiences that mold them to excel in doing this
study;
To Engr. Leoven A. Austria, the researchers’ adviser, for the inputs, her
time and guidance, patience and support. Without her help, this study would not
be possible;
To Dr. Michael C. Godoy, Engr. Maricel M. Lacbay and Engr. Roderick A.
Cabael, the panel of examiners, for the shared knowledge and insights that
contribute to the betterment of the study;
To the researchers’ parents, for the motivation and financial support that
serves as inspiration to the researchers for the completion of the study; and
Above all, the researchers would like to give thanks to Almighty God for
unwavering wisdom and guidance and the blessings bestowed upon them
throughout the course of the study.
Joanne
Anne Gelleen
Errol John
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MUEBLES REPAIR AND RESTORATION SERVICES
Poblacion Barangay 9, Lipa City, Batangas
Joanne Marie S. Layco, Anne Gelleen A. Mercado, Errol John Reyes
Industrial Engineering Department, College of Engineering and Computing
Sciences, Batangas State University, Lipa City, Batangas 4217
Email: jmsantiagolayco@gmail.com,gelleenmercado@gmail.com,
reyeserroljohn@gmail.com
Abstract – Leather has been used by man since the early years. It is used
bought for its function and for fashion. Many products today are made up of
leather material. People invest much for leather materials due to its durability and
appearance. Since leather business has been very good in the recent years,
cleaning and restoration services for these goods are also trending. Cleaning
services which can offer affordable yet satisfying results for leather materials are
sought after by people. Leather is a very delicate material so it must be properly
taken care of and must be maintained regularly. Because of the need in cleaning
services which will offer topnotch quality to leather materials, MUEBLES Repair
and Restoration Services has been proposed by the researchers. Muebles is the
Filipino term for furniture. This service-oriented business is to be located at
Poblacion Barangay 9, Lipa City, Batangas. It will cater all damaged furniture like
table, chairs, closet and sofa. Target market include ten barangays near
Poblacion Barangay 9. Prices are very affordable which will start from Php
150.00. Three workers are to be employed by the business who are tasked to
work eight hours a day and six days a week. Workers are to be well-
compensated by the business. Benefits are also to be given to them by the
business. The project is estimated to have a projected cost of Php 3,000,000.00
and will have a payback period of 2 years and 11 months. It will be financed by
five partners.
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TABLE OF CONTENTS
PAGE
TITLE PAGE i
APPROVAL SHEET ii
ACKNOWLEDGMENT iii
ABSTRACT iv
SUMMARY v
TABLE OF CONTENTS vi
LIST OF TABLES ix
LIST OF FIGURES xi
INTRODUCTION xii
CHAPTER I: PROJECT SUMMARY
Name of the Enterprise 1
Location of the Business 1
Descriptive Definition of the Project 2
Project’s Long Range Objectives 2
Feasibility Criteria 3
Highlights of the Project 5
Major Assumptions and Summary of Findings 10
CHAPTER II: MARKET FEASIBILITY

Service and its Description 13
Demand Analysis 15
Price Analysis 20
Target Market 24
Factors Affecting the Market 25
Proposed Marketing Program 26
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CHAPTER III: TECHNICAL FEASIBILITY
Services 27
Process Flowchart 29
Machine and Equipment 38
Business Location 45
Service Facility Size and Layout 45
Utilities 46
Waste Disposal 46
Labor Requirements 47
CHAPTER IV: FINANCIAL FEASIBILITY

Financial Assumptions 48
Total Projected Cost 53
Initial Investment Requirement 54
Sources of Financing the Project 54
Financial Statement 54
Financial Analysis 56
CHAPTER V: SOCIO-ECONOMIC FEASIBILITY

Government Resources 62
Labor Employment 62
Environment 63
Benefits to the People 63
CHAPTER VI: ORGANIZATION AND MANAGEMENT FEASIBILIT
Form of Ownership 64
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Organizational Chart 64
Key Officers and Personnel 65
CHAPTER VII: LEGAL ASPECTS

Registrations 68
CHAPTER VIII: CONCLUSIONS AND RECOMMENDATIONS

Conclusion 69
Recommendation 70
BIBLIOGRAPHY
APPENDICES
A Demand Projection
B Material Requirements
C Building Design and Bill of Materials
D Land and Operating Cost
E Schedule of Depreciation and Book Values
F Payroll of Employees
G Schedule of Direct Materials
H Price Analysis
I Projected Revenue
J Financial Statements
K Survey Questionnaire
L Survey Result
CURRICULUM VITAE
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LIST OF TABLES
TABLE TITLE PAGE
2.1 Historical Demand of Furniture Repair and Restoration 17
Services
2.2 Projected Demand of Furniture Repair and Restoration 18
Services
2.3 Projected Demand per Service of MUEBLES Repair and 20

Restoration Services by the Year 2019
2.4 Market Analysis Based on Survey Demand 21
2.5 Total Population of Target Market (Year 2015) 24
2.6 Estimated Population and Households of Target Market 25
given PGR of 2.41%
3.1 Tools and Equipment and Its Description 39
4.1 Total Projected Cost 53
4.2 Accumulated Method Payback Period 56
4.3 Current Ratio 58
4.4 Net Profit Margin 59
4.5 Rate of Return on Asset 60
4.6 Rate of Return on Owners’ Equity 61
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LIST OF FIGURES
FIGURE TITLE PAGE
1 Gantt Chart 8
2.1 Historical Demand of Furniture Repair and Restoration 18
Services
2.2 Projected Demand of Furniture Repair and Restoration 19
Services
3.1 General Process Flow Chart 29
3.2 Technical Process Flow Chart 37
3.3 Welding Machine 38
3.4 Sewing Machine 39
3.5 Wood 42
3.6 Leather 43
3.7 Metal 43
3.8 Fabric 44
3.9 Paint 44
3.10 Target Location of MUEBLES Repair and Restoration 45
Services
6 Organizational Chart for MUEBLES Repair and Restoration 65

Services
LIST OF FIGURES
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FIGURE TITLE PAGE
1 Gantt Chart 8
2.1 Historical Demand of Leather Dry Cleaning and 13
Restoration Services (Leather Shoes)
2.2 Projected Demand of Leather Dry Cleaning and 14
Restoration Services (Leather Shoes)
Restoration Services (Leather Bags and Jackets)
Restoration Services (Leather Bags and Jackets)
Restoration Services (Leather Seat Covers)
Restoration Services (Leather Seat Covers)
2.7 Lipa City’s Population (2015) 21
3.1 Process Flow Chart 42
3.2 Target Location of KATAD Dry Cleaning and Restoration 43
Services
3.3 Facility Layout of KATAD Dry Cleaning and Restoration 44
Services
INTRODUCTION
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Furniture is an industrial or craft-based design to support human
activities. Every furniture is made with user needs and function in mind. It takes
up the majority of space and helps make your home feel lived in, welcoming and
complete. However, at some point the furniture will reach its end, but not all can
afford replacing it with new pieces.
Restoration is more of an art form than simply reattaching broken pieces,
and renewing color and hues. A great benefit of furniture restoration is that it can
create a whole new style without the need to spend a fortune. Doing the repair
and restoration process will give a completely new life and look of the furniture,
additionally preserving its value.
Finding a reliable and experienced craftsman in furniture repair and
restoration is important. Expert craftsmanship and furniture restoration should
repair the items back to their original condition. Utilizing advanced equipment,
products and processes can guarantee bringing the furniture back to its beautiful
beginnings and therefore take several steps to ensure quality end-results.
Maintenance, care and protection for valued pieces are possible through different
repair and restoration services for furniture.
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CHAPTER I
PROJECT SUMMARY
This chapter presents the project itself, the feasibility criteria, descriptive
definition of the project, the long range objective of the project, history and basic
conclusions of the project.
A. Name of the Enterprise
MUEBLES Repair and Restoration Services is a service-oriented business
aiming to deliver exceptional furniture repair and restoration services. The
business will cater furniture like table, chair, sofa and cabinet. The name was
coined from the word “MUEBLES” which is the Filipino word for furniture. It’s
mission is to bring the furniture back to its original beauty.
B. Location of the Business
The proponents chose to construct its firm at Poblacion Barangay 9, Lipa
City, Batangas. Considerations like proximity to the target market, accessibility of
transportation, environmental concerns and other utilities were considered for the
selection of the location.
This project will occupy a total of 126 square meters of land in order to
accommodate all the machines and equipment that will be required in the
process and more importantly, for the workers to operate easily.
1
C. Descriptive Definition of the Project
Renbel Furniture and Appliance Center is a business with affordable
furniture like sofa, cabinet, steel bed, dining table and many more. The
proponents want to generate more income in a way that will satisfy the needs of
customers, as well as to provide better quality of the furniture they want to be
repaired. The researchers came up with an idea of adding a furniture repair firm.
Restoration is more of an art form than simply reattaching broken pieces
and renewing colors and hues. When a tree is cut and milled to be made into
furniture it is given a second purpose. A piece is created by a craftsman to
provide many years of service, often staying in the same family for generations.
In our furniture repair service, the management takes great pride in bringing
furniture back to its beautiful beginnings and therefore take several steps to
ensure quality end-results.
MUEBLES Repair and Restoration Services offers services like leather
and fabric re-upholstery, furniture repair, part replacement, furniture
refinishing/polishing, metal furniture repair and stain removal.
To determine the historical and projected demand of the business, this
project requires actual data wherein the researchers have to conduct series of
interview and observation in the business.
D. Projects Long-Range Objectives
The primary goal of every business is to earn profit and to provide top
quality products and services, more so, to satisfy the needs of the clients and
2
customers effectively and efficiently should be accounted for. Meeting or
satisfying the customer’s expectation results to customer loyalty and thus making
the furniture shop the most successful furniture repair firm. Hence, the
proponents’ long-range objectives are to:
 To provide the local market an affordable furniture repair and restoration
service;
 To maintain long-term relationships with customers by gaining their trust
and confidence;
 To increase the profitability of the business by expanding services to
prospective customers;
 To provide employment due to increasing demand and innovation; and
 To expand the business for bigger opportunity.
E. Feasibility Criteria
In order to determine the feasibility of a project, there are some important
factors to be considered such as potential market of the services and products,
the profitability of the services and products and the availability of the raw
materials required in the operation of the services and products.
The proponents carefully analyzed the various aspects of the study;
market, the technicality, socio-economic and management feasibility to determine
if the proposed project is feasible.
3
The following are the most important criteria by which almost every
subject is being measured:
1. Business Capital
It is how much cash is needed to start the business and keep it
running until it is self-sustaining. It is the most important tool for a putting up a
business. Initial capital needed to the operation of the business is Php
2,835,227.39. Capital will be used to buy materials, tools and equipment used in
repair and restoration of furniture and for the establishment of business’ building.
The proponents will look for investors who will shoulder the total initial investment
needed to start the business. MUEBLES Repair and Restoration Services will
regain their investment in 3.85 years or 3 years and 10 months.
2. Potential Market of the Service
Homeowners choose the brand, design and style of each furniture piece
because they want to perfectly match it with their entire home décor. However, at
some point the furniture will reach its end, but not all can afford replacing it with
new pieces. So instead of buying new furniture, availing service that will cater the
specific need will help lengthen the life of furniture.
3. Profitability of the Service
The proponents will evaluate if the service is profitable and marketable.
There is limited number of services which offer repair and restoration services for
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furniture. Demand for such services is constantly increasing. It is assumed that
the business will be profitable.
4. Availability of Materials and Supplies
Since it a service-oriented business, materials include upholstery
materials, tools and equipment will be all bought as initial investments for the
business. These materials, tools and equipment also include wood, glass, paint,
welding machine and sewing machine. Supplies will be bought from different
sources.
5. Location
The shop will be located in Poblacion Barangay 9, Lipa City, Batangas due
to its proximity to the target market, low land cost, and environmental concerns.
Electricity, water supply and communication services are also available in the
area.
6. Socio-economic
The business does not only aim to earn profits but also provide
employment to the people of City of Lipa. With the taxes it will pay, it will be able
to help in the community projects of the government. In addition, it will implement
waste management so that people and environment will be free from hazards of
pollutions. The business will ensure the welfare and health of the residents in the
immediate vicinity of the shop.
F. Highlights of the Project
5
Satisfying demand, customer’s expectation and gaining profit are the main
goals of almost all businesses and companies nowadays. Because the Renbel
Furniture and Appliance Center has the same goal, the management wants to
put its own furniture repair firm generate income and to provide repaired outputs
with higher quality.
1. History
The project came from the response of Renbel Furniture and Appliance
Center to the needs of its customers. Considering the fact that the business is
having some sort of problems, especially when their furniture had broken, the
proponents came up with the idea of building its own furniture repair firm.
Furniture repair and restoration service is a cost effective solution that will save
the customers the cost and trouble of replacement. Having a furniture repair firm
would help the business to generate additional incomes, and to provide excellent
service, so the management considers the idea of investing in the said project.
2. Project Time Table and Status
The proponents created a time table for the pre-operation activities; these
activities are established after gathering data, through interviews, with regard to
the proposed project.
1. Project Conceptualization and Identification
March 2018 to May 2018
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2. Project Feasibility Study Preparation, Screening and
Evaluation
June 2018 to July 2018
3. Registration of Business Name and Securing Necessary
Permits
August 2018 to September 2018
4. Acquisition of Land And Equipment
October 2018 to November 2018
5. Construction of Business Building
December 2018 to February 2019
6. Hiring and Training of Personnel
March 2019 to April 2019
7. Pre-Operation
May 2019 to June 2019
8. Start of Operation
July 2019
7
2018 2019
ACTIVITY Ma Ap Ma Jun Jul Au Se Oc No De Ja Fe Ma Ap Ma Jun Jul
r r y e y g p t v c n b r r y e y
1. Project
Conceptualization
and Identification
2. Project Feasibility
Study Preparation,
Screening and
Evaluation
3. Registration of
Business Name and
Securing Necessary
Permits
4. Acquisition of
Land And
Equipment
5. Construction of
Business Building
6. Hiring and
Training of
Personnel
7. Pre-Operation
8. Start of Operation
8
Figure 1. Gantt chart
9
The Gantt chart shows the series of activities of MUEBLES Repair and
Restoration Services before it officially start its operation on July 2019. The
conceptualization and identification of the project would take three (3) months,
from March 2018 to May 2018. Project feasibility study preparation, screening
and evaluation would run for two (2) months from June to July 2018. From
August to September 2018, registration of business name and securing
necessary permits would be done which would take two (2) months. Then
acquisition of land and equipment would be good for two (2) months from
October to November 2018. After the acquisition of land and equipment,
construction of business building would take three (3) months from December
2018 to February 2019. From March to April 2019, hiring and training of
personnel will commence. Pre-operation period would take two (2) months from
May to June 2019. Start of business operation will start on July 2019.
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3. Nature of the Industry
MUEBLES Repair and Restoration Services is a service-oriented
business. The furniture repair service take great pride in bringing furniture back
to its beautiful beginnings and therefore take several steps to ensure the
customers are pleasantly surprised with the end-results.
4. Mode of Financing
The business itself will provide for all the expenses and cost incurred on
this project. These include the construction of the facility, acquisition of the
machine and equipment, hiring and training of the personnel, maintenance cost
and operation cost of the project.
5. Investment Cost
The proposed project will require an initial investment of Php 2,835,227.39
to finance all the expenses and preparation of the business operation. The
amount will cover fixed assets such as land, construction of building,
procurement of the equipment and wage for the workers. The proposed building
to be established will have a life span of 15 years.
G. Major Assumptions and Summary Findings
1. Market Feasibility
The present demand for furniture restoration service and prevailing market
prices are some factors to consider that will affect the market feasibility of the
service.
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These factors that may affect the market like demand, supply and price.
Moreover, the number of customers and the quality of service can also affect the
demand.
2. Technical Feasibility
MUEBLES Repair and Restoration Services will offer the best service to
its customer. The business is armed with latest equipment and utilizes new
techniques/technologies in furniture restoration. It will be located at Poblacion
Barangay 9, Lipa City. In order to win loyal customers, the proponents will make
sure that they give their customers quality service at reasonable prices. Different
services will be offered to the customers depending on their needs and wants.
Office hours start from eight in the morning (8:00 am) to five in the
afternoon (5:00 pm) and will run six (6) days a week. Services will depend on
customer needs.
3. Financial Feasibility
The financial aspect of the study for the project has a very important role
in determining and decision making of the business. The feasibility of the project
relies on the capability of the business enterprise to generate income and to
cover all the expenses of operation.
The proposed project will require an initial investment of Php 2,835,227.39
to finance all the expenses for the preparation of the business. The financial
expenses will be provided by the Renbel Furniture and Appliance Center itself.
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4. Socio-Economic Feasibility
This proposed project aims to reduce the unemployment rate in the area.
The facility will generate job opportunities to the locals. Moreover, the
government will also benefit from this project in terms of taxes which can help to
finance the government for its activities and for the general welfare of the public.
5. Management Feasibility
The employees of the project will receive their appropriate salary
depending upon their position and all workers will be paid fairly with the
prescribed minimum salary per day as the lowest salary to be received by the
workers. To promote and encourage good performance of the employees, the
business enterprise will provide incentives and benefits.
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CHAPTER II
Market Feasibility
The market is the driving force of every feasibility study. It is the
foundation upon which the proposed enterprise will succeed or not. It also serves
as basis for gathering, recording and analyzing data and information about
customers, competitors and the market itself. It is what people or industries will
need to satisfy.
Marketing is used to identify the customers, to keep the customers, and to
satisfy the customers. With the customers as the focus of its activities, it can be
concluded that marketing management is one of the major components of
business management. The adoption of marketing strategies requires business
top shift their focus from production to the perceived needs and wants of their
customers as the means of staying profitable.
This study provides a further analysis of the target market ranging from
determination of demand to the forecast and the evidence that the proposed
enterprise is feasible.
A. Service and its Description
MUEBLES Repair and Restoration Services is a service-oriented business
located at Poblacion Barangay 9, Lipa City, Batangas and services the whole city
of Lipa and even nearby towns. It offers different repair and restoration services
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for different kind of furniture. Specializing in re-upholstery, it will be known to the
customer for its furniture restoration.
Services to be offered by MUEBLES Repair and Restoration Services
1. Leather Re-upholstery Service
Leather re-upholstery is the work of providing furniture, especially seats,
with padding, springs, webbing, and fabric or leather covers. It includes
redoing/outfitting items like chairs and sofas with springs, padding and leather
coverings.
2. Fabric Re-upholstery Service
It is taking the upholstery off existing furniture and replacing of it with the
new upholstery weight fabric. It can replace worn fabrics and materials and can
give new look for old sofa, chair or couches that doesn’t fit with the décor of
customer’s room.
3. Furniture Repair Services
Services include repairing minor surface damage and wear and tear,
patching cracks and gouges and veneer repair. It also includes tightening old
joints where needed by disassembling, cleaning off old glue, re-gluing and
clamping, squaring and aligning pieces.
a. Scratches, Dents, Heat /Water Mark Removal
b. Structural Repairs and Assembling
c. Furniture rebuilding and regluing
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4. Part Replacement Services
This can restore piece of furniture or change the look of that piece by
changing the style of drawer pulls, hinges, legs or other furniture parts. It also
includes matching and fabricating replacements for missing sections and pieces.
5. Furniture Refinishing/Polishing
Wooden and metal furniture pieces involve stripping furniture pieces of
their finish and applying a new stain, paint, lacquer and/or varnish. Color
matching and color change services are also offered.
6. Metal Furniture Repair
This service includes fix broken iron wrought, remove corrosion in
aluminum.
7. Stain Removal
Leather, fabric and wood can have stains and marks over time and with
use. This service includes cleaning up the wood, leather or the fabric part of the
furniture.
B. Demand Analysis
Market compromises all the potential consumers bounded by natural,
economical, and technological barriers possessing to satisfy all their wants and
needs.
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The demand analysis is part of the important task of identifying the needs
of consumers and determining whether they are willing and have the capability to
pay for the products a business plans to produce.
Data on the demand for furniture restoration services were gathered
through research conducted in Lipa City Hall.
1. Historical Demand
In this feasibility study, the proponents are optimistic that they can satisfy
their market's wants, needs, and expectations in the proposed service. To visibly
evaluate the marketability of the service, it is essential to study its historical
demand. Historical demand is the basis for many important small business
decisions. To analyze the data properly, historical data must be captured
correctly. This portion is important for it will determine the projected demand of
the proposed service.
2. Projected Demand
The projected demand signifies the quantity of the product or service that
the customers are willing to buy in the future. It is necessary for the business to
make forecast if demand will increase continually. It will be an indicator for
possible sales and demand. This is an estimation of the future levels of
distribution demand affecting profit margins and business activities.
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Table 2.1
Historical Demand of Furniture Repair and Restoration Services
Year Historical Demand
(Number of Repaired/Restored
Furniture)
2013 938
2014 961
2015 984
2016 1,008
2017 1,032
The historical number of household multiplied by 1.01 units of furniture per
household (based on survey demand) shown in Table 2.1 reflects a steady
increase from year 2013 to 2017. The proponents obtained the data from the City
Hall of Lipa City, Batangas. This is a clear proof of profitability of furniture repair
and restoration services in the area since there is no existing furniture repair and
restoration services within Poblacion Barangay 9, Lipa City. For a greater
understanding, a bar graph is shown in figure 2.1.
1,040
1,020
1,000
980
960
940
920
900
880
2013 2014 2015 2016 2017
Dema nd of Furni ture Repai r a nd Restoration Servi ces
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Figure 2.1 Historical Demand of Furniture Repair and Restoration Services
Figure 2 shows the graphical representation of the historical demand of
furniture repair and restoration services. The rapidly increasing trend shows a
continuous increase in the demand, which the proponents want to serve and
satisfy.
Table 2.2
Projected Demand of Furniture Repair and Restoration Services
Year Projected Demand

Furniture)
2019 1,083
2020 1,108
2021 1,135
2022 1,163
2023 1,191
Table 2.2 shows the projected number of repaired/restored furniture from
year 2018 to 2022. The proponents used Arithmetic Geometric Curve to project
the number of furniture because it has the least standard deviation as compared
to other methods of projection. According to survey, there is an existing demand
of 1.01 units of furniture per household.
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1,200
1,180
1,160
1,140
1,120
1,100
1,080
1,060
1,040
1,020
2019 2020 2021 2022 2023
Projected Demand of Furni ture Repa i r and Restoration Servi ces
Figure 2.2 Projected Demand of Furniture Repair and Restoration Services
Figure 2.2 shows the graphical representation of the projected demand of
furniture repair and restoration services. It shows the rapid increase of projected
demand of services from the year 2019 to year 2023.
Table 2.3
Projected Demand per Service of MUEBLES Repair and Restoration
Services by the Year 2019
Type of Services Projected Demand

Furniture)
Leather Re-upholstery 92
Fabric Re-upholstery 44
Furniture Repair 350
Furniture Refinishing/Polishing 161
Part Replacement 360
Metal Furniture Repair 37
Stain Removal 39
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Table 2.3 shows the total projected demand for the year 2019 of each
service provided by MUEBLES Repair and Restoration Services. Based on
survey, Part Replacement has the highest demand of all the services while Metal
Furniture Repair has the lowest demand.
C. Price Study
Price is central to marketing; it is one of the four variables in the marketing
mix that the business people used to develop a marketing plan. It is a factor for
comparing the value and service of one good product to another. For beginners,
setting a price is a problem; especially since one is trying to attract customers.
Price depends on what kind of woods, glass, metal, upholstery and furnishings
will be used for the furniture restoration and it depends on the persons who will
avail the service.
Table 2.4
Market Analysis
Based on Survey demand
Proximate to Lipa City, Batangas
FURNITURE TYPE OF SERVICE PRICING

Leather Re-upholstery 16 Php 6,000 – 8,000 13
Above Php 8,000 3
Stain Removal 3 Php 500 – 1,000 3
Above Php 1,000 0
SOFA
Fabric Re-upholstery 7 Php 6,000 – 8,000 7
Above Php 8,000 0
Above Php 1,000 0
CLOSET Furniture Repair 52 Php 1,000 – 2,000 48
Above Php 2,000 4
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Part Replacement 31 Php 1,000 – 2,000 28
Above Php 2,000 3
Furniture Refinishing/Polishing 11 Php 500 – 1,000 11
Above Php 1,000 0
Above Php 1,000 0
Furniture Repair 25 Php 1,000 – 2,000 20
Above Php 2,000 5
Part Replacement 24 Php 500 – 1,000 7
Above Php 1,000 17
Above Php 1,000 0
Above Php 1,000 0
TABLE Part Replacement 24 Php 1,000 – 2,000 16
Above Php 2,000 8
Part Replacement 9 Php 1,500 – 3,000 8
Above Php 3,000 1
Metal Furniture Repair 5 Php 1,000 – 2,000 5
Above Php 2,000 0
Above Php 1,000 0
Furniture Repair 48 Php 500 – 1,000 39

Above Php 1,000 9
Above Php 1,000 2
Above Php 1,000 0
Above Php 1,000 0
Above Php 1,000 5
Metal Furniture Repair 8 Php 500 – 1,000 7
CHAIR
Above Php 1,000 1
Above Php 1,000 0
Leather Re-upholstery 17 Php 1,500 – 2,500 13
Above Php 2,500 4
Above Php 1,000 0
Fabric Re-upholstery 9 Php 1,500 – 2,500 9
Above Php 2,500 0
Above Php 1,000 0
22
Table 2.4 shows the pricing scheme that the customers are willing to
spend for certain furniture service. Customers are very particular and demanding
and rightfully so in terms of service they could get for the amount they pay or are
willing to pay.
MUEBLES Repair and Restoration Services commits itself to give the
customers the best quality of service that will meet their expectations at a very
reasonable price.
D. Target Market
The target market of the study covers the households located nearby
Poblacion Barangay 9, which includes Balintawak, Poblacion Barangay 10,
Poblacion Barangay 11, Poblacion Barangay 3, Poblacion Barangay 5, Poblacion
Barangay 6, Poblacion Barangay 8, Sabang, Poblacion Barangay 9-A, and
Poblacion Barangay 9 itself. These areas will be the initial target market since
they are closest to the area of the firm and most of the businesses established
within Lipa City have the same customers regardless of the type of business they
operate.
This may also cover some of the households in Lipa City like Antipolo del
Norte, Latag, Mabini, Marawoy, Poblacion Barangay 1, Poblacion Barangay 2,
Poblacion Barangay 4, Poblacion Barangay 7, San Sebastian, Tambo and so on.
Table 2.5
Total Population of Target Market (Year 2015)
23
Populatio
Barangay n
Balintawak 15,176
Poblacion Barangay 3 2,474
Poblacion Barangay 5 646
Poblacion Barangay 9-A 786
Sabang 23,535
TOTAL 48,712
Table 2.5 shows the total population of the ten (10) target markets of the
study. It was computed and recorded by the Lipa City Hall.
Sample to be taken are exclusively from households in the target market.
About 92.57% of the households belong to the target market. (PSA, 2015)
Population growth rate is 2.41%.
Table 2.6 Estimated Population and Households of Target Market given
PGR of 2.41%
Year Estimated Population Estimated Households

2015 48,712 9,742
2016 49,886 9,977
2017 51,088 10,218
2018 52,319 10,464
F. Factors Affecting Market
Demand is affected by several factors:
24
1. Promotion and Customers Orientation
There is a need for extensive promotion and effective orientation of the
services that will be offered. An assurance that the company offers quality service
will undoubtedly create positive impact on the customer and achieve business
growth.
2. Quality
Customers nowadays have become both demanding and assertive,
expecting the best kind of service for the honest money they pay for. If the
service satisfied the customer, they will patronize it. If a firm intends to capture a
big size of the market, it should provide high quality services to ensure higher
demands on the product.
3. Income Changes
Demand for furniture restoration service is also affected by income
changes. People’s consumption changes proportionately with income; when
income is less, little amount will be available for consumption. Fewer
commodities will be sold and less service will be availed.
F. Proposed Marketing Program
25
MUEBLES Repair and Restoration Services will penetrate the market by
providing furniture repair and restoration services that can compete with other
existing service providers in terms of price and quality of service.
The shop will promote a marketing strategy to claim market share and
achieve a significant niche in the market. Online advertising will be the strategy of
the proponents. Services will be promoted through different social media sites so
that larger market will be reached easily.
CHAPTER III
Technical Feasibility
Technical feasibility describes the service rendered by MUEBLES Repair
and Restoration Services. The services offered and the processes to deliver the
service are discussed. Materials, tools and equipment are listed including their
functions. The business location and layout are also considered in the study.
A. Services
MUEBLES Repair and Restoration Services is a restoration business in
Poblacion Barangay 9, Lipa City, Batangas and services the whole city of Lipa
and even nearby towns.
The business will provide high quality restoration services to furniture
shops and furniture customers. Specializing in re-upholstery, it will be known to
the customer for its furniture restoration.
26
B. Service Description
The first and most critical step in achieving a satisfactory restoration is
establishing expectations for how the piece in question will look when the
restoration process is complete.
The firm recognizes that not all pieces require a full restoration, so offered
services’ range or levels of restoration from merely stabilizing the piece, to
"touching up" the finish, to completely restoring the piece to its original condition.
The services offered can usually stabilize a piece, so it will function as intended
in a few hours, while a full restoration may take many days over the course of a
week.
The most common causes of furniture damage
1. Screws becoming loose
2. Abrasive cleaning products, cloths or scrubs (please read the care guide or
label with your furniture)
3. Not stacking or storing furniture correctly
4. Chair being stacked, when they’re not designed to be stacked (shop our
stacking chairs instead)
5. Furniture not being moved correctly
6. Table tops being etched by spills of liquids
7. Indoor furniture being used outdoors
8. Sunlight causing color bleaching
27
9. Stains not cleaned up properly or quickly enough
10. Furniture not being used correctly – i.e. using a foot rest as a stool and it is
snapping or breaking.
START
Pick up of
Furniture
Establishing
Expectations
Is Estimated
NO
Cost
Acceptable?
YES
28
Scheduling the
Operation
Rendering of
Services
Delivery of
Furniture
END
Figure 3. 1 General Process Flow Chart
Technical Description of Processes
The general processes to be done in the proposed restoration service of is
given technical description:
1. Pick up of Furniture. The furniture to be restored will be picked up from the
customer’s house and to be brought to the working area.
2. Establishing Expectations. Establishing expectations means how the piece
in question will look when the restoration process is complete. Offering a range
or levels of restoration from merely stabilizing the piece, to "touching up" the
finish, to completely restoring the piece to its original condition.
3. Evaluation and Estimate. The next step is to evaluate the piece and provide
a restoration plan with an estimate of what it will cost.
4. Scheduling the Operation. Planning the schedule of operation includes the
time allotted for each operation and the date of completion.
29
5. Rendering of Services. It is the start of operation on the services needed for
repair/restoration.
6. Delivery of Furniture. The repaired/restored furniture will be delivered from
the working area to the customer.
Services to be offered by MUEBLES Repair and Restoration Services
1. Leather Re-upholstery Service
Leather re-upholstery is the work of providing furniture, especially seats,
with padding, springs, webbing, and fabric or leather covers. It includes
redoing/outfitting items like chairs and sofas with springs, padding and leather
coverings.
2. Fabric Re-upholstery Service
It is taking the upholstery off existing furniture and replacing it with the new
upholstery weight fabric. It can replace worn fabrics and materials and can give a
new look for old sofa, chair or couches that doesn’t fit with the décor of
customer’s room.
3. Furniture Repair Services
30
The service includes repairing minor surface damage and wear and tear,
patching cracks and gouges and veneer repair. It is also on tightening old joints
which includes by disassembling, cleaning off old glue, re-gluing and clamping,
squaring and aligning pieces.
a. Scratches, Dents, Heat /Water Mark Removal
b. Structural Repairs and Assembling
c. Furniture rebuilding and regluing
4. Part Replacement Services
This can restore piece of furniture or change the look of that piece by
changing the style of drawer pulls, hinges, legs or other furniture parts. It also
includes matching and fabricating replacements for missing sections and pieces.
5. Furniture Refinishing/Polishing
Wooden and metal furniture pieces involve stripping furniture pieces of
their finish and applying a new stain, paint, lacquer and/or varnish. Color
matching and color change services are also offered.
6. Metal Furniture Repair
This service includes fix broken iron wrought, remove corrosion in
aluminum.
7. Stain Removal
31
Leather, fabric and wood can have stains and marks over time and with
use. This service includes cleaning up the wood, leather or the fabric part of the
furniture.
Time Study for MUEBLES Repair and Restoration Services
A. Fabric/Leather Re-upholstery Service
ACTIVITY ESTIMATED TIME (in minutes)

Taking down or removing layers of
20
upholstery right down to the frame.
Brush off dirt and debris of frame. 25
Retying or replacing old springs. 15
Filling or replacing foam or cotton in
60
worn-out cushions.
Measuring the furniture to be
10
reupholstered.
Measuring of fabric/leather to be cut. 20
Cutting the fabric/leather using heavy
10
duty shear.
Sewing the fabric/leather together. 120
Stapling the fabric/leather under the 35

furniture.
TOTAL 300
B. Furniture Refinishing (Wooden Furniture)

Removing the old paint or varnish by
sanding or through the use of 10
chemical stripper.
Sand the wood 12
Applying sanding sealer 13
Applying the stain/paint 12
Applying varnish or lacquer 13
Drying of furniture 60
32
TOTAL 120
C. Furniture Refinishing (Metal Furniture)

Removing the old paint by sanding or
12
through the use of chemical stripper.
Sand the metal 13
Clean the furniture to remove dirt, oil,
5
dust and rust.
Applying the stain/paint 13
TOTAL 103
D. Furniture Rebuilding and Regluing

Label the parts 10
Disassemble the furniture 15
Remove screws and nails 10
Scrape out old glue 9
Clean the surfaces 5
Replace Loose or Broken Dowel Pins 10
Apply glue to the joints 10

Reassemble the furniture using clamp 20
TOTAL 89
E. Furniture Dent Removal (Wooden Furniture)
33
Damp the dent with water 5
Place a damp paper towel or piece of
5
cloth over the dent.
Give the water time to soak 10
Steaming up the dent using hot iron 15
Smooth out the surface with the
10
sandpaper
Put filler material to large dents 15
Brush on a protective finish. 10

TOTAL 70
F. Furniture Stain Removal (Wooden Furniture)

Remove the finish over the stain
10
gently with sandpaper
Sand the stain 15
Remove sanding dust using cloth 5
Put on several light coats of varnish to
15
match the original finish.
TOTAL 45
G. Replacement Parts Services (Wooden Furniture)

Assessment of parts to be replaced 10
Draw the part to be created 15
Measure the part to be replaced 15
Cut the part 30
Re-fitting the new part using glue,
45
screws or nails, or through welding
Refinish the replacement part 15
TOTAL 190
H. Wrought Metal Furniture Repair
34
Remove rush and flaking paint 6
Turn on welding machine 1
Weld broken parts back on to the
10
furniture
Work across the join and ensure the
weld penetrates deeply to give 20
increased strength.
Buff the excess welding materials 15
Sand the metal surface 12
TOTAL 64
35
36
Figure 3.2 Process Flow Chart
Figure 3.2 shows the general process of operation in the proposed study.
Machine and Equipment
The proposed project requires machine and equipment in order to operate
and create or generate income. In this part of the study, the researchers show
the list of machines and equipment required in the facility with their specification
and usage of the said equipment.
37
Figure 3.3 Welding Machine
Figure 3.3 shows the welding machine to be purchased for the proposed
study. Welding machine is a machine which joins the two metals or
thermoplastics by heat. It converts energy to heat in the weld zone that result in
melting, fusion, and joining.
Figure 3.4 Sewing Machine
Figure 3.4 shows the industrial sewing machine to be purchased for the
proposed study. Sewing machine is a machine used to stitch fabric and other
materials together with thread.
Table 3.1
Tools and Equipment and Its Description
Tools and Images Description

Equipment
Upholstery A staple gun or
Staple Gun powered stapler is a hand-held
machine used to drive heavy
metal staples into wood, plastic,
or masonry.
38
Power Drill A drill is a tool fitted with a
cutting tool attachment or driving
tool attachment, usually
a drill bit or driver bit, used for
boring holes in various materials
or fastening various materials
together.
Claw A claw hammer is a tool

primarily used for pounding nails
Hammer into, or extracting nails from,
some other object.
Metal Tape A metal tape measure or

measuring tape is a flexible ruler
Measure and used to measure distance.
Chisel A chisel is a tool with a

characteristically shaped cutting
edge of blade on its end, for
carving or cutting a hard
material such as wood, stone, or
metal by hand, struck with a
mallet, or mechanical power.
Screwdriver A screwdriver is a tool,

manual or powered, for
screwing and unscrewing
(inserting and removing) screws.
39
Plier Pliers are used to adjust
nuts or bolts and for work
involving cutting and skinning
wires, cutting and removing
pins, nails and other fasteners.
Block Plane A block plane is a small

woodworking hand plane which
is designed to cut end grain and
is typically small enough to be
used with one hand.
Saw In woodworking and

carpentry, hand saws, are used
to cut pieces of wood into
different shapes. This is usually
done in order to join the pieces
together and carve a wooden
object.
Shear Shear cut cleanly through

leather, upholstery, vinyl and
more.
Sandpaper Sandpaper is used to

remove material from surfaces,
either to make them smoother to
remove a layer of material or
sometimes to make the surface
rougher.
40
A brush is a common tool
Brush
with bristles, wire or other
filaments. It is used
for cleaning, grooming hair, mak
e up, painting, surface finishing
and for many other purposes.
Materials and Supplies
As for its supplies, MUEBLES Repair and Restoration Services will acquire
mostly imported chemicals and materials. Other materials will be purchased from
local distributors.
Some of the materials and supplies to be used in the operations are the
following:
Figure 3.5 Wood
Wood is the hard substance that forms the branches and trunks of trees
and can be used as a building material, and for making things.
While lumber is available in the domestic market, manufacturers have
started using imported species. Mahogany and tanguile are the commonly used
types of wood that are locally sourced.
41
Figure 3.6 Leather
Leather is a durable and flexible material created by tanning process which
converts the putrescible skin into durable, long-lasting and versatile natural
materials for various uses. The skin of the leather is soft and matte finish also
known as garment leather or commercial leather. It is known for strength and
durability.
Figure 3.7 Metal
A metal is a material that is typically hard when in solid state, opaque, shiny,
and has good electrical and thermal conductivity. Metals are generally malleable
—that is, they can be hammered or pressed permanently out of shape without
breaking or cracking—as well as fusible and ductile.
42
Figure 3.8 Fabric
Fabric is cloth or other material produced by weaving together cotton,
nylon, wool, silk, or other threads.
Figure 3.9 Paint
Paint is a colored substance that is spread over a surface and dried to
leave a thin decorative or protective coating.
Business Location
MUEBLES Repair and Restoration Services is to be located at Poblacion
Barangay 9, Lipa City. The proposed business will be put up beside the Sideway
Grill – Restaurant. The business space will consist of service area, working area,
storage area, and waiting area. It is to be situated near the proponents’ area so
that they can easily assess and evaluate the condition of the business. To easily
attract market, it is to be located at an accessible area.
43
Figure 3.10 Target Location of MUEBLES Repair and Restoration Services
Service Facility Size and Layout
The business will make use of 126 square meter site comprised of parking
area, receiving area/billing area, work area, restored products and storage. The
parking area covers 27 square meters, the restored products area with 13.696
square meters, receiving/billing area with 34.24 square meters, 33.984 square
meters for the work area, and 17.936 square meters for the storage area.
Utilities
Utilities keep the services operation running including the water
consumption, electrical consumption and the internet connection.
The project will generate power supply through Batangas Electric
Cooperative (BATELEC II) to provide lighting, ventilation and electricity for the
machineries needed in the operation of the business.
44
This project will also generate water supply from Metro Lipa Water District
(MLWD) and the proponents expects for the minimum water consumption of the
business every month.
The PLDT internet connection will provide the means of communication for
the business’ need when transacting with suppliers and customers.
Waste Disposal
One of the problems that contribute to continuous increasing of
environmental concerns and issues is waste. The proponents will make sure that
the operation of MUEBLES Repair and Restoration Services would not harm the
environment.
The wastes including wood cuttings and saw dusts which can be collected
and recycled to boards. Also, glass cuttings will be collected and sold to junk
shops for re-molding. The proponents will also provide different garbage bins that
are allotted for non-biodegradable, biodegradable and recyclable wastes.
Labor Requirements
Labor forces are the most important components in any industry and it is
the most valuable organizational asset. It is important to choose employees or
workers who can perform their respective duties.
45
MUEBLES Repair and Restoration Services will employ a total of three (3)
workers. Each of them will be given assigned tasks and responsibilities according
to their respective positions, capabilities and field of specialization.
Chapter IV
FINANCIAL FEASIBILITY
46
Financial study is the most important aspect of this feasibility study as it
pictures the condition of the business proposal to prove that the proposed
venture, MUEBLES Repair and Restoration Service is feasible. This chapter
covers different financial tasks that determined whether the business is to be
pursued or not.
The object of this financial feasibility study is to analyze total facility costs,
including construction and operating expenses, and potential facility revenue that
could vary from rental fees, and other forms of participant contributions. A
business plan that measures the adequacy of potential revenues to meet
operating, debt service and replacement costs is developed. Options for capital
financing are not analyzed but recommended.
A. Financial Assumptions
In formulating the projections, assumptions play an important role because
they serve as the foundation for estimating future expenditures, expenses and
revenues of the project as accurately as possible. These assumptions therefore,
must be based on well considered, realistic and workable facts.
The following are the major assumptions in the course of business:
1. Working Days
47
The proponents have decided that there will be 6 working days a week, 8
hours a day and approximately 288 operational days a year.
2. Inflation rate
It is the rate at which the general level of prices for goods and services are
rising and, consequently, the purchasing power of currency is falling. Inflation
rate of 4% was used by the proponents to determine the cost of materials,
utilities, supplies and other expenditures for the next four years. It is measured in
the estimation of the financial statement for it can affect the price of the service
because of the increase on the direct and indirect materials.
3. Fixed Assets
Fixed assets include all tangible belongings that are necessary and useful
in the operation of the business such as land, building, machinery and
equipment, furniture and fixtures and other non-current assets. Estimation of the
useful are also presented, including the reliability and durability of the assets.
4. Accounts Payable
Accounts payable is the aggregate amount of an entity's short-term
obligations to pay suppliers for products and services which the entity purchased
on credit. If accounts payable are not paid within the payment terms agreed to
with the supplier, the payables are considered to be in default, which may trigger
a penalty or interest payment, or the revocation or curtailment of additional credit
from the supplier. The proponents have decided that purchases on account will
48
be 40% of the total annual purchases and ending accounts payable will be 3% of
its purchases on account.
5. Initial Investment
Initial investment will be Php 2,835,227.39 to be made by the owner of the
business. There will be partnership between the proponents and the owner of
Renbel Furniture and Appliance Center.
6. Revenue
Service revenue is the sales reported by a business that relate to services
provided to its customers. This revenue has usually already been billed, but it
may be recognized even if unbilled, as long as the revenue has been earned.
Service revenue will be computed by multiplying the number of services rendered
per type of service with its equivalent service fee. Service fee will be fixed
starting on the second year of operation. There will be 40% mark up on each
process in determining the service fee to be billed to customers.
7. Cost of Services
Cost of services is the total cost of manufacturing and delivering a product
or service. Cost of services’ information is found in a company’s income
statement and is designed to represent the direct costs associated with the
goods and services the company provides. Cost of services includes the direct
charges-materials and direct charges-salaries.
8. Depreciation
49
The annual monetary decrease in the value of the physical assets and
verifies the intended useful life and obsolete time of the machine. Building will
have a useful life of 15 years, likewise, some of the machinery and equipment
will have a useful life of 10 years and the rest of it will have a useful life of 5
years. Furniture and fixtures as well as non-current assets are deemed to have a
useful life of 5 years. Likewise, straight-line method of depreciation is used to
determine the annual depreciation expense for each asset.
9. Communication, Light and Water
There will be 4% annual increase on the utilities and the billing rate will be
affected by the inflation rate yearly.
10. Provision of 13th Month Pay
Provision of 13th Month Pay was enacted by the management. All
employees of the firm will receive the incentive per year, as mandated by the law.
It will be 1/12 of the annual salary gained by the employee.
11. Salary
It is a fixed regular payment and typically paid on a monthly basis but
often expressed as an annual sum which made by an employer to an employee.
Service personnel will receive their compensation on a semi-monthly basis.
Moreover, in order to motivate and encourage workers to be more
efficient, the salary of the employees will increase by 4% annually.
12. Project Cost
50
This includes the actual investment and the cost in the acquisition of
company’s assets like land and building, construction and renovation, machine
and equipment and the company’s furniture and fixtures. Assumption of the
project cost was estimated for the first three months.
13. Service Fee
Service fees are based on the process the customer would like to have
and depend on the nature of leather they have. Service fee will include a 40%
mark-up. Different prices are set due to increase on the general level of prices of
direct materials and increase on direct charges-salaries.
14. Annual Income tax
Since the project is formed as a partnership which primary purpose is to
earn profit through the offering service, it will be taxed just like corporation with a
rate of 30% based on its taxable amount. The business is required to file, with or
without payment, on or before the 15th day of the 4th month following close of
the taxpayer's taxable year. Payment must be made on the next day after the
deadline of filing.
B. Total Projected Cost
51
The next step in the preparation of the financial aspect of a project
feasibility is the estimation of the project’s total cost or initial asset requirements.
Fixed assets and variable costs will comprise the total project cost.
Table 4.1
Total Projected Cost
Fixed Assets Php
Land 1,008,000.00
Building 812,883.90
Office Equipment 19,850.00
Tools & Equipment 105,293.50
furniture and fixture 12,300.00
Truck 500,000.00
2,458,327.40
Working Capital
Direct Materials 136,258.33
Direct Labor 81,455.70
Utilities 12,619.16
Non-consumable supplies 4,628.00
consumable supplies 1,288.00
Office Equipment 19,850.00
Tools and equipment 105,293.50
Diesel 2,552.19
Permits and Licenses 12,955.11
Total Project Cost 2,835,227.39
C. Initial Investment Requirement
MUEBLES Repair and Restoration Services will require an initial
investment cost of Php 2,835,227.39. This will be used for the construction of
building, acquisition of land and purchasing of conventional supplies and
equipment.
52
D. Sources of Financing the Project
The proposed business will be financed by the Renbel Furniture and
Appliance Center. One hundred percent (100%) of the fixed assets and total
initial working capital will be financed by the owner himself.
E. Financial Statement
Financial statements are collection of reports about an organization's
financial results, financial condition, and cash flows. They are useful to determine
the ability of a business to generate cash, and the sources and uses of that cash,
to determine whether a business has the capability to pay back its debts, to track
financial results on a trend line to spot any looming profitability issues and to
derive financial ratios from the statements that can indicate the condition of the
business.
1. Projected Income Statement
Income statements help investors and creditors determine the past
financial performance of the enterprise, predict future performance, and assess
the capability of generating future cash flows through report of income and
expenses.
53
The income statement provides the investors with much insight in the
business’ revenues and expenses. Most importantly, the income statement tells
the investors if the business is profitable. If the company makes substantial profit,
it indicates to investors that it is in a stable state.
Detailed computation of Income Statement is presented in Appendix J
table 10.
2. Projected Cash Flows
Cash flow refers to the movement of cash into and out of the business, a
project, or a financial product. It is usually measured in a specified, finite period
of time.
Detailed computation of projected cash flows is presented in Appendix J
table 11.
3. Projected Balance Sheet
Balance sheet or statement of financial position is a summary of the
financial balances of a sole proprietorship, a business partnership or a company.
Assets, liabilities and ownership equity are listed as of a specific date, such as
the end of its financial year. A balance sheet is often described as a “snapshot of
a company’s financial condition”. Of the four basic financial statements, the
balance sheet is the only statement which applies to a single point in time.
See Appendix J table 12 for detailed computation of balance sheet.
F. Financial Analysis
54
Financial analysis refers to the assessment of the financial statements in
order to determine the strengths and weakness of the financial position and
performance of the firm. Financial Analysis will provide insights with regards to
the profitability, liquidity, cash solvency, and growth and stability of the business.
This will also serve as a gauge for decision making of the firm.
Furthermore, the financial analysis is the most important part of the
feasibility study. This part is essential to evaluate the project’s viability. Financial
ratios and other measures are used.
A. Payback Period
This is used by enterprise to ascertain how fast initial investment is
recovered. It refers to the period of time required for return on an investment to
repay the sum of the original investment.
Table 4.2
Accumulated Method Payback Period
Total Initital Investment Cost

Payback Period =
Total Income after Tax
Number of Years
Investment Income
Year
Cost after Tax
2,835,227.3
2019 448,544.42
9
2,386,682.9
2020 724,322.56
7
1,662,360.4
2021 776,140.88
1
2022 886,219.53 836,808.51
2023 49,411.02 899,734.01
55
3,685,550.3
Total
9
Paybac
3.85
k Period
The project has a payback period of 3 years and 10 months. This means
the project cost can be recovered in less than five years, hence the study is
deemed to be feasible in terms of financial feasibility.
B. Test for Liquidity
This measure is applied to determine the firm’s ability to meet short term
obligations and to remain solvent in the event of adversities. It indicates the
entities’ liquidity, financial flexibility, ability to generate profit and its solvency.
Current Ratio
Current Assets
Current Ratio = x 100
Current Liabilities
Table 4.3
Current Ratio
CURRENT CURRENT CURRENT

YEAR
ASSETS LIABILITIES RATIO
2019 737,122 281,924.93 2.61
2020 1,633,563 447,391.80 3.65
2021 2,447,447 478,482.80 5.12
2022 3,327,309 514,883.38 6.46
2023 4,271,450 552,638.68 7.73
Current ratio measures the firm’s ability to pay off its currently maturing
obligations, with its resources. As shown in the table, the business has highly
56
enough assets to cover its current liabilities in the five-year period indicating that
the business is highly liquid and stable and has enough amount of current asset
to pay every possible current liability that will arise in the five-year period.
C. Test for Profitability
This measure reflects the operational performance and efficiency of the
profit. This shows the ability of the current business which is MUEBLES Repair
and Restoration Services to earn profit.
Net Income
Net Profit Margin= x 100
Net Sales
Table 4.4
Net Profit Margin
NET NET PROFIT

YEAR NET SALES
INCOME MARGIN
2019 448,544.42 1,124,330.00 39.89
2020 724,322.56 1,392,500.00 52.02
2021 776,140.88 1,491,175.00 52.05
2022 836,808.51 1,594,255.00 52.49
2023 899,734.01 1,700,870.00 52.90
This measure is helpful to management, providing insight into how much
profit is being produced per monetary unit of sales. As with many ratios, it is best
57
to compare a business’ net profit margin over time to look for trends and compare
it to other businesses in the industry.
D. Efficiency Ratio
Rate of Return on Asset
Net Income
Return on Asset Ratio= x 100
Total Assets
Table 4.5
Rate of Return on Asset
RETURN ON
NET TOTAL
YEAR ASSETS
INCOME ASSETS
RATIO
2019 448,544.42 2,963,653.25 15.13
2020 724,322.56 3,753,442.68 19.30
2021 776,140.88 4,460,674.56 17.40
2022 836,808.51 5,233,883.65 15.99
2023 899,734.01 6,071,372.97 14.82
Return on asset gives an idea as to how efficient the management is in
using assets to generate earnings. Table 4.5 shows the business’ return on
assets indicating that the company is earning at around 13% on monetary
investments.
58
Rate of Return on Equity
' Net Income

Return on Owner s Equity= x 100
Owner s ' Equity
Table 4.6
Rate of Return on Owners’ Equity
RETURN ON
NET OWNERS' OWNERS'
YEAR
INCOME EQUITY INVESTMEN
T
2019 448,544.42 2,681,728.32 16.73
2020 724,322.56 3,306,050.88 21.91
2021 776,140.88 3,982,191.76 19.49
2022 836,808.51 4,719,000.27 17.73
2023 899,734.01 5,518,734.29 16.30
Return on equity measures the business’ profitability revealing how much
profit the proposed business generates with the money that the owner had
invested. As shown in the table, the business will have an average return on
equity which is around 14% indicating a good performance in terms of returns in
equity.
59
CHAPTER V
SOCIO-ECONOMIC FEASIBILITY
MUEBLES Repair and Restoration Firm will be a good partner in uplifting
the economic status of many families and will help in development of the
community. The company looks not only on profit generation but on the social
and economic benefits of the community as well.
A. Government Revenue
The city’s revenue will increase as direct result of the taxes that can be
collected from the company. This can help the government to fund community
services like livelihood projects, building of schools, bridges, health center, roads
and other programs that can be constructed.
B. Labor Employment
60
MUEBLES Repair and Restoration Services will need qualified, skilled and
competitive workers which comprise its organizational structure. Establishment
of the restoration firm can alleviate the unemployment problem and help improve
the living condition of its workers and their families as well. The business
believes in people and their responsibility to give their customers quality service.
C. Environment
The company will implement zero-waste management. The firm plans to
gather all excess materials from production and reprocess them. By doing this,
the people and environment will be free from hazards, will have return on costs of
garbage disposal and meet the need for environmental preservation.
D. Benefits to the People
The firm will offer economy of price, quality of service and satisfying output
to its customers. The main goal is to satisfy customers’ needs and meet their
expectations. The service and output will be non-toxic and will not be harmful to
both the workers and the customers. The firm will offer benefits to its workers in
terms of health, insurance, security and bonuses every end of the year.
61
CHAPTER VI
ORGANIZATION AND MANAGEMENT FEASIBILITY
Effective management is essential to the existence of MUEBLES Repair
and Restoration Services. The survival of the company calls for the effective
management and cooperation of every member of the company. It is the
responsibility of the firm to encourage everyone to raise the standard of living,
achieve moral and social objectives and create new and productive ideas.
Good decision-making, motivation of people, coordinating activities,
handling workers, performance evaluation and similar activities of management
shall be prioritized to get things going smoothly and perfectly.
A. Form of Ownership
MUEBLES Repair and Restoration Services will operate under the form of
sole proprietorship that unite themselves to contribute money or property to a
common fund with the intent of dividing equally the profit and benefits brought by
62
the firm during its operation. Likewise, they will also bear the risks, problems,
threats and competition that may be met by the business during its operation.
Starting with a basic structure, the proponents chose this form of ownership
because it will be suitable for the business’ purpose.
B. Organizational Chart
The organizational structure of MUEBLES Repair and Restoration
Services show the relationship, functions, and importance of every individual in
the firm. It shows the coordination of the top management with its business
subordinates, and the pattern of the decision-making and implementation of the
policies within the organization.
OWNER
OWNER
MASTER
CRAFTSMAN
WORKER 1 WORKER 2
63
Figure 6. Organizational Chart for MUEBLES Repair and Restoration
Services
C. Key Officers and Personnel
Master Craftsman
The master craftsman has the duty of overseeing projects, and times, in
repairing or restoring of the furniture itself. He oversees the carpenter and other
worker and is responsible for estimating the materials to be used in the furniture.
He must possess good working skills in the wood and other furniture materials for
he will, at times, aid and teach his fellow workers in using tools and other
equipment in the furniture repair and restoration services. He holds the highest
position next to the owner.
Qualifications:
 Male, at least 25 years of age,

 Must be very technical and vocationally oriented in wood working, furniture
making, carpentry, upholstery and other related fields in furniture assembly.

 Knowledgeable in different working properties of woods, and experience in
operating hand tools, carpentry tools and electric power tools,

 Efficient and hardworking,
 Have a good sense of material estimation for repairing furniture,
 Work experience is a must (preferably 2 to 5 years in the wood working or
furniture making).
Worker (2)
64
The worker will be responsible for delivering satisfactory service to
customers. He must be trained in working with furniture, to carefully implement
the best solution for the damaged furniture. He must be trained in providing
leather and fabrics in furniture like sofa and chairs. He is expected to work under
pressure and must be customer-oriented. He is also responsible for delivering
the repaired or restored furniture to the customers.
Qualifications:
 Male, at least 25 years of age,

 Must have technical and vocational skills in wood working, furniture
making, carpentry, upholstery and other related fields in furniture assembly.

 Knowledgeable in different working properties of woods, and experience in
operating hand tools, carpentry tools and electric power tools.

 Efficient and hard working.
 Have a good sense of material estimation for furniture restoration.
 Knowledge in glass cutting and related field in metal working is leverage.
 Knowledge in metal working and welding is leverage.
 At least high school graduate, with professional driver’s license and
experience to operate articulated vehicles of 4501 kg and above (heavy
vehicles)
 Has good record and willing to work over time.
Salary of workers is presented in Appendix J.
65
CHAPTER VII
LEGAL ASPECT
The company will comply with the legal aspects required by the
government. Securing permits and licenses are necessary in establishing any
business. MUEBLES Repair and Restoration Service will secure the necessary
requirements which include the following:
a. DTI Registration
b. Business Tax
c. Building Permit
d. Barangay Clearance
d. Mayor’s Permit
e. Fire Inspection Clearance
g. Occupational Fee
h. Philhealth Registration
i. Registration with Bureau of Internal Revenue
j. Registration with Social Security System
66
CHAPTER VIII
CONCLUSIONS AND RECOMMENDATIONS
Based on the feasibility study, the proponents are convinced that investing
in business of furniture is feasible. MUEBLES Repair and Restoration Services
could be a good source of income and could generate employment opportunities
especially in the area of Lipa City.
A. Conclusion
Service-oriented business has potential in the market. It allows freedom to
leverage skills and earn profit. MUEBLES Repair and Restoration Services is a
service-oriented business aiming to deliver excellent furniture repair and
restoration services. It also aims to guarantee earning profit and help labor force
in the community. To attain one of its goals, the business must be flexible to meet
and solve its problems especially those economic in nature that may affect its
operation. The proponents concluded that the proposed project is feasible and
viable in terms of location, proximity to the market, and market demand through
market, technical, financial, management, and socio-economic studies. An
investment of Php 2,835,227.39 will be needed by the business to start its
operation and the investment is anticipated to be recovered in 3 years and 10
months
67
B. Recommendations
Based on the foregoing results and in consideration of its objectives, the
proponents recommend the following:
1. The business firm shall thoroughly examine the marketing strategy so as
to capture market for furniture repair and restoration services.
2. Continuous research on furniture repair and restoration services may be
done to meet standards and demand of customers.
3. The business firm shall be aware of the present situation in the market,
must adapt to changes, level up its marketing strategies, and innovate.
68
BIBLIOGRAPHY
Unpublished Study
Atienza et. al. (2010). EQC Leather-Shoe Manufacturing
Online References
https://www.forbes.com/sites/houzz/2016/12/13/how-to-clean-and-care-for-
leather-furniture/
https://www.chemdry.com/residential/leather-cleaning-restoration
https://www.howtocleanthings.com/how-to-clean-leather/
https://www.popsugar.com/smart-living/Homemade-Leather-Furniture-Cleaner-
30606503
69
APPENDICES

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MUEBLES Repair and Restoration Services

Poblacion Barangay 9, Lipa City, Batangas

A Feasibility Study Paper Presented to the Faculty of the

College of Engineering and Computing Sciences

BATANGAS STATE UNIVERSITY

In Partial Fulfillment of the Requirements of the Degree of

Bachelor of Science in Industrial Engineering

Layco, Joanne Marie S.

Mercado, Anne Gelleen A.

Reyes, Errol John R.

This project feasibility entitled “MUEBLES Repair and Restoration at

Poblacion Barangay 9, Lipa City, Batangas” prepared and submitted by

JOANNE MARIE S. LAYCO, ANNE GELLEEN A. MERCADO and ERROL JOHN

R. REYES in partial fulfillment of the requirements for the degree of BACHELOR

OF SCIENCE IN INDUSTRIAL ENGINEERING is hereby accepted.

LEOVEN A. AUSTRIA, MSIEM, CIE

Approved by the panel on oral examination with a grade of ____________.

MICHAEL C. GODOY, Ph.D., PIE

MARICEL M. LACBAY, CIE RODERICK A. CABAEL, MBA

Accepted and approved in partial fulfilment of the requirements for the

August 2018 NORA G. DIMAANO, Ph.D.

The researchers would like to express the deepest appreciation and

feasibility study possible:

To Batangas State University, for providing them quality education of

To Dr. Michael C. Godoy, Engr. Maricel M. Lacbay and Engr. Roderick A.

contribute to the betterment of the study;

throughout the course of the study.

CHAPTER II: MARKET FEASIBILITY

CHAPTER IV: FINANCIAL FEASIBILITY

CHAPTER V: SOCIO-ECONOMIC FEASIBILITY

CHAPTER VI: ORGANIZATION AND MANAGEMENT FEASIBILIT

CHAPTER VII: LEGAL ASPECTS

CHAPTER VIII: CONCLUSIONS AND RECOMMENDATIONS

TABLE TITLE PAGE

2.1 Historical Demand of Furniture Repair and Restoration 17

2.2 Projected Demand of Furniture Repair and Restoration 18

2.3 Projected Demand per Service of MUEBLES Repair and 20

2.4 Market Analysis Based on Survey Demand 21

2.5 Total Population of Target Market (Year 2015) 24

2.6 Estimated Population and Households of Target Market 25

given PGR of 2.41%

3.1 Tools and Equipment and Its Description 39

4.1 Total Projected Cost 53

4.2 Accumulated Method Payback Period 56

4.3 Current Ratio 58

4.4 Net Profit Margin 59

4.5 Rate of Return on Asset 60

4.6 Rate of Return on Owners’ Equity 61

FIGURE TITLE PAGE

2.1 Historical Demand of Furniture Repair and Restoration 18

2.2 Projected Demand of Furniture Repair and Restoration 19

3.1 General Process Flow Chart 29

3.2 Technical Process Flow Chart 37

3.3 Welding Machine 38

3.4 Sewing Machine 39

3.10 Target Location of MUEBLES Repair and Restoration 45

6 Organizational Chart for MUEBLES Repair and Restoration 65

2.1 Historical Demand of Leather Dry Cleaning and 13

Restoration Services (Leather Shoes)

2.2 Projected Demand of Leather Dry Cleaning and 14

Restoration Services (Leather Shoes)

2.3 Historical Demand of Leather Dry Cleaning and 16

Restoration Services (Leather Bags and Jackets)