Cyberhub Internet Cafe
Republic of the Philippines
NUEVA ECIJA UNIVERSITY OF SCIENCE AND TECHNOLOGY
Cabanatuan City
A FEASIBILITY STUDY ON
THE PROPOSED CYBERHUB INTERNET SHOP
In partial Fulfilment of the
Course Requirements in
PROJECT FEASIBILITY STUDY
Mr. Ferigrino Urbano
Adviser
Marco Joseph Bernacer
Bernardo Balic
Nelson Galang
Timtus Oliver Torres
Jaydee Nilo
Merberth Silvestre
Joey Gutierrez
September 19, 2011
RECOMMENDATION FOR ORAL EXAMINATION
This Project Feasibility Study entitled “A FEASIBILITY STUDY ON THE PROPOSED CYBERHUB INTERNET SHOP”, prepared and submitted by Marco Joseph Bernacer, Bernardo Balic, Nelson Galang, Timtus Oliver Torres, Jaydee Nilo, Merberth Silvestre, and Joey Gutierrez, in partial fulfilment on the requirements in the subject PROJECT FEASIBILITY STUDY has been examined and recommended for Oral Examination. APPROVAL SHEET

Accepted for Oral Examination
Mr. Felipe E Balaria
Chairman
Panel Members
Mrs. Mercedes Santos
Ms. Joy Nacino Mr. Juvenal Yabut
Accepted in partial fulfilment of the requirements in the subject PROJECT FEASIBILITY STUDY. Mr. Ferigrino Urbano
Adviser
Ms. Jocelyn Cruz
Dean. CMBT
ACKNOWLEDGMENT
The researchers would like to extend their special appreciation to the following persons: Mr Ferigrino M. Urbano, their feasibility study Adviser, for his guidance and unwavering support; Miss Cherry Hernandez, owner of Kanuto’s Internet Shop for the information she furnished the researchers; Mr and Mrs Carlos Pajarillaga, owner of the boarding house, for accommodating the researchers during the preparation of the project; They will never forget the Lord who gave them all the knowledge and strength. The Researchers

DEDICATION
To our parents, brothers, and sisters;
To our loved ones;
MJSGB
BMB
JTG
NBG
TOET
JTN
MSS
Table of Contents
RECOMMENDATION FOR ORAL EXAMINATION i
ACKNOWLEDGMENT ii
DEDICATION iii
LIST OF TABLES vii
LIST OF FIGURES viii
I. Summary of the Project 1
1.1 Name of the Firm 1
1.2 Location 1
1.3 Brief Description of the Project 1
1.4 Project Summary 3
1.4.1 Market Feasibility 3
1.4.2 Technical Feasibility 3
1.4.3 Management Feasibility 4
1.4.4 Financial Feasibility 5
1.4.6 Socio-economic Impact 5
II. Introduction/Background of the study. 6
2.1 Brief Background of the Study 6
2.2 Operational Definition of Terms 7
III. Market Study 9
3.1 Market Description 9
3.2 Methodology 10
3.3 Demand 13
3.4 Supply 15
3.5 Demand – Supply Analysis 16
3.6 Market Share 18
3.7 Marketing Strategies 19
3.7.1 Pricing 19
3.7.2 Promotions and Advertising 20
3.7.3 Advantages against competitors 23
IV. Technical Study 24
4.1 Services 24
4.2 Business Operation 24
4.3 Machines and Equipment 26
4.4 Computer Software 29
4.5 Furniture and Fixtures 33
4.6 Supplies 35
4.7 Utilities 36
4.8 Labor Requirements 37
4.9 Building Location 37
4.10 Building and Facilities 39
4.11 Building Size and Layout 41
4.12 Services 42
4.12.1 Capacity to provide service 42
4.12.2 Service income forecast 43
4.13 Waste Disposal 44
V. Management study 45
5.1 Forms of Business Organization 45
5.2 Capitalization 46
5.3 Manpower Requirements 47
5.4 Organizational Structure 47
5.5 Legal Requirements 50
VI. Financial Study 51
6.1 Total Project Cost 51
6.2 Sources of Funds 52
6.3 Assumptions Underlying Projections 52
6.4 Projected Cash Flow Statement 53
6.5 Projected Income Statement 54
6.6 Projected Balance Sheet 55
6.7 Schedules 57
6.7.1 Service Income Forecast and Other Service Income 57
6.7.2 Non-Current Asset 58
6.7.3 Gains on Sale of Assets 60
6.7.4 Depreciation 61
6.7.5 Accumulated Depreciation 62
6.7.6 Salaries, Utilities, Income Tax and Permits and Licenses 63 VII. Financial Analysis 65
7.1 Return on Investment 65
7.2 Payback Period 66
A. Return on Investment 67
B. Payback Period 67
VIII. Socio-economic impact 68
Appendices 70
Appendix A – Sample Questionnaire and Survey Results 70
Appendix B – Online Order Forms 73
Appendix C - Documentation 75
LIST OF TABLES
Table 1 - Distribution of Samples 10
Table 2 - Demand Distribution 13
Table 3 - Number of Customers Served at a time/per day and demand figures 14 Table 4 - Supply Figures at a time and per day 15
Table 5 - Demand and Supply Figures 16
Table 6 - Market Share 18
Table 7 - Pricing of Competitors vs. Pricing of the proposed business 19 Table 8 - Services Offered 20
Table 9 - Proposed Services of Cyberhub 23
Table 10 - Description, Qty., Unit Cost, Total Cost of Machines 25 Table 11 - Additional Equipment for Business Operation 28
Table 12 - Cost of Computer Softwares 29
Table 13 - Description, Qty., Unit Cost and Total Cost of Furniture and Fixtures 33 Table 14 - Office Supplies (One Month Stock) 34
Table 15 - Utilities (Electricity, Water and Communication) 35 Table 16 - Proposed Position/Salary 36
Table 17 - Full Service Capacity based on Number of Hours of Operation 41 Table 18 - Projected service income from computer rentals 42 Table 19 - Cleaning Supplies 43
Table 20 - Proposed Position/Salary 46
Table 21 - Legal Requirements 49
LIST OF FIGURES
Figure 1 - Distribution of Samples per Department 10
Figure 2 - Demand and Supply Gap Chart 17
Figure 3 - Projected Supply Figures 18
Figure 4 - Leaflets before and after announcement 21
Figure 5 - Tarpaulins to be hanged near site 22
Figure 6 - Server Unit – Lenovo ThinkCentre M71z 25
Figure 7 - Computer Unit – ASUS BM5342 26
Figure 8 - Printer - HP Photosmart Ink Advantage eAIO 27
Figure 9 - Air-conditioning Unit - LG Brand 27
Figure 10 – Furniture and Fixtures, from left - actual picture of chair and wall painting 33 Figure 11 - Building 38
Figure 12 - Organizational Chart/Structure 46
I. Summary of the Project
1.1 Name of the Firm
The Proposed business is an Internet Café, which shall be hereby named “Cyberhub”, a play on the words cyber, which means “anything that relates to computer culture and its characteristics, particularly the internet”, and hub which describes “a center of an activity or network”. 1.2 Location

Sumacab Este, Cabanatuan City. Along the highway, in front of NEUST. 1.3 Brief Description of the Project
The Business is an internet café of twenty computer units located at Sumacab Este Cabanatuan City near the Neuva Ecija University of Science and Technology Sumacab campus. The site will be rented at a monthly cost of P 8,000.00 and shall be improved by the partners. The business will target students of NEUST, teachers, professionals, as well as residents near vicinity. The high demand of fast internet café is growing day by day when users are not contented with below par speeds that competitors around the area are currently offering. The demand is strong enough to keep yet another five internet shops of the same kind to be established. Coupled with the location’s high traffic and high chance of discovery, the business is bound for success. Internet shops are yet another business trend, not just a fad, which is likely to be lucrative for up to 10 more years, and still greatly unsatisfied/unsupplied. The nearest competitor will be the Leo building, with an estimated market share of 13.24% (see Table 6 for complete details) which is lower than the estimated market share of the proposed business, rated at 14.71%. The nearest competitor with the same estimated market share is Webmaster, but is not a direct competitor since the shop focuses more on gamers, and has somewhat a loyal following with its customers. Based on the survey conducted (explained further on market study) 16 units of the computer units should be capable in internet demanding tasks since 89% of the respondents reflects the characteristics of an internet-junkie. 11% are gamers, therefore 4 computer units are thus fully specced to meet the highest expectations a gamer might have, though it is to be noted that both types of computers are capable of pulling of the same task. (More on technical study) Initial capital requirement of the proposed project is P 759,713.08. The initial capital will come from the equally invested money of the partners. The shop will be managed by one of the partners who have a handful of knowledge when it comes to computers. He will be assisted with two cashiers who will do the day-to-day operations of the business. 1.4 Project Summary

1.4.1 Market Feasibility
At present, there are 8 internet shops operating near NEUST, where the business will be located. According to the survey conducted, out of the total student population of 5,382, 4,019 go on internet shops located in Sumacab. Out of 4,922 population of Sumacab Este 2,793 go to internet café, at least near the NEUST Sumacab Campus (page 12 for illustration). Although there are a total of 6,812 of the combined population go to internet shops, only 1,467 of them will be treated as demand (page 14, for computation). They are the ones who answered that they go to internet shops more than once a week. The business can only serve 20 customers at a time. Out of 1,350 unserved demands of habitual customers 20 is equivalent to 1.48% (Table 7, page 18) which will therefore be referred as target market. The business further targets 8% of 5,345 nomadic customers, which is equivalent to 438. (Page 19 for computation) 1.4.2 Technical Feasibility

The manager has enough knowledge about computers and is well fitted to manage the business. Two computer-literate people will also be hired serving as cashiers. The computer units will be bought in bulk at PC Home Cabanatuan branch, 2nd Floor of NE Pacific Mall. The server will be ordered online at Lenovo’s online shop. The printer will be bought at Micro Valley Cabanatuan branch, at the time it is readily available. Other equipment will be bought at CD R-King Cabanatuan. The air-conditioning unit, as well as the furniture and fixtures will be bought on weemall.com. Computer softwares are also to be bought online on their respective online retailer/shops. The price of products that will be bought online already includes freight and shipping charge. (See table 12-15) The building is to be improved by the business. The shop will have a waiting area for customers and will be installed with air-conditioning unit while following the safety standards provided by the municipal government. The operation period of the business is 16 hours, starting at 7:00 in the morning and closing at 12:00 in the evening. The business will adapt the pricing provided by the competitors i.e. 15 pesos for an hour of using a computer. 1.4.3 Management Feasibility

The business is a partnership type, with 7 partners equally contributing money to pay for the computed total project cost. Top management which comprises of the partners has an equal authority to manage the business and direct the cashiers but with the approval of other partners. For better management, one of the partners will act as the manager. There is an estimated two weeks to be consumed to complete the preparations and the activities prior to operation. Those activities include the purchase of machines, equipment, furniture and fixtures, signing of rent agreement and securing the necessary permits needed by the business. 1.4.4 Financial Feasibility

The total project cost is estimated at 759,713.03 (see financial study) which will be provided by the partners. The amount includes purchases of non-current assets, prepaid and pre-operating expenses, and the 10% contingency working capital needed by the business. Return on Investment is 86% on year 1 and payback period is just 11 months and 16 days (.96 year) 1.4.6 Socio-economic Impact

The business will sincerely and devotedly pay taxes. It will help two unemployed people have a job and will give them benefits. Cyberhub can help students attain their goals fast and convenient by giving them the best service available. The business will charge reasonable prices II. Introduction/Background of the study.

2.1 Brief Background of the Study
Ever since the start of Computer Era, the evolution of computers has sky-rocketed. Just like what the famous Morse law indicates, technology grows exponentially every year. And as an enough manifestation of our inevitable fate of living a computer connected world, businesses that depends on this phenomenon started to exist, one of which is an internet café. There is a strong demand for internet cafés in Sumacab. That is according to the survey that we conducted. One of the reasons is the growth of students studying at the nearby NEUST Campus and of students living in boarding houses around the area. Another is that almost all assignments that the teachers are requiring students to pass should be computer-printed, the reason why almost a third of an internet shop’s profits came from printing services. Past demands enjoy the same trends, so for now, it is safe to assume that it will be the situation in the near future. Given that most students still don’t have their own computer/laptops, they have no choice but to rely on internet cafés whenever needed. The partners, believing that the best way to use their money is to put up a business, decided that the best business to enter today is an Internet Café. One of the partners agrees to be the manager since he has a considerable amount of knowledge when it comes to Computers. The decision of the partners is not based on the past trends alone. Return on investment, projected net income, as well as its high feasibility in all areas of the study is also considered. 2.2 Operational Definition of Terms

AIO – Acronym for All-in-One
Anti-virus – Computer software defending the Operating System against malicious attacks. Burning – is the process of embedding data to a physical object, such as CD or DVD. Computer Software – an application or game installed on computers for specialized tasks of either editing, creating or consuming media. They are classified as intangible assets although sometimes bought on a physical package, such as CDs and DVDs, instead of downloading. Computer Units – in this study will only refer to those computers that is available for customer usage. Intangible Assets – are assets that don’t have physical form. It may have physical form but the enjoyment of the product is possible even though the physical form doesn’t exist. Nomadic users – as used in this study, refers to internet café customers that only goes to internet shops when needed, and does not consider the shop that he/she enters. Online – Having a characteristic of being connected to the internet. Operating System (OS) – is the system the runs on your computer and manages you hardware. Printer – a machine that prints soft copies of documents/pictures created or retrieved through the use of computer. Photocopier – a machine particularly made for duplicating documents. Scanning – the process of copying a hard copy of a document into a soft copy viewable via computer monitor and editable through computer software/programs. Specced – as referred to in this study, is a colloquial term that should be used as a suffix or adjective which means “having specification” Server Unit – a computer unit that is specially specced to handle resource intensive task of managing the operation of the shop. Users – customers who use computers within the shop.

III. Market Study
3.1 Market Description
The business targets students, teachers and employees of NEUST Sumacab Campus, neighbouring residents, and professionals residing and/or working in Sumacab Este, Cabanatuan City. The NEUST Sumacab Campus as of June 2011 has a total population of 5,382 officially enrolled students (NEUST Office of the Registrar). Among the 5 departments located inside the campus, the College of Management and Business Technology has the highest student count with a total of 2022 while the...

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