“A Feasibility Study on the Expansion of

Elyza’s Laundry shop

in Purok Matinabangon”

Presented to the faculty and staff of Institute of

Business and Tourism Management

In partial fulfillment for the degree of Bachelor of

Science in Tourism Management and Bachelor
of Science in Business Administration

Submitted by: Jenny Magsayo

Fhea Maezel S. Fua

2018
 TABLE OF CONTENTS

Chapter 1
The Problem and its Background
Introduction Page 3 - 4
Related Literature Page 4 – 5
Related Studies Page 6
Statement of the Problem Page 7
Conceptual Framework Page 8-9
Scope and Limitations Page 10
Significance of the Study Page 10-11
Definition of Terms Page 12-14
Chapter 2
Research Methodology
Research Design Page 15
Population Page 16
Research Respondents Page 16
Research Instruments Page 17
Validation of the Instrument Page 17-18
Data Gathering Procedure Page 19-20
Chapter 3
Marketing Aspect
Business Name Page 21
Business Description Page 21
Business Location Page 22
Service Description Page 23
General Business Condition Page 23-25
Competitive Condition Page 25
Target Market Page 26
Survey Results Page 26-30
Demand/Supply Analysis Page 31-32
Demand and Supply Gap Page 32
Pricing Strategy Page 33
Advertising and Promotion Page 33-34
Packaging Page 34
SWOT Analysis Page 34-35

1
Chapter 4
Technical Aspect
Commercial space Page 36
Service Description Page 37
Service Process Page 37-39
Equipment, materials Page 40
Space layout Page 41-42

Chapter 5
Financial Aspect
Capitalization Page 43
Sources of Funds Page 43
Financial Assumption Page 44
Pre-Operating expenses Page 45
Projected Income statement Page 46
Projected Balance sheet Page 47
Return of Investment Page 48

Chapter 6
Management Aspect
Ownership Page 49
Organizational Structure Page 49-50
Job analysis Page 50
Policies Page 51-52
Chapter 7
Socio- economic Aspect
Contribution to the Government Page 53
Contribution to the society Page 53
Chapter 8
Conclusion and Recommendation Page 54

Appendix A Page 55
Appendix B Page 56
References Page 57

2
 CHAPTER 1

THE PROBLEM AND ITS BACKGROUND

Introduction

One of our daily needs is clothing in order to be presentable and in proper

hygiene. People tend to change clothes as needed which could relate how laundry is

needed from time to time. Laundry businesses imparts advantages to persons who are

unaware of time management, hectic schedules, and difficulties in balancing

household chores with working hours or students activities.

Laundry shops offer services like washing, drying and folding using the latest

laundry machines available in the market for efficiency and cleaning capabilities. The

laundry is done in these shops rather than doing it at home which can lessen the effort,

time wastage and reduce stress.

As per the owner of Elyza’s Laundry shop, laundry business is easy and

convenient to manage. He further states that it is not capital or management intensive

and a laundry business can even start right from home and let it grow from there. It is

a very lucrative business, since people living in the city has limited time to do laundry.

There is a need to put up a laundry shop in Purok Matinabangon in Barangay

Calindagan knowing that by physically inspecting the location, there is only a few

competitors and the population is quite large. The latest models of laundry equipment

3
can ease the burden of a hectic and busy person since it can process the laundry in

less than 2 hours, all dried up and folded.

The proposed laundry shop expansion will be located in Purok Matinabangon,

Barangay Calindagan, South Road, Dumaguete city. It has population of 7,535 as per

the Census of 2015 by the Philippine Statistics Authority (PSA)i. Elyza’s Laundry shop

is intended for the residents in this area which has a lot of hotels, apartments and

boarding houses.

Related Literature

Laundry processes are often done in a room reserved for that purpose; in an

individual home this is referred to as a laundry room or utility room. The material that

is being washed, or has been laundered, is also generally referred to as laundry.

Laundry has been part of history since humans began to wear clothes and began

decorating homes with linens and other household washable items. The usual process

in the olden times in Europe involves hand washing the laundry with water in a

communal setting called watercourses. The washed laundry are then placed in a

ii
clothes line outside the house or laid out in the grasses to dry .

Under the category of washing machines, the first patent registered was in 1691

but there was no known details. In 1850, Nicholas Bennett invented a “wash mill” but

was patented in the name of David Parker which was then called the “Improved

Washing machine”. This is the mechanical type of machines that uses pedals to rotate
4
the laundry. Bendix Home Appliances introduced the first automatic washing machines

in 1937 which had most of the features found in today’s machinesiii.

In the new age of laundry equipment, the process will only take less than two

(2) hours to finish an 8-kg laundry all dried up and folded.

The new washing machines and dryers out in the market are the top loader and

front loader type. The top loader type is the washing machine that the loading of laundry

is on the top side of the machineiv. While the front loading type are those washing

machines that you put the laundry on the front sidev. The top loader is preferred than

the latter due to its ease and comfort in doing the laundry and no need to stoop down

in a front loader type.

5
Related Studies

The proposed expansion of Elyza’s laundry shop in the target market area will

be beneficial to people who have less time to do laundry and will lessen their household

workload.

By looking around the city, the researchers were able to notice that a lot of new

laundry businesses have started in the year 2018 naming a few like “Miracle wash” and

“U Wash” which started operating only in 2018 but now has 2 branches each. Let us

take for example “U wash”, it started its first branch in Banilad Dumaguete city near

Southview hotel but now has a branch near FU north campus and another one fronting

Sto. Rosario subdivision in Bagacay, Dumaguete city.

As per the online newspaper CHRON, in college towns and urban neighborhood

laundry shops will be a lucrative business since most people are busy and going to

laundry is part of their daily life. A good location, quality service and good reputation

are the keys to have a good laundry businessvi.

A business plan can be useful at this stage where owners would like to know

how feasible a business venture will be in a certain target area. It is a formal written

document that shows the business goals and the methods on how these goals will be

attained on the given timeframevii.

6
Statement of the Problem

This study is intended to evaluate the feasibility of expanding the laundry

business of Elyza Laundry Shop in Barangay Calindagan, South Road, Dumaguete

city. The expansion will be located along South road near the Phoenix gas station

which is just a few hundred meters from schools and Robinsons Mall.

Specifically, it seeks to answer the following questions:

1. Is the proposed expansion of Laundry Shop feasible from the technical point

of view?

2. Is the proposed expansion of Laundry Shop feasible from the marketing point

of view?

3. Is the proposed expansion of Laundry Shop feasible from the financial point

of view?

4. Is the proposed expansion of Laundry Shop feasible from the management

point of view?

5. Is the proposed expansion of Laundry Shop feasible from the city’s socio-

economic point of view?

7
Conceptual Framework

Figure 1 Diagram of the Conceptual Framework

Technical Aspect
Product description
Product process
Equipment, materials & other facilities
Plant location
Plant layout

Marketing Aspect
General business condition
Competitive condition
Target market
Demand/survey
Pricing Strategy
Advertisement
Packaging
SWOT

Financial Aspect Expansion of

Capitalization Elyza’s Laundry
Sources of funds Shop
Sales projection
Pre-operating Expenses
Income statement for 5 years
Balance sheet for 5 years
Return of Investment (ROI)

Management Aspect
Ownership
Organizational structure
Job analysis
Policies

Socio-Economic Aspect
Contribution to the government
Contribution to the society

8
 The essence of the conceptual framework is to show the relation of every aspect

in the study.

The technical aspect will first tackle the proposed location, the equipment, and

the process. Once this is all laid out, the assessment of how feasible is the expansion

of the laundry shop with the current demand and competition which is under the

marketing aspect.

The financial aspect will gather the data from the survey in order to summarize

the demand and create the projections and assess if this will be feasible or not.

When all the 3 aspects have been identified and clarified, the management

aspect will have to be reviewed if there is enough qualified people to do the task in the

expansion of the laundry shop. And lastly, the whole project should assess its

contribution to the community in general.

9
Scope and Limitations

The scope of this feasibility study will focus on the working individuals who have

no time for household chores including doing the laundry. In addition to this, student

boarders are also part of the scope of this study since the researchers have notice that

most of the boarding houses in the city have limited spaces to do laundry.

The study limits its area of coverage in the survey will be the non-working

individuals who are at home with lots of time to do their own laundry and those students

who are not boarding but living with their families who does the laundry for them.

Significance of the Study

This study will benefit the people from all walks of life who are having a hard

time doing the laundry due to time constrains or maybe due to limited space to do

laundry in their place of residence. They will be the prospect customers in the

expansion of Elyza’s laundry shop who will benefit this study.

This type of customers may be the working class who have very limited time in

doing the chores in the house after work which includes doing the laundry that takes at

least 3 to 4 hrs. The working individual in Business Process Offices (BPO) are more

exposed to pressures at work which makes them burned-out and leaves them with no

time to do simple laundry.

10
 Another type of these prospect customers who will benefit this study are those

students coming from different provinces around Negros Oriental studying in different

schools of Dumaguete city. These customers are usually staying in boarding houses

which are overcrowded with limited space to study, sleep and do laundry.

This study will also benefit future researchers who will give them information on

how much to invest on this laundry shop, how the business operates and how feasible

it is for possible business venture. This can be a guide for their future feasibility studies.

11
Definition of Terms

These are the terms used in this feasibility study of expanding the Elyza’s

laundry shop.

Laundry. In this study, the term is used to describe a process of washing all

types of dirty clothing including selected over and under wears like jackets,

sweatshirts, undershirts, and others. It also means washing of linen, curtains,

and draperies.

Washing Machine. It is the machine used to wash laundry using liquid/powder.

It spins the laundry for washing mixed with the detergents.

Dryers. These laundry dryers are using LPG (liquefied petroleum gas) to dry

the washed clothing instead of the usual spin dry machines or the dryers using

electricity to dry the laundry.

Laundry shop. It is a shop where the machines are located and where the

laundry will be washed/ processed. Ideally, the shop has to have space for

machines (at least 3 sets) and some seats for the customers waiting for the

laundry to be processed. A six-seater table has to be in place for the folding of

processed laundry.

Income statement. This is part of the financial statements and it shows the

income and expenses of a business and the owner will be able to know if this

investment is earning or not. This is also the basis for calculating the return of
12
investment based on the net income. This is prepared usually on a monthly

basis.

Balance sheet. This is also part of the financial statements and it shows the

asset, liabilities and capital of the business. This will gauge the growth of a

business as the total assets/capital increases due to steady net income. This is

usually prepared on a monthly basis together with the income statement.

Sales projection. This is the sales or income expected from laundry services

performed. This is based on the survey and supply of the laundry shop.

Pre-operating Expenses. This is the expenses incurred in the performance of

the laundry services. They are usually incurred prior to the start of operating the

business like laundry supplies and equipment.

Return of Investment (ROI). This is part of the analysis in a business using the

financial statements to calculate if the investment is doing well with steady net

income so that the owner will know if his investment will be recovered or

returned by way of the business net income.

Capitalization. This is the capital requirement needed for start-up of every

business. This may include the pre-operating expenses needed including taxes,

salaries and permits needed.

Sources of funds. The sources of funds is related to the capital requirement.

These are some of the options available for the owner where to get their
13
capitalization for the proposed business venture. He has options available by

borrowing from financial institutions or using the profits from existing business.

LPG. This is the short name for Liquefied Petroleum Gas used for cooking,

heater and drying laundry. This is now used by the new dryers found in the

market today.

BTU. This is short name for British thermal unit which is the measurement used

for the size of dryers.

Leasehold Improvements. This is cost of the improvements done in the leased

space for the expansion of Elyza’s laundry shop. This will be capitalized and not

outright charged to expenses. Usually this is co-terminus with the contract of the

leased space.

14
 Chapter 2

Research Methodology

This chapter of the study discusses the research design, population and

sampling, respondent of this study, research instruments to be used in the study,

validation of instruments specifically on the research constructed questionnaires, data

gathering procedures and others.

Research Design

In order to attain the overall possibility of the proposed business, the

researchers employ a preliminary study undertaken to assess whether a planned

business is likely to be practical and successful as well as to estimate the cost.

The researchers will use the preliminary study to find out what prevails in the

present opinions which uses various methods like surveys. The instrument to be used

is under quantitative type of research which is a structured way of collecting and

analyzing data obtained from different sources. Qualitative research involves the use

of computational, statistical, and mathematical tools to derive results. viii.

15
Population

The population of Barangay Calindagan is at 7,535 as per the 2015 Census by

the Philippine Statistics Authority. The sampling of the study will be those individuals

who are working in the office and have no time to do laundry, and for student boarders

(male/female) from different nearby provinces who have no time for laundry chores

because they are busy with school activities or the boarding houses have limited

spaces to do laundry.

Research Respondents

The targets respondents will be residents of Purok Matinabangon in Barangay

Calindagan situated near the elementary school where there are a lot of apartments

with limited space for laundry. The other populated area of Barangay Calindagan is

near the Robinson’s mall where Citadini School is also located and further south are

the residences near South Elementary school.

The respondents will include the working individuals and the student boarders

who are in the target area. These individuals are mostly considered as having less time

to do laundry chores due to office work or busy with school activities or limited space

to do laundry in their residents/apartments or boarding houses.

16
Research Instruments

The primary research instrument used is the survey to the respondents using

questionnaires. The secondary instruments are those the researchers have gathered

from the internet and from books which are all included herein.

These are some types of instruments the researchers will be using for the study.

1. Survey questionnaires. This is the series of questions which will be used in

the conduct of our data gathering process and will be answered by the

respondents.

2. SWOT analysis. This is the strategic planning technique used to help people

and businesses identify the strengths, weaknesses, opportunities and threats

related to a project or business venture like the expansion of the Elyza’s

laundry shop

Validation of the Instrument

The survey questionnaire for this research will be subjected to content and

construct validation. Content validation is the process of reviewing the instrument or

survey making sure that it covers what the researchers are researching and what

information the researchers need in having a laundry shop in Barangay Calindagan.

17
 On the other hand, the Construct validation is the general understanding of the

study as accurate through the responses from the survey by the respondents. The

survey will validate if the expansion of the laundry shop is feasible in all aspects in the

proposed location.

This is a test to know that such feasibility study is accurate and reliable. As part

of validity testing, a criterion validity test has to done. This will include a question in the

survey questionnaire if they are willing to patronize proposed expansion of Elyza’s

laundry shop. The respondents will validate this criterion as part of the survey.

18
Data Gathering Procedure

Figure 2 Diagram for Data Gathering Process

19
20
 Chapter 3

Marketing Aspect

Business name

The proposed expansion of the laundry business in this study will still be the

same, Elyza’s Laundry shop. The business name is derived from the name of the

owner, Mr. Eliser Aure.

.Business description

The Elyza’s laundry shop is a sole proprietor type of business that caters laundry

services to the people of Dumaguete city. Elyza’s laundry shop has been in existence

for almost a year now and the owners decided to expand their business in Barangay

Calindagan.

The expansion of Elyza’s laundry shop will be accessible through South road

near schools, businesses, residential apartments and which is very appropriate for

drop-off laundry. Customers can leave the dirty laundry in the morning before they go

to work or school and get the folded cleaned laundry after work or school.

21
Business location

The expansion of Elyza’s laundry shop will be in Purok Matinabangon, Barangay

Calindagan, Dumaguete city. It is the building beside the Phoenix Gas station along

the South road. This is a hundred meters away from Cittadini /Don Bosco School and

Tiptop hotel.

The location is only less than a kilometer away from Foundation University,

Silliman University, AMA, NORSU, Asian school of Technology and STI. It is along the

road connecting to a lot of residential areas going to Bacong , Bagumpandan, Banilad

and Dauin.

Aside from this, it is also near the hotels like GOhotel, Manhattan suites, TipTop

hotel, Southview hotel and Heart hotel.

Location map of proposed business expansion for Elyza’s laundry shop

22
Service Description

The Elyza’s laundry shop offers the following services:

1. Wash. This is the laundry service where the customers will only use the

washing of their laundry. Drying up the laundry will be on the customer’s

responsibility.

2. Wash and Dry. This laundry service involves the option to wash and dry the

dirty clothes of the customers. They can do it by themselves or drop off the

laundry and come back later on but not folded.

3. Wash, dry and fold. This laundry services is usually for drop-off kind of

service which includes the washing, drying and folding the laundry. Most

customers who are busy with work are availing this kind of service.

It is typically similar to those existing laundry shops but certain things make it

stand out from the rest is their quality service and professionalism towards its

customers.

General business condition

The onset of the house-help law, it now requires the employers to pay more to

the house-help for their benefits (SSS/Pagibig/Philhealth). This makes it even harder

to find a cheaper helper these days. This could strain more on a household budget and

would rather chose to go out and buy food or cook or even bring the dirty clothes for

laundry.

23
 As per the Daily Telegraph newspapers, millennial generations who are the

main work force of this time are best described as:

“Basic life skills are on the endangered list, with fewer young adults able to perform

simple tasks like sorting their laundry or ironing a shirt, and it’s a disturbing trend that’s

only getting worse”.

This is why a Filipino entrepreneur, Allan Escalona, created the Quicklean

franchise Inc., a do-it-yourself laundry shop called Laundromats. It has already more

than 20 branches around the company he said the demand for laundry services in

urban centers are on the rise. Mr. Escalona further said they started to venture into the

self-service laundromat business after seeing the growing demand for laundry services

alongside the growing populationix.

Barangay Calindagan in Dumaguete City houses a lot of businesses that caters

to a lot of clientele and employs a lot too. Robinsons mall Dumaguete is located in this

area which employs thousands of staff for the various shops inside the mall. These are

some potential customers working in the mall with limited time to do the house chores

as well as laundry.

The area also houses the main Ceres terminal of Vallacar Transport Corporation

that brings people to the city or to other destinations. As mentioned earlier, schools

abound in this area and at least 5 gas stations too (shell, petron, jetti, star oil, sea oil).

24
 The researchers noted after going around the city, laundry business is thriving

as it can be seen that new shops have opened in 2018 with one or two branches which

indicates that it is a very viable business opportunity. The city of gentle people has

been known as the University City and it means students abound in the city from

different parts of the country and even from overseas.

Laundry shops in the target area is starting to grow noting the potential clients

passing the South Road without falter, an increasing trend with unlimited potentials.

Competitive condition

There are at least 5 laundry shops located along South Road Barangay

Calindagan area with a popular U Wash laundry shop up in Barangay Banilad just

around the curve near Petron Gas station. Papalaba laundrymat is just beside Cittadini

school while Zoie laundry services is between Star oil and Sea oil gas stations.

Around the city, you will notice that new laundry shops have opened in 2018 like

for example U-wash which has already opened 2 branches and Miracle wash which

opened its new branch in Batinguel in less than a year of operation. There is very stiff

competition in this laundry business since most of them are using almost similar

machines (Maytag or LG) which makes it like a price war. Some laundry shops are

offering promotions like 10 loads plus 1 free. Another laundry shop is having raffle draw

for a free wash. Every time you bring laundry, they will give you one raffle ticket.

25
Target market (Demand)

This will determine the number of Students/ Working individuals and families in

our target area who are living in apartments, houses, boarding houses and bachelor’s

pads. This will determine if there is a demand in the expansion of Elyza’s laundry shop.

The researchers use the actual number of residents in apartments and boarding

houses totaling to 7,535 based on the 2015 census. The number of respondents in the

survey is 133 calculated using the Slovins formula

(respondent=population/(1+population x 𝑚𝑎𝑟𝑔𝑖𝑛 𝑜𝑓𝑒𝑟𝑟𝑜𝑟 ) for statistics, with a 5%

margin of error. The sampled population was Purok Matinabangon in Barangay

Calindagan with a population of 200.

Survey results

Table no. 1. Type of Respondents

Description Frequency Percentage

Students 56 42%
Employees 77 58%
Total 133 100%

Note: Table 1 shows the types of respondents in the survey which

indicates that the target area has a lot of student boarders.

26
Table no.2. In need of laundry shops nearby

Description Frequency Percentage

Yes 63 47%
No 70 53%
Total 133 100%

Note: In table 2, it shows that 47% of the respondents are in need of

laundry which could relate to the demand in the expansion of Elyza’s
laundry shop.

Table no. 3. Number of times respondent visits a laundry shop

Description Frequency Percentage

Daily 0 0%
Weekly 63 100%
Monthly 0 0%
Total 63 100%

Note: Based on the data provided above, out of the 47% in need of a
laundry shop nearby in table 1, these respondents will go to the laundry
shop on a weekly basis.

27
Table no.4. Services availed from a laundry shop

Description Frequency Percentage

Washing 0 0%
Drying 0 0%
Wash, Dry & fold 133 100%
Total 133 100%

Note: Based on the table presented above, out of the three (3) services
offered in the survey, all the respondents prefer the wash-dry- fold laundry
service.

Table no. 5. Number of kilograms of laundry in a week

Description Frequency Percentage

8kgs 55 41.35%
8-16kgs 40 30.08%
16up kgs 38 28.57%
Total 133 100%

Note: This shows that the respondents has a maximum of 8 kgs of laundry
every week. This indicates that Elyza’s laundry shop will have an
anticipated services of 8kgs weekly from 47% of respondents noted in
table no. 2.

28
Table no. 6. Respondents preferred price per 8kgs laundry

Description Frequency Percentage

For Washing
P 65 133 100%
P 70 0 0
P 75 0 0
For Drying
P 65 133 100%
P 70 0 0
P 75 0 0
For Folding
P 20 133 100%
P 25 0 0
P 30 0 0

Note: This shows that the respondents prefer P 65 for washing/ drying and
P 20 for folding. This can now be used as basis for pricing and for
projecting the financial statements.

Table no. 7. Expected number of hours to process laundry

Description Frequency Percentage

Less than 3 hrs 63 47.37%
5 hours 48 36.09%
8 hours 22 16.54%
Total 133 100%

Note: Respondents prefer to get back their laundry in less than 3 hours.
This could mean that they prefer this type new laundry service compared
to the old style of putting the washed laundry in clothesline to dry up.

29
Table no. 8. Problems encountered

Description Frequency Percentage

Low customer service 50 37.59%
Unsatisfactory washing of clothes 47 35.34%
No pick-up on agreed time 26 19.55%
Not proper packing of washed clothes 10 7.52%
Total 133 100%

Note: Table 8 shows the low customer service as the most common
problems they have encountered in other laundry shops. This will be the
guided of the expansion of Elyza’s laundry shop when starting operation.

Table no. 9. Willingness to patronize the expansion of Elyza’s laundry shop

Description Frequency Percentage

Yes 133 100%
No 0 0%
Total 133 100%

Note: The 133 respondents in the survey are willing to patronize the
expansion of Elyza’s laundry shop considering the prices they preferred.

30
Market need

Survey results indicate that the market needs are of the following factors

enumerated below. The researchers will use this as basis to better achieve customer

satisfaction and have continuous flow of return-customers.

o Customer service
o Quality of laundry process
o Price
o Timeliness and customer service

Demand analysis

In getting the demand for our target, the researchers will consider the number

of respondents in need of a laundry shop as per survey conducted. These are the

projected demand for laundry services in our target area.

Willing to avail of laundry per survey 100 %

No. of respondents in survey 133

Estimated no. of kilograms for 8 kilos

laundry in a week per survey
Projected demand in Kgs 1064 kgs
No. of loads per 8kg load 133 loads a week

Note:

Demand Analysis. The projected demand is the estimated number of

kilos of laundry per week that needs to be catered by our services.

31
Supply Analysis

No. of Load per Load

Cycle load per day x 3 capacity per
Working hour for
Services per load day machines week
laundry shop
Machine wash 15 hrs(900 mins) 35 mins 25 75 loads 525
Machine dry 15 hrs(900 mins) 45 mins 20 60 loads 420

Note:

Supply analysis. The Loading Capacity per week is the normal operating capacity that
the Laundry shop can cater. Working time for the laundry shop is 7am to 10pm

Demand and Supply Gap

Demand Supply Demand and Supply Gap

133 420 287 loads

As seen above, there will be a gap of 287 loads (supply in excess of demand)

that Elyza’s laundry shop will have to fill in. The demand is conservatively based only

on the respondents who are willing to patronize the expansion of the laundry shop and

this could be increased with effective advertisement as indicated in the succeeding

pages.

32
Pricing strategy

The pricing will be based on the results of the survey which is P 65 for washing

and P 65 for drying for a maximum load of 8 kgs. The charge for folding will be P 20

per load.

Advertising and Promotion

This refers to raising customer awareness on the opening and with the services

offered in the expansion of Elyza’s Laundry shop.

Leaflets and flyers

This will be distributed upon opening of the shop so that the market will know

that it is already available. The leaflets and flyers will be personally done by

the owner of the shop which has a budgeted amount of P 2,000.00.

Leaflets will include the following information:

-Services offered
-Price list
-Company address, contact number, business slogan
-Business hours

The leaflets or flyers can also be placed or inserted inside any newspaper and

Hi-Top newsstand in Dr.V. Locson (fronting Ace logic) can accept this for a

minimal fee of P 100 for every 500pcs leaflets.

33
 Tarpaulin

This will be placed in front of the site of the expansion of Elyza’s laundry shop

and some strategic places nearby with an estimated cost of P 2,000.00 (4pcs).

It will include the following information:

-Business name, address and contact number

-Business logo and business slogan
-Business hours
- Business location
-laundry services and rates

Packaging

The packaging of the product will only involve the putting of the finished laundry

in a plastic bag provided free by the laundry shop and sealed with a plastic tape.

SWOT Analysis

Strength

- Using washing and drying machines with quality brand and proven
efficiency
- High profitability because it is more accessible to market
- Quality output and service
- The location is on the main hi-way which is near boarding houses,
apartments, schools and offices.
- Prices are competitive and in accordance with the market demand
34
 - Does not need a large amount of capital
- Good return of investment

Weaknesses

- High maintenance for quality washing/drying machines

Opportunities

- Development of more residential areas near the location that could bring
in more prospect customers
- Only a few competitors are within 1 km radius from location

Threats

- Future competitors

35
 Chapter 4

Technical aspect

This provides information for the structure and the floor plan, operating

procedures that are essential to the overall operation of the business, equipment,

supplies together with their description and specifications.

Commercial space

The space will undergo renovation just to maximize the space intended for the

laundry business since the space is not that large enough to settle all the

equipment or other furniture. The rent will be 2 months deposit and one month

advance totaling P30,000.00 on first month and costs P10,000.00 on a monthly

basis onward provided by a lease contract for minimum of 1 year and renewable.

Below shows the renovation cost for the space rented.

Description of jobs Estimated Cost

Fabrication and installation
Cabinets 10,000
Counter tables 7,000
Divisions 6,000
Flat board for folding 5,000
28,000
Leasehold and improvements
Electrical works 5,000
Painting 4,000
plumbing works 10,000
19,000

Total renovation costs 47,000

36
Service Description

Wash and dry. This is usually the Do-it-yourself style of service where the

customer will have the option to load their laundry and put on the desired

quantity of detergent and softeners and wait for it till it’s done. They will be the

one to transfer it to the dryer after wash and wait till it’s done.

Wash –dry and fold. This is the drop-off services where the customer leaves

their laundry and tells the laundry staff how much quantity of detergent and

softeners will be placed. The staff will process the washing and drying then

fold the laundry after it is done with the drying process.

Service Process

The processing of laundry in Elyza’s laundry shop is different as compared to

other industry players which can be accounted in the areas of:

1. Fast laundry process- the expansion of Elyza’s laundry shop can process

laundry in less than 2hrs for an 8kg laundry while the other laundry shops

will take days to dry up

2. Efficient and Economical – the expansion of Elyza’s laundry shop uses

Liquefied Petroleum Gas (LPG) to dry the washed laundry which is very

economical compared to electrical dryers used by other laundry shops while

some are still depending on sun drying and will take days to dry up the

washed clothes.

37
 This is the flowchart of the laundry process (fig.no.1) from the time the customer

comes in and hands over their dirty linens/clothes for laundry service.

Figure 3 Flowchart for Service Process

Receiving

weighing Recording

Load to washer Load to dryer Fold

Operating Procedure

The chart above shows the laundry process as explained below.

Receiving. All laundry received will be handled by the receptionist/cashier. It will

be logged in the cash register upon payment and handed over to the washers

for weighing.

Weighing/ recording. All laundry received are weighed to know if it exceeds the

8kg maximum load per washer/dryer. It is then placed in the laundry basket and

queued in the washer.

38
Washing. Each batch of 8kg (or less) laundry is loaded in the washer with the

desired liquid detergent and fabric softener loaded in the dispenser. The

washing machine is then set to 35 minutes for washing. A sticker is placed in

the machine to note the name of the owner of the laundry being processed.

Drying. The clothes washed are then transferred to the dryers. The sticker is

then removed from the washer and placed in the dryer. The laundry staff/washer

then sets the dryer machine to 45 minutes for the drying process of the laundry.

Folding. After the drying process, the clothes are then removed from the dryer

machine to the laundry basket. One by one the laundry is properly folded in the

table and placed in the plastic bag along with the sticker to identify the

processed laundry.

39
Equipment, materials and other facilities

Table 1
Laundry Machines(washer and dryer)
P 210,000 per set
Whirlpool Maytag brand P 630,000 for 3 sets
Laundry supplies
Pens P 200 (10pcs)
Logbook P 500 (5 pcs)
Liquid Detergent P 1,000 (2pcs/P10 )
Fabric softener P 1,000 (2pcs/P10)
Laundry bags P 380
Plastic bags for finished laundry P 168
Laundry furniture and fixtures
Fuji mechanical table weighing scale P 2,900
Laundry basket wooden style P 1,292 (2 sets)
Rectangular folding table P 1,699 x 2pcs
Bench P 1,960 x 2 pcs
Chairs P 400 x 2 pcs
LPG tank P 3,000 x 3pcs
Water Tank P 10,000

40
Space layout

Shown below in Fig.no.2 is the layout for the said proposed expansion of Elyza’s

laundry shop space with an area of 45 sqm while fig. no. 3 shows the outside view of

the proposed expansion.

Figure 4 Space Layout

Figure 5 Front View

41
Figure 6 Floor Plan

Figure 7 Electrical Plan

42
 Chapter 5

Financial aspect

The financial feasibility of this project gets some information from the different

aspects like marketing, technical, and management. This will comprise the

capitalization, the sourcing of funds, the financial projections for five (5) years and

some financial ratios.

Capitalization

The owner is budgeting at least P 800,000 for the laundry machines, renovation

cost, laundry supplies and advertisements in the expansion of Elyza’s laundry shop.

Sources of funds

The capitalization will come from the funds of the existing laundry business of

Elyza Laundry shop and in case there will be shortage of funds in the purchase of

equipment for the expansion, the owners are willing to seek assistance from financial

institutions. The interest rate for commercial loans is 7% on the average per year.

43
Financial Assumptions

These are financial projections based on the survey results particularly those

respondents who are willing to patronize the expansion of Elyza’s laundry shop.

Sales Projections:
1. Washing
No. of loads per week per survey 133
Rate desired as per survey x P 65
Estimated income per week P 8,645
No. of weeks in a year x 52

Estimated income on washing per year P 449,540

2. Drying
No. of loads per week per survey 133
Rate desired as per survey x P 65
Estimated income per week P 8,645
No. of weeks in a year x 52

Estimated income on drying per year P 449,540

3. Folding
No. of loads per week per survey 133
Rate desired as per survey x P 20
Estimated income per week P 2,660
No. of weeks in a year x 52

Estimated income on folding per year P 138,320

Total projected Gross income for the year P 1,037,400

44
Pre-Operating expenses

These are the expenses to be incurred before the start of operation which mainly

includes the renovation cost, equipment, rental deposits and business permits.

Model Type Qty Cost Total Amt

Machines
Washers & Dryers Whirlpool Maytag 3 210,000 630,000
Other Equipment
Water tank 10,000
LPG Tank P 3000x3 pcs 9,000
Plastic Chairs P 400x2 pcs 800
Bench P 1920x2 pcs 3,840
Laundry basket P1292x2 pcs 2,584
Weighing scale 2,900 29,124
Taxes and licenses 10,000
Rent (1 month advance + 2 months deposit) 30,000
Leasehold improvements/renovation cost 47,000
Advertising
Leaflets 2,000
Tarpaulin 2,000 4,000
Cleaning products
Liquid detergents P 10x100 pcs 1,000
Fabric softener P 10x100 pcs 1,000
Liquid bleach 200 2,200
Supplies
Tagging paper (sticker) 100
Ballpens P20x 10 pcs 200
Scotch tape P 10x 10 pcs 100
Record book P 100x5 pcs 500
Calculator 200
Fire Extinguisher 1,500
Plastic bags for finished laundry 168 2,768

Total 755,092

45
Projected Income Statement

The projected Income Statement is for 5 years and assumptions in this

presentation is that the 1st year is based on survey of 133 loads per week while Year 2
has 10% increase and Year 3-5 has 20% increase from the survey results.

Year 1 Year 2 Year 3 Year 4 Year 5

Service income
Wash/Dryer 899,080 988,988 1,078,896 1,078,896 1,078,896

Fold 138,320 152,152 165,984 165,984 165,984

1,037,400 1,141,140 1,244,880 1,244,880 1,244,880

Less: Cost of services

Dryer cost-LPG/electric 222,042 244,247 266,450.8 266,451 266,451

Washing cost-Electric/water 72,791 80,070 87,349.1 87,349 87,349

294,833 324,317 353,800 353,800 353,800

Gross margin (Income-cost) 742,567 816,823 891,080 891,080 891,080

Less: Administrative expenses

Salaries 288,000 316,800 348,480 383,328 421,661

Rent 120,000 120,000 120,000 120,000 120,000

Taxes and licenses 10,000 10,000 10,000 10,000 10,000

Advertisement 4,000 4,000 4,000 4,000 4,000

Supplies 2,768 2,768 2,768 2,768 2,768

Depreciation 141,225 141,225 141,225 141,225 141,225

565,993 594,793 626,473 661,321 699,654

Projected Net Income 176,574 222,030 264,607 229,759 191,426

Note: Please refer to Appendix A for calculation of cost of services and Appendix B for
the schedule of Administrative expenses.

46
Projected Balance Sheet

The projected 5 year Balance Sheet is related to the assumptions noted in the
Income Statement for the increases in number of loads.

Year 1 Year 2 Year 3 Year 4 Year 5

Cash 389,120 749,565 1,152,332 1,520,250 1,849,835
Laundry Equipment 630,000 630,000 630,000 630,000 630,000
Less: Accumulated Depreciation (126,000) (252,000) (378,000) (504,000) (630,000)
Leasehold Improvement 47,000 47,000 47,000 47,000 47,000
Less: Accumulated Amortization (9,400) (18,800) (28,200) (37,600) (47,000)
Other Equipment 29,124 29,124 29,124 29,124 29,124
Less: Accumulated Depreciation (5,825) (11,650) (17,475) (23,300) (29,124)
Other Assets- rental deposit 20,000 20,000 20,000 20,000 20,000

Total Assets 974,019 1,193,239 1,454,781 1,681,474 1,869,835

Liabilities

Capital 800,000 800,000 800,000 800,000 800,000

Add : Net income 176,574 398,604 663,211 892,970 1,084,397
Total liabilities and capital 976,574 1,198,604 1,463,211 1,692,970 1,884,397

47
Return of Investment (ROI)

The website www.entrepreneurs.com.ph features different types of business

startups and it says in one topic on laundry shop that the ROI with full demand most of

the time will be in 8 months.1

On the other hand, Laundromats laundry shop franchise says it will take 2-4 yrs

in ROI but says it is dependent on the demand since some of their stores have ROI in

less than a year.2.

In our proposed expansion of Elyza’s laundry shop, if with the full demand

expected in our proposed location, the ROI is less than a year. In this study, the

researchers have based the financial reports on the survey results which is only 32%

of the supply. Table 3 below shows the ROI under this study.

Table 2

Year 1 Year 2 Year 3 Year 4 Year 5

Cumulated Net Income 176,574 398,604 663,211 892,970 1,084,397

ROI for an investment of 800,000 22% 50% 83% 112% 136%

1
https://www.entrepreneur.com.ph/board/index.php?topic=47622.msg263968#msg263968

2
http://www.pinoy-entrepreneur.com/2016/05/23/quicklean-laundromats/
48
 Chapter 6

Management aspect

This chapter provides information about the management aspect of the

business. This includes how the business will be managed, controlled and supervision

matters. The management aspect will determine the successful realization of the

business. That’s why the study of the officers, key personnel and manpower

requirements will be very important matter in this chapter.

Ownership

Elyza”s laundry shop is a sole proprietorship type of business owned by Mr.

and Mrs. Eliser Aure. They both personally manage the business with two

assistants.

Organizational structure

Elyza’s laundry shop has a simple organizational structure having the owner as

the manager with two assistants. This same set-up will be used for the proposed

expansion of their laundry shop in Barangay Calindagan.

49
 Figure 8 Organizational Structure

Manager/
receptionist/
cashier

Washers Washers

The manager/receptionist/cashier is the authority in running the laundry shop

being the owner.

Job analysis

The proposed expansion of the Elyza’s laundry shop will require the following

personnel for its operation.

Manager/receptionist/cashier – the owner will handle this position who will be

responsible for the following

-Marketing/promotion of the laundry shop

-supervises the operation

-accepts and releases the processing of the laundry

-has full knowledge in the technicalities of the laundry equipment

50
 Washers- the two washers will be responsible for loading the laundry to the

washers and then to the dryers. Afterwards, they will fold the laundry and place

it inside the plastic bags. This is only for drop-off laundry.

As for customer willing to do their laundry, the washers will only assist them on

the laundry process until it is done.

Note: the bookkeeping of the transactions and reporting process will be

outsourced meaning not an employee of the laundry shop.

Policies

Recruitment and hiring

The expansion of the laundry shop will employ the services of a manager and

two washers. And since the manager is also the owner, the hiring process will

focus only on the washers.

Recruitment process- in filing up the washer positions, the job openings will

spread through the word of mouth. Interested applicants shall submit the

following documents addressed to the owner of the laundry shop.

- Application letter
- Resume
- Barangay clearance

Hiring process – the applicant will be called for personal interview one-by-one

and from there the owner will select the two washers to be hired. The qualified

applicant will have to submit the following documents.

51
 - Medical certificate
- Police certificate
- NBI clearance

Health Care and Safety facilities

To ensure that the laundry shop is safe and clean, regular check-up and

cleaning of the washing machines will be done. The washers are tasks to keep

the surrounding of the laundry shop clean at all times.

Salary and fringe benefits

The salary scheme of the proposed expansion of Elyza’s Laundry shop is as

follows:

Manager P 12,000

Washers (2) P200x30 daysx2 12,000

P 24,000

Note: the working hours will be from 7am to 10pm daily

52
 Chapter 7

Socio economic aspect

This chapter in general provides information about the socio economic study of

the business as well as its environmental impact. This will tackle the benefits that can

be rendered to the customers, the owners and the staff and how to keep the

environment safe from the chemicals that are the main components of the laundry

business.

Contribution to the government

As Filipino citizens, the business owners will pay their tax liabilities mandated

by the law. Tax will help the government generate funds for the improvement of public

service and government projects.

Contribution to society

The business will keep this city marketable to attract more investors and tourists

that will help the community for its improvements and modernization.

53
 Chapter 8

Conclusion and Recommendation

The market study has determined the demand for the laundry service in the

particular target area through survey in Purok Matinabangon. The researchers applied

the conservative approach in projecting the income and assets for the next 5 years by

using the survey respondents as the base for the market demand. There is a big gap

in the demand and supply, but this can slowly be diminished by constant

advertisements and by word of mouth from customers for efficient laundry service.

The researchers has recommended that a promotional blitz has to be done

upon opening day of expansion of Elyza’s Laundry shop to let the target market know

it is open already and able to cater to their laundry needs at very reasonable price. This

will include radio ads, flyers campaign on door to door and newspaper inserts,

tarpaulins in strategic areas, and a good laundry shop signage.

As the demand rises, the ROI will be less than expected of 3 ½ years.

54
Appendix A

Cost of Laundry Service

Note: LPG factorx

Water consumption calculationxi
Conversion of gallon to liters for water consumptionxii

55
Appendix B

Administrative Expenses Schedules

56
REFERENCES

i https://psa.gov.ph/content/population-negros-island-region-based-2015-census-
population
ii https://en.wikipedia.org/wiki/Laundry
iii https://en.wikipedia.org/wiki/Washing_machine#cite_ref-8
iv https://www.choice.com.au/home-and-living/laundry-and-cleaning/washing-
machines/articles/top-loading-washing-machines
v https://www.choice.com.au/home-and-living/laundry-and-cleaning/washing-
machines/articles/front-loading-washing-machines
vi https://smallbusiness.chron.com/laundry-business-tips-2647.html
vii https://en.wikipedia.org/wiki/Business_plan
viii https://www.sisinternational.com/what-is-quantitative-research/
ix https://www.sunstar.com.ph/article/68153
x https://www.elgas.com.au/blog/2042-how-do-i-calculate-the-lpg-propane-
consumption-per-hour
LPG - Propane
Consumption
Conversion Chart
LPG - Propane
MJ BTU
Unit of Measure
1 Liter 25 23,700
1 KG 49 46,452
45 KG 2205 2,090,340
1 Gallon 96.5 91,502
1 Pound 22.8 21,594
100 Pound 2280 2,159,400
Note: Some numbers have been rounded

xi https://www.consumerreports.org/washing-machines/yes-your-washing-machine-is-
using-enough-water/
xii https://www.calculateme.com/volume/gallons/to-cubic-meters/

57