HOME DELIVERY SERVICE FOR A COFFEEHOUSE BUSINESS
PRE-FEASIBILITY STUDY
NATHALIA JANE M. LUMAUAG
KRISTINE JOY A. FERNANDEZ
JENNY ROSE D. QUILLOPE
MARRIAN C. BARRUN
A PRE-FEASIBILITY STUDY SUBMITTED TO ROY B. CABARLES OF
THE COLLEGE OF BUSINESS MANAGEMENT WESTERN
PHILIPPINES UNIVERSITY, ABORLAN, PALAWAN
IN PARTIAL FULFILLMENT OF THE
REQUIREMENTS IN GEE6 (THE
ENTREPRENEURIAL MIND)
BACHELOR OF SCIENCE IN HOSPITALITY MANAGEMENT
JULY 2021
TABLE OF CONTENTS
TITLE PAGE i
TABLE OF CONTENTS ii
LIST OF FIGURES iii
LIST OF TABLES iv
CHAPTER PAGE
I. INTRODUCTION 1
Brief Description 1
Objectives 1
II. MARKET POTENTIAL AND PROSPECTS 2
Products/Services 2
Market Segmentation 2
SWOT Analysis 2
Market Share and Sales 3
III. TECHNOLOGY ASSESSMENT AND OPERATIONS 5
VIABILITY
Technology Requirements 5
Equipment and Machineries needed 5
IV. INVESTMENT REQUIREMENTS AND PRODUCTION/ 6
SERVICING COSTS
Source of Capitalization 6
Pre-Operating Costs 6
Production/Service Facilities Investment 6
Working Capital Investment 7
V. FINANCIAL FORECAST AND DETERMINATION OF 8
FINANCIAL FEASIBILITY
Initial Capital Requirement 8
Financial Statements 8
Return on Investment 8
ii
List of Figures
PAGE
Figure 1. Home delivery service market shares 3
Figure 2. Home delivery service market sales 4
iii
List of Tables
PAGE
Table 1. SWOT Analysis 2
Table 2. Source of capitalization 6
Table 3. Pre-operating cost 6
Table 4. Long-term investment 6
Table 5. Working capital investment 7
Table 6. Financial statement 8
iv
CHAPTER I
Introduction
Brief Description
The Home Delivery Service for a Coffeehouse Business Feasibility Study was the
recommended action in a coffeehouse business in Abo-abo, Sofrono Española,
Palawan due to on-going effects of COVID-19 pandemic. The opportunity of
implementing a home delivery service for a coffeehouse is essential to coped up with
the effects of the COVID-19 in the coffeehouse where it experience a decrease in
sales because of the COVID-19 restrictions and protocols that prevents most of its
customers to go personally to the establishment.
This study will assess the potential of home delivery service for increasing the
sales of the coffeehouse business. It will also provide insight about how will it affect
the growth of the coffeehouse business and contribute to its market shares and sales.
Objectives
This study aims to give information about the implementation of home delivery
service for a coffeehouse in Abo-abo, Sofrono Española, Palawan.
Specifically, it aims to give the following information:
1. to know the market potential and prospects of home delivery service for a
coffeehouse business;
2. to identify the required technologies, equipment and machinery for the
operation of home delivery service for a coffeehouse business;
3. to determine the investment requirements and production or servicing costs
of home delivery service for a coffeehouse business; and
4. to assess the financial needs and forecast of home delivery service for a
coffeehouse business.
1
CHAPTER II
Market Potential and Prospects
Products/Services
The service presented in this study is home delivery service in which it will be
used to deliver that products of the coffeehouse. The coffeehouse menu offer six
groups of drinks—coffee, tea, sodas, smoothies, juice and cocoa—with several
choices within each group. This enables the coffeehouse to provide more variety
than our competitors while keeping the preparation of the drinks easy to execute.
The coffee house is taking advantage of the immense popularity of flavored drinks
and Chai tea by offering a product mix that includes items the other coffeehouses do
not offer as well as more familiar drinks. It also have a wide range of gourmet hot
cocoa. It offers several smoothie drinks and sodas. And it carries the highest quality
fresh juices.
Market Segmentation
The coffeehouse’s customer base in Abo-abo, Sofrono Española, Palawan is
comprised of four target groups. The affluent local residents, local business people,
students, and travelers passing through. These groups are all potentially strong
customer segments. The benefit of this mix of customers is that it helps maintain
consistent business throughout the year. The other customer segments provide a
consistent foundation all year long. Also, by appealing to several market segments,
the coffeehouse does not become overly dependent on any single consumer group.
For example, several local coffeehouses with primarily student customers do poorly
during the non-school months. They must also market themselves anew each year to
the incoming students.
SWOT Analysis
The table below shows the strengths, weaknesses, opportunities, and threats that
the home delivery service for the coffeehouse have.
Table 1. SWOT Analysis
Easy to use and convenient.
Provide friendly ways to order: online website and through
Strengths
phone calls
Trained people for making delivery
2
Limited Capital
Competitor can offer similar service with better price and
Weaknesses promo
Quantity required for delivery is sometimes too much for one
person
Market expansion
Opportunities Expanding customer market
Improve customer service
Cheaper prices of competitors
Economic Downturn
Threats
Increasing potential competitors
COVID-19 restrictions and protocols
Market Share and Sales
The home delivery service of the coffeehouse is expected to reach an estimated
80% market shares of the the online ordering service and phone ordering service of
the coffeehouse for a month. Also, it is expected to contribute at least 40% to the
market sales of the coffeehouse for a month.
Figure 1. Home delivery service market shares
3
Figure 2. Home delivery service market sales
4
CHAPTER III
Technology Assessment and Operations Viability
Technology Requirements
The home delivery service will use integrated online ordering system that will be
use by the customers to use when they order and for receiving orders. Also, it
requires phone ordering system that will be use by customers that cannot access the
coffeehouse’s websites.
Equipment and Machineries needed
The home delivery service requires a motorcycle equipped with insulated
delivery box. Insulation backpack thermal bag is also require for more convenience.
And the boxes and bags are equipped with food and drink holders to prevent it from
spilling.
5
CHAPTER IV
Investment Requirements and Production/Servicing Costs
Source of Capitalization
The table below shows that sources of capitalization that is intended for the
home delivery service of the coffeehouse and its corresponding amount.
Table 2. Source of capitalization
SOURCE OF CAPITALIZATION AMOUNT
Owner Php. 33,000.00
Bank Loan Php. 60,000.00
Total Php. 93,000.00
Pre-Operating Costs
The table below indicates the pre-operating cost of the home delivery service of
the coffeehouse.
Table 3. Pre-operating cost
PRE-OPERATING COST
Online ordering system Php. 5,600.00
Phone ordering system Php. 8,700.00
Motorcycle Php. 60,000.00
Delivery box Php. 1,000.00
Insulation backpack thermal bag Php. 1,900.00
Supplies Php. 800.00
Start-up Inventory Php. 10,000.00
Working Capital and Contingency Php. 5,000.00
TOTAL COST Php. 93,000.00
Production/Service Facilities Investment
The table below indicates the long-term investment for the production/service
facilities of the home delivery service of the coffeehouse.
Table 4. Long-term investment
LONG-TERM INVESTMENT
Motorcycle Php. 60,000.00
Online ordering system Php. 5,600.00
Phone ordering system Php. 8,700.00
TOTAL INVESTMENT Php. 74,300.00
6
Working Capital Investment
The table below shows the working capital investment of the home delivery
service for the coffeehouse and its current assets and current liabilities.
Table 5. Working capital investment
CURRENT ASSETS
Cash Php. 33,000.00
Accounts receivable Php. 60,000.00
Inventories 0
TOTAL ASSETS Php. 93,000.00
CURRENT LIABILITIES
Accounts payable Php. 60,000.00
Short-term borrowings 0
Accrued liabilities 0
TOTAL LIABILITIES Php. 60,000.00
WORKING CAPITAL Php. 33,000.00
7
CHAPTER V
Financial Forecast and Determination of Financial Feasibility
Initial Capital Requirement
The initial capital requirement for the owner, as shown in the Source of
Capitalization section on Chapter IV, depends on the successful acquisition of funds
from each of the listed sources. The funds will be used to fulfill the projected capital
budget requirements as explained in the Financial statement section. Adjustments to
the amount of funds by each source may be necessary in the event of unforeseen
circumstances.
Financial Statements
The table below indicates the financial statement of the home delivery service of
the coffeehouse. It also indicates the sources of cash and where it will be used.
Table 6. Financial statement
SOURCES OF CASH
Equity Contributions Php. 33,000.00
Loan Financing Php. 60,000.00
TOTAL SOURCE OF CASH Php. 93,000.00
USES OF CASH
Online ordering system Php. 5,600.00
Phone ordering system Php. 8,700.00
Motorcycle Php. 60,000.00
Delivery box Php. 1,000.00
Insulation backpack thermal bag Php. 1,900.00
Supplies Php. 800.00
Start-up Inventory Php. 10,000.00
Working Capital and Contingency Php. 5,000.00
TOTAL REQUIREMENTS Php. 93,000.00
Return on Investment
The coffeehouse is estimated to earn about Php. 870,000.00 a year and about
Php. 72,000.00 a month. The home delivery service is expected to contribute about
40% of the market sales of the coffeehouse. The estimated net income for home
delivery service for the coffeehouse is Php. 72,000.00 for a month and the total
investment for the home delivery service is Php. 93,000.00.
8
72,000.00
ROI
93,000.00
ROI 0.7795698924731
ROI 0.78
The return of investment for the home delivery service of the coffeehouse is 0.78
or 78%.
