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Feasibility Study Sample


welcome By: Elena Grace Flores
FEASIBILITY STUDY

CASIMIRO VILLAGE PHASE 3 MULTIPURPOSE COOPERATIVE (CV3MC)

I.    INTRODUCTION AND SCOPE OF STUDY

In the verge of Casimiro Village Phase 3 Homeowners Association fight to let Casimiro Development Corporation turn over the public properties to its lawful owner CV3HAI rather than revert them to the government’s care – problems were identified to allow the association to sustainably manage Casimiro Village Phase 3. Over the years, it has been observed that only half of the homeowners are willing to contribute for repairs and special projects for service facility development to provide security, protection, comfort, orderliness and beauty to the village.

Instead of forcing those who can’t afford, the cooperative system was suggested to help raise funds and generate businesses that can support the expenses in building and running the service facilities needed. Since it’s a fact that there’s a shortage of pay parking facilities in the area, this has become a priority for the cooperative’s business. To know if the pay parking business is feasible is the first objective of this feasibility study to sustain this Community Service Facility. Next is to determine the credit facility viability that will be extended by the Cooperative to the homeowners of Casimiro Village Phase 3 for the Guard House Development Project that will be fulfilling the Credit Facility functions of the Cooperative.

II.    MARKET ANALYSIS

According to this report on the car sales in the Philippines dated 28 April 2014: http://www.topgear.com.ph/news/industry-news/top-gear-philippines-car-sales-report-for-march-2014, 60,133 units were sold to Filipinos for 3 months only from January to March 2014. Therefore, cities in the Philippines are expected to need more car parks since they are already exhausted.

A. Domestic Market Profile

In Las Pinas alone, vehicles are already crowded and some car owners do not even own a car parking space. This resulted to outsiders finding ways to park in the vacant lots inside and outside the village’s entrance. The move resulted to chaotic parking which is not only an eye sore but also grievances among neighbors.

B. Target Market

Homeowners, neighbors, staff and customers of the newly built commercial building belonging to the village and located just next to the guard house are the priority renters of the planned 2-phased car parking facilities.

C. Overall Market Feasibility

The demand of such service facilities is already in existence. Since the village still has appropriate vacant lots that can be managed for this purpose, it is best to commercialize the car parking business through a cooperative – to be able to finance those homeowners Development Project.

III:    DEVELOPER SURVEY AND INVESTMENT ANALYSIS

The first Parking Area measures at 198 sqm only with estimated 12 to 14 cars parking on single level. Parking fee is 30 Pesos for the first 3 hours and 10 per succeeding hour.

  1. Estimated number of parking cars is 36 a day for 3 shifts which is 1,080 Pesos revenue per day.
  2. The quote for RF automated parking facility reaches 350,000 Pesos which takes 3 to 4 years to recoup.
  3. Sliding door of the car parking facility will not be implemented yet and RF automated system will not be installed to ensure ROI in the first 2 years.
  4. Initial investment for the simplified version is limited from 75,000 to 120,000 Pesos for the parking facility alone.
  5. Quote for the Guard House Project Development is Php 169,000 that will be loaned from the Cooperative by the Homeowners of Casimiro Village Phase 3 – after deducting the collection for the mandatory contributions from the homeowners.
  6. Mandatory Contribution is 500 Pesos (around 25 homeowners) for residential and 1,000 pesos for commercial (around 25 hoeowners): 12,500 + 25,000 = 37,500 Pesos
  7. Total Investment is 289,000 Pesos for the Pay Parking facility and Guard House Project less the estimated mandatory contribution of 37,500 is: 251,500 Pesos
  8. 2 parking boys will be hired who will also do the collection.
  9. CCTV camera will be installed to discourage anomalies and make auditing more efficient
  10. Collection/parking boys will turnover collection to the CV3 Multipurpose Cooperative treasurer
  11. 5,000 land royalty, 6,000 parking staff, 1,000 water and 3,000 lights are the main Operational Expenses – totaling to 15,000 Pesos Operational Costs per month
  12. 70% of the monthly net revenue will be paid back to the investment or capital loan and the 30% will go to the Cooperative Reserves (to be reversed after ROI).
  13. Nawasa to be connected using old water meter from Liberty Building
  14. CV3MC must apply for MERALCO
  15. The 2nd Phase Parking facility at the Club House area will be decided upon depending on the outcome of the first 2 projects which is the First Phase Parking Facility and the Guard House Development.

IV.     Organization & Technology Analysis

  1. Officers for Day to Day Operation:General Manager: Flaviano Alvarez (with security bond)
    Treasurer:  Aida Manalastas (with security bond)
    Secretary: Elena Grace Flores
  2. Hired staff will be limited to at least 2 Parking Assistants who will be coordinating with the officers and security guards of the village in a day to day basis.
  3. 15 Members of the Board of Directors will be appointed who are in charge of policy making and performance evaluation of the cooperative including the Chairman of the Board.
  4. The following Committees will be setup as support groups with 3 members each:
    • Audit Committee
    • Credit Committee
    • Election Committee
    • Education and Training Committee
    • Mediation and Conciliation Committee
  5. Volunteer accountant is Epitacia A. Alvarez

A. Organizational Capacity Analysis

Officers, accountant, members of the board of directors and committee member will be rendering services to the community in a voluntary basis – meaning, no fix compensation allocation not unless decided upon by the board of directors to spare allowances to the working officers. Hired staff is also limited to the least possible cost to make the operations of the Cooperative sustainable.

B. Technology & Equipment Needs

CCTV must be installed and ensured to be operating in a 24/7 cycle to safeguard the transparency and accuracy of the collection.

C. Operational Scenarios

Management:

  • The General Manager will oversee the overall operation. Treasurer will be in charge of finances and the secretary will be preparing documents and records for meetings.

Collection:

  • Parking staff to turn over their collection during their shift to the treasurer – which to be deposited to the Cooperative’s bank account the next day.

Audit:

  • The audit committee will be reviewing the CCTV coverage and compare them to the amount collected.
  • Financial Report will be submitted by the appointed accountant in a monthly basis.

V.    Design and Structural Analysis

A. See the attached sketch of the Pay Parking Facility
B. See the attached sketch of the Guard House Development Project

VI.    Financial Analysis

A. Review & Analysis of Assumptions

  • Monthly Estimated Gross Revenue:  Php 32,400
  • Monthly Operational Expense:  Php 15,000
  • Monthly Estimated Net Revenue:  Php 15,000
  • 70% of Monthly Net Revenue:  Php 11,250
  • 30% of Monthly Net Revenue:  Php  3,750

B. Financial Summary and Feasibility through ROI Calculations

  • 251,500/11,250 = 22.4 months to Recoup if assumptions are realized – which is around 1 (one) year and 9 (nine) months.

VII.     Overall Feasibility Evaluation

A. Summary and Conclusions

  • It is very possible that ROI will be reached in 2 years time with the Pay Parking business. This is a very helpful community service facility and sustainable at that. On top of that project, the homeowners of Casimiro Village Phase 3 can also make use of the Cooperative’s Credit Facility to fund the Guard House Development Project that will not earn any revenue – but will be fully funded within the 2-year period together with the Pay
  • Parking Facility. This will definitely secure and beautify the village at first glance.

B. Recommendations

  1. Reserves must be accumulated by the Cooperative to fund other maintenance and special projects in the future to promote the village’s standard of living or the community in general.
  2. Profit sharing among members of the cooperative must happen only after the 2-year ROI period with the option to reinvest.
  3. No shares can be pulled out of the cooperative within 5 years from registration date.

Prepared by: Elena Grace Flores/ Secretary

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