Talk:Our Barangay Inc. - OBI

• OBI or Our Barangay Inc. is a non-profit organization in the Philippines with SEC Registration No. CN201027908 aimed to establish connectivity of all barangays to the internet, empower residents by active participation in its governance and assist barangays to become well-informed using information and communication tools (ICT) for development.

Business Feasibility Study

Why write a feasibility plan? The feasibility plan is not a formal document but it can be considered a structured formal commercial report. It is your first reality check. (The marketplace will be the real check.)

First and foremost, read these basic Instructions:

1. Write a cover letter to potential investors outlining your product or idea. Show how you have researched and come to a conclusion that your product or idea is viable.
   • A business plan cover letter provides a summary of the purpose of your business and how you plan to accomplish that purpose. The audience is most often a potential investor or group of investors. Given the purpose and audience, the letter should be written in a persuasive manner and detail the desired investment amount, as well as what type of return the investor can expect to receive.
   • Selling a business plan to potential investors is the purpose of a business plan cover letter. The investor needs to be convinced that the business plan is carefully constructed and has significant market potential. The name and a description of the business should be included in the first few sentences.
   • Within the first paragraph of the cover letter, the reason for contacting the potential investor should be disclosed. In addition, a brief summary of the product or service that the business will offer should be provided. Details about how the business will serve the market competitively should also be included in this paragraph.
   • A summary of the target market and how it will be reached might be included in the second paragraph of a business plan cover letter. At the very least, the letter should provide some rationale for how the business will become profitable. Potential profitability can be communicated by highlighting several competitive advantages, unmet market needs, or market test data.
   • The ultimate goal of a business plan cover letter is to convince an investor to provide funds for your business. Besides being informative, the letter needs to highlight the positive aspects of the business plan without going into too much detail. The cover letter should indicate that the complete business plan is attached for further review, and be enticing enough to persuade the potential investor to actually read the plan.
2. Describe your product or idea in detail. List your potential customers and explain their views about your product or idea. Explain how customers will use the product.
3. Lay out the infrastructure. Indicate where you intend to house the business and if you intend to rent or buy. Describe the technology you will use.
4. Include information about the competition and their share of the market. Indicate their strengths and weaknesses and critical risks factors to your venture.
5. Show financial projections for at least 3 years. Estimate your rate of return.
6. Conclude with supporting statements why this idea or product is feasible. Credit the resources used to support your feasibility business plan.

The Business Idea

Separate from the cover letter are your support statements. In your cover letter you refer to these separate items.

1. How would you describe your business idea?
2. What is it?
3. What type of product will you be selling?
   • Products & Services: Create a list showing the products / services you will be offering. Also look at how long it will take you to produce or procure them. Determine how much it will cost to buy or produce them and how much you can sell them for.
   • Describe what is unique about the company's product/service compared to the competition. Make sure this is consistent with the unmet need of the target market(s).
   • Suppliers: Identify preferred and alternative suppliers on a list and show products /services / prices on this list. Collect catalogues and brochures to assist this study
4. How will it work?
5. How is it different from existing businesses?
6. If it is similar to others, Are there competitors near you?
   • Competition: List your competitors and show their perceived strengths and weaknesses. For each main competitor, list two good points and two bad points. You need to understand why they are competition to your proposed business.
   • Ask the Question: How can you attract their customers from them? Price is not the only answer. #*Map: Obtain a map and on it define your market boundaries, location, competitors, suppliers, and demographic information on your market.
7. Marketing and Sales Strategy (Who will buy from you?)
   • Describe the pricing strategy and justification. Include the expected gross profit margins.
8. Regulations/Govt. Permits
   • Outline non-economic forces that might affect the prospects of the firm:
     • Key government regulations and the company's plans for compliance.
9. Who are the Key People?
   • Who are they? Are they you, your partners, your family or any one else?
   • Determine your/their skills and strengths and whether they help or hinder in the proposed venture? Create a one-page resume of each key person. This is not merely a job history, but a picture of each key person, showing pertinent strengths, skills, experience, training and qualifications. It will reveal to you and any potential lender, supplier, partners or agent, the operational/management strengths (and weaknesses) of you and your team. It will also show you the need to acquire any missing skills you can identify.
10. Location - Your site, is it rented, owned, or at home? Why locate there? What are the advantages and disadvantages?
11. Capital Requirements & Strategy
    • How much equity will the firm need, and when?
    • What sources might you tap?
    • When will investors begin to see a return and at what rate?
12. Financial Projections
    • Include a narrative highlighting key underlying assumptions and the logic governing your projections. Include financial history, if any (e.g. equity and debt), and likely financing stages, including information about funding sources and uses. Provide a page or two of footnotes for each financial spreadsheet attached explaining the assumptions behind each major line item. Some core components of this part of the report are listed below
      • Balance Sheet Projections
        • Three years, if possible.
        • Highlight inflows of capital.
      • Income Statement Projections
        • Year 1: Monthly or quarterly.
        • Years 2 and 3: Annually
      • Cash Flow Projections
        • Year 1: Monthly or quarterly.
        • Years 2 and 3: Annually
      • Break-even Analysis

The cover Letter

• This is a sample letter, Just to make things easier.

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Manang Tekla Orgullosa
Por Centro
Balakan, Salug
Zamboanga del Norte, Philippines
CP# 63-999-111-1111

May 24, 2012


Our Barangay, Inc.
Ms. Elsa Bayani, President
Philippines

Re: Business Feasibility Study: Water Filtration / Purification Store

Dear Ms, Bayani,

I am Manang Tekla Orgullosa from Balakan, Salug, Zamboanga del Norte. I intend to start a water purification/filtration store in my community and hopefully have it financed by OBI. The bottles of purified water that our people buy are from the Poblacion, a more urbanized barangay which is a few kilometers away from where we are. Balakan and the other neighboring barangays comprise of over 5,000 people which would be more than enough to support my intended business.

Currently the water source is from the municipality of Salug and others are from home made wells. The municipality water is mostly chlorinated and the well-water can be contaminated with bacteria.

Almost everybody in our community buy bottled water or water in plastic. These purified water are more expensive here in Balakan because they have to pay for transportation to stock them in stores. This will be one thing I will have over my competition and that is lower cost of production. Sales of the purified water will be in the form of 8oz, 12oz, 32oz bottles, 1 gallon containers and 5 gallon containers. Consumers can also come to my store and do direct re-fills.

I have my own land, building and deep-well so my overhead will be much smaller.

Attached hereto are other supporting documents about who I am, my intended business, list of competitors and projected financial statement.

Thank you for the opportunity to present my business idea to Our Barangay, Inc.

Very truly yours,

Manang Tekla Orgullosa