1 SOFTWOODS Softwoods A Business Plan In Partial Fulfillment of the Requirements in Business Correspondence Gieanne Prudence G. Venculado III BSA Meekness December 16, 2020 2 SOFTWOODS TABLE OF CONTENTS Executive Summary…………………………………………………………………3 Company Overview…………………………………………………………………5 Products and Services……………………………………………………………….7 Market Analysis…………………………………………………………………......8 Strategy and Implementation………………………………………………………..10 Management Team…………………………………………………………………..11 Financial Plan………………………………………………………………………..12 Appendices…………………………………………………………………………..17 3 SOFTWOODS EXECUTIVE SUMMARY Softwoods brings three (3) years of experience in manufacturing and retailing furniture products with the commitment to produce quality products and implement positive change. Softwoods has a quality system designed for the home, office and school spaces, with the emphasis on ensuring consistent product quality and continuous improvement. This innovative approach enables them to significantly increase efficiency, adapting latest technology and remain competitive in today’s ever-changing marketplace. A. Company Overview Softwoods offers suitable and selectable options of high quality and durable furniture. In line with their tagline: “your imagination, our creation”, they assure to provide and create the furniture that their client’s desire. With regards to every amount paid, their product’s quality and affordability will be met. Mission We are committed to provide better standard and give value for money. We strive to offer high quality products and mainly focus on durability, Continuous improvement in technology and designs. We have a high concern in developing skills and knowledge in woodworking to our industry employees. Vision Softwoods is the most preferred manufacturer and retailer of furniture; with the highest user base that provides world class quality at affordable prices. Goals and Objectives • • • • • Maintaining the highest quality and be a leading manufacturer in the industry. Provide employment opportunities and to develop skills and knowledge in woodworking to our employees. To maintain technological leadership through continues effort to update product technology and manufacturing method. To maintain employment and safeguard the interest of labors. To exploit and utilize the plenty availability of raw material efficiently and effectively. Core Values Responsibility, quality and passion are the key to achieve a sense of fulfillment each day. SOFTWOODS B. Products and Services Softwoods’ products are classified under the following three (3) main categories: 1. Home furniture 2. Office furniture 3. School furniture At Softwoods, they believe that quality and safety matter the most. They take the safety of our customers very seriously, which is why they choose products which are composed of highquality materials that are assembled and designed by their very own team. They offer collections that fit any personality through the emphasis that wood works in different ways. C. Market Analysis Softwoods directly or indirectly competes with all furniture providers nearby our store that offer upscale and quality furniture. Competition will come from specialty furniture stores and furniture chain stores. Direct competition will come from companies offering locally manufactured furnishings and décor similar to Softwoods. Majority of the residents are economically active (15 to 64 years old), in which they are considered as potential clients that may need to renovate and design their home, school, and office spaces. These group of people will most likely be beneficial to the business’ offerings. D. Strategy and Implementation An ever-growing change in technology should be complied with in order to compromise with the clients. Softwoods created a professionally built website (www.softwoods.com.ph) that will allow the clients to browse the product offerings. advanced feature where the client can upload a neat picture of their place and apply the products they want to purchase. Through this, they can visualize the place virtually with attached furniture they desire. The item can be delivered doorto-door once placed and paid. Through deliveries, the safety of the furniture and clients are ensured. E. Management Team In order to launch the store, Softwoods need to hire the following personnel: 4 5 SOFTWOODS • • • • • • • • Marketing manager (1) Manufacturing manager (1) Logistics manager (1) Marketing staff (2 to start) Manufacturing staff (4 to start) Logistics staff (2 to start) Finance staff (1 to start) Operational staff (1 to start) F. Financial Plan Below are the initial financial goals for the company: • • • Obtain an operating line of credit from a financial institution. Finance growth through retained earnings. Operate on a 25-30% gross margin. The projected revenues for the first year is to exceed Php 5,000,000, incurring a loss of at least 2.5%. The business will show an increase in profits of at least 3% to 5% for the next two (2) years, with projected revenues of Php 10,500,000. The start-up funding of Php 10,000,000 will be invested by the owner. The goal is to fund the growth of the business from its earnings. COMPANY OVERVIEW Softwoods located at Mabical, Floridablanca, Pampanga, Philippines, is a new, furniture manufacturing and retail store focusing on home, school and office furnishings and décor. Our products will be primarily from local manufacturers, highlighting the talent and high design sense of area businesses and craftspeople. Softwoods was founded by Gieanne Prudence G. Venculado. While the founder has got interested in the furniture business for some time, it was in June 2017 that she decided to launch SOFTWOODS Softwoods. Specifically, during her childhood, Ms. Venculado lived in a house mostly occupied by wood-based furniture. As she grew up, she saw a furniture store in Metro Manila, an independently-owned furniture store that enjoyed tremendous success by focusing on locally-made products. After that, she fully understood that a similar business would enjoy significant success in his hometown. Specifically, the customer demographics and competitive situations in Metro Manila and Pampanga were so similar that she knew it would work. Furthermore, after surveying the local population, this theory was proven. After surveying the local customer base, Ms. Venculado incorporated Softwoods as GP Corporation on June 2017. Company’s legal structure and ownership Softwoods is under the GP Corporation. A corporate structure is perhaps the most advantageous way to start a business because the corporation exists as a separate entity. In general, a corporation is created when it is incorporated by a group of shareholders who have ownership of the corporation, represented by their holding of common stock, to pursue a common goal. A corporation's goals can be for-profit or not, as with charities. However, the vast majority of corporations aim to provide a return for its shareholders. Shareholders, as owners of a percentage of the corporation, are only responsible for the payment of their shares to the company's treasury upon issuance. 6 7 SOFTWOODS PRODUCT AND SERVICES Below is Softwoods product list. As stated, all items are classified under the following three (3) main categories: 1. Home furniture 2. Office furniture 3. School furniture HOME OFFICE SCHOOL Dining table Desk School chair Dining chair Office chair Student’s desk Living room chair Filing cabinet School table Couch Bookcase Teacher’s desk Coffee table Sofa Classroom storage Shelves Meeting table and Book carts Cabinetry Bed Bed-side table Stools chairs The store will feature a display of a specific manufacturer’s work in our front area of our store, along with information about the “story” of that furniture. In any cases where the client is undecided as to what furniture design will suit their place, an interior design will be present to suggest. Transactions will be completed by skilled sales people on the floor of the store, who will offer a high level of customer service. Delivery of large items will be offered to customers. To 8 SOFTWOODS develop an ongoing customer relationship, free repairs for damages covered by the warranty life will be provided. MARKET ANALYSIS Industry Analysis Softwoods directly or indirectly competes with all furniture providers nearby our store that offer upscale and quality furniture. Competition will come from specialty furniture stores and furniture chain stores. Direct competition will come from companies offering locally manufactured furnishings and décor similar to Softwoods. Customer Analysis Softwoods will serve the residents of Mabical, Floridablanca, Pampanga and the immediately surrounding areas. AGE GROUP 14 and below 15 to 64 65 and above 4% 30% 66% 9 SOFTWOODS Mabical is a barangay in the municipality of Floridablanca, in the province of Pampanga. Its population as determined by the 2015 Census was 3,171. This represented 2.53% of the total population of Floridablanca. Combining age groups together, those aged 14 and below, consisting of the young dependent population which include infants/babies, children and young adolescents/teenagers, make up an aggregate of 30.43% (965). Those aged 15 up to 64, roughly, the economically active population and actual or potential members of the work force, constitute a total of 65.66% (2,082). Finally, old dependent population consisting of the senior citizens, those aged 65 and over, total 3.91% (124) in all. Majority of the residents are economically active, in which they are considered as potential clients that may need to renovate and design their home, school, and office spaces. These group of people will most likely be beneficial to business’ offerings. SWOT Analysis STRENGTH Strong management Quality control system Knowledgeable employees High quality equipment Reliable customer service Professional built website WEAKNESS Resource limitation Inventory cost OPPORTUNITIES Few competitors Nearby access to municipal road Change in client's preference Advancement of technology THREATS Regulatory and environment changes Natural disasters Fluctuating prices of raw material 10 SOFTWOODS STRATEGY AND IMPLEMENTATION Competitive Edge Softwoods is critical in choosing its workforce. In order to create signature quality of their furniture, qualified applicant must undergo a carpentry course. The said course will be free and taught by their experience superior; in which they were also able to acquire before starting the business. Through Softwood’s internal strategy, it will lessen the cost and further errors in the process of production. The quality of care received by the employees will be reflected through Softwood’s output. Sales strategy Softwoods’ sales strategy is to make themselves known through mailings, print advertising, social media, and personal contact to interior designers who are primarily involved with the design/construction of commercial development a furniture. Moreover, having a showroom will be a sales tool itself. A showroom will give the exposure to the general public, new arrivals to the area, and construction professionals. Softwoods also ensured to have a professional interior designer in their physical store that will help the clients by suggesting the best furniture that will suit the place described. An ever-growing change in technology should be complied with in order to compromise with the clients. Softwoods created a professionally built website (www.softwoods.com.ph) that will allow the clients to browse the product offerings. Also, it has an advanced feature where the client can upload a neat picture of their place and apply the products they want to purchase. 11 SOFTWOODS Through this, they can visualize the place virtually with attached furniture they desire. The item can be delivered door-to-door once placed and paid. Through deliveries, the safety of the furniture and clients are ensured. In line with valuing customer relation and satisfaction, Softwoods’ furniture comes with 3months warranty of repair, may it be on-call or picked up to be repaired at the warehouse. MANAGEMENT TEAM CEO CORPORATE ATTORNEY VICE PRESIDENT OF MARKETING MARKETING RESEARCH SPECIALIST MARKETING STAFF VICE PRESIDENT OF MANUFACTURING QUALITY CONTROL ENGINEER ADVESTISING SPECIALIST MARKETING MANAGER ASSITANT SECRETARY MANUFACTURING MANAGER MANUFACTURING STAFF LOGISTICS MANAGER LOGISTICS STAFF VICE PRESIDENT OF FINANCE VICE PRESIDENT OF HUMAN RESOURCE INTERNAL AUDITOR COST ACCOUNTANT HUMAN RESOURCE MANAGER OPERATIONAL STAFF FINANCE STAFF The organizational chart of Softwoods is specific. As a manufacturing and retail business, they require more manpower in order to fulfill the task efficiently. The higher positions are occupied, while the production staffs are still vacant. In order to qualify, there should be experience for the manager positions and willingness to learn for the staff positions. 12 SOFTWOODS Hiring Plan In order to launch the store, Softwoods need to hire the following personnel: • Marketing manager (1) • Manufacturing manager (1) • Logistics manager (1) • Marketing staff (2 to start) • Manufacturing staff (4 to start) • Logistics staff (2 to start) • Finance staff (1 to start) • Operational staff (1 to start) FINANCIAL PLAN Below are the initial financial goals for the company: • Obtain an operating line of credit from a financial institution. • Finance growth through retained earnings. • Operate on a 25-30% gross margin. The projected revenues for the first year is to exceed Php 5,000,000, incurring a loss of at least 2.5%. The business will show an increase in profits of at least 3% to 5% for the next two (2) years, with projected revenues of Php 10,500,000. The start-up funding of Php 10,000,000 will be invested by the owner. The goal is to fund the growth of the business from its earnings. The financial plan contains these essential factors: • • A growth rate in sales of 48% for the year 2021 and 20% for 2021. Average sales per month of Php 420,000 in the first year, Php 870,000 the second, and Php 950,000 in the third year. SOFTWOODS • Continue to fund the growth of the business from the revenues it generates. Financial risks • • • Unexpected change in variable costs compared to the previous one. Entrance of new competitor that will reduce the potential to generate more sales. Switching to different source of suppliers due to scarcity of raw materials. 13 14 SOFTWOODS APPENDICES Company Logo Sales Promotion 15 SOFTWOODS Products (Home Furniture) 16 SOFTWOODS Products (Office Furniture) 17 SOFTWOODS Products (School Furniture)