Business Plan
Chapter I
INTRODUCTION
This chapter presents the study of the industry where the business belongs, their
competitors and the business introduction. It also shows the objectives and definition of
terms of the study.
Background of the Study
Study of the Industry
According to mattress market research reports and industry analysis of IBIS
World’s mattresses have been in existence in their current form and have experienced
advancements over the years that make them more comfortable and attractive to
prospective buyers. Many the different companies are started from small scale and less
resources and now transformed into gigantic leading companies that advertised with
different features, designs and brands.
As stated in the report on “Mattress Market-Global Industry Analysis Forecast of
2013-2019”; the production of mattresses has emerged as a lucrative business marked
improvement in manufacturing techniques and the availability of new, more affordable
materials. These aspects have consequently improved profit margins of industry players.
Moreover, consumers with a higher disposable income are conscious of the
brand and comfort associated with a mattress. So, the mattress market is reaping the
benefits of the improving housing and aesthetics market. The category of high-quality
mattresses deserves a special mention as it has considerably grown in popularity. These
mattresses address health-related attributes of users as well as environment safety.
Consumer’s buying habits have been changing due to increase in public
awareness on environmental issues. This has led to a shift in consumers’ buying
behavior, which is favorable for the environment. Large numbers of consumers are now
choosing natural and organic products due to changes in buying habits. The eco-friendly
mattresses are generally made of naturally occurring materials and alternatives having
less chemical and ecological impact than conventional mattresses.
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Study of Competition
Numerous other manufacturers, primarily operating on a regional or niche basis,
serve the balance of the mattress market. The business’s direct competitors are the
ones who sell comparable products in Lipa City. The business competes with other
retailers who often provide a wider selection of mattress alternatives.
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Business Introduction
Nowadays, people want to settle for a better world, one with less poverty,
increased access to health care and education and huge technological possibilities and
also concern of how things will become easy and instant. Many businesses are arising
from different opportunities that are built up from the people’s wants and needs.
The revolutionary “FINNOM BAG” was created to provide individuals a
convenient way of having an instant cot in a bag in an easier and more portable way. As
this revolution came, the mat which is in-lined in mattress industry is continuously
improving and innovating of having new designs and features. The business primarily
focuses on individuals who are enthusiasts in doing outdoor activities like picnic, camps
and even vacation. Mattress is the main use of the product which is foldable and turns
into a bag where the purchaser can store their valuables, personal things and even their
food as well.
In this study, the proponents identified the needs and wants of the target customer
through their perceptions for the specifications and features of the product.
The proponents recognized that “FINNOM BAG” will bring convenience to its user by
proving that the product is of high quality and good value option.
The “FINNOM BAG” will offer its product through online internet in social
networking sites such as Facebook and Instagram for easy access to everyone. As for
the retail and direct selling activity of the product there will be a location for storing the
processed FINNOM BAG in Villa Lourdes Subdivision that provides an advantage of
easy distribution and access for all the proponents coming from different places nearby
Lipa City.
In assembling the product and financial requirement, the proponents came up
using less cost materials but of high quality than those of the exclusive materials in order
to offer customers affordable price for the product. The production capacity will be
monitored to avoid shortage and surplus in the production and to identify enough volume
of available resources needed in creating the product.
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Objectives of the Study
1. This paper aims to discuss the flow of the business implementation and the
company’s aspiration and objectives.
2. To generate sales and to gain profit from the proponents product.
3. To innovate and develop a mattress bag product that would satisfy the needs
and wants of the proponents target market.
4. To guide the entrepreneurs in creating and implementing their own
businesses in the future.
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Chapter II
MARKETING PLAN
This chapter mainly discusses the product and its description. The discussions
include the objectives, target market, supply and demand, and promotional strategy. To
summarize this chapter, it is the overall marketing strategy of the FINNOM BAG.
Objectives
1. To discuss the product and it’s description, value and the dissemination of the
product
2. To identify target customers.
3. To gather information about the demand and supply to be able to identify the
feasibility of the business
4. To discover effective marketing strategies that mainly focuses on 4p’s.
5. To anticipate at the marketing expenses from the marketing strategies.
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The Product
Figure 2.1
The Product
Figure 2.1 shows the product and its description.
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FINNOM BAG is typically a multi-purpose bag that can turn into a mattress
which best fits individuals who are enthusiasts of doing outdoor activities such as
picnics, hiking, fishing, canoeing, camping or even a floor cover during sleepovers. The
product is an easy open bag, locked by a jacket zipper which are detachable on the
gusset and can be folded to keep packed that looks simple and easy to carry out. The
overall bag is made of nylon oxford and materials which is resilient in all kind of dirt. It
has an essential space that can accumulate enough weight of things that can be brought
during the great deal of intrinsic enjoyment and satisfaction to be experienced from
outdoor activities. Inside the bag is a mat which size to 52x52 inches when open that
can occupy one to two persons.
Channel Analysis
Figure2.2
Distribution Channel
CUSTOMERS
ONLINE
Figure 2.4 shows how the product will be distributed among consumers. The
business uses two distribution channels in distributing the product to consumer.
The proponents will directly sell the product to the customers that will help the
business to be viable and for the product to be known quickly into the market. The
business selects direct selling because this business can easily and immediately gain
feedback regarding the sales performance and comments of the customers particularly
on the quality and durability of the product.
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The current trend of the internet social interactions and the trend are here to stay.
Treating social networks as the proponents other distribution channel means reaching to
more people and increase awareness of the business innovative product.
For the orders, the customers will fill up a form including relevant information for
easy access of orders such as:

Full name

Complete address

Contact number

Quantity of order

Date of payment

Mode of payment
Once the form is completed the customer will wait for the invoice and pay within
the day. For the delivery of the product the customers may choose in any courier such
as JRS or LBC. Shipping fee of the product will be added on the cost of the product.
Meet ups would be available only within the area of Lipa- Batangas only.
Target Market
Identifying a target market is an essential step in developing a business planning.
As people grow older, their tastes and preferences change.
People nowadays are inclined into different outdoor activities like picnics, camp
and vacation which mostly take them into an overnight trip and sleep over. That’s why
the proponents decided to cater individuals who are enthusiasts of doing outdoor
activities such as travelling, camping, and picnic and have the capacity to buy the items.
The bag is well-designed with durability and quality that consider most customers’
personal comfort and satisfaction.
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The Market Situation
Demand
Figure 2.3
Percentage of Demand for Matting
32%
68%
Yes
No
Figure 2.2 shows the percentage demand for matting.
Through the survey conducted towards the target market which mainly consisted
by families and individuals that use portable mattings and functional bags and are
engaged in outdoor activities such as picnics, camping and even for indoor activities.
Seen on Figure 2.2, 68% corresponding to 102 respondents out of 150
respondents demands or requires matting for such activities, the remaining 32%
corresponding to 48 respondents states that they do not demand for matting for outdoor
activities.
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Historical Demand
Table 2.1
Estimated number of people
Parks/ Tourist
Spot
No. of Tourists
( 3 seasons)
No. of expected
Tourists Annually
No. of
Respondents
YES
NO
43
7
NUVALI ( Night
900 - 1500
Sky Cinema)
Tagaytay Picnic
1000 – 2500
29
21
Grove
Other Tourist
30
20
destination
The data on Table 2.1 shows the number of people and families that spend time
and engages in picnics in parks and recreational places and tourists’ spots such as
NUVALI in Sta.Rosa, Laguna, Tagaytay Picnic Grove.
The Night Sky Cinema event in NUVALI, 900 – 1500 people are expected by the
park to participate on this event during Christmas season, Valentines and in Halloween
and Tagaytay Picnic Grove estimates that they are able to cater 1000 – 2500 people
annually. Based on the survey, the tallied data shows the number of people and families
agreed that they use mat for different activities on different tourists’ destinations.
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Projected Demand
Table 2.2
Projected Demand for Matting
Population of Lipa
359,133
Target Population ages 15-19
14,048
Target population ages 20-24
12,459
Total Target Individual Population
26,507
Target Households ( Family of 4 to 6 persons)
2,536
(Source: OCPDC computations using PSA (NSO) 2000 to 2015 Census of Population
Results, Projected Total Population CY 2015)
The data shown in Table 2.2 is the expected number of individuals and
households that is the target market of FINNOM Bag Enterprise. This indicates that the
great effect of the continuous increase of parks and tourists’ destinations that allows
outdoor activities is affecting the growth of demand for functional bags and mattings. The
increase in population allows the demand for mattings to increase as for the growing
number of people that will be the potential market for the product.
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Supply
Table 2.3
Historical Supply for Mattings
Stores in Lipa City
Sales per
Sales
Quarter
Annually
Coolzone Junior Mat
30
120
Toy Express
20
80
Alexander Mat
20
80
Happy Dreamer Mat
25
100
Camper Mat
10
40
Local Retailers in Lipa’s
10
40
PublicMarket
Price
P 450
P 300
P 300
P 400
P 350
P 250
Table 2.3 shows the annual increase supply of matting in Lipa City based on the
conducted survey towards the stores.
There are numerous retail stores inside the public market and also stores in mall
establishments in Lipa City that offers functional bags and matting. These retail stores
expects to sell 10 to 30 units of product per quarter, in Php 250 to Php 450 price range
and most of the stores are supplied by a single company that manufactures mattresses.
Inside the mall establishments, the stores are supplied by the same company that
manufactures foldable mattings and expects almost the same value of units of mattings
to be sold.
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Projected Supply
Table 2.4
Projected Annual Supply
Year
Annual Supply
2016
460
2017
460
2018
2019
460
460
2020
460
In Table 2.4, the data shows the supply from the year 2016 to 2020.
With this data, FINNOM Bag Enterprise believes that the projections is constant
based on the assumptions and the units able to supplied by the competing stores, also
the number of parks and tourists destinations that are offering different activities yearly
to gather costumers.
Demand and Supply Analysis
Table 2.5
Demand and Supply Analysis for Mattings in Lipa City
Demand
Supply
Population of Lipa
359,133
Target Population ages 15-19
14,048
460
Target population ages 20-24
12,459
460
Total Target Individual Population
26,507
460
Target Households ( Family of 4 to 6 persons)
2,536
460
Table 2.5 shows that demand for matting out of the target population count in
Lipa City and the number of units able to be supplied by the retailers and other
establishments is constant.
The study shows that there is a possibility that FINNOM BAG Enterprise can do
its business in order to suffice the number of demand for the product, considering that
the increase of outdoor enthusiast who seeks experience are using mattings when they
visit recreational parks, nature parks and tourists destinations.
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Market Gap
Table 2.6
Market Gap Analysis for Mattings in Lipa City
Stores in Lipa
City
Target
Population/Household
Sales Annually
Coolzone Junior
Mat
Toy Express
4,418 / 423
120
4,418 / 423
80
Alexander Mat
4,418 / 423
80
Happy Dreamer
Mat
Camper Mat
4,418 / 423
100
4,418 / 423
40
Local Retailers in
Lipa’s Public
Market
FINNOM Bag
Enterprise
4,418 / 423
40
Market Gap
Individual /
Household
4,298 /
303
4,338 /
343
4,338 /
343
4,318 /
323
4,378 /
383
4,378 /
383
500
26,048 /
(expected to
2,078
be sold)
Table 2.6 shows that, with the current status of the demand and supply for
4,418 / 423
mattings, the company determined the target population using the same number of
population being used by the competing stores.
Subtracting the annual sales of the competing stores, it indicates the gap that the
stores are not able to supply for individual and household consumers. FINNOM Bag
Enterprise recognized that it is feasible to supply the gap, by offering its unique multipurpose product that suites the target market.
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Market Share
Table 2.7
Market Share Analysis for Mattings in Lipa City
Stores in Lipa
City
Target
Population/Household
Sales
Annually
Market Share
Coolzone Junior
Mat
4,418 / 423
120
2.72 % / 28.37
%
Toy Express
4,418 / 423
80
1.81 % / 18.91
%
Alexander Mat
4,418 / 423
80
1.81 % / 18.91
%
Happy Dreamer
Mat
4,418 / 423
100
2.26 % / 23.64
%
Camper Mat
4,418 / 423
40
.91 %/ 9.46%
As shown on Table 2.7, the enterprises computed each market share of their
competitors by the number of customers they served.
The sold items annually of the firms will be divided by the total population per
store and will be multiplied by 100. The enterprise is able to come up with its own market
share analysis result. FINNOM Bag Enterprise as a starting business aims to suffice the
number of demand for matting that the competing retailers and sellers are not able to
meet.
Projected Sales
Table 2.8
Computation for Projected Annual Sales of FINNOM BAG
Period of Sale
Amount
Total Quarterly Sales (125 units)
Php47,500
Total Annual Sales (X4 quarterly)
Php 190,000
Table 2.8 shows the Computation for projected annual sales of FINNOM BAG.
During the starting year of FINNOM BAG Enterprise it aims to sell the expected
125 units per quarter and 500 units annually for Php 380 as the price for every FINNOM
BAG.
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Business Plan
Marketing Strategies
Product Strategies
Figure 2.4
Logo
COMPANY LOGO
PRINT BAG LOGO
Illustrated in Figure 2.3 is the brand name of the product.
“FINNOM BAG” is initials coming from “F” which stands for “foldable” and one of
the characteristics of the bag, the word “Inno” which means Innovative and “M” that
stands for Mattress which is the main use of the product. The proponents choose color,
red and black since it is a warm color easily noticeable and visible to the eye. The arc
between the letters “N” and “O” serves as the handle of the Bag. The vector line and a
circle below symbolize a person lying since the product main use is for the users to lie
on it.
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Tagline
“Exceptional among others”
Taglines are very efficient way to get your message across. The proponents
come up to a tagline “exceptional among others” since the product is incomparable
among the other since the design and style of the product was created from simple
ordinary product to extraordinary. Just like the other taglines, the proponents make it
short, catchy and easily distinguish by the customers.
Product Quality
Nowadays, many companies are looking to maximize profits and market share in
an interconnected,
competitive environment. There are challenges for these
organizations which include: meeting the changing demands of customers, maneuvering
through a consolidating market, and executing strategies to grow profitably. However the
appearance of the product is one that costumer’s consider. Appearance is not only the
basis to say that the product is satisfactory but also the quality of the product should be
considered.
FINNOM BAG not only known for its design and style, but also to its durable
quality. Unlike other bags, FINNOM BAG is made up of high quality materials starting
from the textile, zipper, foam and strap that ensure long-lasting use of product. The fun,
ease and handiness are there because FINNOM BAG can carry things together without
worrying worn out edge and that allow you to enjoy doing outdoor activities. FINNOM
BAG can bring you to any destination comfortably. This bag is very functional and will let
the users experience using it to the highest form of comfort.
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Price Strategy
Table 2.9
Price of the Product
Particulars
Amount
Nylon Oxford
P 25.00
Lining Nylon Taffeta
P 25.00
Foam
P 44.00
Detachable Zipper Chain
P 26.00
Strap Double Play
P 2.00
Polyester Sewing Thread
P 1.00
Velcro
P 2.00
Logo
P 2.00
Labor
P 70.00
Delivery of the product
P 55.00
Total Purchased cost per unit Php 252.00
Mark-up (33.70%)
Php 128.00
Selling Price
Php380.00
Table 2.9 shows a single unit of FINNOM BAG costing.
One of the four major elements of the marketing mix is price. It can be set to
maximize profitability for each unit sold. Furthermore pricing affects other marketing mix
elements such as product features, channel decisions and promotions. In order to
determine the price at which the FINNOM BAG will be sold, proponents must identify
and consider their buyers. In order to lessen the cost the proponents search for a lowpriced materials with high quality in order for the business to offer for affordable price
where anyone could afford to buy.
Table 2.9 shows a single unit of FINNOM BAG costing to Php 252.00. Using the
cost-based pricing strategy considers the variable cost, fixed cost and the percentage
markup for the product. The proponents decided to set the markup to 33.70% equal to
Php 128.00 and give Php 28.00 for the social corporate responsibility of the business.
The selling price of the bag will be Php 380.00.
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Place Strategies
In this digital era where businesses are moving towards Internet marketing,
FINNOM BAG Enterprise mainly concentrates in using internet base business so there is
no need for the proponents to rent or lease a place for their business. These allow
potential customers and buyers to access quickly to the business.
Promotion Strategies
Figure 2.5
Screenshot of Facebook page and Instagram Page
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Figure 2.5 illustrated a picture of a screenshot of the Facebook page and
Instagram page of FINNOM BAG.
Promotion is an activity that supports the furtherance of a cause, venture, or aim.
As part of promotion strategy, the partners plan to use one of the cheapest ways of
promoting products which is through the use of online sites, posters and sales talk will
be also used since it is an effective tool wherein the customers can influence others to
buy the product.
Figure 2.5 illustrated a picture of a screenshot of the Facebook page and
Instagram page of FINNOM BAG. The rise of modern society has been inextricably
linked with the emergence of technology. One of the features that are associated with
modernity and technology is the use of social networking sites where almost everyone is
being influenced. It is a one way to promote a product without using much time and
money. The proponents decided to promote the product by creating online page in
different sites to promote the product. This is through the use of facebook page and
instagram page that can be found, liked and shared by the market. The name FINNOM
BAG is the name of the facebook page. The logo of the product is uploaded so that the
market would become familiar to the product. The proponents will post all the updates
and information about the product. The customers may upload or raise their comments,
questions and suggestions in both page for the further innovation and changes in the
product.
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Business Plan
Figure 2.6
Sample flyers
Figure 2.6.shows the sample layout of flyers.
Flyers provide a logical and cost-effective way of communicating to a particular
target market that’s the reason why the proponents chose it as another way in promoting
the product. The proponents will place the posters around the vicinity of Lipa City. Thus,
the proponents choose attractive layout for the posters and flyers that can lure nearby
people into the new product.
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Business Plan
Marketing Expenses
Table 2.10
Marketing Expenses (Quarterly)
Items
Flyers
Quantity
250 pieces (4.25x11)
Unit Price
Php 1.00
Cost
Php 250.00
Business card
100 pieces
Php 1.00
Php 100.00
TOTAL EXPENSES
Php 350.00
Illustrated in Table 2.10 is the projected cost of expenses for the execution of the
promotion of the proponents to the product.
Since the proponent’s promotional strategy rely mostly on using Social
networking sites and word of mouth, the only marketing expenses of the proponent to be
recorded is the printing of flyers and business card. For printing of flyers, the size would
be ¼ sizes of the short paper that will cost Php 1.00 each and for printing of business
card that cost Php 1.00.
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Business Plan
Chapter III
PRODUCTION PLAN
This chapter includes the discussion of the purchased FINNOM BAG per quarter.
The proponents decided to be a Merchandising Enterprise with the help of C.S.J.D.M.
Multi-Purpose Cooperative located at Towerville Livelihood Center Minuyan Proper, City
of San Jose Del Monte, Bulacan. Even the Enterprise is merchandising the ideas in the
design the FINNOM BAG came from the proponents.The Cooperative is responsible for
providing raw materials and especially the production of the product. Also, the
Cooperative will deliver the FINNOM BAG in Lipa City and it costs P55.00 per FINNOM
BAG.
Objective
1. To manage and monitor the expected cost for every purchased FINNOM BAG.
Table 3.1
Number of Purchased FINNOM BAG
Number of Purchased FINNOM
Bag
Amount
125 pieces (per quarter)
Php47,500.00
Table 3.1 shows the number of purchased FINNOM BAG per quarter
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Chapter IV
ORGANIZATIONAL PLAN
This chapter provides the detailed discussion of the business form of ownership,
its organizational chart, job specification and job descriptions of employees and its
compensation, the policies, legal requirements of stated form of business ownership and
organizational expenses.
Objectives
1. To clearly state the agreement among the partners in line with the dissemination
of responsibilities, shouldering of losses, division of ownership and profits.
2. To identify a positions with applicable job description and specification in order to
assess the Mat-bag Enterprise essential for suitable worker.
3. To be able to build strong organizational policies and regulations that will guide
business in providing high value quality product to customers.
4. To distinguish the legal requirements the business must comply in order to
operate the business legitimately.
5. To determine all the expenses that will incurred by the organization in connection
to the compensation given to the employee and the cost of legal requirements.
Form of Business Ownership
The FINNOM BAG chose to be entitled as partnership organization as form of
their business ownership since the proponents consist of six aspiring entrepreneur
associates who agree to share in the profits or losses of the business. This would allow
the proponents to have equal responsibilities and liabilities for the enterprise in line with
fast raising of funds and partition of tax.
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Business Plan
Organizational Structure
Figure 4.1
Organizational Structure
Manager
Marketing
Personnel
Finance
Personnel
Merchandiser
Illustrated in Figure 4.1 is the organizational chart of FINNOM BAG.
Show in the top level is the manager, while the 2nd levels are different
departments of the company. The business manager who is Jainine Gutierrez is the one
responsible for the overall management of the business.
This person in charge manages the group by setting objectives and decisions to
attain the company’s objective and goal which is stated in the mission and vision of the
company. She must have a wider knowledge and skills about her company in order to
understand and monitor different situations of every operation.
The lower-level management shows that there are different departments that are
specified, which are: Marketing personnel, Financing Personnel and Merchandising
Personnel. In marketing personnel, the persons who are in charge of this position are
Kristel Fernandez and Leonard Archie Opulencia. The two are responsible for creating a
marketing plan strategy on how to introduce and promote the product to the market;
establishing the pricing strategy and identifies the needs and wants of the target market
in the implementation of the product. Next is the Financing Personnel, person in charge
of this position is Arol Shervanne Sarino, he is responsible in managing the finance of
the business. He is also in charge of computing for all the expenses and liabilities in
making the product. Last is the Merchandising Personnel, who are Darlyn Nilburth
Bautista and Kathleen Rodriguez, they are in charge in collaborating with buyers and
suppliers to negotiate prices, quantities and time-scales. They are responsible in Monitor
stock movement and consider markdowns, promotions and price changes.
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Manpower Requirements
Human resources needed to accomplish specified work loads of organizations.
Job Specifications
Manager

Has knowledge about business and other related field

Strong and effective communicator

Good leadership strategy

Ability to work under pressure

Demonstrated ability to manage and supervise a staff team.

Proficiency with office computer equipment and software.
Marketing Personnel

Has knowledge in the field of Marketing and other field related to promotion and
advertising

Strong effective communicator.

Highly developed, demonstrated teamwork skills.

Ability to coordinate the efforts of a large team of diverse creative employees.

Demonstrated ability to increase productivity and continuously improve methods,
approaches, and departmental contribution.

Commitment to continuous learning.

Expert in Internet and social media strategy with a demonstrated track record.

Demonstrated effectiveness in holding conversations with customers, customer
evangelism, and customer-focused product development and outreach.

Demonstrated ability to see the big picture and provide useful advice and input
across the company.

Ability to lead in an environment of constant change.

Experience working in a flexible, employee empowering work environment.
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Financing Personnel

Has knowledge in Accounting and other field related to accounting

Proven knowledge of accounting principles, practices, standards, laws and
regulations

Advanced computer skills primarily in accounting software and databases

Ability to develop, monitor and maintain management information systems and
procedures.

Ability to work on own initiative
Merchandiser

good practical skills

the ability to work quickly and methodically

good team working skills

the ability to concentrate while doing repetitive tasks

the ability to follow instructions

an awareness of health and safety

Willingness to work flexibly.
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Job Description
Manager

Maintains staff by recruiting, selecting, orienting, and training employees;
maintaining a safe, secure, and legal work environment; developing personal
growth opportunities

Establishes strategic goals and objectives

keeping personnel records

supervising and monitoring the work of the under personnel

dealing with correspondence, complaints and queries

Maintain a workplace which is safe and healthy.
Marketing Personnel

Developing the marketing strategy for the company in line with company
objectives.

Overseeing the company’s marketing budget.

Preparing online and print marketing campaigns.

Planning and implementing promotional campaigns.

Managing distribution channels for the product

Researching and evaluating new product opportunities
Financing Personnel

Maintain day-to-day financial control of the service within budget

Make regular reports to the governing body on income, expenditure and any
variations from budgets.

Ensure that appropriate financial regulations and controls are in place and in use
at all times.

Monitor and analyze accounting data and produce financial reports or statements
Merchandiser

Analyze sales figures, customers reactions and market trends to anticipate
product needs and plan product ranges/stock

Collaborate with buyers, suppliers, distributors and analysts to negotiate prices,
quantities and time-scales
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
Monitor stock movement and consider markdowns, promotions, and price
changes.
Gantt chart
Table 4.1
Gantt chart
MONTH
WEEK
June
July
August
September
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16
Creating a business plan
Conducting a Survey in
Business plan
Buying raw material
needed (Prototype)
Training
Finance/Registration
Promotion of product
Start of Business
Operation
Illustrated in Table 4.1 are the Gantt chart of FINNOM BAG and the project
schedule activities of the business.
The first activity of the business is creating the business plan that lasted for
three weeks. Activity includes the process of brainstorming and suggestions of different
ideas of what kind of business proponents will enter. On the second activity, the
proponents conduct survey in order for the proponents to get the demand and supply for
two weeks. Buying of raw materials needed for the production of the prototype covered
two weeks. This includes the time span of the sample product to be created. The
promotion of the product lasted for 5 weeks to invite interested customers to see the
advertisement and to build awareness about the FINNOM BAG. The business operation
started at the first week of September which is also equal to four weeks.
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Legal Requirements
Table 4.2
Legal Requirements
Legal Requirements
Cost
SEC Registration
BIR Registration
DTI Registration (Regional)
Mayor’s Permit
Php 500.00
Php 500.00
Php 1,000.00
Php 2,130.00
Total:
Php 4,130.00
Table 4.2 shows the legal requirements.
Before any business can completely and legitimately operate their business,
there are documents that must be completed and submitted. One of the most essential
requirements needed by any business is to process legal requirements. It is an
obligatory process whereby all necessary legal requirements are met by the business
because it will stand as a proof of legitimacy in operating their business.
The first thing needed is to register the business name chosen by the owner/s of
the business. Since the company is a partnership type, it must be registered in
Securities and Exchange Commission (SEC) which will enable the business to operate
legitimately and prevent from any form of fraud.
After registration of the business in SEC, the proponents chose to register their
company name with DTI to ensure that no other individual can have the same identity
similar to Mat-bag. The business name will help in building its own uniqueness in the
market. Business name registration is required before starting the business.
Since the business would be operated in Lipa City, FINNOM BAG must secure a
mayor’s permit or municipal license from Municipal/City Hall of Lipa City. Accomplishing
such gives the business the right to operate and legitimates its existence.
Requirements such as Location Clearance and Barangay Clearance along with
Sanitary Permits and Fire Safety Inspection certificates are not anymore needed since
the kind of business is an online business.
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Partnership Agreement
This Partnership Agreement is made on August 2016 among Darlyn Nilburth
Bautista, Kristel Fernandez, Jainine Gutierrez, Archie Opulencia, Kathleen
Rodriguez and Arol Sarino who are the “General Partners” of the business FINNOM
BAG Enterprise and agreed as follows:
1. Type of Business
The partnership allied themselves as General Partners which has the
purpose of making and selling “FINNOM BAG” for Individuals who are
enthusiasts in doing outdoor activities.
2. Name of Partnership
The name of the Partnership will be “FINNOM BAG” which was used
when the business is being implemented.
3. Term of Partnership
The partnership shall begin on August 2016 and shall continue until
terminated as herein provided.
4. Initial Capital
The initial capital of the Partnership totaled to Php 33,000 that will be
used in and contributed equally by each of the Partners.
5. Withdrawal of Capital
No one is allowed to withdraw any amount of the capital without the consent
and approval of the General Partner.
6. Profit and Losses
The net profits of the partnership shall be divided equally between the
partners and the net losses shall be borne equally by them. Partnership profits
and losses shall be charged to each of the partner.
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7. Partnership Document
Throughout the operation, everyone shall inform about all the operation of
the business including all of its income, expenditures, assets and liabilities, shall
be entered.
8. Time Devoted to Partnership
Each of the members of the partnership shall devote his/her full time and
skills with regards to his/her task every working time.
9. Management and Authority
Each of the members shall have an equal voice and authority with the
support of the partner.
10. Death
Upon the death of either partner, the responsibilities of the deceased will
be divided and be shared equally by the other members and as for the profits or
shares; it will be given to the immediate family of the deceased person.
11. Consents and Agreement
Every member of the partner shall have a copy of the agreement
consents paper to be filled and signed by everyone.
12. Sole Agreement
The sole agreement contains the agreement of parties pertaining to their
partnership and clearly states their rights, duties and obligations to their partner
and to the business. All agreements will be effective starting August 2016.
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DARYN NILBURTH BAUTISTA
JAININE GUTIERREZ
KATHLEEN RODRIGUEZ
KRISTEL FERNANDEZ
LEONARD ARCHIE OPULENCIA
AROL SHERVANNE SARINO
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Chapter V
FINANCIAL PLAN
This chapter provides FINNOM BAG Enterprise financial plan for the
establishment of the business and for its progression.
Objectives
1. To be able to show the realistic progression in FINNOM BAG financial statement.
2. To discuss each proponent’s source of financing and how the proponents will
manage its capital.
Table 5.1
Project Cost
Items
Amount
Purchased Bag per quarter
Php 24, 625
Delivery of the product marketing expense
Php 6,875.00
TOTAL EXPENSES
Php 31,500
Table 5.1 shows how much expense the business acquired in implementing the
business.
Capital Requirements
Each proponent should be able to acquire the capital needed for the business
which is total of Php 33,000.00 as the proponent’s starting capital. This will guarantee
that all the cost that will be incurred during the first quarter of the business will be
handled and still having enough capital for the next production.
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Source of Financing
Financing is needed to start a business and ramp it up to profitability. There are
several sources to consider when looking for start-up financing. Proponents Darlyn
Nilburth Bautista, Kristel Fernandez, Jainine Gutierrrez, Archie Opulencia, Kathleen
Rodriguez, Arol Shervanne Sarino will give equal amount of Php 5,500.00 each for a
total of Php 33,000.00.
The financial needs of a business will vary according to the type and size of the
business. Since the enterprise is in partnership type of business and compose of college
students the proponents came up to equity financing which is the source of financing
mainly comes from the proponent’s relatives and personal savings. Since the first place
to look for money is from own savings or equity the proponents agree to share half of its
own savings in the business which amount equally.
Table 5.2
Income Statement
Table 5.2 shows the Income Statement.
FINNOM BAG Enterprise’s income statement shows the sales that will be
generated for the next 5 years of its business life and the business’ profit that will enable
FINNOM BAG Enterprise to continue the business.
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Table 5.3
FINNOM Bag Enterprise Sales Schedule
SALES (10% annually)
Units of bag
Volume/quarterly
125
47,500.00
Volume/annually
500
190,000.00
Selling/bag
380
Total sales
190,000.00
Table 5.3 shows the expected quarterly sales and annual expected sales for the
starting year of operation.
This implies that for every quarter 125 units of FINNOM Bag is expected to be
sold to fulfill the expected total sales per quarter which is Php 47,500, the successful
achievement of quarterly sales will add up to Php 190,000 annual sales. FINNOM Bag
Enterprise agreed that there will be a 10% increase of purchases for the following year
that is shown on Table 5.1.
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Table 5.4
Balance Sheet
Table 5.4 shows the Balance Sheet.
The balance sheet shows the cash generated for the continuing years of
FINNOM BAG Enterprise is capable of handling its liabilities and at the same time giving
each proponent equal profit.
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Table 5.5
Statement of Partners’ Equity
Table 5.5 shows the Statement of Partners’ Equity.
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Table 5.6
Cash Flow Statement
FINNOM BAG ENTERPRISE
Statement of Cash Flows
For the 5 years ended December 31, 2016 to 2020
Year 0
Year 3
Year 4
209,000
229,900
252,890
278,19
209,000
229,900
252,890
278,19
Purchases
Donations and
Contributions
138,600
152,460
167,706
184,47
14,000
14,000
14,000
14,000
Income Tax
15,000
16,920
19,032
21,355
-
167,600
183,380
200,738
219,82
33,000
41,400
46,520
52,152
58,347
76,700
118,100
164,620
216,72
33,000
118,100
164,620
216,772
275,19
33,000
118,100
164,620
216,772
275,119
33,000
118,100
164,620
216,772
275,119
-
-
-
-
-
118,100
164,620
216,772
275,19
27,933
30,563
33,456
36,639
90,167
134,057
183,316
238,41
Cash Receipts:
Original investments
of partners
Year 5
33,000
Sales
Total Cash Receipts
Year 2
33,000
Cash Payments:
Total Cash Payments
Net increase (decrease)
in cash
Add: Cash beginning
Cash, end
Cash, end (Balance
Sheet)
Cash, end (Cash Flow
Statement)
Difference
CASH BALANCE, END
MINIMUM CASH
REQUIREMENT
CASH EXCESS
(DEFICIT)
Table 5.6 shows the Cash Flow Statement.
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Table 5.7
Ratios
Profitability
Net Income to sales
Return on Assets
Gross Profit
Year 1
0.18%
60.34%
33.68%
Year 2
0.19%
38.07%
33.68%
Year 3
0.19%
30.07%
33.68%
Year 4
0.20%
25.29%
33.68%
Year 5
0.20%
22.12%
33.68%
5.11
5.53
6.98
7.35
8.65
8.98
10.15
10.45
11.51
11.77
45.45%
18.07%
20.39%
13.60%
15.30%
11.14%
12.49%
9.57%
10.72%
8.50%
Liquidity Ratio
Acid-test ratio
Current ratio
Solvency Ratio
Debt/Equity Ratio
Debt Ratio
Table 5.7 shows the Ratios.
Table 5.7 shows the financial, liquidity and solvency ratios of FINNOM Bag
Enterprise. The Net Income to Sales ratio shows the enterprises’ percentage of net
income with the deducted tax out of the expected annual sales. The Return on Assets
shows the ability of the enterprises’ profitability using its assets for the upcoming years
of the business, which means that 60.34%, 38.07%, 30.04%, 25.29%, and 22.12% is the
respective profitability percentage from the annual assets. The Gross Profit ratio shows
that 33.68% is the constant adequacy of the enterprise’s gross profit of sales revenue
that meets up to the expenses and the expected profit.
The Acid-test ratio shows that for every Php 1.00 of the enterprises’ liability there
is Php 5.11, Php 6.98, Php 8.65, Php 10.15 and Php 11.51 out of the enterprises’
current asset to pay it for the respective years. The Current Ratio shows that for P1.00
currently maturing obligations there is Php 5.53, Php 7.35, Php 8.98, Php 10.45 and Php
11.77 allotted to meet up the enterprises’ current financial obligations in each of the five
years respectively.
The Debt to Equity ratio of FINNOM Bag Enterprise shows that for on the starting
year there is a 45.45% for the starting year of the business and for the following years
there is 20.39%, 15.30%, 12.49% and 10.72% respectively that represents the
percentage that will be available for the enterprises’ income tax payables out of the total
liability and partner’s equity of FINNOM BAG. The Debt ratio shows that 18.07%,
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13.60%, 11.14%, 9.57% and 8.50% are the percentage of the assets that is provided
through the enterprises’ liabilities for the respective years, it also shows that FINNOM
Bag Enterprise is able to generate profit with diminishing reliance from debts for the
coming years.
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Chapter VI
SOCIAL RESPONSIBILITY STUDY
Social responsibility is a form of self-regulation that FINNOM BAG business
adopts as a part of their corporate conscience and citizenship. Often referred to as
corporate social responsibility or CSR, this policy spurs FINNOM BAG business to
develop and to monitor the public’s social perception of them as a responsible business.
As Lasallian Entrepreneurs, the proponents can make a difference in our
community by being highly competent entrepreneurs. The most benefit that comes into
mind in terms of entrepreneurship is that the proponents can create job opportunities not
just for the proponents but for other people in the community that could help them
transform their lives. By generating a new and improve innovative product, the
proponents can advance mankind into a new way of living. Through a unique offering of
new goods and services, young entrepreneurs break away the tradition and indirectly
support freedom on obsolete system and technologies. Overall, as Lasallian
Entrepreneurs could give inspirations to others to enlighten and encourage them for
cultivating for the future research that will benefit the community.
Giving back to the community is essential in running a business. This will
establish good rapport towards the proponents’ target market, hence creating a positive
environment where there is more possibility of patronage from consumers. The FINNOM
BAG enterprise decided to save a portion of their sales of bag that will be sold to support
its commitment to donate to Dalipit West Elementary School. Part of the money that will
be saved will be used to donate school supplies for the students. This is to help the
students support their needs in school and help them lessen their expenses in buying
additional supplies. As part of FINNOM BAG Enterprise social responsibility, they want
to at least relief the sufferings of those students who are most in need.
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Chapter VII
CONCLUSION
The innovated product which is FINNOM BAG defines how a single and simple
product can evolve into a revolutionary product as convenient way of cot even during
outdoor activities. This product in line with mat industry provides a proof that simple
product cannot simply exist as it is until new ideas is plotted for its higher use. The
product can be distributed to its target customer for the purpose of giving a less hassle
idea of using the new developed product.
The competition in mat industry provides the status that the FINNOM BAG in the
market, highly suggests that it can thrive to survive though a lot of competitors already
exist due to its high demand most especially on the target customers that the proponents
have chosen. The new developed features are introduced to explain how FINNOM BAG
can positively worked as a new entrant in the market and to let the customers familiarize
to the business. The tables for both demand and supply which stands to be one of the
most crucial parts of reflecting if the business can possibly survive in the market convey
the information that FINNOM BAG can have a chance to exist and be known in the
market. Also, ways in distributing the products are thoughtfully explained which will also
give convenience on both buyer and seller.
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BIBLIOGRAPHY
http://www.themattressbuyerguide.com/adjustable_bed_review.html
http://hdpronrube.com/www.themattressbuyerguide.com
http://www.sleepproducts.org/statistics/mattress-industry-forecast/
http://www.statisticbrain.com/mattress-industry-sales-statistics/
http://www.tsnn.com/organizers/international-sleep-products-association
http://www.bloomberg.com/news/articles/2015-03-12/new-startups-aren-t-keeping-bigmattress-up-at-night
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EXHIBIT
MATERIALS
Nylon Oxford
Tapeta Cloth
Taffeta Cloth
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Zipper
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2MM Foam
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Thread
Screen Printing Ink
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Silk Screen
Silk Screen printing Squeegee
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