Business PLAN group 8 - Grade: 2 PDF

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CHAPTER 1THE PROBLEM AND ITS BACKGROUNDRATIONALEClothing is important as it reflects an individual’s culture, personality and preferences. People can use clothing to enhance personal appearance and protect the body from extreme temperatures and elements in various climates. People often form first i...

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CHAPTER 1 THE PROBLEM AND ITS BACKGROUND RATIONALE Clothing is important as it reflects an individual’s culture, personality and preferences. People can use clothing to enhance personal appearance and protect the body from extreme temperatures and elements in various climates. People often form first impressions based on what a person wears. People throughout the world also view clothing as a reflection of current fashion trends. Clothing trends often change depending on the season, the popularity of designers and the attire of famous people especially celebrities. Although clothing can be influential in a person’s life, younger generations tend to be more influenced by fashion trends than older ones. Fashions inspired by past eras are often recycled into present trends. According to Discovery News, humans started to don clothing nearly 170,000 years ago. Wearing clothing helped primordial humans to survive during the last Ice Age. Eventually, humans began to use clothing as a way to express themselves, and nations

around

the

world

followed

suit.

(https://www.reference.com/beauty-

fashion/clothes-important-9875c0ff7ac5301c) Clothing changed through history under the influences of cultures, fashion and wealth. Before, people's clothing were simple and not too attractive which only purpose was to protect from weather conditions but now there's already a wide spectrum of different clothing items. As a result, everyone always has those t-shirts that they love, that they got from somewhere special or that have sentimental value. The problem is, 1

as those t-shirts get old, people tend to either dispose such or make an advantage from iit. This is the reason why ukay ukay dominated the market. The Ukay-ukay (a Filipino version of the flaw market) has successfully carved its own niche in the country’s local clothing industry.Inside these second-hand clothes stores, shoppers are forced to dive or sift through endless racks of clothes for a good find. This manner of search is called halukay in the Filipino, from where the name “Ukay-Ukay” comes. The spread of Ukay-Ukay shops have made the practice a norm among Filipinos. The allure of inexpensive clothes continue to draw people inside these shops to look for branded clothes for less and electic but tasteful pieces. Ukay- ukay remains appealing because it is the practical choice for clothes shoppers on a tight budget.

(https://www.scribd.com/document/374282958/Ukay-ukay-Business-Is-It-Still-

Feasible) According to Abueg, ukay-ukay is a very affordable source of fashionable yet durable clothing material for those with relatively low incomes. Some people would resort to buy ukay-ukay items because the latter are relatively homogeneous with the brand new garments and accessories that may be bought in relatively high-class stores and shopping malls. Philippine made textiles and garments are said to be 30 percent more expensive than their counterparts in the market, due partly to the inefficient local production and technology processes as well as their relatively low productivity. (https://www.academia.edu/34931181/CHAPTER_II._REVIEW_OF_THE_RELATED_LI TERATURE_BUYERS_AND_THE_INCOME_OF_VENDORS).

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Some ukay-ukay shops are filled not necessarily of second-hand clothes, but also those with slight factory defects, out of season fashion, displaced ready-to-wear items from department store shelves to make way for new arrivals, and all others that deserve another-chance of being worn. Fashion is expensive especially for students who are still dependent to their parents. Therefore, the proponents came up to a business of making use ukay-ukay items into something useful and generally pleasing. CT Bags will offer a convenient bag which cost is lower considering that reusing clothes outweigh small cost. Unlike plastic bags that are often transparent and decorated with a store logo, CT Bags are available in a variety of colors and designs that can match your personal style. These bags can be used for carrying variety of everyday items. Due to the fact that the cloth bags are not transparent; you can store and carry food and beverages, spare shoes, office supplies and all your personal belongings. The business is a good venture to start because the demand for drawstring bags is continuously increasing to people especially to teenager ranging from 13-20 years old which is the target customer of the business. The drawstring bag is the most versatile and useful bags one can come across. They might be small and look insignificant but they assist people in many important tasks in their everyday life. Drawstring bags are lightweight; this feature makes them all the more worthwhile.

STATEMENT OF THE PROBLEM 3

The primary objective of the study is to determine the viability of proposed business which is CT Bags. It aims to answer the following queries: 1. The feasibility of the business in terms of: a. Organization and Management Aspect; b. Market Aspect; c. Technical Aspect; d. Financial Aspect; e. Financing Aspect and f. Socio-Economic Aspect 2. How viable and profitable is the business operation of CT Bags?

SIGNIFICANCE OF THE STUDY

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The business focuses on the helpful effects of innovating ukay ukay into a fashionable bag to the following sectors: Future Entrepreneurs. The proposed business can help and provide ideas to those who are planning to have a business of the same nature. Future Researchers. This will serve as a reference material for their study. Proponents. It will help them to determine necessary steps in establishing a business and how to analyse the strengths and weaknesses inside the business and the opportunities and threats outside the business. Students. This will create awareness and influence students to use eco-friendly fashionable bags. Public. It will help the public to be accustomed with the possible uses of “ukay ukay” and also to have the details in establishing a business through second hand apparels. SCOPE AND DELIMITATION This study aims to ascertain the viability and profitability of the business CT Bags in which “ukay ukay” clothes are introduced as new comfortable and convenient bags. The business is located at 168 Mall, Mc Arthur Highway, Urdaneta City, Pangasinan. The business will operate its daily business operations at the middle of Bread Fun and Peralta Guani Optical. This study will focus on the following aspects: Organization and Management Aspect, Market Aspect, Technical Aspect, Financial Aspect, Financing and Socio-Economic Aspect. Definition of Terms 5

For better understanding, the terms stated in the proposed business are defined operationally: Clothing. It is a collective term for items worn on the body. CT Bags. A business that will use old clothes in manufacturing a reusable bag at low cost. Financial Aspect. It is composed of the total project cost, income statement, the cash flow projection, statement of changes in equity and the balance sheet. Financing Aspect. This refers to the source of capital. Market Aspect. It will determine the factors to be considered in establishing the business as well as the financial basis through demand analysis. This generally refers to the product or service that the business will offer. Organization and Management Aspect. This is the process of planning, organizing, leading and controlling resources within an entity in achieving its objectives. This refers to the kind of organizational structure of an entity. Socio-Economic Aspect. This refers to the benefits that the society will be getting from the proposed business. Technical Aspect. It refers to the location, layout, structure, specification, and equipment’s and production process. Ukay Ukay. It is where second hand apparels are sold at cheap prices CHAPTER 2

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MARKET ASPECT The purpose of this chapter is to discover the current demand and supply of the service, to forecast the demand and supply, to find where to put its competitive position in the industry, to study the target market and to design marketing activities for the business. Business Description Fashion has transformed over the years. Shopping became more accessible and affordable. This means that consumers are buying clothes more than ever before. With new clothing lines added in a short time, consumers no longer need to wait for the seasons to change to buy the latest trends. For this reason, people tend to dispose clothes that no longer fit and clothes that are out of current trends. Other common reasons why people get rid of old clothes are because they were damaged and they have developed a fault. As a result, street chains selling “Ukay-ukay” have come to dominate the market. Therefore, the proponents of the business came up with the plan of making a drawstring bag out of used clothes instead of disposing or throwing it. Furthermore, the entity also considered the destructive effects that may brought by the clothes in the landfill on the environment. The proponents treated this recycling initiative, CT-Bag, to create awareness and try to influence people to use eco-friendly bags. This bag is suited to personal comfort and fits to any kind of outfit. CT-Bags are made for everyone to have pleasing appearance at low price.

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The prices per drawstring bag are P100.00. The prices of the bags fluctuate or ship due to forces of demand and supply and changes in the price of inputs. The prices of the bags in three consecutive years are shown in Table 1. Table 1 Drawstring bag DESCRIPTION

2019

2020

2021

Drawstring

Php 100.00

Php 105.00

Ph 110.00

Location of the Business Enterprise\

The location is located at 168 Mall, Urdaneta City, Pangasinan. The proposed location will be rented P3,000.00 per month. SWOT Analysis 8

This section discuss the SWOT analysis for the CT- Bags enterprise in Urdaneta City by analysis of the competitive rivalry in the target market to focus on the enterprise’s strength, minimize and control threats and take the advantages of the available opportunities. I. STRENGTHS 1. The location of the business is accessible to the target market which will allow it much favourable to customers. 2. The business will produce drawstring bag with affordable prices. 3. The product which is drawstring bag is one of the most versatile kinds of bag. 4. Smooth flow of business operation through appropriate procedures and providing good customer relationship. 5. Free repair of purchased product. II. WEAKNESSES 1. The business is new to the market compared to industry leaders. 2. The target customers might have many options from competitors. 3. The business has little market presence and reputation. III. OPPORTUNITIES:

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1. The business has the opportunity of expanding with many future opportunities for success. 2. Local governments encourage recycling old and used clothes into something usable to lessen the effects devastating effects of clothes in the landfill. 3. Drawstring bag which is the main product of the business is on trend. 4. Opportunity to enter into a business with a small startup capital. 5. The business could also promote environmental friendly attitude, perception and lifestyle in a way that the business itself produces recycled materials. IV. THREATS 1. Potential entrants of large competitor in the market with same kind of products. 2. Branded drawstring bag in the market with their expertise and loyal customers 3. Existing business which offers the same kind of products Name of the Business CT Bags The proponents chose the “CT-Bags” as the business name because it manufactures drawstring bag out of used clothes. The “CT” stands for and corresponds to Clothing since the product is made up of clothes. Quantification of the Demand

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To determine the immediate needs of customers and their ability and willingness to pay for a certain product or services, demand analysis is required. Table 2 below presents the total population of Urdaneta City, Pangasinan. Table 2 Population

2019

Number of Population

139,162

Source:https://cpdourdaneta.wordpress.com/population-data/ The percentage of teenagers in the total population is 40% of the total population, 55,665. Analysis of Supply The projected units to be produce by the enterprise is 12,000 units in one year. There are existing business enterprises like small retail store and department stores inside different Malls selling drawstring bag in Urdaneta City, Pangasinan. The proponents of the business enterprise considered all the existing enterprises which sell the same kind of bag they will produce which is drawstring bag. The competitors of the business are considered valuable because they pose a threat to the enterprise. It will influence the decisions on production capacity and marketing strategies of the enterprise. Analysis of Target Market

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The very key to a successful beginning in a business specifically in the bag industry in any venture are the passion and determination to invest effort, time and of course financial support in the project. The answer for a successful and prosperous business will take a lot of considerations including the business enterprise’s location, accessibility of supplies and most importantly its marketing strategies since you can’t sell when you can’t tell. These are things which are essential factors for the determination of target market for which you can offer products to. The CT-Bags business enterprise aims to produce and offer customers a quality and affordable drawstring bag in Urdaneta City, Pangasinan. The target market location of the CT-Bags enterprise is Urdaneta City. The term market refers to the people whom a business enterprise wants to please and satisfy. The specific target market in Urdaneta City is the students especially teenagers age ranging from 13-20 years old. The CT-Bags enterprise will accept orders through online since the business used social media in advertising the product from other location with free shipping fee. The map of the Market is presented as follows; Figure 1 on next page shows the Map of Urdaneta City, Pangasinan.

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Figure 1. Map of Urdaneta City, Pangasinan Marketing Strategies The CT-Bags will be using the four marketing programs to be able to establish itself in the market and to be easily known by the public. With these marketing

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programs, the enterprise aims to become popular and successful in the industry. Below are the strategies of CT-Bags Shop: I.

Product a. The business will offer durable, affordable and quality product to customers. b. The customers can choose whatever design of bags they want

II.

Price a. The string bags offered by the enterprise will be PHP90.00-100.00 base on the type of cloth used which is very affordable compared to other. The price is inclusive of all the cost incurred in the production of the product and the acceptance profit as well.

III.

Place

The enterprise will be located at 168 Mall, Mc Arthur Highway, Urdaneta City, Pangasinan. The location will result to easy access since it is located along the highway. It is convenient and accessible for the customers to go in this area and many people will pass through on the location of the business area and it has a lot of prospect customers.

IV.

Promotion 14

a. Signage outside the business premises b. The enterprise will also promote the product through the use of online advertising through Facebook and by distributing flyers. The proponents considered the rampant use of technology in today’s modern world in promoting and making the product publicly known in the market. Since most of the possible customers are using internet or technology, it will be of a big advantage for the proponents. FACEBOOK ONLINE ADVERTISEMENT

SAMPLE FLYER CT BAGS Create beyond imagination

@168 Mall, Urdaneta City Pangasinan #0933009715

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Interpretation of logo of the busines Figure 2 in the next page is the logo of “CT Bags” business enterprise. The different figures have different interpretations. The circle represents movement, power, infinity and continuity because a circle has no end. The logo is also dominated by different colors; green, yellow and white. Color green represents nature, prosperity and money. It is a color of growth and vitality, associated with new life and renewal since the product of the business is bags made up of old clothes which the proponents will give another life on it instead of throwing in the landfill or stacked in the cabinets. Color yellow is attention grabbing, promotes happiness and warmth. And the color white represents peace, purity and cleanliness. Since reducing the destructive effects of clothing in the landfill is one of the objectives of the proponents. In addition, the colors used to the logo pertains to the colour of environment where in the business promotes it nature that what’s to lessen textile pollution. The word CT Bags is the business name which means Clothing Bags. The proponents used rope font style to indicate that the product is a drawstring bag.

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Figure 2. The “CT-Bags” business enterprise logo

CHAPTER 3 17

ORGANIZATION AND MANAGEMENT ASPECT This chapter provides information regarding the organizational structure of the enterprise, the form of ownership, the different duties and qualifications of the officers and key personnel that will guide and clear their role perception in the enterprise. It also discusses the management policies that will lead the operation of the business. A. Type of Business Organization The CT Bags enterprise is a General Partnership composing of 6 general partners Each proponent will be contributing equal share in the initial capital and the profit and losses will be divided equally. B. Organization and structure GENERAL MANAGERS

KEY PERSONNELS (Production workers and Seller) General Partners The general partners of CT Bags enterprise will be the one in taking full responsibility in the management of the enterprise. The partners will be in charge in implementing various strategies for the development of the business. They partners will also have equal power in managing and supervising the business to avoid any kind of conflicts. Key Personnel

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The CT Bags will have 2 production workers who will be in charge for the manufacturing of drawstring Bags. The business enterprise will only have one seller who will sell the products in the business enterprise location. C. Qualifications, Duties and Function of Staff Qualifications: 

Must be at least 18 years of age



Either male or female for production and selling



With pleasing personality



Can work independently and able to communicate well to customers



Must be flexible and works accurately



Willing to learn their designated task

Duties and Function Production workers 

Responsible in processing the raw materials to a finished products



Ensuring that standard operating procedures of the business are met



Maintaining his work station clean at all times

Seller 

Responsible in selling the products



Keeping the products safe in the business location

D. Salary and Employee Benefits SALARY

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The enterprise will have 3 workers; 1 seller with a minimum wage of P256.00 daily and 2 production workers ( cutting, sewing and finishing) P250.00 each. The wages of each production workers will be based on the number of bags produced (10 bags daily/ P25.00 per bag). Salaries will i...