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Business Plan
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Table of Contents
Page
I. Executive Summary
II. Opportunity
III. Execution
IV. Company
V. Financial Plan
VI. Appendices
Helen’s Sew and Fit will be located in Sta. Cruz, Davao del Sur because aside from
the fact that the company owner is a resident of the place, manufacturing industry in the
province is also improving. The present and dynamic institution both public and private are
the primary target market of Helen’s Sew and Fit. Being the first registered provider of
customized T-shirt in the province as evidence in the List of Registered Businesses with the
Business Bureau, the company will take advantage of this opportunity.
To ensure potential market, actual survey was conducted with several respondents
authorized by manufacturing companies and schools operating in Sta. Cruz. It shows that
that Helen’s products and services are in demand in this sector. However, as a newly-
opened T-shirt manufacturing business, promotion thru print ads has to be intensified to
catch their attention. This will be reinforced with the delivery of quality finished products in
order to gain the customers’ trust. The growing economy of the locality as it aspires to
become a city, given the presence of large industrial companies like the San Miguel
Corporation, Coco Davao Inc., Franklin Baker Co., GSL Food Industries, and Sea oil
Philippines oil storage facility which is part of a 300-megawatt coal power plant run by
Aboitiz Power Corporation’s Therma South, Incorporated, posed the company to benefit as
it focus on this potential market.
Helen’s operation will start from the purchasing of machineries and equipment,
furniture and fixtures, fabric, painting materials, and other supplies and accessories needed
to make the finished product ready for delivery. The production process will begin with the
designing, pattern making, cutting, sewing, and then printing. With this process, skilled
sewers and skilled graphic layout artist will be hired. In addition, hiring of a
bookkeeper/secretary will be considered as well to take care of the financial records and at
the same time serve as the secretary. The fundamentals to engage in business start-up are
satisfied both by the market study and the technical capability of the proponent to produce
the desired products. The initial investment of Five Hundred Forty Two Thousand Four
Hundred Pesos (Php542,400.00) will be compensated with the projected net income of One
Million One Hundred Ninety Six Seven Hundred Eighty One Pesos (Php1,196,781.00) after
three years of operation.
II. Opportunity
2.1 Market Problem or Opportunity
T-shirt printing need in Sta. Cruz is dramatically increasing because of the growth of
companies and schools in the area, thus suppliers are not accessible. This gap was identified by the
proponent hence a market study was conducted. The survey results revealed that the
companies purchase T-shirts to be used as company uniform of their employees at an
average of twice per year. This comes as a package deal from the manufacturing company
which can best offer quality shirts at a cheaper price. Most of the respondents also signified
purchase of clothing needs other than shirts, such as sportswear, jogging pants, and jackets.
None of the respondents said of having their own T-shirt provider. Another group of
respondents who signified purchase of customized shirts are those from private and public
schools in the locality. Survey results showed that customized shirts are needed for its
students and faculties. All of them said that purchase of T-shirts is done twice every year.
The results revealed that companies and schools are open for providers who could
customize their t-shirt printing needs at an affordable price without compromising the
shirts’ quality.
2.2 Solution
To customize the company’s services, the customer will choose their own T-shirt
design and printing style. They will be guided with the samples or prototype shirts of
different colors, styles, clothing materials, and printing designs on display. Once decided,
Helen’s will take the job order on agreed price, quantity, sizes, and delivery schedule.
Prompt delivery of quality T-shirt with print will be adhered to in order to make every
customer smile.
The company will take advantage on the fact that T-shirt has never been out of
fashion. It is this growing interest in T-shirt clothing that inspires the company to do-it-
themselves from the designing, cutting, sewing, and printing. Highest quality finished
products at reasonable prices will be provided. More clothing choices such as jogging pants,
sportswear, and jackets will be offered after three years of operation and innovate more to
cope with the fashion trend.
Business Philosophy
Customer care and satisfaction would be the primary concern of this new business
venture. Thus, quality and reasonable pricing will be maintained. Helen’s Sew and Fit
stresses long-term relationships, while providing results in the shortest possible time frame
as the ultimate basis for success.
The target customers are the manufacturing companies and schools operating in the
province. This business industry is seen to have an average of one thousand (1,000.00)
workforce, e.g. Franklin Baker, Co., which provide their workers with customized T-shirts to
be used as working clothes. Occasional order of T-shirts for special event purposes is also
expected from them. This is based on the fact that in today’s fashion trend, customized T-
shirt is the most common apparel to be worn as alternate company uniform or for special
event celebration. The same is true to public and private schools which are also in need of
shirts for physical education activity uniform, sports fest, intramurals, foundation day
celebrations, and other school events. Shown below are some information taken from the
records and registries of the Business Bureau of the municipality of Sta. Cruz, Davao del Sur:
Average No. of
Industry Category No. of Employees /
Companies Students
Manufacturing 12 1,000
High Schools 6 700
Elementary Schools 27 300
Target Market
12 Manufacturing Companies x 880 units per order 10,560
16 Schools x 400 per order 6,400
2.4 Competition
Because Helen’s Sew and Fit offers a specific customized product line, our
competition is limited to other custom clothing manufacturers located in Davao City
since it is just less than 50 kilometers away from the municipality of Sta. Cruz, Davao del
Sur. The popular garment-maker companies located in Davao City are: 1) Ven Mark
Garments and 2) Thread and Fold. The business has been in the garment manufacturing
business for long and can accommodate bulk orders. Their established brand and
reputation is an edge. 3) Other competitors are the online companies selling printed and
embroidered T-shirts and other custom clothing. These businesses are accessible online
however, deliveries would be a problem.
Helen’s competitive advantage is reinforced with the fact that there is no other
registered garment or customized T-shirt manufacturer operating in Sta. Cruz area as
per registry of the Business Bureau. Thus, the company aims to be the first provider of
high quality customized clothing at reasonable prices in the province. Helen’s still
believes that customers are likely to opt for their finished products and services for
convenience and accessibility. Helen’s proximity to the targeted market is one strong
factor for a competitive price offering attributed by the lower delivery cost.
Amidst the presence of competitors, Helen’s Sew and Fit will still have the
competitive advantage based on the following factors:
o High Perceived Value. The product must convincingly offer a high level of value
and durability for the price, and give costumers confidence that their money is
well and wisely spent.
o Quality and Fashion. Fashion remains important, but quality comes first in the
minds of many costumers. Products that offer quality and fashion will have a
competitive edge.
o Brand Reputation. The brand must stand for a company that clearly puts
customer satisfaction and value above all else.
III. Execution
The successful strategic plan of Helen’s is built around the business's visions, mission, goals
and objectives and, its success is dependent upon the organization attaining its mission and the
realization of its goals and objectives.
Vision
Helen’s Sew and Fit envisioned to become the leading provider of customized T-
shirts and other clothing needs of every business organization operating in the province of
Davao del Sur.
Mission Statement
The company is dedicated to provide the community with customized T-shirts of
style and comfort at reasonable price. Thus, it is also committed to exceed the customers’
expectations in quality, delivery, and cost through continuous product innovation and
customers interaction. Attaining highest level of efficiency, integrity, and honesty among
employees, suppliers, customers, and stakeholders that will drive long term loyalty, is our
main concern.
Goals
To achieve the business’ vision and mission, Helen’s goals are as follows:
o To run a profitable operation by offering customers more clothing choices and
continuously find ways to customize their T-shirts with refined craftsmanship.
o To expand and create a reliable brand so that more customers will patronize the
products because of the perceived value and quality guarantee that comes with all
the finished products.
o To have an increased production and sales to cater the demand of T-shirts and other
clothing needs in the market.
o To contribute to the economic growth of the province through jobs generation.
Objectives
The company aims to attain the following objectives:
1. To increase the number of purchase orders for at least ten percent (10%) in year 2
and year 3, respectively
2. To achieve a net income of at least fifteen percent (15%) per year
3. To expand the business by acquiring additional four to five sewing machines in year
four
4. To uplift the economic status of some community residents through employment of
professional and skilled workers.
3.1 Marketing Plan
Products
Customized T-shirt that is carefully manufactured and printed by Helen’s will be
the finished products for the first three years of operation. Below are the different T-
shirt design and printing styles to be manufactured that comes for the whole package:
1. Polo shirt with collar which color, size and printing design at the customer’s
choice. Color-combined style can be one option as this becomes the fashion
trend nowadays especially for polo shirts. So Helen’s must be ready for this kind
of style. It goes along with the slight increase in price as it becomes labor
intensive.
2. Plain shirt without collar which color, size and printing design at the customer’s
choice.
Printing styles, such as embroidery, silkscreen, embossed, and rubberized will be the
different options than Helen’s can offer. The company representatives will be directed
to Helen’s prototype shirts with different print designs to help them decide which print
is more suited for their desired shirts. Cloth swatches of different type (i.e cotton,
polyester, jersey etc.) and colors will be made available at all times to help the customer
decide which cloth and color that Helen’s will sew for them. Sizes available are extra
small, small, medium, large, extra-large, and double or triple extra-large.
Place
Helen’s Sew and Fit will be renting a space in a commercial building near the Sta.
Cruz Public Market and Commercial Complex. It is a newly constructed building as part
of the on-going development of the town. Adjacent to this building is the public
transport terminal along Davao-Cotabato national highway. Thus, this location is ideal
for the business to start because of its accessibility by the customers. Pick-up or delivery
of the finished products would be convenient for both the company owner and
customers.
Price
Competitive pricing proportionately with the cost of raw materials, direct labor,
factory overhead, and operating expenses will be used. Delivery within Sta. Cruz area is
free. Pricing techniques include giving trade discounts for purchase orders above 100
pieces. The company’s value proposition is to provide the highest-quality T-shirt for the
best prices. With competitive pricing and free delivery, Helen’s value proposition is clear
to the target market.
Promotion
Helen’s Sew and Fit will also rely on three other factors to help increase
sales. The first is excellent customer service. Having excellent service will provide the
customer with the feeling that the business is looking out for the customer's interest.
Second, when a customer places an order, they will probably be excited to see the
finished product, so Helen’s Sew and Fit fastest turnaround time possible should be
maintained. Lastly, sales will be boosted by offering customers a high quality product.
High grade cotton materials and quality printing artwork will be used.
3.2 Operations
The production of Helen’s finished products includes the operations of
purchasing fabrics and materials from a reliable textile producer, cutting and sewing
them to make a T-shirt, print, inspect, pack, and then deliver them. Shown below are
the steps:
Garment Making involves the making of T-shirts for uniform or sports attire. The
bulk of the garments to be produced by Helens’ Sew and Fit go to the
manufacturing business which employs a big number of employees.
The Textile Printing will directly employ graphic artist while the Garments
Making requires Sewers and Cutters. The basic production process is illustrated
below:
Pressing /
Packing printing Inspection
finishing
Aside from the cloth which is the company’s major raw material, other supplies
and accessories such as threads, buttons, needles, and printing materials must be
purchased from reliable suppliers who can offer reasonable prices. This will be identified
thru canvassing online or thru floating of quotation sheet with the local suppliers.
Production capacity
The basic process of finished products will start from the sizing, pattern making,
cutting, sewing, and printing. For the business to start, the company will purchase the
following machineries and equipment:
Personnel
For the operation to start, Helen’s Sew and Fit will hire four (4) highly skilled
sewers for the T-shirt making and one (1) graphic artist for the shirt printing. There will
also be one (1) bookkeeper/secretary to take charge in the financial recording and
business licensing and at the same time serve as secretary to the manager. This will
bring a total number of six (6) personnel.
Suppliers
The raw materials will be sourced out from reliable suppliers operating in Davao
City. There are plenty of them where Helen’s can canvass with for a cheaper price.
Preference goes to suppliers which offer wholesale and negotiable prices for bulk
orders. Among them are the following:
The above suppliers have long been in their business for many years already,
catering to various garment manufacturing needs in the region. Credit terms can be
considered only after its customer’s credibility is established thru continuous patronage
of their merchandise. Helen’s will take advantage of such incentive in the future.
3.3 Milestones
Market Study
Dev’t. of Plans
Filing of Legal
Documents
Procurement of
Equipment and
Raw Materials
Constructing of
Building
Hiring of
Manpower
Distribution of
Promotion
Paraphernalia
Business
Launching
IV. Company
4.1 Overview
Helen’s Sew and Fit will be registered with the Department of Trade and Industry
as a Sole Proprietorship which is solely owned and operated by the business owner,
Deolly L. Roque.
Manager
Bookkeeper Graphic
Sewers
/ Secretary Artist
4.3 Advisors
The project calls for a total investment of Php542,400.00 that includes an initial
working capital of Php261,700 to cover cash requirements for the first two months of
operation and Php40,700.00 for pre-operating expenses as shown below.
Sources of Funds
The forecasted 10,176 units of T-shirts sold for the first year of operation is
based on the estimated market share.
Use of straight-line method in depreciating the PPEs at its estimated useful
life of 5 years net of 5% book value.
Rent expense will increase by 10% on the 3rd year.
Property insurance is at 2% of insurable assets
Loan of P200,000.00 is payable in 36 months at 16% interest per annum.
Repair and maintenance cost is assumed at 5% of the book value of
machinery and equipment
Salaries and wages of the manager, bookkeeper/secretary, and graphic artist
are fixed monthly rate
Salaries and wages of the sewers are on a per piece basis
Salaries and wages is targeted to increase by 10% starting in the third year of
operation
Fringe benefits are estimated at 5% of total direct labor
The business is tax-exempt for being a BMBE registered.
Sales will increase by 10% in the 2nd year and 15% in the 3rd year
Cost of direct materials will increase by 10% in the 2nd year and 15% in the 3rd
year.
Variable cost is projected to increase by 10% in the 2nd year and 15% in the
3rd starting in year 2
No provision for accounts payable
Inventory is estimated at 10% of the direct material purchased
Receivables are estimated at 16% of the total annual sales
Transportation & Delivery expense is estimated at 0.5% of sales
Owner’s drawing is P 20,000 per year.
Statement of Operation
Note 1 – Sales
Year 2018 Year 2019 Year 2020
Plain/collarless shirts 916,430 1,008,073 1,159,284
Silkscreen print
3,000 pcs @ P145.00/pc 435,000 478,500 550,275
Embossed/rubberized
3,106 pcs @ P155.00/pc 481,430 529,573 609,009
Poloshirt 1,226,850 1,349,535 1,551,965
Embroidered
2,152 pcs @ P325.00/pc 699,400 769,340 884,741
Silkscreen print
1,918 pcs @ 275.00/pc 527,450 580,195 667,224
Gross Sales 2,143,280 2,357,608 2,711,249
Less: 2% 42,866 47,152 54,225
Net Sales 2,100,414 2,310,456 2,657,024
With 10% and 15% increase in sales in CYs 2019 and 2020 respectively .
With 10% and 15% increase in cost in CYs 2019 and 2020 respectively
Note 3 - Direct Labor
Year 2018 Year 2019 Year 2020
T-shirts sold (collarles shirts) 6,106 6,717 7,724
@P20.00/piece 122,120 134,332 154,482
T-shirts sold (Poloshirt) 4,070 4,477 5,149
@28.00/piece 113,960 125,356 144,159.40
Total 236,080 259,688 298,641
Fringe benefits for the sewers are higher than the fixed wage earners
because they do not have the 13th month pay.
Note 17 – Utilities
Year 2018 Year 2019 Year 2020
Electricity 37,440 41,184 47,362
Water 12,000 13,200 15,180
49,440 54,384 62,542
With 10% and 15% increase in CYs 2019 and 2020 respectively
Profitability Ratios
Profitability ratios are company’s ability to generate profits from its operations. It focus
on a company’s return on investment in inventory and other assets. These ratios basically
show how well companies can achieve profits from their operations.
Net Profit
Net Profit 348,726 382,492 499,329
Margin =
Net Sales 2,100,414 2,310,456 2,657,024
= 0.17 0.17 0.19
Payback Period
The initial working capital of the owner in the amount of Php542,400.00 will be
recovered in approximately two years and seven months computed as follows:
D. Payback Period
Expected Cumulative
Year Net Cash Net Cash
Flow Flows
0
(542,000) (542,000)
2018
197,858 (344,142)
2019
517,130 172,988
2020
922,412 1,095,401
Payback Period
= 2 + (344,142 / 517,130)
= 2 + 0.66
= 2.66 years or 2 years and 8 months
VI. Appendices
- Technical specifications of products, drawings, photos, sales brochures, and
other bulky items
- Survey Question
- Tabulation and Result of the Market Study / Marketing Research