Far Eastern University – Makati

Institute of Accounts, Business, and Finance

A Proposed Business Plan for Fumbrella

Project Submitted to Ronald Reyes

In Partial Fulfillment of the Requirement in

Management Consultancy

Members:

Acosta, Viannice Antoinette V.

Aw, Mary Rose F.

Soriano, Danielle Hannah M.

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 ACKNOWLEDGMENTS

This research wouldn’t be this successful without these people who helped the researchers done

the paper. The researchers are grateful enough and thankful to all those who supported them all

throughout the said study. The following people who supported the researchers are:

First person the researchers would like to thank is the Lord Jesus Christ who gives the

researchers more strength, knowledge and courage to finish everything on time and with

accordance to the task being asked to do.

Second are the families of the researchers for the unconditional love, moral support and

financial support to complete this study.

The third person that the researchers are thankful enough is to their Professor, Sir

Ronaldo Reyes for moulding the researchers and pushing them to the best they can to make the

best Strategic Paper at the same time for all the guidance, patience and for all the support to put

on to the researchers.

Lastly, the friends of the researchers who’ve been there to help and give the best

suggestions they can give to make this a successful one, to cheer the researchers up and who

stood by them through good and bad.

Thank you!

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 EXECUTIVE SUMMARY

The following is a business plan on manufacturing the newest product in the market,

Fumbrella. The Philippines is a tropical island, which makes it even hotter than usual especially

during April to May.

Fumbrella company is known to be a newly establish business in the Philippines with a

small organization made to manage the overall operation of the business. Fumbrella Company

established only two managers composed of business development & operation as well as the

finance. The operation made for this company is through industrial technology. Industrial

technology is the use of engineering and manufacturing technology to make production faster,

simpler and more efficient. It is a field that employs creative and technically proficient

individuals who can help a company achieve efficient and profitable productivity. The marketing

aspect made by the company focuses on the uses of Social Medias since it is rampant today. The

company made assure that all types of social medias are used in advertising the first ever

umbrella with a fan in the Philippines.

Financial Statements are projected for the next five years, it was assumed that raw

materials increases 5% per year. Depreciation was computed on a straight line basis with an

estimated useful life of 5years for the furniture and fixtures and 10years for the equipment and

machineries. The partners also projected that sales and demand would increas3e 10% per year.

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 TABLE OF CONTENTS

ACKNOWLEDGEMENT ………………………………………………………………………2

EXECUTIVE SUMMARY ……………………………………………………………………..3

Chapter I: Summary of Project

A. Name of the Company ………………………………………………………………..6

B. Location ………………………………………………………………………………6

C. Vision & Mission and Core Values …………………………………………………..6

D. Brief Description of the Product ……………………………………………………...7

E. Organizational Structure ……………………………………………………………...8

F. SWOT Analysis and TOWS Analysis ………………………………………………..9

Chapter II: Economic Aspect

A. General Market Description …………………………………………………………11

B. Legal Factors ………………………………………………………………………...12

Chapter III: Marketing Aspect

A. Product ………………………………………………………………………………13

B. Price …………………………………………………………………………………13

C. Placement ……………………………………………………………………………13

D. Promotion ……………………………………………………………………………14

E. People ………………………………………………………………………………..14

F. Media Planning and Scheduling …………………………………………………….15

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Chapter IV: Technological Aspect

A. Product …………………………………………………………………………..…16

B. Manufacturing Process …………………………………………………………….17

C. Plant Size & Production Schedule …………………………………………………19

D. Machine & Equipment ……………………………………………………………..20

E. Plant Location ………………………………………………………………………24

F. Plant Layout …………………………………………………………………………25

G. Building and Facilities ………………………………………………………………29

H. Raw Materials ……………………………………………………………………….30

I. Utilities ………………………………………………………………………………31

J. Waste Disposal ………………………………………………………………………31

K. Production Cost ……………………………………………………………………...33

L. Labor Requirement ………………………………………………………………….34

Chapter V: Presentation, Analysis and Interpretation of Data ……………………………..36

Chapter VI: Financial Aspect …………………………………………………………………39

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 I. Summary of Project

A. Name of the Firm

Fumbrella Company

B. Location

Our company is located at Binondo along Ermita Motors. We chose to

lease at this area for the reason that it is beneficial for us since it is accessible for

our buying & procurement and at the same time it is the area flooded by the

community.

C. Vision & Mission and Core Values

Vision

To be the best selling & most popular umbrella company that offers the

consumers comfort like no other even when travelling under the sun.

Mission

To provide protection against too much heat and to provide comfort from the

coolness of the air that comes directly from our unique product.

Futuristic
Above and Core Values:
and
Beyond
Innovative

Futuristic and Innovative, our company’s objective is to focus and

Neighborly
develop products that can cope up with their rapid change of technologies.

Above and Beyond, the ambition of the company is to rise above the

competitors and to serve the people beyond they deserve. Neighborly,

aims to serve the neighborhood itself.

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D. Brief Description of the Product

Our product is an innovated umbrella with portable fan that operates

through by a battery infused. The product the researchers made are composed of

umbrella, the main product, propeller, and a little box for electric wirings we are

also composed of batteries, wirings and also a switch. Along with the new product

built the product itself add benefit such as make the users comfortable from

coolness and protection from heat.

The nature of the business we came up is about manufacturing specifically

on industrial technology. Industrial technology is the use of engineering and

manufacturing technology to make production faster, simpler and more efficient.

It is a field that employs creative and technically proficient individuals who can

help a company achieve efficient and profitable productivity. Together, these

organizations offer a wide variety of products when it comes to variation of colors

that frequently have only one thing in common. The type of organization we

choose is Hierarchal Organization. We prefer the type of management that is

centralized that all the decisions and the processes made by the different

departments will be seen by the head officer. We also want a management that

will be open for all ideas and comments or somewhat collaboration made by all

staffs in the company even if the management is in hierarchal way.

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 E. Organizational Structure

CEO

Business
Finance Department Development &
Operation

General Accountant Shipment

Billings Customer Service

Product Demand

Strategic
Communication

Hiring &
Deployment

Since we are a new established company we have a small organization that

would be composed of two departments or two managers such as Finance and Business

Development & Operation department. Finance department is composed of general accountant

who would look at the management’s budget, legal advisory at the same time look for auditing

processes. Together with that, the finance department also has the billings section for the sales

and purchasing processes of the company. The qualification required for this position is that they

should have a degree with accordance with the position they’re looking at and at the same time

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with finance department specifically the position of general accountant he/she passed the board

examination or already a certified accountant. Second department is the business development &

operation which composed of shipment, customer service, product demand, strategic

communication and recruitment/termination. With this department, the personnel that would be

qualified in this position is that it has a degree of bachelor of science in administration major in

management since it will be based on how he/she communicates and operate the management as

a whole.

F. SWOT Analysis & TOWS Analysis

STRENGTHS WEAKNESS OPPORTUNITIES THREATS

1st ever operating

umbrella with fan It’s not a necessity
Competitors who
in the Philippines during rainy days
Since we are the offer similar
1st establishment products
Based on mass Those people who
that produces this
budget are traveling with
product people Entry of new
private cars
will directly entrants
In demand during
buy/consign with
sunny days Those people who
us Portable Fans
specifically on prefer to go out at
summer season night or afternoon

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 TOWS

Strengths Weakness

Since we are the 1st company established Despite the rainy season our product
Opportunities
with this kind of product the strategy to would still work efficiently because it

be imposed is to produce numerous will not be affected by any circumstance

umbrellas with fan given such as getting wet by the rain.

Considering the possibility of the entry

Competitors of the same industry will
of new entrants the approach that the
Threats not be prevent the only thing we can do
researcher will establish is to produce
is to outsmart and do better than them.
products that are unique and firm.

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II. Economic Aspect

A. General Market Description

The target markets of this study are the commuters and those who travel or

go outside of their houses often under the heat of the sun. This includes people of

all ages from the students, employees, men, women, children and adults. In

particular, the target market would actually be the general market specifically

malls, convenient stores and product outlets/branches which is also located in the

same business area. Those people who have been using umbrellas but this time

would give them a better experience with much comfort because of the fan to

bring them coolness under the sun especially this coming summer where the

weather is expected to get hotter and hotter. Our goal is to provide them

satisfaction and the comfort that they deserve and also to make it easier for them

to travel or to commute during those very hot and restless time of the day when

they are outside.

General market factors refer to the overall conditions within a defined

market that affect all properties within that market. These factors are influenced

by the demographic, economic, and locational characteristics of a market.

Economic will be affected in the sense that the purchasing power of the

consumers would depend on the economy. General market factors change over

time with demographic patterns, economic and business cycles, employments

trends and government policies, amongst other factors. As an example, rising

unemployment in a region could cause office rental rates to decrease and tenant

defaults to increase throughout that region. This differs from a property-specific

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 factor such as a particular tenant declaring bankruptcy and thus defaulting on his

or her lease.

B. Legal Factor

Legal Requirements The following basic legal requirements are needed in starting

up a business: SEC registration would be needed for registering as a partnership

or corporation. This would have an estimated cost of less than 10,000 pesos based

on the 0.10% of the maximum aggregate price of the securities to be offered plus

Legal Research Fee (1% of Filing Fee). DTI registration for registering the

business trade name (BTR) which is “Fumbrella”. Mayor’s business permit for

getting the license to operate in the city or municipality and payment of your local

business taxes. Before starting the operations the permit from the office of the

mayor must be complied with. This would have an estimated cost of 5,000-8,000

pesos. BIR registration for getting TIN, official receipts and invoices, registering

your books of accounts, and paying your national internal revenue taxes (Income

tax, VAT or Percentage Tax, Withholding Taxes, etc.,). The taxes expense would

be based on the projected net income of the company from the sales every month

in the year 2018 the tax expense would be P 2,031,753.66 followed by tax

expense for 2019 which is P2,303,164.86, for 2020 P2,884,805.82 ; for 2021 is

P3,368,118.09 and 2022 would be P3,912,316.64.

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III. Marketing Aspects

a. Product

The product that our company is going to sell is a newly designed umbrella that

has a fan that operates once you opened the umbrella. This product is designed to help the

users get the comfort that they deserve even while travelling under the heat of the sun.

Our products also have a variety of colors that would make consumer choose what color

or design they want. All other competitors offer umbrellas and portable fans separately

but we are the only one that sells a product with a dual used on just one output.

b. Price

The projected selling price of the product is P599 which is based on our

production cost. This is calculated through the expenses made and all throughout the 12

months operation. We accurately computed all the costs that are to be incurred from the

raw materials, production, manufacturing, marketing and selling.

c. Placement

This product is going to be sold in retail stores, through catalogs, sales calls, Web

pages, or within the working hours telephone services that can process customer orders.

This could be met through the operations in our facility and building that has a specific

room for selling our product and also store outlets located at the malls

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 d. Promotion

The promotion for the umbrella with a fan would be through social media

advertisements, pages and websites, billboards and tarpaulins. Since we would start up a

new company and introduce a new product in the market television commercials would

be too expensive that is why we would focus more on the outside or external

advertisement such as the billboards and tarpaulins.

e. People

The people who are included in the creation and manufacturing aspect of this product

are the highly skilled workers who are trained well in the different aspects of their work

such as the design team, the electricians and other skillful workers who are assigned to

ensure the quality of our product and to improve each and every product. We intend to

get highly skilled workers by hiring people who are well experienced in this aspect of

electrical and industrial works.

f. Media Planning and Scheduling

Media planning is an exercise to find the best medium or combination of media

that will produce the best overall effect relative to the needs of the advertised brand.

Media planning in general should involve optimum benefits in the long run. The media

mix, in terms of balance of usage for social and print media or other types of media

vehicles, should be such that the best utility of the advertising budget is obtained, and

duplication of audience is avoided as far as possible.

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 Decide Target Market

It is necessary to decide specific market where planned efforts can be directed. The target market

of our company would be the commuters. It could be students, workers, children, youth and/or

adults.

Media Objectives

To generate more sales, there is a need for the company to focus a little more on the different

advertisements such as the social media advertisements, billboards, flyers and other advertising

materials.

Selection of Media Types

The media type would be Promotional Advertising media and Outdoor Advertising media.

Selecting Specific Media Vehicle

The media mix would be 50% social media ads, 25% billboards and 25% flyers and other

advertising materials.

Allocation of Funds

The funds that are allocated for the media types or the advertisement would be P16,500

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IV. Technological Aspect

A. Products

This feasibility study is conducted to analyze and evaluate our proposed project

which is to produce an innovated umbrella; the product we made is umbrellas with

portable fan which, in our idea to be the first product here in the Philippines. This

product is composite of a large size of umbrella, fan which in our product will just be

an propeller to be easily folded as the umbrella being folded. Batteries are also used to

make the propeller work together with the wires.

We believe passionately that make innovation a visionary strategic lever for

change, business transformation, management, profitability and overall sustainability. It

is also a systemic lever that engages, empowers and enables people to affect business

breakthroughs and deliver profound culture, system, process, product and people

changes. The result is increased organizational engagement, reach, competitiveness,

faster business growth and increased business value to enable businesses to flow and

flourish in this age of disruption.

The use of this product is make the user feel fresh and comfortable since now a

day’s our climate is change. This will be a big help for this time since its summer time,

it’s hot and the only thing we need is a fan at the same time being covered by the sun.

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B. Manufacturing Process

Buy
Buy Materials
products Umbrella, battery, wire,
propeller and etc.
wires &elysee/blade

Build
Buildthe
theelectric
electricwirefirst
wiring that
that
will be put on the umbrella

Electrical test

Willthe
Will the wiring
wiring
YES NO
works?
works?

Put the propeller Redo the

on the umbrella electrical wiring

Does it work?
NO

FINISH Put the propeller on

the umbrella YES
PRODUCT

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 A flow chart, or flow diagram, is a graphical representation of a process or system that

details the sequencing of steps required to create output. A typical flow chart uses a set of basic

symbols to represent various functions, and shows the sequence and interconnection of functions

with lines and arrows.

We made a flow diagram to show the sequence on how we made our production. In

building up our product the first thing that we did was to buy the needed materials to come up

with our final product. The second thing that we did is to build up the electrical wires and the

battery used to make the fan works. After that, we set the wiring, the next thing we did is

electrical testing to know if the build wires are working well. If the wiring doesn’t work well

with what we’re planning to do, we will redo again the wiring to make the fan work. As we

already knew that the wiring we made is good, we install it on the umbrella at the same time

already put the propeller.

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 C. Plant Size and Production Schedule

Rated annual and daily capacity per shift, operating days per year, indicating

factors used in determining capacity. The estimated number of finished product to be produced

for the first year is 24,000 umbrellas with portable fans, which is equal to 100 products a day.

There would be 240 operating days per year, excluded here are the weekends and holidays. The

number of products that are to be produced indicated here is constitutes the factor that man

power is being used to produce and they are obliged to work for 8 hours daily so that they would

have much time to rest and work properly.

When you have a written plan and schedule, it's similar to maintaining an ongoing "to-do"

list for your business. Completing and checking off the items on your plan will help motivate

you and your employees to accomplish your project goals. Each item you complete represents a

success for you and your business.

Another benefit of planning and scheduling is that your small company is better prepared in

case of an unexpected occurrence compared with not outlining a plan ahead of time. A thorough

plan contains multiple solutions—one as the main course of action and the rest as backups to that

preferred option. If the unexpected occurs, you can then default to "Plan B" and continue

seamlessly throughout the project.

Expected production volume for the next five years, considering start-up and technical

factors. The expected volume of production is expected to increase by 10% annually. This means

that by the end of five years an estimated of less than 24,000 are to be produced.

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D. Machinery and Equipment

Our company bought several types of machines and equipment to be used in

production and manufacturing umbrella with portable fan. The said machines and

equipment is first, the umbrella sewing machine for stitching the umbrella after

assembling the wirings. Second is the printing machine for printing and putting up our

company name. The last machine bought for the production is the packaging machine.

All our machines and equipment will be bought in China at a discounted price.

Umbrella Sewing machine- this would be used for the finishing touches of the umbrella,

and the design of the canopy.

 Single needle lock stitch machine designed for trailers, sewing establishment and

garment industry

 In addition to straight stitch it can be effectively used with special attachment for

hemming and sewing on lace, ruffing, trucking etc.

 Full rotary Shuttle

 capable of more than 3000 stitches per minute

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 Stitches fine and heavy calicoes, muslin, fine linen cambric shirting, fine and heavy

silk, light/heavy woolen, khaki drill, cotton canvas, terylene, corduroy, upholstery

fabrics, terry cotton, soft leather

 Stitch length: 6 - 25 stitches per inch

 High/low speed operation

 For stitching hosiery items like shirt, t-shirt, panels, ladies suit, skirt etc.

Printing machine- this machine is used only for the imprints of the brand’s name on each

product. It is a device for applying pressure to an inked surface resting upon

a print medium (such as paper or cloth), thereby transferring the ink. It marked a dramatic

improvement on earlier printing methods in which the cloth, paper or other medium was

brushed or rubbed repeatedly to achieve the transfer of ink, and accelerated the process.

Typically used for texts, the invention and global spread of the printing press was one of

the most influential events in the second millennium.

- One of the key advantages of printing out material is that it is

convenient. An industrial printer is an investment that can provide financial benefits in

several areas. Owning equipment eliminates the need for outsourcing, which can often

have huge upcharges compared with in-house production along with uncertain delivery

dates that can affect not only your schedule, but also your customers’. You’re also able to

avoid the minimum quota requirements set by printing companies and print on only what

you need, which will greatly reduce your per job expenses.

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 Packaging Machine

Double head umbrella packing machine is made up of stainless steel and at the same time it is

powerless operation since you’ll just need to put the umbrella down and the umbrella will be

sealed. This kind of machine is also efficient since it is easily used at the same time it doesn’t

consume any time considering that you just need to push down the umbrella. Easy operation

since it can do by anyone in the management or in the production team.

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Comparative analysis of alternative machinery and equipment in terms of cost, reliability,

performance, and spare parts available

The alternative machine to be used is the sewing machine. It would be more reliable and cost

effective than to use manual labor in sewing the canopy of the umbrella.

Umbrella Sewing machine Manual Labor

Cost -More expensive -Cheaper

Reliability -more reliable -inconsistent

Performance -fast and stable -slow and volatile

Spare parts available -costly yet efficient -not available

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E. Plant Location

The ideal place to build up the building would be at Binondo. We chose to build at that

place since it’s known to be a public market at the same time close enough to “Divisoria”. We

designated at this area since it is also convenient for us since some of our raw material would be

got from that place. We prefer to go there since we don’t have any prospect customer but rather

all people is our prospect even if your rich, middleman or not. We just want to deliver the needs

and wants of each and every consumer that would like to have a refreshing feeling while strolling

everywhere.

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 F. Plant Layout

Finance Material Storage

Department M
Business A
D Development C
O & H
O Operation I
Department Electrical N
R Processing E
Product
Outlet &

Quality Control Check E

Q
C
U
O
U
I
N P
T Packing Area M
E E
R Stock Room N
Finished Goods T

Shipping Door

The plant layout made was to be manufacturing area at the same time an area connected

with the end user. The left part is the opening door or the entrance wherein there will be a

customer service that would help consumer look for what they need. On the bottom side of the

customer service they will all see the fished product display, different designs and colors that

will get their attention. In front of the product outlet there will be a counter, an area where

customers will get the product they want and pay for the price. Lower part of it, is the stock room

for the finished product. We put the stock room beside the counter so that our people would be

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easily got the product demanded by our customers; we did this to make the payment easier at the

same time, time-efficient for the management as well as on our shopper. Inner part of the layout

is the overall processing, here you can see how our products being manage and process through

different sections such as the business development department wherein advertisement and

promos are being talked about, shipping area for those purchasers that doesn’t have time to go on

our place and being delivered to them.

This will be our inside interior. The designed layout is more intricate and detailed interior.

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G. Building and Facilities

The building type the researcher made was a single storey building with a modern

look interior & exterior with an environmental look to make the atmosphere refreshing. The land

area would be 250 square meters and a 200 square meter floor area. The 200 square meters are

composed of different sections that would be useful on the productions such as the labor;

electrical, machineries equipment and etc. The cost of erection of the building estimated as P399,

950 that would composed the lease price and the furniture & fixtures included in the facility. The

left 50 square meters are used for the parking of our customers, trees, hedges to make the border

of the land area and a stand for lights.

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H. Raw Materials

a. Umbrella – The main product of the feasibility

- a collapsible shade for protection against weather

consisting of fabric stretched over hinged ribs

radiating from a central pole.

- Php60.00

b. Propeller – the second main product for the project.

- Cuts the air and pushes it forward

- Php17.00

c. Wires -used to bear mechanical loads or electricity and telecommunications

signals

- Php25.00

d. Battery – battery is the used product to make the wiring works.

- a device consisting of one or more electrochemical cells with

external connections provided to power electrical devices

- Php7.50

e. Battery Holder - compartments or chambers for holding a battery

- Php25.00

f. Screw - a short, slender, sharp-pointed metal pin with a raised helical thread

running around it and a slotted head, used to join things together by

being rotated so that it pierces wood or other material and is held

tightly in place.

- Php0.50

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 I. Utilities

The used utility here is the usage of electrical test to assure the availability or if

the install electrical wiring works. Machinery and Equipment used for the production are also

used for the electricity. Water also used for the comfort rooms and for cleaning the area. Utilities

used in the administration or distribution are also included in our manufacturing such as the

lighting of the building as well as outside our vicinity and together with this is the cooling of the

building or the use of air-conditioner. Internet connection is also added in the utilities since it

will be used by the management.

J. Waste Disposal

In the manufacturing of umbrellas with portable fans, the waste that are needed to

be disposed are scrap fabrics that are used for the umbrella, scrap materials from metals,

fiberglass and/or wood used for the stretcher, shaft and rib, wirings, and other electrical materials

cut out from the assembling of the portable fan. It is estimated to be 50 kilograms of waste

monthly.

The waste disposal method to be used is Waste to Energy (Recover Energy) and Recovery

and Recycling:

Waste to energy process involves converting of non-recyclable waste items into useable

heat, electricity, or fuel through a variety of processes. This type of source of energy is a

renewable energy source as non-recyclable waste can be used over and over again to

create energy. It can also help to reduce carbon emissions by offsetting the need for

energy from fossil sources. Waste-to-Energy, also widely recognized by its acronym WtE

is the generation of energy in the form of heat or electricity from waste.

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 Resource recovery is the process of taking useful discarded items for a specific next use.

These discarded items are then processed to extract or recover materials and resources or

convert them to energy in the form of useable heat, electricity or fuel.

Methods used in other plants

This is not applicable due to the fact that the operations of the company is based on only one

plant.

Cost of waste disposal

The estimated cost of waste disposal would be around 3000-5000 monthly, inclusive of all the

costs incurred in the process of disposing those that cannot be recycled.

Clearance from proper authorities or compliance with legal requirements

There is no need for a clearance from proper authorities or compliance with legal requirements

about the waste disposal because there are no harmful chemicals or toxic materials being used in

the production of our product.

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K. Production cost

2018 2019 2020 2021 2022

24,000 units 26,400 units 29,040 units 31,944 units 35,138 units

Direct 3,864,000.00 4,057,200.00 4,260,060.00 4,473,063.00 4,696,716.15

Materials

Direct Labor 209,650.00 209,650.00 209,650.00 209,650.00 209,650.00

Manufacturing

Overhead- 9,600.00 10,080.00 10,584.00 11,113.20 11,668.86

Packaging

Total 4,083,250.00 4,277,650.00 4,480,294.00 4,693,826.20 4,918,034.9

Production cost

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L. Labor requirements

Position Number of Employees

Manager (Finance, Business Development &

Operation)

General Accountant 1

Factory Worker 4

Guards 2

Cashier 1

Maintenance 2

Truck Drivers 2

The researchers made up 14 employees who are composed of the management personnel,

industrial workers, and staffs for maintenance, security, cashier and drivers. Management

personnel comprise 2 managers which are divided by the departments made, functioning as the

finance department and business development & operation. The wages of our management are

based from their experiences and credentials. The researchers also have 1 general accountant.

The industrial workers are formed of 4 employees who will be our direct laborer known to be the

electricians, packaging personnel, material holders and the quality control personnel. These 4

workers are all around workers, they will be the one who will package, connect the wirings and

identify if the product is good enough to be delivered. The rates for our industrial workers are

based from their daily works and will be based on minimum wages which is P491/day. For the

remaining 7 employees is the cashier, maintenance, guards and truck drivers. The rate of the

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remaining employees will be the same for the wages we indicated on our industrial workers but

for the rate of our truck drivers will be different since there will be no daily deliveries so we

made it on a fixed amount.

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 V. Presentation, Analysis and Interpretation of Data

The study conducted had been analyzed with the cooperation of 45 different people

known to the students, commuters and workers that are applicable with the execution of the

study. In this chapter all responses of our prospect study will be summarized in charts. The

researchers used website to conduct the said survey for the efficiency and for effective way

of disseminating the survey form.

The first question that was asked about is if the respondents are commuters or not, with

the graph made 93.3% or to be exact 42 respondents said that they are commuters and the rest

are not. The researchers assumed that the 3 respondents that said no are along their workplace or

school or they have a private car.

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 The second query that was asked is if the prospect respondents uses umbrella or not at all.

The feedback that the researcher made was 93.3% with a definite number of 42 respondents

admitted that they use umbrella.

The third question that was being asked about if commuters feels sweaty under the sun.

Like the 3 questions above 93.3% responded that as they do some errands they feel sweaty under

the sun.

37 | P a g e
 The fourth question that was asked about is if the respondents have already seen an

umbrella with a fan. With the graph made, 100% said that they haven’t seen this kind of product

or this kind of umbrella.

The number of people who are willing to try our umbrella is not a 100% and this

indicates that the company should strive harder to convince those people who are not interested

with the researchers’ product

38 | P a g e
 VI. Financial Aspect

This chapter discusses the financial aspects of the study, in order for a business

plan to understand it needs money to start. To determine whether the future industry will

remain profitable through the existence of competitors and unfavorable economic

condition, the researchers have to project a five year financial statement.

Financial Assumptions

1. Selling Price of FUMBRELLA:

AUTOMATIC

UMBRELLA
P599.00
WITH

PORTABLE

FAN

2. Raw Material increases 5% per year

3. Depreciation expense is computed on a straight line basis with an estimated useful life of

5 and 10 years.

4. 50% of Net Income will be distributed after 5 years.

5. Fumbrella Company is on a cash basis method. The company record revenue only when a

customer pays for a billed product, and also records a payable only when it is paid by the

company.

39 | P a g e
 Initial Capital Requirements
The partners agreed to contribute an equal sharing of capital in the amount of

P1, 500,000 each.

INITIAL CAPITAL
REQUIREMENTS
(in pesos)

PARTNERS RATIO INVESTED AMOUNT

Viannice Acosta 25% 1,500,000
Hannah Soriano 25% 1,500,000
Rose Aw 25% 1,500,000
Ron Reyes 25% 1,500,000
TOTAL 100% 6,000,000

Purchase of Raw Materials

PURCHASED OF RAW
MATERIALS (in pesos)
ITEM QNTY. UNIT AMOUNT
PRICE
MONTHLY YEARLY
(PCS) (PCS)
UMBRELLA 2,000 24,000 60
1,440,000.00
PROPELLER 2,000 24,000 17
408,000.00
BATTERY 2,000 24,000 25
600,000.00
WIRES 4,000 48,000 25
1,200,000.00
BATTERY HOLDER WITH COVER 2,000 24,000 7.5
AND SWITCH 180,000.00
SCREW 6,000 72,000 0.5
36,000.00
TOTAL 18,000 216,000 135
3,864,000.00

40 | P a g e
Expenses
RENT EXPENSE (in pesos)
MONTHLY ANNUAL COST
30,000 360,000

OFFICE FURNITURE
AND FIXTURES
ITEM QNTY. PRICE AMOUNT ESTIMATED USEFUL DEPRECIATION
LIFE (years) EXPENSE
TABLE 10 5
1,500.00 15,000.00 7,500.00
OFFICE 10 5 2500
CHAIR 500.00 5,000.00
AIRCON 2 5
30,000.00 60,000.00 30,000.00
CABINET 4 5
S 4,950.00 19,800.00 7,920.00
LIGHT 4 5
BULB 3,000.00 12,000.00 15,000.00
TOTAL 30 25
41,950.00 111,800 62,920.00

PACKAGING (in pesos)

ITEM QNTY. PRICE MONTHLY ANNUAL COST
PAPER BAG 800 1.00 800
9,600.00

41 | P a g e
 EQPMT.
ITEM QNTY. PRICE AMOUNT ESTIMATED DEPRECIATION
USEFUL LIFE EXPENSE
Computer 1
14,998.00 14,998.00 10 1,499.80
Sewing Machine 2
46,000.00 92,000.00 10 9,200.00
Printing Machine 1
48,000.00 48,000.00 10 4,800.00
Packaging 1
Machine 20,000.00 20,000.00 10 2,000.00
Truck 1
60,000.00 60,000.00 10 6,000.00
TOTAL 6
188,998.0 234,998.00 50 23,499.8
0 0

DEPRECIATION
EXPENSE
ITEM COST DEP
2016 2017 2018 2019 2020
FURNITURE &
FIXTURES 111,800.0 22,360.00 22,360.00 22,360.0 22,360.00 22,360.0
0 0 0
EQUIPMENT
234,998.0 23,499.80 23,499.80 23,499.8 23,499.80 23,499.8
0 0 0
TOTAL
346,798.0 45,859.80 45,859.80 45,859.8 45,859.80 45,859.8
0 0 0

42 | P a g e
 SALARIES AND
WAGES
POSITION COST PER MONTH COST PER ANNUAL
Manager (2)
50,000.00 600,000.00
General Accountant
17,000.00 204,000.00
Truck Drivers (2)
18,000.00 216,000.00
Minimum Wage Earner (9)
88,380.00 1,060,560.00
TOTAL
173,380.00 2,080,560.00

Utilities Expense

Cost Annual
Electricity and
Internet 18,000.00 216,000.00
Water
2,000.00 24,000.00
TOTAL
20,000.00 240,000.00

PROMOTIONAL EXPENSE
COST NO. OF MONTHS ANNUAL COST
Social Media OWN FACEBOOK PAGE
Billboards 20,000 5 100000
Flyer's and 500 7 3500
posters
TOTAL 20,500 103500

OFFICE SUPPLIES (in pesos)

ITEM QUANTITY PRICE ANNUAL COST

43 | P a g e
RECORD BOOK 3 370.00
1,110.00
OFFICIAL RECEIPT 1 1,295.00
1,295.00
BALLPEN 50 220.00
11,000.00
BOND PAPER 1 159.00
159.00
STAPLER 2 189.75
379.50
STAPLER WIRE 10 189.00
(BOX) 1,890.00
TOTAL
67 2,422.75 15,833.50

44 | P a g e
SUPPORTING SCHEDULE
INVENTORY LEVELS

2016 100 units/day x 240 operating days per year 24,000.00

24000 x 90% 21,600.00 UNITS SOLD
24,000 x 10% 2,400.00 UNSOLD UNITS

ENDING INVENTORY 324,000.00

2017 110 units/day x 240 operating days per year 26,400.00

26400 x 90 % 23,760.00 UNITS SOLD
26400 x 10% 2,640.00 UNSOLD UNITS

ENDING INVENTORY 396,000.00

2018 121 units/day x 240 operating days per year 29,040.00

29040 x 95% 27,588.00 UNITS SOLD
29040 x 5% 1,452.00 UNSOLD UNITS

ENDING INVENTORY 196,020.00

2019 133/day x 240 operating days per year 31,944.00

31944 x 94% 30,027.36 UNITS SOLD
31944 x 6% 1,916.64 UNSOLD UNITS

ENDING INVENTORY 258,746.40

2020 146/DAY X 240 operating days per year 35,138.40

35138.4 x 95 % 33,381.48 UNITS SOLD
35138.4 x 5% 1,756.92 UNSOLD UNITS

ENDING INVENTORY 237,184.20

45 | P a g e
 Fumbrella Company
Projected Statement of Comprehensive Income
As of the years ended December 31,2016-2020

2016 2017 2018 2019 2020

Sales
12,938,400.0 14,232,240.0 16,525,212.0 17,986,388.6 19,995,506.5
0 0 0 4 2
Cost of
Goods Sold 3,759,250.00 4,204,930.00 4,680,274.00 4,631,099.80 4,939,597.21
Gross Profit
9,179,150.00 10,027,310.0 11,844,938.0 13,355,288.8 15,055,909.3
0 0 4 1
Less:
Operating
Expenses
Salaries
Expense 2,080,560.00 2,080,560.00 2,080,560.00 2,080,560.00 2,080,560.00
Rent Expense
360,000.00 360,000.00 360,000.00 360,000.00 360,000.00
Utilities
Expense 240,000.00 240,000.00 240,000.00 240,000.00 240,000.00
Promotional
Expense 103,500.00 103,500.00 103,500.00 103,500.00 103,500.00
Depreciation
Expense 45,859.80 45,859.80 45,859.80 45,859.80 45,859.80
TOTAL
OPERATING 2,829,919.80 2,829,919.80 2,829,919.80 2,829,919.80 2,829,919.80
EXPENSE
NET INCOME
BEFORE TAX 6,349,230.20 7,197,390.20 9,015,018.20 10,525,369.0 12,225,989.5
4 1
Less: Tax
Expense 2,031,753.66 2,303,164.86 2,884,805.82 3,368,118.09 3,912,316.64
(32%)
NET INCOME
4,317,476.54 4,894,225.34 6,130,212.38 7,157,250.95 8,313,672.87

46 | P a g e
 COST OF GOODS SOLD SCHEDULE

2016 2017 2018 2019 2020

Beginning
Inventory 324,000.00 396,000.00 196020 258746.4
Add:
Purchase of
Raw 3,864,000.00 4,057,200.00 4,260,060.00 4,473,063.00 4,696,716.15
Materials
Direct Labor
209,650.00 209,650.00 209,650.00 209,650.00 209,650.00
Overhead-
Packaging 9,600.00 10,080.00 10,584.00 11,113.20 11,668.86
TOTAL
4,083,250.00 4,600,930.00 4,876,294.00 4,889,846.20 5,176,781.41
Less: Ending
Inventory 324,000.00 396,000.00 196,020.00 258,746.40 237,184.20
COST OF
GOODS SOLD 3,759,250.00 4,204,930.00 4,680,274.00 4,631,099.80 4,939,597.21

PROJECTED
DEMAND AND
SALES
DEMAND 2016 2017 2018 2019 2020
FUMBRELLA
24,000.00 26,400.00 29,040.00 31,944.00 35,138.40
SALES
FUMBRELLA
12,938,400.0 14,232,240.0 16,525,212.0 17,986,388.6 19,995,506.5
0 0 0 4 2

47 | P a g e
 Financial
Ratios

2016 2017 2018 2019 2020

PROFIT MARGIN 0.33369478 0.343882996 0.370961194 0.397925959 0.415777058

(Net Income/Sales)

Return on Investment 0.72 0.82 1.02 1.19 1.39

(Net
Income/Investment)

Return on Total Asset 0.418462453 0.321740814 0.287238169 0.251138968 0.225836238

(Net Income/Total
Asset)

Return on Equity 0.418462453 0.321740814 0.287238169 0.251138968 0.225836238

(Net Income/Total Equity)

48 | P a g e