TABLE OF CONTENTS

Chapter I- Product Definition/Service Description

A. Assortment
B. Variety

Chapter II- Sales Target

A. Quantity in units/day per week
B. Amount in peso per week

Chapter III- Capital

A. Initial Input
B. Additional Input
a. New money
b. Realized profit
C. Purchased/Procurement Recquired

Chapter IV- Pricing

A. Policy: Selling price= cost plus margin
B. Margin rate vs. Competition

Chapter V- Place of (Distribution) Business (Location)

A. Foot traffic
B. Commercial Area
C. Residential Area
D. School Vicinities
Chapter VI- Hours of Operation
Chapter VII- Staffing
Chapter VIII- Inventory
Chapter IX- Cash Handling Recordation
A. Daily Cash Settlement
Cash on hand vs. Goods sold
B. Depository & Safe keeping

Chapter X- Signage
A. Design & Art
B. Business Name

Chapter XI- Contingencies

A. Unsold goods (Perishable)
B. Revision of Sales Target
C. Staff Substitution
D. Additional Inventory
E. Steep Sales Fluctuation
F. Stockouts
G. Additional Capitalization
COMPANY OVERVIEW
The form of organization that HEARTWORK has is a Partnership business;
equally owned by a two self taught practicing artists. It was discovered on the idea
that finding different brands of art supplies that are hard to find should be made
easy, cause as fellow artist the owners also struggled in finding the art materials
that they desired. Maintaining satisfaction of customers is essential to the bottom
line. With this in mind, they will make sure to meet the customer’s satisfaction and
even guide them through the materials they prefer for their artwork and to also
ensure them with trustworthy transaction.

It would be located alongside the national road of Muntinlupa city so it would

be easy for the store to be seen, and to deliver products to customers as well.
Products will feature various types of art supplies that are either hard to find in
most art supplies stores in the Philippines or those that are mostly sold in other
countries..

The target market for HEARTWORK is mostly artsy people, because

HEARTWORKS know that many creative people are looking for specific brands
that they couldn’t find, but HEARTWORKS are also for everyone who just has a
heart for art. It can also be forefront in an exciting and growing market. The city of
Muntinlupa currently has only a few stores exclusively offering art and craft
supplies, usually you have to go to another city or even country to get a good
quality and famous art supplies that is good for different art techniques and used by
famous artist.

HEARTWORK also plans to offer discounts to regular customers and to offer

free delivery to customers who live in the cities nearby. They will create a website
or a Facebook page so they can browse the products we offer and just order online.
I. Product description / service description
In the Philippines, it isn’t often that you can find a very famous brand of art
supplies that many famous artists that you see on the internet from another country have.
Most often, professionals or even amateurs tend to order online abroad just to get a
specific brand that they know has good quality, art supplies that not many stores have in
the Philippines or those that are only sold in another country like the United States of
America.
HEARTWORK will be focusing on those product, they will offer those products to
help many artist save money from shipping fees or even transportations fees to another
city, but not only that, HEARTWORK plans to be the go-to art supply store for many
artsy people, whether amateur or professional, HEARTWORK will be a retail store
offering different types and brands of art materials and supplies that crafter’s need and
artists’ love.

HEARTWORK will also make sure to provide information to customers about

every art material they wish to purchase to give them enough knowledge like how to use
the art material when creating art, tips on when and where to use it, etc. This will help
customers be secure on the art supply that they want. HEARTWORK will offer lines that
include basics and mid-range for customers on a budget but love good quality as the
premium ones and the premium quality supplies that are used by professionals. Also,
while shopping for their desired materials, HEARTWORK will make sure to provide
soothing and relaxing music to somehow relax the customers and make them feel at home
or at ease.
HEARTWORK will also be offering art classes to those who have a passion for art
but can’t put into work, giving demonstrations and tips for better artwork, for example:
Some people tend to have difficulties when it comes to shading their drawings,
HEARTWORK will make sure to give tips on where to properly put shadings to give the
drawing a realistic look to it. HEARTWORK will rely on customer feedback and reviews
to know what certain adjustments are needed to make to constantly reach their
expectations.
a. Assortment
Each Item will be divided into alleys of shelves and it will be stocked with
assortment of art supplies, for example, the brushes with different brands shapes
and sizes will be group together in a shelf for customers to easily know where to
go when they need brushes, and same goes for other type of art supplies.

b. Variety
These are some of the variety of art supplies that HEARTWORK will offer:

Traditional drawing media

 Airbrush
 Acrylic paint
 Chalk
 Charcoal (soft or hard)
 Coloured pencil
 Conté
 Crayon
 Gouache
 Graphite (can be pencils which are small or large sticks similar to
charcoal)
 Marker
 Oil paint
 Pastel
 Pen and ink
 Pencil
 Sand
 Tempera
 Watercolour
Traditional Supports for drawing
 Canvas
 Card stock
 Fabric (with fabric pens)
 Glass
 Human body (typically for tattoos)
 Metal
 Paper
 Plaster
 Scratchboard
 Vellum
 Walls (typically for murals)
 Wood
II. Sales target
1. Quantity in units per week/per month

HEARTWORK’s sales target and expectation is that at least 15% of their

inventory will be sold per week, HEARTWORK rely heavily on customer
satisfaction and the interior designing of the store and its decoration to attract
arts and crafts lovers, with that we can somehow make sure that at least 50% of
the customers will return and consider the store as their go-to shop to buy their
art supplies and maybe recommend HEARTWORK to their friends and
families, with that they can make sure that there will be growth on sales.

2. Amount in pesos per month

HEARTWORK’s projected sales amount is P15,000 – P30,000 per week.

Below is the list of the price ranges of some of the products HEARTWORK will
offer:

Products Amount
Brush (individual) P15 - P1,118
(Set) P145 - P1,780
Acrylic Paint (individual) P195- P780
(Set)
P206- P2,150
Watercolour P10 – P4250
Pencils (individual to set) P7 – P 30
Charcoal Pencil P28 – P2916
Coloured Pencils P10 – P3,465
Watercolour Pencil P91- P3,645
Oil Pastel P85 – P2,419
Paper (watercolour pad, sketchpad, P10 – P1,281
toned paper, etc)
Canvas P65- P14, 765(roll)

HEARTWORK will offer art materials with different prices ranges for those on
budget, and to also be a guide to those who are willing to spend more money on
premium quality products, giving them advices and knowledge, to also ensure
customer satisfaction.
III. Capital
1. Initial capital
The initial input for HEARTWORK is P2, 000,000, based on all of its
estimated start-up requirements. The initial capital will be generated with the
help of friends, families and own money of the owner.

Start-up Requirements:

Start-up Expenses:

Legal P4485

Rent and Deposit P85,000

Travel: Trade Show P20,000

Set-up Banking P5000

POS System and Computers P150,000

Security System P15,000

Advertising P5,000
Phone and Wifi System P3,000
Total Start-up expense P327,485
Start-up Assets:

Operating Cash on hand P 54,515

Start-up inventory P1,500,000

Other current assets P50,000

Long-term Assets P68,000

Total Requirements (budget) P 2,200,00

2. Additional input due to good sales performance

Due to good sales performance, the initial input would heavily focus on re-stocking
inventory and other supplies needed for the store. The additional input will be
generated from HEARTWORK’s sales and maybe tips from the art classes.

The projected profit is 50,000 to 65,000 monthly, but assumed to increase

during the school month, where students buy their school or art materials to get
ready for the first day of school or months of school events where there are poster
making or slogan making, and on holidays, like Christmas or New Year, where
most people buy art products as gifts to people they know who are artsy.

3. Purchase / procurement required

There are various types of art materials used depending on their function, for
example, pencil; there are different types of pencils, like coloured pencils,
watercolour pencil, charcoal pencil, graphite pencil, mechanical pencil etc.

The product that HEARTWORK will be selling will come from suppliers of
different brands of art materials, like manila atelier, crown supply manila, etc.
They will do the procurement process of:

1. purchase planning,
2. supplier research and selection,
3. value analysis
4. financing
5. price negotiation
6. making the purchase,
7. supply contract administration,
8. inventory control and stores
IV. Pricing

a. Policy: selling price = cost plus margin

HEARTWORK will follow the cost-plus pricing method since it is a

simple way to derive a price of a product and justifiable, like in cases where
customers ask why the increase in price, the supplier can point out the reason.
HEARTWORK also applies a standard of 10% HEARTWORK so the formula
that will be used is:

Price= Direct material costs + Direct labour cost (delivery, transportation, etc.)
x (1+Markup/margin)

b. Margin rate vs. Competition

HEARTWORK will keep the margin rate low, since the vicinity that
HEARTWORK will be located are mostly surrounded with schools it means their
main priority is to keep it affordable for students. HEARTWORK plans on making
their prices a little lower than other supplies store, but keeping in mind the break-
even point, so that many people would consider HEARTWORK rather than other
art supply store considering that they would save more money, or even a little
amount.

People nowadays prefer places that are both affordable and offer good quality
products, HEARTWORK will make sure to offer both of those for beloved
customers and to also obtain an increase in demand by being the go-to place for
artsy people.
V. Place of business (location)
HEARTWORK will be located in Tunasan, Muntinlupa city alongside the
National Road so people could easily be aware of the store. HEARTWORK plans
on opening the store beside the TSP Gen. trading building.

Since it is located alongside a service road, many residents, cars and other vehicles
pass by the location every day, it is also filled with commercial areas like SM
Muntinlupa, office complexes and many restaurants, right in front of the building
is a restaurant called “Picked” which has a lot of customers from time to time,
which mean a lot of resident stop by at the spot, which means potential customer.

It is also surrounded with residential areas, the nearest subdivision is

Parkhomes Subdivision and Villa Carolina 2 which is known to have well-off
residents and professional/ amateur artist, but over-all Muntinlupa is also one of
the cities known for having many young artist and Professionals artist even
crafters, which also means potential buyers.

When it comes to surrounding schools, the building is located in front of a

school; which is the Lyceum of Alabang, an educational institution offering high
school and college degree, which mean that many students can possibly stop- by to
check-out the place and consider the store as the place where they would buy the
materials for school works or maybe just for their hobby. Another thing we found
out is that most students found it attractive when restaurants or stores have a trendy
feature inside them, it attracts them and the advantage is they can post it to their
social media and share the word out about the store to their friends and can
possibly get many shares. That is a good advantage for the store, to be known
widely by many artsy people. So overall, the location of building has a good foot
traffic review.
VI. Hours of operation
Just like any other retail store, HEARTWORK plans on maximizing the days
every month, but considering the day of Sunday as the day of rest, which the owner
of HEARTWORK respects. In total, HEATWORK will be open 6 days a week,
from morning to evening, for students going to school early and need a material on
the way. The owners will be hands-on the overall operation working full time for
the first few years.

DAYS HOURS

MONDAY 7:30 AM – 9:00 PM

TUESDAY 7:30 AM – 9:00 PM

WEDNESDAY 7:30 AM – 9:00 PM

THURSDAY 7:30 AM – 5:00 PM

FRIDAY 7:30 AM – 5:00 PM

SATURDAY 7:30 AM – 5:00 PM

The Store will close early from Thursday to Saturday; the owners reserved the time
for their Religious Beliefs to be at the Church.
VII. Staffing
For the first 2 to 3 years the owners will be operating the business themselves,
and on the following years, the owners will hire 2 full time employees to give them
time to focus on expanding and the growth of business. Also, it’s important for the
employees to be educated to the materials being sold, for them to be able to cater
the needs and questions of the customers about the specific product. They should
be able to give right information, that’s why the first duty of the owners is to
educate them and somehow give them knowledge to be well prepared for the job.

 Employees will be encouraged to work within their own creative, physical

and intellectual boundaries. They must be able to connect with each
customer and be able to explain and demonstrate each product the customer
wishes.
 All duties will be divided based on the strength and weaknesses of the
employees.
 HEARTWORK will also be expecting a high degree of customer service
skills since this is one of what we rely on for success.
 Must have a kind personality that is easy to approach.

Owners
(Ria Pacuan &
Rochelle Dela
Cruz)

EMPLOYEE 1 EMPLOYEE 2

HEARTWORK will also have a set of rules and regulations that needs to be
honoured by ever employee including the owners for easy work place relationship
and avoid misunderstanding and chaos within the workplace.
Policies
 Each employees should spend their working hours efficiently, effectively,
productively and not leave their work without prior permission and
justifiable reasons.

 Cooperation, good and clear communication and smooth sailing relationship

shall be observe by both the superior and subordinate in accomplishing their
work.

 Each should also have a kind and friendly approach towards every customer,
making sure to give them knowledge about every product being sold.

 Honesty is the best Policy, Employees must report to managers every time,
honouring authority even without the presence of the managers.

 Must observe cleanliness at all times, keeping the area as clean as possible.

 Headphones and other ear pieces used in connection with music players,
smart phones or other audio equipment are prohibited for use by employees
during working hours especially in the presence of customers.

 Respect the beliefs of one another, especially when it comes to religion to

avoid conflict.
VIII. Inventory
As a Retail store, each Goods will be bought in advance and each Item as
stated before will be divided into alleys of shelves and it will be stocked with
assortment of art supplies. Since the products being offered, aren’t like foods that
can easily get spoiled, most of HEARTWORK’s inventory will be placed on a
clean, empty room, and the others will be stored in shelves available for purchase.

Below are only some of the brands and some of the products that will be offered in
the store:

FABERCASTELL
Polychromos colour pencil Colour pencils
Pitt artist pens Watercolour Pencils
Castell 9000 & Pitt graphite Pastels
Albrecht Durer Artists’ Pens
Watercolour pencils Karl Box
Pitt monochrome charcoal Gelatos
Pitt pastel pencils Graphite and charcoal sketch pencils

DONG-A PRISMACOLOR
Sculpt and modelling materials Colour Pencils sets
Craft materials Brush markers sets/markers
Colour pencils/pencils School art Pencils
Drawing and illustration materials White erasers
watercolours NuPastels
Colour pens Water colour pencils
Ballpens accessories

Pads and papers

CANSON WINSOR & NEWTON

Acrylic paper pads Deep edge canvas
Drafting vellum Deep edge linen
Arches Watercolour board Professional canvas
Canson Art book STRATHMORE
Canson drawing pads Color pencil pads
Sketch Pads sketch
Glassine Drawing rolls
IX. Cash handling and recordation

Like any other retail store, HEARTWORK will record all of its
financial activities through Cash Flow statements, keeping track of all
the in and outs of cash. HEARTWORK will train its staff, making sure
that cashiers are well trained and have total control over the POS
systems, making sure that all receipts, invoices and other payment-
related documents must be accurately processed and filed.

The cash that the owners will physically manage and distribute is
the cash towards paying for the suppliers and maintenance of the store
like the electricity, water bill, etc, recording all of it to the cash flow
statement, to also keep in track whether the store is making a profit or
loss.
And also, For website transactions, HEARTWORK will utilize
its POS software for every sales transaction, to record the customer’s
name, address and purchases, and for in store sales, the payments will be
done through bank transaction and same as on website we will make
sure to record every transaction, and as said, making sure to have a
friendly approach to the customers, educating them, and filling their
need without making them feel that they are being pressured to buy. The
payments will be done through bank transaction
X. Signage

HEARTWORK’s signage is designed by the owner, emphasizing the simple

watercolour background and the simple font used, somehow implicating that those
artworks doesn’t have to be extravagant, an artwork can be considered even in the
simplest form, as long as it came from the heart of its creator.

Since, the owners want HEARTWORKS to be a place where artists find

happiness. The name HEARTWORKS has three different meaning, (1) the name
HEARTWORKS, simply means every work of art that comes from the heart is
considered artwork, “where there is no heart there is no art”. (2) The word Art is
emphasized using different colour, emphasizing the stores product which is art
supplies. (3) Taking out the emphasized word “art”, leaves us with “HE WORKS”,
dedicated to how God’s works are also an artwork, the first and the most fantastic
artwork above all things.

The owners want the business name to be simple yet have a lot of
possible meanings that can give inspiration to customers.
XI. Contingencies
If unexpected events affect the business in the future, the owners of
HEARTWORK plans to add and open a DIY space like ceramic painting, t-shirt
painting, and a little bar where customers can buy beverages except alcohol, and
also adding snacks, for customer to somehow enjoy the time while creating art.

The additional inventory would be the ceramics, t-shirts and paints needed for the
space, it would be stored in shelves, so customers can freely choose what type of
ceramic or colour of t-shirts they would want to paint. The additional capital would
be P200, 000 including the furniture and other fixtures that would be used for the
DIY space, and P50, 000 for equipments for the bar.

HEARTWORK also plans on opening an art gallery, for the competitions that
HEARTWORK will host, and also adding the artworks of the customers that used
the products they bought from the store. To somehow give them a sense of
recognition, HEARTWORK will be putting them up on walls, with the name of the
artist under it and the type of materials used for it. The owner also plans of making
it a haven for artist amateur or professional, where they can just chat, make a group
and hangout. This way it would be easy for them to consider HEARTWORK as the
place to constantly buy their materials and also make friends with the same interest
as them. This would potentially increase the growth of sales for HEARTWORK