I.

Introduction/Executive Summary

RB Furniture is an enterprise specializing is custom furniture & fixtures for the

masses and high-end residential, resort and commercial market. Its owners have

extensive experience in the furniture & fixtures industry.

Over some years of being involved with the furniture & fixtures making, the

owners have seen a need for a broad selection of design choices, high-end finishes,

along with top of the line organization, customer service and quality.

The owners have provided the capital to cover the start-up capital and expenses.

But to meet the increasing demand and for its growth, they are in need of additional

working capital

Executive Summary

Overview

A. Business Name:

RB Furniture’s

B. Business Address:

Purok 1081, Villa Hermosa Sur, Maddela Quirino

C. Type of project/business

Sole Proprietorship

Contact Person

Name/Position : Felix Recto

 Address : Saranay, Cabatuan, Isabela

Phone No. : 0927-367-3083

MISSION

Our mission is to carefully design a manufacture furniture with respect for people, environment

and the materials used.

VISION

To deliver a high-quality product, on time and within budget while also providing a fast, error

free ordering system.

OBJECTIVES  

The company objectives are:

 To be a top furniture supplier to luxury homes in the regional market.

 Revenues to more than double Year1 levels by the end of Year2.

 Aim to have 70% of sales in high-end residential customer segment.

 20% of sales in mid-range residential customer segment.

 10% of sales in commercial development segment.

 INTRODUCTION

II. Marketing Aspect

A. Description of the product

The design and style of our product line is unique. We offer superior

quality and design at competitive prices. Our affordable designs are a modern

version of popular antique wood furniture, scaled down in size to fit into today's

homes, apartments, and condominiums. Our products are available in a variety

of resilient finishes and colors so that customers have the flexibility to

customize our furniture to their individual tastes.

RB Furniture manufactures and sells handmade furniture including

dining room tables, coffee tables, and end tables. We will expand production to

include bookcases, wall units, buffets, hutches and cabinets for entertainment

centers to complete our lines of unique dining room and living room furniture.

B. Comparison of the product with its competitors

Local seller agents

C. Main Customer/Target Market

Our primary target market includes small independent furniture retailers

in Maddela, Quirino and surrounding communities. Secondary markets include

independent retailers in other areas of the province. As our company grows and

sales volumes increase, larger furniture chains and department stores will be
 targeted. Currently, our company does not have the capacity to service this

market.

D. Market Share

A. Competitors market share target market

Furniture A 40% 30%
Furniture B 60% 45%
JB Furniture 25%

Our business targets to capture is the 15% for the market share of

competitor A and 10% competitor B, a total of 25%

E. Promotional Activities

Our company's promotional strategy targets both potential retail outlets

and potential consumers. Local independent retailers are contacted directly. As

the company grows, a manufacturing agent will be hired to promote our product

lines to retail outlets throughout the province. Agents typically charge a 5% to

7% commission on the wholesale price of product sold. Retailers then add a

markup on the product which determines the retail price of the product.

Our company has produced a catalogue featuring our product lines and

samples of our wood finishes that we distribute to targeted retailers. Retailers

can use the catalogue to show potential customers any products not displayed in

their showroom and to order additional product. The wood finish samples are

used to show customers the finishes and stains available with our product lines.
 A brochure has been developed on each product line that is distributed to

interested consumers through the retailers. The brochures feature pictures of

each product and highlight the unique design and quality of our products.

F. Marketing Strategies

Our advertising will be targeted at a specific market through some media

channel such as radio, newspapers, on-line or internet advertising. While

advertising will be expensive, it will be an effective and helpful means in

creating a positive public image. We will be able to reach a wider audience and

provide a great opportunity for leads and eventually sales and ultimately profits

G. Place/Distribution Channel

Independent Furniture Retailers

Maddela,Quirino
10% Surrounding Communities
30%
20% Province of Quirino
Larger furniture chain

40%

The figure above shows the total population of our primary targets and

how we distribute our product to the customers and to be market. Our first

priority are the independent furniture retailers in the Province of Quirino

because it has the 50% of the population. Second is the independent furniture

retailers in Larger Furniture Chain it has the 30% of the population. Third
 independent furniture retailers, in surrounding communities that have 20% of

the population and the independent furniture retailers in Maddela, Quirino that

have the 10% of the population.

H. Selling price

Our strategy is to price our products at a level comparable to our

competitors. Our strategy takes into account production costs, competitive

pricing strategies and consumer price sensitivity. The household furniture

market is very competitive and the price conscious consumer market is looking

for good value. Our company's goal is to provide good quality furniture for a

reasonable price while still maintaining healthy profit margins. While, our

company does not offer volume discounts to retailers, we do offer credit terms

of 30 days.

Below is the proposed average prices of our products which will be used

as our selling price:

Proposed Prices of our Products

Products Prices (Peso/Kg)
End tables
Dining room tables
Coffee tables

I. Production specification

1. For final granulation

2. Includes business permit

 3. Working capital includes 1-month expenses and items produced every month

1. Source of machinery, equipment & materials

The Fancing Moriecos tools and equipment shall be acquired locally at Santiago City

and Manila These shall be taken to the suppliers that can provide the least prices and

better after sales-service of the product.

2. Utilities, Plant Location and Layout

Staff entrance for

administrative
WC WC
staff
Administration Staff Entrance for
production staff
Changing Changing
room rooms

Hygiene zone
Finished
goods Dispatch/
store
putting
(include
Incoming together
Raw refrigerate
Work of order
goods material Production Packaging d areas for
preparation example)
store

Packaging
storage

Waste

Utilities:
Water
Electricity
Pot
Ladle
Plant Location:
The production area will locate at Saranay, Cabatuan, Isabela
Production Schedule (you may use Gantt chart)
 3. Labor Requirement

Laborer – the one who will do the hands-on production to make finished goods.

Operator – the one assigned to handle the stickers, fliers, and also the logo.

Cashier- the one will compute the cost and expenses of the products.

No. of employee Salaries/ Wages Total Cost

Labor 7 300 2100

4. Inventory Schedule

Material Cost (in Pesos)

Packaging 10.00

Label 5.00

5. Total Operating cost schedule

III. Organizational Aspect

A. From of business organization

The form of the business is “Sole Proprietorship” business and the owner are

responsible for the business and firm. Smoothly Juice it’s established with single

initially.

 Quality Inspector

The “Quality In charge” or “Quality Inspectors” is the most important person in the

production process to quality of the product or their design. We are quality conscious

for the customer satisfaction that why we have well – qualified quality inspector for the

betterment of our product. Particular designation in the company. Our company is flat

organization.

B. Pre-operating activities and expenses

 Pre-operation Activities

The pre-operating activities will be drafting of Constitution of by-laws membership

training, election of officers, registration of the Sole Proprietorship to the first assembly

meeting, hiring of personnel, business registration and construction of primary facilities

that are necessary to start the business operation.

 Pre-operating expenses

Acquisition of tools and equipment will be comprise the highest cost while, hiring

of personnel is the pre-operating period.

a. Timetable of all activities ( use Gantt Chart)

Days’ Time Schedule Total

Monday 6am – 1 pm 8
Tuesday 6am – 1 pm 8
Wednesday 6am – 1 pm 8
Thursday 6am – 1 pm 8
Friday 6am – 1 pm 8
Saturday 6am – 1 pm 8
Sunday Close 0
Total 48 hours per week
 IV. Financial Aspect

a. Balance Sheet

b. Income Statement

c. Cash Flow Statement

Table 5. Cash flow Statement (Continued)

 ANNEXES

1. Organizational Structure

Owner

Labor

Supplies and Materials and Expenses

1. Office
Supplies and
Materials
Particular Qty Description Unit Price Value
1. Ballpen 15 Pcs 5 75
2. Pencil 15 Pcs 5 75
3. Record book 5 Pcs 45 225
Total 375

Economic Analysis

- Economic analysis involves assessing or examining topics or issues from an

economist’s perspective.

Economic analysis is the study of economic systems. It may also be a study of a

production process or an industry.

The analysis aims to determine how effectively the economy or something within it is

operating. For example, an economic analysis of a company focuses mainly of how

much profit is making.

1. Payback Period

- Payback period is the in which the initial cash outflow of an investment is expected to

be recovered from the cash inflows generated by the investment. It is one of the

simplest investment appraisal techniques

2. Benefit-Cost Analysis

- A cost-benefit analysis is a process business used to analyse decisions. The business or

analyst sums the benefits of a situation or action and then benefits of a situation or

action and then subtracts the costs associated with taking that action. Some consultants

or analysts also build the model to put a dollar value on intangible items, such as the

benefits and costs associated with living in a certain town, and most analysts will also

factor opportunity cost into such equations.

3. Profitability Index

- The profitability Index is an index that attempts to identify the relationship between the

costs and benefits of a proposed project through the use of a ratio calculated as:

Discount Factor 106% /annum

Inivestment 480,000.00
PI = 2.62 - favorable

4. Net Present Value (NPV)

- Net present value (NPV) is the difference between the present value of cash inflows

and the present value of cash outflows over a period of time. NPV is used in capital

Budgeting and investment planning to analyse the profitability of a projected

investment or project.

- R = net cash inflow-outflows during a single period t

- I = discount rate of return that could be earned in alternative investment

- t = number of time period

- If you are unfamiliar with summation notation here is an easier way to remember the

concept of NPV:

- NPV = (Today’s value of the expected cash flows) – (today’s value of invested

cash)