Luntian Doors and

Windows Corp. Business Plan

The Table of Contents

Executive Summary 1

Mission 4

Company Overview 5

Products and Services 7

The Market 15

Market Definition 15

Market Segment 15

Marketing 17

Position 17

Pricing 17

Distribution Channels 18

Advertising and Promotion 18

Competition 20

Risk/Opportunity 22

Management Team 24

Capital Requirements 25

Financial Plan 27

Assumptions 27

Financial Statements 27
 Luntian Doors and
Windows Corp. Bussiness Plan

Executive Summary

Whether one is aiming an elegant, energy efficient, or a secure home amidst the rapidly

changing outlook for taste in fancy accessories for their respective homes, the rising issues in

energy consumption the worsening challenges being given by the environment, families have

been having a great problem in addressing these things simultaneously. It would then not be

surprising that synergistically addressing these things has long been a dream for many, but, by

introducing the products and services being offered by our company, Luntian Doors and

Windows, such dreams that seemed next to impossible turns them into a reality.

We, at Luntian Doors and Windows, have been providing our customers with the utmost

quality products superior to others, use only the finest products and cutting-edge technology in

our field, to meet the undoubting high expectations being set by the customers and the respective

circumstances. Our outstanding and exemplary staff has been thoroughly trained to help the

customers select the type of door or window they need, whether it be interior or exterior, metal,

glass or wood, having been elegantly garnished or simply decorated, among others.

Our windows and doors are specially set up to meet all of the challenges being offered by

the environment, such as harsh winds, raining conditions, and extreme heat. He have been

licensed and insured company with a seemingly uncountable years of experience; our proven

quality workmanship and our wide variety of selections have continually set us apart from the

competition being set by other companies. On the other hand, if one is looking forward for high
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 Luntian Doors and
Windows Corp. Bussiness Plan

quality services, especially for those looking forward for replacement of doors and windows, we

have been offering a wide variety of brands and styles to choose from. One may check out the

great selection for replacement for doors and windows, and be surprised that a home that seemed

degraded may be turned into an elegant one, by changing the out-of-style doors and windows,

while simultaneously maximizing the efficiency being brought.

Luntian Doors and Windows manufactures custom wooden doors and windows,

primarily for residential construction. Doors (solid wood, wood/glass or wood/brass) account for

90% of gross sales while wood-frame windows account for 10%. Our products are sold to

Southern Ontario retailers with an increasing portion going to exports. The company started by

selling to the new home market in 1988 but in response to changes in the marketplace is now a

leading supplier for the up-scale renovation market.

Our implementation plan will be carried out in two parts: prepare for manufacturing, and

marketing and selling the product. In preparation for manufacturing, we plan to hire cheap labor

and train them to engage them in full-service sales and installation purposes dedicated to satisfy

the needs for the customer’s doors and windows. That is, we will purchase the required materials

-- steel, plastic, wood, and other types of materials depending on the product -- from wholesale

companies in bulk, build our own prototype for a specific product, and thoroughly test our

prototype before starting mass assembly. We estimate our startup time, completion of the first

successful prototype, to be approximately ranging from a week to up to three weeks. Our

qualified team has expertise in such works, which will ensure successful product development

and an unmatched reliability and quality.

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 Luntian Doors and
Windows Corp. Bussiness Plan

In marketing and selling the product, we plan to hire knowledgeable salespeople, capable

of convincing customers to promote the upliftment of their quality of life. To promote our product

we will sponsor young surfers, team up with companies selling complimentary products, and

involve the company in surfing community events such as competitions. The total estimated cost

for the installation and fabrication of doors and windows shall vary per piece, which shall be

influenced mainly by the specific characteristics of the said product. Markups shall not be

initially included.

Luntian’s Doors and Windows is one of the companies in the growing market eager for

inventive new products and upgrades. We at Luntian’s Doors and Window believe that the

products and services we provide will create a more advanced and more productive exchange of

products to the ever-growing industry of doors and windows. With our proposal, we offer you the

chance to join an industry with a strong trend of growth.

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 Luntian Doors and
Windows Corp. Bussiness Plan

Mission Statement

The Luntian Doors and Windows’ mission is to be the recognized and the leading name

in the manufacturing of high quality window and door accessories, parts and services. Being a

performance leader means, we will achieve operational excellence, industry-leading customer

satisfaction and superior financial performance.

We aspire to carry a reputation in the marketplace for developing and delivering our

products, that is, our doors and windows in a time saving and better-way products sold at a fair

price for uses in the market in a professional way. We can achieve such a thing by closely

understanding the market trends and needs of the public, having innovative and profitable

merchandising and packaging and by having a cutting edge product development.

To accomplish our goal, The Luntian Doors and Windows needs a capital to start with, an

experienced set of managerial staffs to keep the company moving forward towards its goal, and

by having larger and more efficient facilities. In such a manner, achieving the said goals would be

met in no time.

In pursuit of our goal, we resolve to treat stakeholders, customers, and the community

with utmost professionalism, honesty and obeying the rules set by the respective parties. These

groups see our company as providing an improved quality of life that have been derived from our

striving company.

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 Luntian Doors and
Windows Corp. Bussiness Plan

Company Overview

The Luntian Doors and Windows manufacture custom wooden doors and windows,

primarily for residential construction. Doors (solid wood, wood/glass or wood/brass) account for

90% of gross sales while wood-frame windows account for 10%. Our products are sold to

retailers with an increasing portion going to exports. The company will start selling to the new

home market in but wishes to be a leading supplier for the up-scale renovation market.

Our products fit well into overall social and economic trends. Renovation investment has

continued to increase as the population ages: people tend to stay more at home and invest in their

comfort (cocooning). In addition, our market niche is fairly well protected against fluctuations in

the real estate market: high-quality doors and windows add both resale value and comfort. In

2001, renovation and alterations accounted for 38.7% of household pesos and additions

accounted for 24.7%. Further, the appeal of wood, a natural product, remains strong in today's

markets. Its warmth, solid look and silky feel are intangible factors favoring our specialized

products.

The manufacturing of custom wooden doors and windows is very concentrated, with a

few manufacturers occupying 75% of the market. However, the renovation and construction

markets have traditionally been very fragmented, with a large number of small operators, both for

clients and suppliers.

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 Luntian Doors and
Windows Corp. Bussiness Plan

The millwork industry is stable and mature. Manufacturers produce a wide range of

fabricated millwork, including wood millwork commodities with metal and plastic overlays.

Within the industry, in terms of value, doors (30%) represent the largest segment followed by

windows (including wood, aluminum, metal and vinyl clad, 25%). The niche market is

significant, representing 25% of all sales.

While the millwork industry generally follows fluctuations in new home construction,

repair and remodeling investment remains steady. The market for custom products such as those

from The Luntian Doors and Windows’ tends to be better protected from fluctuations

There are no significant regulations for this industry.

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 Luntian Doors and
Windows Corp. Bussiness Plan

Products and Services

The Luntian Doors and Windows make, provide, install and do related services in various

types of windows and doors, which include the element in the list, some of which are shown in

the sample picture among others. The price ranges, P700.00-P8000.00 for windows and

P7000.00-P18000.00 for doors, are dependent on the dimensions of the specified door or window,

on the material used, and other characteristics as specified by the customer.

 Alu-Clad Windows  Entrance Doors

 Sash Windows
 Timber Windows  French Doors
 Sliding Sash Windows
 Alu Wood Windows  Sliding Doors
 GRP Wood Windows
 Triple Glazed  Bi-Folding Doors

Windows  Patio Doors

 Double Glazed
 Half Doors
Windows
 Timber Sash Windows  Pine Doors
 Wooden Windows
 Alu-Clad Doors  Back Doors
 Timber Doors
 Exterior Doors

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 WINDOWS

*Alu-Clad Window *Sash

Windows

*Timber Windows *Sliding

Sash Windows
 *Alu-Wood Windows *GRP Wood
Windows

*Triple Glazed Windows *Double Glazed

Windows
 *Wooden Windows

Sliding Windows Bifolding Windows

 DOORS
Half Door
French Door
*Back Doors
*Pine Doors
 *Timber Doors

Alternatively, Luntian Doors and Windows deliver the following services:

 Door and Window Services

 Maintenance Works and Repairs
 Installation Services
 Replacement Services
 Inspection Services
 Services for Upgrades

Presently, the products and services being offered are in the development stage. We plan to

follow this type of exemplary service with extensions to our line, which shall include steps that

will pave the way for a greater quality products and services.

Our products or services, however, is unique because of the flexibilities it had offered which

then stood out above the rest, including the innovation in hurricane impact windows, a great leap

that redefined products in its own respect.

 The Market

Market Definition

We expect to compete in the local manufacturing and distribution of high quality doors

and windows, and be an internationally recognized distributor. This market was approximately

made for large and small scale construction and made order available in wholesale or retail. We

believe, the major future trend in the industry will be towards environmentally oriented, high

quality, and value oriented product offerings.

Market research suggests this market will grow to be having shipments or deliveries

around the country by having branches nationwide by the year 2020. We expect the niche in

which we compete to grow more during this time. The major forces affecting this change will be

trends, demand, environmental issues and innovations. The area of greatest growth within the

industry will be focused on our doors and windows designs, parts, accessories and services by

setting standards.

Market Segment
 We define our market segment as the light and ventilation of the buildings, home and

other infrastructures. This segment has been steady in the last few years. Industry experts like the

Santiago doors forecast greater sales for the industry in the next few years.

The major market segments are on production, design, services, etc. List, in general, the

types of customers we are likely to reach such as retailers, contractors, construction firms, etc.

The segment of the market is based on windows that retail in the Php 700.00 – Php 8000.00

depending on the specification of the costumer and doors ranging Php 7000.00 – 18000.00

depending on the materials needed. Most of the sales in the segment are delivered on the

specified place using truck. The charge is included on the package the costumer availed.

A typical customer for our product is a person who current may use our products as one

of his prospect to make good ventilation and design for his home, building, etc. They are

motivated to buy our product because of its uniqueness since we ensure customer satisfaction,

high quality at reasonable price. We know this from customer responses and feel our customers

perceive our products as good value

Our product, does, however, have the following weaknesses; man power if the orders are

made at high volume and a possible scarcity of raw materials. We are working to position our

product as a continuous innovation in order to reduce this vulnerability and hire people to

increase man-power.
Marketing

Our marketing plan is based on the following fundamentals:

We expect to penetrate the local then international segment of the market and achieve this

by using the retail, wholesale, mail order and internet as our primary distribution channels. In

time, we plan to capture 50-60% share of the market.

Position

We will position our product as good value for price and top quality which is a position

not presently being addressed by the competition. One demographic group in particular, the

elderly has a particular need for this product, and we tailor our positioning accordingly.

Pricing

We arrive at our pricing based on market prices. We review this pricing quarterly to

ensure that potential profits are not squandered. Customers seem willing to pay as much as the

specified price for their orders because of quality since we can assure it to them.
Distribution channels

The distribution channels we use for our product are retailers, wholesalers, contractors,

etc. These make sense for delivering our product to the end user because of the reputation of the

products. Our channel will prove more advantageous because it will be known and a trend when

it comes to doors and windows.

Advertising, promotion, trade shows

Luntian Doors and Windows have developed a comprehensive advertising and

promotion strategy, which will be implemented by the best possible firm when fund is

completed. We expect to have a presence in several national magazines as well as the trade press.

We will produce our own ads and be a part of ad campaigns of our JV partners or OEMs. Our

publicity plan is to remain in constant contact with editors and writers of different medias and

seek stories and coverage that will introduce us to buyers.

 We plan to promote our product through a variety of onsite product sampling, give-aways

at fund raisers, sponsorship and other high leverage events. The objective of all our promotions is

to expand the costumers, position our product as a premium brand, and strengthen our ties to the

consumers.

Luntian Doors and Windows participate in the following trade shows; economic green

awareness and innovations participated by the managers and CEO of the company and talked

about the efficiency of the products. We have a regular display booth of knock down construction

which allows us to display our existing products and introduce new ones. The following factors

are taken into account when considering a trade show; will this event help deliver our message to

our target audience? Does the location of the show have significance? Is the time frame

convenient? Is it a "must-go show"?

Competition

There are three major manufacturers in the Philippines which is serving approximately

75% of the doors and windows segment: Rockefeller Windows and Doors, Luntian Doors and

Windows, and JV Doors and Windows Services, whose reputation have been established and is

offering different types for the needs of the customers. Several local operations make up the

balance of the local marketplace with competition arising from artisan door makers.

Major strengths of large competitors lie in the economies of scale given by their broad-

brush approach to the marketplace. The large size of these companies allows them better access

to retailers across the Philippines.

Both Rockefeller Windows and Doors and JV Doors and Windows Services concentrate

their efforts in aluminum and vinyl windows, and are not positioned to enter the diverse range of

products to be introduced in the market without significant investment and re-tooling, a

significant advantage to these companies. They also offer doors but only as an add-on to fill

orders from their regular customers.

Rockefeller Windows and Doors has decided to concentrate on the manufacture of plain

interior doors but has also entered into an agreement with a foreign company to distribute their
French doors in the market in the Philippines. Although their doors are of lower quality and lack

our unique glass carvings and brass inlays, they represent a significant threat to our products,

especially in the superstore market.

Local artisans' products are most similar to ours, and while they generally have close

relationships with architects and local builders, they are unable to supply the larger retailers

because of their size and more specialized nature of their products.

Luntian Doors and Windows’ advantage reside in its niche: we are big enough to supply

large retailers, yet offer high-quality wood products that respond directly to the tastes of the mid

to high-end market segment. Even Rockefeller Windows and Doors higher quality products do

not match our custom glass carvings and brass inlays, and the "one-size-fits-all" approach of the

competition allows ample room for smaller specialized competitors such as Luntian Doors and

Windows to thrive. We intend to continue positioning our products in the higher end of the

market.

In superstores, where our products are at the greatest disadvantage beside JV Doors and

Windows’, our point-of-sale marketing efforts (“Feel the Difference” series) have paid off and

our sales remain strong.

Risks and Opportunities

Business Risks

Some of the major risks facing our development include limited operating hours, limited

resources and hence, had passed down to production uncertainties. Having these problems rooted

mainly from the limited resources that greatly affected the production. While the supply of the

raw materials needed is considered to be unlimited to some certain points of time, the quality of

these sources vary. Providing quality materials is no easy task, and hence having a limited

resource would imply a limited product being produced. The result of variability in log quality is

low yield from primary breakdown. Using a customized production system, that will have to be

developed, it will be difficult to leverage profits from fixed costs particularly at early stages of

the business.

Hence, now, since the resources being delivered varies from time to time, uncertainty

issues arise and hence transform the problem itself to the limit in operating hours and production

uncertainties.

Also, it is also an emerging threat to the company the increasing environmental and

certification requirements for raw materials that may put downward pressure onto the industry.

Initially profits will be low, resulting in tight cash flows and little flexibility.
Opportunities

Although our business today has its share of risk, we feel we can overcome these risks

because of the skilled professionals and employees we have recruited. Their expertise and the

experience in similar instances would then be of great help in alleviating or, if possible,

eliminating the said problems. We will address the limitations being brought to our company by

doing a comprehensive study to pave a way in giving certain alternatives to keep the scorching

determination of the company towards success running, and to further complement the said

solution, we shall also be partnering with a larger company who knows the market, and have had

a much broader experience in such. Having their thoughts and opinions regarding the problems

would be of great help to our company.

If we are able to overcome these risks, our company has the opportunity to continually

dominate a niche in the marketplace, and consequently, become a major force in the industry in

the production of doors and windows, and the services we render. We feel our brand, and our

company in general, could become known as the premiere supplier of high quality products and

services in the door and window industry, and being a role model in such an endeavor. We think

we can achieve this goal in the next few years, possibly, by 5 years.
Management Team

CEO

Executive
Secretary

Vice President
Vice President

Sales & Marketing

Finance & Accounting
Production and
Distribution

Marketing Sales
Distribution
Purchasing
Production
Accounts
Recievable

Manager Manager
Manager

Manager Manager
Manager
Capital Requirements

We seek a sum of ₱1,500,000.00 of additional senior financing to fund our growth for the

next three years. At that time, we will need an additional ₱ 300,000 to reach a positive cash flow

position.

The initial stage of funding will be used to complete development of the business, to

purchase equipment, to introduce and market our new product line, and to fund working. Here is

a breakdown of how the funds will be spent;

Complete Development ₱ 800,000

 Complete development includes:

 Legal expense for obtaining licenses and permits as well as

accounting services totaling ₱ 50,000

 Insurance coverage of ₱ 200,000
 Pre-paid rent expense for 2 months for the warehouse at

₱100,000
 Pre-paid rent expense for 2 months for the office at ₱

60,000
 Premise remodeling in the amount of ₱ 200,000
 Purchase Equipment ₱ 300,000

Market our new product line ₱ 200,000

Fund working capital ₱ 300,000

 Fund working capital includes:

 Start-up expenses of ₱ 100,000
 Start-up Assets of ₱ 200,000

We can provide and exit for this investment within 10 years by the sales earned by the

company.

Based on our projections, we feel an investment in our Company is a sound business

investment. In order to proceed, we are requesting an investment of ₱ 1,000,000 by January

2016.

Financial Plan
 The following assumptions where made in order to perform financial forecasting:

 Steady growth of log home building industry

 Annual company growth of 10-15%
 Access to financing as required by business plan
 Unlimited supply of timber at a steady cost
 Interest and Taxation as follows: