Busplan2 Hiraya-Totes

FAR EASTERN UNIVERSITY
Institute of Accounts, Business and Finance

Business Administration Department
HIRAYA TOTE BAGS
A Business Plan Paper
Presented to
the Faculty of Business Administration Department
Far Eastern University – Manila
In Partial Fulfillment
of the Requirements for the Degree
Bachelor of Science in Business Administration
By
JUSTINE PATRICK B. ALDAY
RALEIGH JUSTINE A. CATIBOG
CHRISTIAN PAULO C. DEL ROSARIO
MANUEL C. DELA CRUZ IV
SHARMAINE L. DELOS REYES
LEIGH QUENNIE PAJADO
TOM JAZPHER L. SHIRAISHI
8 December 2021
RECOMMENDATION AND APPROVAL SHEET
This undergraduate business plan paper :Hiraya tote bags, prepared and
submitted by Justine Patrick B. Alday, Raleigh Justine A. Catibog, Christian Paulo
C. Del Rosario, Manuel C. Dela Cruz IV, Sharmaine L. Delos Reyes, Leigh
Quennie Pajado and Tom Jazpher L. Shiraishi in partial fulfillment of the
requirements for the degree of Bachelor of Science in Business Administration,
has been examined and is recommended for acceptance and approval for oral
defense.
JOHNELYN G. TANGPUS
Adviser
BUSINESS PLAN REVIEW PANEL
Approved by the Committee on Oral Defense with a grade of ________.
EDGAR BRYAN CATAQUIS RODOLFO SARINGAN JR

Panel Member Panel Member
MICHELLE MARINO
Chairman
Accepted and approved in partial fulfilment of the requirements for the

degree of Bachelor of Science in Business Administration.
EARL JOSEPH M. BORGOÑA, CPA, MBA, LLB

Dean
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ACKNOWLEDGEMENT
The proponents of this business plan paper would like to express their
utmost gratitude to the following people for their invaluable contribution that helped
in the completion of this paper.
Ms. Johnelyn G. Tangpus, feasibility adviser, for the extra effort, genuine
support, and for dedicating time in making detailed comments, feedback and
important recommendations that completely guided the proponents to finish the
paper right from the start of the semester;
Ms. Ali Fornillos, graphic designer who dedicated time to be of service to

the respondents in digital/ virtual model of the product;
All the respondents who willingly answered the needed survey and trusting
us in handling the information that they provided;
The Lord Almighty, for His Divine Love and Mercy that has kept the
proponents in good health and determination to accomplish their study.
The Proponents
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DEDICATION
The proponents dedicate this paper to all young entrepreneurs and

innovators who exert extra effort and creativity in their business ideas, all people
in the labor workforce who continuously strive despite the threats brought by the
pandemic, the different indigenous people of the Philippines and to the proponents’
future selves, as they embark on a new journey upon finishing this academic
paper.
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EXECUTIVE SUMMARY
Hiraya Arts. Ph is a start-up partnership company that aims to hit “four birds
in one single stone” by innovating a tote bag that proposes a solution to the
problem of rubber waste disposal, promotes the crafts and culture of the Philippine
Indigenous People and lend a helping hand to tailors to bounce back in the
economy due to the COVID-19 pandemic. Creech (2021) reported that the inner
bicycle tubes are non-biodegradable since their material composes butyl that do
not decompose but transforms into shreds of microplastics that cause a threat to
the environment and ecosystem. With this problem, Hiraya Arts. Ph offers Hiraya
Tote Bags that come with three varieties namely: Malong from the Maranao and
Mindanao Tribes, Inabel from the Northern Region and Ramit from the Mangyan
tribe of Mindoro. The resurgence of indigenous textiles in the Filipino fashion
industry has been booming since 2017 as an act of acknowledging and advocating
for the Filipino craft and heritage. (Gutierrez, 2017) To further make the tote bag
unique, the handles of Hiraya Tote bags are made of the combination of inner
bicycle tubes and used clothing. Even though the raw materials will be perceived
as not useful for some, Hiraya Arts.Ph redefines the meaning of “repurposing”
through the idea of greenvolved entrepreneurship and incremental innovation.
Hiraya Arts. Ph aims to be the leading supplier/ seller of sustainable,
durable, fashionable, and unique tote bags by establishing a strong presence in e-
commerce websites and social media platforms to reach customers of all ages and
all genders. In our survey, everyone is a potential customer of Hiraya Tote bags,
may it be from the working population, students, professionals or even from Gen
Z’s, Millennials to Boomers generations. Furthermore, the Hiraya Tote bags can
be used on any occasion or according to the preference of the client, making tote
bags a more convenient choice to use every day. The company was established
in the year 2021 with 7 young entrepreneurs that equally contribute to capital and
investment.
Hiraya Arts. Ph has an agile and lean organizational structure, wherein
every member of the partnership has an equal and assigned tasks of duties that
are crucial in the operations of the business. The company has the following
officers to manage the business: procurement and manufacturing officer,
marketing, and sales, human resource, quality control, and distribution and
logistics officer. The proponents are hands-on in ensuring the quality of raw
materials, end-product quality control, packaging and even on the mailing or
delivery of the product. From procurement to delivery, each member of the Hiraya
Arts. Ph have different responsibilities to fulfill.
When the procurement officer collects the raw materials, the used clothes
are immediately checked by the quality control officer for the quality checking,
classification of textile material and condition of the materials. Then, the inner
bicycle tubes are being tested if the rubbers are still in good shape to serve as
handles of the bag. Afterwards, it is thoroughly cleaned and sanitized, with cloth
Hiraya tote bags P a g e | iv

and alcohol. The raw materials will be sent to the Garments Capital of the
Philippines, Taytay, Rizal for cutting, sewing and completion of the tote bags. Each
process is intricate and detailed to ensure that every tote bag is durable, quality
made and unique.
Hiraya Totes will be primarily marketed through the use of social media
platforms, e-commerce sites and through various market channels like in retail
stores, pasalubong centers, government’s livelihood markets, and even
wholesaler stores. Given the opportunity, Hiraya Arts .Ph will collaborate with
different local government units and departments like the Department of Trade and
Industries (DTI), Department of Tourism, and Tourism Promotions Board to
strengthen the brand promotion through government support. For the pricing, the
product will be sold at the amount of ₱150.00, and value-based pricing strategy
will be used in order to have high profitable sales of the product. In line with this
pricing, the proponents also compared the data gathered from competitors in the
industry. In addition, a uniform pricing strategy for all three different variations of
the tote bags is used to maximize the profits as a study shows that this kind of
pricing is better when products are highly marketed through online platforms.
Given the situation brought by the pandemic, Hiraya Arts.Ph does not have a
physical store yet, hence focusing on different social media and e-commerce
platforms. Hiraya Tote bags’ target market includes all ages and all genders,
segmented in 19-25 years old located in Luzon.
Like all starting businesses, Hiraya Arts. Ph is projected to gradually
increase profitability by 165% from year 1 to Year 5 and net revenues increasing
yearly to Php 100,339 in year 1, Php 151,621 in year 2, Php 186,456 in year 3 and
Php 228,064 and Php 266,344 for year 4 and year 5. Hiraya Arts.Ph is expected
to have a payback period of 2 years and 3 months, wherein it projects a good
capital turnover, generating a great amount of sales and revenues. The company
has no outstanding loans, debts and any liabilities as the partners decided to
finance everything through their shared capital. The internal rate of return (IRR) of
the company is 40 %, and this means that the investments will most likely return
to investors. Finally, the net worth of the company also increases yearly, starting
from Php 624,171 in year 1 and ending up with a net worth of Php 1,172,656 in
Year 5.
Upon the production of different product prototypes, the company sold 4
units out of the 9-prototypes made and had inquiries after conducting the market
survey about the availability of the product. This is an indication that Hiraya Tote
bags have a big potential to generate revenues for the company. Along with the
growing demand, Hiraya Arts.Ph aims to expand its business by adding more
assets, lesser expenses and to soon have its own manufacturing shop and office.
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TABLE OF CONTENTS
RECOMMENDATION AND APPROVAL SHEET ......................................................................................... I
ACKNOWLEDGEMENT ......................................................................................................................... II
DEDICATION ...................................................................................................................................... III
EXECUTIVE SUMMARY ....................................................................................................................... IV
TABLE OF CONTENTS .......................................................................................................................... VI
LIST OF TABLES ................................................................................................................................ VIII
LIST OF FIGURES.................................................................................................................................. X
CHAPTER 1: INTRODUCTION ................................................................................................................ 1
FORM OF BUSINESS .......................................................................................................................................... 1

COMPANY PROFILE AND LOGO ........................................................................................................................... 2
INDUSTRY ....................................................................................................................................................... 5

PRODUCT HIGHLIGHTS ...................................................................................................................................... 6
CHAPTER 2: MARKET STUDY ................................................................................................................ 8
MARKET ANALYSIS ........................................................................................................................................... 8

Historical Demand .................................................................................................................................. 8
Projected Demand ................................................................................................................................ 11
Historical Supply ................................................................................................................................... 12
Projected Supply ................................................................................................................................... 13
Demand and Supply Gap Analysis ........................................................................................................ 14
PROJECTED SALES .......................................................................................................................................... 16
SWOT ANALYSIS ........................................................................................................................................... 17
MARKETING MIX ........................................................................................................................................... 18
COMPETITORS ANALYSIS ................................................................................................................................. 22
MARKET RESEARCH ........................................................................................................................................ 24
CHAPTER 3: OPERATIONS AND PRODUCTIONS STUDY ........................................................................ 27
KEY BUSINESS OPERATIONS ............................................................................................................................. 27
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PRODUCT CONCEPT ........................................................................................................................................ 28

PRODUCTION REQUIREMENTS AND PROCESSES.................................................................................................... 29
................................................................................................................................................................... 33
FIGURE 3.3 HIRAYA TOTE BAG PACKAGING (1) .................................................................................................... 33
QUALITY CONTROL AND SAFETY MEASURES ........................................................................................................ 33
CHAPTER 4: MANAGEMENT STUDY .................................................................................................... 36
BUSINESS MODEL .......................................................................................................................................... 36

ORGANIZATIONAL STRUCTURE .......................................................................................................................... 39
MANAGEMENT AND PERSONNEL....................................................................................................................... 40
INTELLECTUAL PROPERTY ................................................................................................................................. 43
CHAPTER 5: FINANCIAL STUDY ........................................................................................................... 44
CAPITAL REQUIREMENTS ................................................................................................................................. 44

STATEMENT OF FINANCIAL POSITION ................................................................................................................. 46
STATEMENT OF COMPREHENSIVE INCOME .......................................................................................................... 48
STATEMENT OF CHANGES IN EQUITY .................................................................................................................. 49
FINANCIAL RATIOS AND ANALYSIS ..................................................................................................................... 51
Payback Period ..................................................................................................................................... 51
NPV ....................................................................................................................................................... 51
IRR ........................................................................................................................................................ 52
Profitability Ratios ................................................................................................................................ 53
Liquidity Ratios ..................................................................................................................................... 59
Activity Ratios ....................................................................................................................................... 60
Solvency Ratios ..................................................................................................................................... 60
Break-Even Analysis ............................................................................................................................. 62
CHAPTER 6: SOCIO-ECONOMIC STUDY ............................................................................................... 64
APPENDICES ..................................................................................................................................... 66
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LIST OF TABLES
Table 2.1. Historical Demand of Competitor 1 located in Pampanga.
Table 2.2 Historical Demand of Competitor 2 located in Bulacan
Table 2.3. Historical Demand of Competitor 3 located in Laguna
Table 2.4. Summary of Historical Demand for all respondents
Table 2.5. Forecasted Monthly Demand for each Competitor and Hiraya
Arts.Ph
Table 2.6. Historical supply of Competitors 1, 2 and 3.
Table 2.7. Forecasted Supply of Competitors 1, 2 and 3.
Table 2.8. Demand and Supply Gap Analysis for Competitor 1
Table 2.9. Demand and Supply Gap Analysis for Competitor 2.
Table 2.11. 5-year Projected Sales of Hiraya Tote bags
Table 2.12. SWOT analysis
Table 4.1. Hiraya Arts. Ph Business Model
Table 5.1. Financing Plan of Hiraya Arts. Ph
Table 5.2. Statement of Financial Position of Hiraya Arts.Ph
Table 5.3 Statement of Comprehensive Income/Profit or Loss Statement of

Hiraya Arts.Ph
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Table 5.4. Statement of Changes in Equity of Hiraya Arts.Ph
Table 5.5. Statement of Cash Flows of Hiraya Arts.Ph
Table 5.6. Payback Period of Hiraya Arts.Ph
Table 5.7 NPV Calculation of Hiraya Arts. Ph
Table 5.8 IRR of Hiraya Arts.Ph
Table 5.9. Profitability of Hiraya Arts.Ph
Table 5.10. Return on sales of Hiraya Arts.Ph
Table 5.11. Return on equity of Hiraya Arts.Ph
Table 5.12. Return on assets of Hiraya Arts.Ph
Table 5.13. Asset turnover of Hiraya Arts.Ph
Table 5.14. EBITDA of Hiraya Arts.Ph
Table 5.15. Liquidity Ratio of Hiraya Arts.Ph
Table 5.16. Solvency Ratio of Hiraya Arts.Ph
Table 5.17. Equity Ratio of Hiraya Arts.Ph
Table 5.18. Leverage Ratio of Hiraya Arts.Ph
Table 5.19. Break-even Analysis of Hiraya Arts.Ph
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LIST OF FIGURES
Figure 1.1 Hiraya Arts. Ph Company Logo

Figure 2.1. Product Illustration of Hiraya Tote bag
Figure 2.2. Packaging of Hiraya Tote Bags
Figure 3.1 Process of Hiraya Arts. Ph
Figure 3.2. Hiraya Tote bag Process
Figure 3.3 Hiraya Tote bag packaging (1)
Figure 4.1 Organizational Chart of Hiraya Arts. Ph
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CHAPTER 1: INTRODUCTION
Hiraya Arts.Ph is a supplier-retail business of sustainable and fashionable

tote bags. Operations based in Taytay Rizal, Hiraya Arts.Ph continuously makes
its presence in all online platforms for its marketing and sales. The company
provides a new perspective of “greenvolved entrepreneurship” as the company
addresses environmental, economic, and social issues.
Nowadays, people are more vocal and cautious of the environment, thus
our distinctiveness in terms of materials used will always be a factor to set new
trends in the accessory and bag industry. In an article of Ro (2021), the fashion
industry is a big contributor to the detriment of the environment, accumulating to
10% of the global greenhouse gas emissions, and an estimate of 20% in the
wastewaters. This sustainable and fashionable tote bag, Hiraya Arts.Ph aims to
provide Hiraya Tote bags to all generations and all genders. It is a unisex and
multi-purpose bag that is suitable for all. We produce quality products that enable
a person to feel stylish, an advocate of Philippine culture, and environmentally
responsible. Hiraya Arts.Ph’s tote bags will be available locally and nationally as
its entrepreneurs come from different parts of the nation. To further expand our
market share as well as the existing online platforms for gaining sales, we also aim
to supply our products to pasalubong centers, airports, and malls.
Form of Business
Hiraya Arts.Ph is a general partnership start-up company that is equally
financed by 7 young entrepreneurs. The partnership is the best business structure
and the most suitable one for Hiraya Arts.Ph as it consists of two or more people
that own and manage the business. According to Uzialko (2020) of Business News
Daily, the partnership is the best start-up business structure as access to capital is
advantageous since they can split their finances. Like many people say, “two
heads are better than one.” Starting up a business can be costly and expensive,
so having partners to split the finances is a great advantage to getting the business
off the ground, especially for most people who risk starting a business using their
savings. If it was done alone and failed, the person will go back from scratch. But
if it is a partnership, it is easier to provide and split for the capital and it will be
easier to solve the problems at hand. The great thing with Hiraya Arts.Ph is that
the business does not require a big capital for raw materials, to begin with, thus
better results for the profit and investments of each partner.
In addition, starting the Hiraya Arts.Ph company requires a tremendous load

of work, especially in the early stages. Having partners to share the
responsibilities can help lessen the burden and even share the opportunities and
successes that the business can achieve. Hiraya Arts. Ph, being a partnership kind
of business enables its owners to take pleasure in companionship and mutual
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support. Having partners can boost confidence and morale, especially when we
are just starting to penetrate the market.
On the other hand, dividing and sharing tasks are also reasons why Hiraya
Arts. Ph decided on being partners as it can cover all the bases of the business
efficiently. In a partnership, partners can collaborate and be creative by sharing
ideas, enhancing complementary skills, and even have the same shared values
that can make the Hiraya Arts.Ph company successful. In terms of decision
making, the partnership is giving the business opportunity for growth through
multiple perspectives. The partners can utilize and share their skills, strengths,
resources, and expertise to make the business better. Their knowledge can help
the business to be connected to more investors and contacts that may develop
and expand the operations of the business.
Another benefit of being in a partnership is that it creates an avenue for

better decision–making in the business, for all members can discuss and exchange
opinions to arrive at a mutual decision. Business profits may be equally shared or
distributed in accordance with what is stipulated in the written contract. Unlike sole
proprietorships where only one person will be responsible for paying taxes,
partnerships, however, divide the taxes equally among the number of partners.
Just like the saying “two heads are better than one,” the joint determination of
discussing different matters and circumstances with partners is obviously better
than what each partner might have accomplished separately. The right business
partnership will enhance the quality and improvement of the business. It is hard to
start a business alone, especially when lacking experience. In a general
partnership, what one lacks can be fulfilled by the other, vice versa, with an equal
share of success and liabilities.
Company Profile and Logo

Hiraya Arts.Ph is a start-up company established in 2020 that continuously
targets hitting four birds with one single stone. Rooted from the concept of
“greenvolved entrepreneurship,” our company represents the combination of
fashion, innovation, culture, and being an eco-friendly business in the local and
global setting. Our company takes pride in giving importance to the environment
and creating our very own local brand that will help support the livelihood of our
indigenous people and preserve the rich culture of the Philippines. An article of
Gutierrez (2017) observed that indigenous textiles of the Philippines are” coming
back” and being used by designers for their couture collections. Hiraya Tote bags,
the pioneer and flagship product of the company exhibited uniqueness and
durability while addressing different environmental, cultural, and economical
concerns of Filipinos that arose from the COVID-19 pandemic. A news article
reported by Rivas (2021) emphasized that 3.07 million are unemployed, which was
the lowest recorded rate since the pandemic began. With a customer-friendly price,
Hiraya tote bags Page |2

we continue in seeking new designs and creative methodologies to further cater to

trends and preferences of our clients even during the pandemic. Composed of 7
young entrepreneurs, Hiraya Arts. Ph redefines the meaning of “repurposing” by
giving new life to old materials and believes that we can make the future greener
and more sustainable.
Company Logo
Hiraya Arts.Ph logo symbolizes the

company’s theme and product representation.
It is about envisioning a safer and greener
future for the succeeding generations. The
company aims to create a sustainable product
that will help heal our environment and support
the crafts of our indigenous people. We used
the symbol of the eye and the sun as a
representation of a new day. It shows a new
chance to create something helpful and
beneficial to everyone and the environment.
The color also represents hope, to make a
difference and join the initiative of saving the
environment and being sustainable and with
the company. It is about being positive to make things better even through simple
things. The yellow color also suits the best as it creates a warm feeling and
energizing feeling that attracts the customers. The plant or the leaves is the
representation of the vision of the company to produce sustainable and eco-
friendly products. The combination of the elements represents the company’s
sophistication for the aesthetic and a potential local or Philippine fashion brand
image.
Vision
To be one of the leading manufacturing tote bag businesses in the

Philippines that provides sustainable, cultural, and stylish fashion choices, and
achieve excellence in innovation for a greener future that improves the social,
economic, environmental, and cultural dimensions of the Philippines.
Mission
We strive to be the best provider of stylish and sustainable tote bags across
the Philippine Archipelago for all genders of all ages at the lowest possible price.
Hiraya Arts. Ph upholds being ecologically smart by redefining the meaning of
“repurposing,” culturally sensitive, fashionably innovative while making sure that
indigenous people, tailors, and all stakeholders of the company are well taken care

of and continuously profiting even during the pandemic. We use the latest
technologies in ensuring that our products and marketing strategies are up to date
with the current trends in order to cope with the demand of the customers. Our
team believes that style should not be at the cost of being environmentally cautious
and that our company will set a new standard for the community.”

Industry
From the sole purpose of gaining profit for the business, companies are now
going green and environmentally responsible as part of their corporate social
responsibility. Like grocery stores and department stores of retail giants like
Robinsons and SM, they seek the alternative to use eco-tote bags instead of non-
biodegradable plastics for their consumers to use and carry. These grocery giants
even hold activities with non-government organizations (NGOs) to collect plastic
bottles into tote bags to continue the initiative of being concerned for the
environment. (Manila Times, 2021). From being part of companies’ initiatives to be
eco-friendly, tote bags became a different industry as customers use these bags
as a fashion accessory, company and event giveaways, school bags, work bags,
and etcetera. SM was able to conduct a fashion for their mall tote bags and sold
over 38 million pieces, saving the use of 75 million single-use plastic bags. (Zabala,
2017) In addition, tote bags became a part of the produced designs of different
famous brands like Tommy Hilfiger, Coach, Nike, H&M, and many more. Tote bags
also influenced the fashion choices of people due to the portrayal in mainstream
media, Korean telenovelas, and Korean fashion icons.
Tote bags in the Philippines and throughout the entire world are seeing an
increase in demand and are still in their growing stage. According to the Philippines
Trade Data, there is an increase in the number of tote bags being imported from
the country as well as the number of exported tote bags from the Philippines.
Though a not common industry, tote bags make their presence in the import and
export global economy making trade connections with countries like Canada,
Netherlands, Japan, and the USA (united states).
Fashion news outlets in the Philippines also focus on the trends of tote bags
especially now it is the time of the pandemic. According to an article posted by
Ferrer (2021) in Cosmopolitan PH, there is a growing trend in the tote bag industry
especially in this time of pandemic. People nowadays often go out with a lot of stuff
to carry on and a tote bag is the best accessory for them as it is surely a go-to bag
because of its functionality and spacious design. In today’s time, a person headed
for grocery, school, bank, or even on beaches, tote bags are the most suitable
especially for additional essentials like the added alcohols, sanitizers, face masks
and face shields.

Data Bridge Market Research (n.d.) forecasted that in the next few years,
the tote bag industry will grow globally at a rate of 4.10% across North America,
Europe, Asia Pacific, South Africa, and Middle East & Africa, in the period of 2021-
2028 because of the increasing demand of the consumers as well as the demand
for eco-friendly products to replace the use of plastics. Furthermore, the tote bag
industry in Asia is predicted to prosper in the periods from 2020 to 2027 in all types
of materials like nylon, cotton, and other fabrics due to the growth in retail markets,
tote bags becoming a fashion statement, increase in unique designs as well as the
increase of women in the workforce (Data Bridge Market Research, n.d.) This just
shows that the tote bags industry will continue to rise in the market. Its potential
will surely bloom in the upcoming years to come as more ideas will be born
according to the changes in society and actual trends. A shop in America
described its Korean Tote bags as the highest-selling product costing $17.99 USD
or around Php 900. This specific model however sells in the Philippines for only
Php 85 to Php 150. (KawaiiPenshop, n.d.)
In addition, trends in the market play a vital role in the behavior of the
market. For example, if a product is “trending,” more people will purchase it. The
trend today includes the various influences of Korean culture, fashion, food, music,
or what the people call the “K-Wave.” With the existing K-Wave or Korean Wave,
it continues to manifest among the Filipino culture leading to influences of food,
music, language, and fashion. (Navarra, 2019) As this trend continues, this
includes the highly portrayed Korean icons like RM from BTS, Jennie from
Blackpink, stars, and celebrities using tote bags and even “statement tote bags”
that are heavily shown as part of their everyday fashion, character identity, and the
use of tote bags. (Seow,2020; Tai, 2020) If the Korean wave continues, Korean
merchandise, as well as fashion tote bags, will continue to influence the Filipinos’
fashion choices as heavily seen today among millennials and Gen Z’s.
Product Highlights
Hiraya tote bags feature a unique raw material as they are made from the
combination of used clothes, traditional clothes, and a used inner bicycle tube,
unlike the common tote bags that we see nowadays. The primary characteristic
that the product showcases are the elegant properties that make it stand out.
Hiraya totes have outer pockets made of traditional cloth and woven textile from
various parts of the Philippines, a bag handle made up of inner bicycle tubes, and
a base made out of used clothings.
Hiraya Totes have a variety of attributes like their colors, design, and
texture. It is a product that can adapt and be customized depending on the
customers’ wants and own preferences. The standard size of the tote bag
measures 17’’ x 15’’ with different colors and textures of the old cloths and
traditional cultural fabrics.

The Hiraya Totes offers convenience and comfortability as it is a lightweight,

spacious, durable product. Tote bags give customers comfort and unlike plastic
bags, tote bags are more sustainable. Customers can use it whenever they go
outside, use it for personal errands, grocery shopping, and more- it is a hassle-free
bag. Hiraya Arts.Ph’s appealing attribute lies in its style, story, and its contribution
to society. It also builds trust and ensures customer satisfaction through the added
value of Hiraya Totes for the customers’ benefit. With its extraordinary raw
materials, sophisticated appearance, impeccable use, and other unique
characteristics, it will surely be beneficial not just for its customers but also for
society and the environment.
The versatility of the product makes it the “on the go bag.” It is a multi-
purpose product that can be used for groceries, shopping, sports, school, even for
laptops and other necessities. It can be hand or machine washed, making it
economical to use. The inner bicycle tubes are quality sewed and attached to the
body that can support the overall weight of the bag and the items placed inside it,
with a limit of 6-7 kilograms as tested in the prototype.
To summarize, the uniqueness of Hiraya Totes gives it an edge over other

tote bags. The raw materials used promote environmental care, easy to use
without worries as to the durability of the product. Aside from that, Hiraya totes are
low maintenance and made with quality, durability, and safety. Hiraya Totes bring
convenience, fashion, sophistication, and awareness whenever they use the single
tote bag from Hiraya Arts.Ph.

CHAPTER 2: MARKET STUDY
Market Analysis
In this part, the demand and supply of the competitors of Hiraya Arts.Ph will
be discussed and analyzed to be used in making projections and forecasts. The
gathered data came from the results of the surveys answered by the competitors,
supported by related studies and statistics from the tote bag industry.
Demand Analysis
In this analysis, the latest data of competitors will be used to discuss the
demand and supply for the tote bags in the Philippines. However, out of 25
competitors invited to participate in the survey, only 7 responded. Hence, the data
gathered as well as the geographical location of the respondents vary from one
competitor to another, and do not represent the whole industry of tote bags.
Furthermore, out of 7 competitors who responded in the survey, only 3
respondents disclosed data regarding their monthly supply and sold tote bags.
Historical Demand
Month (2021) No. of Sold Tote bags Unit Price Monthly Sales (Php)
January 250 125 31,250
February 100 125 12,500
March 150 125 18,750
April 150 125 18,750
May 300 125 37,500
June 500 125 62,500
July 400 125 50,000
August 500 125 62,500
September 300 125 37,500
October 400 125 50,000

Table 2.1. Historical Demand of Competitor 1 located in Pampanga.
In Table 2.1, the recent monthly demand was recorded by Competitor 1

located in Pampanga. Tote bags are standardly sold for Php 125 each and offer
lower prices for people who buy bulk or tote bags amounting to 100 pieces and
above. The highest recorded sold tote bags are in the months June and August
amounting to Php 62,500 sales. On the other hand, the lowest sales are in the
month of February where Company 1 only sold 100 tote bags in a month. This
amounted to a total of Php 12,500. From January to October, the monthly sales
are already accumulating to Php 381,250.
Month (2021) No. of Sold Tote bags Unit Price Monthly Sales (Php)
January 7 250 1,750
February 6 250 1,500
March 4 250 1,000
April 4 250 1,000
May 3 250 750
June 5 250 1,250
July 10 250 2,500
August 11 250 2,750
September 4 250 1,000
October No data 250 No data
Table 2.2 Historical Demand of Competitor 2 located in Bulacan
In the table above, Competitor 2 who is in Bulacan sold tote bags for Php
250 each. Competitor 2 has a lower number of tote bags sold since Competitor 2
manually paints the designs personalized by each customer. Therefore, the price
is higher than other sellers who bulky prints or sell plain designed tote bags. The
price can get more expensive if customers require intricate details, but most tote
bags are charged for Php 250. For the month of October, Competitor 2 did not
provide any data for the sales of October.

Unit
No. of Sold Tote bags Price Monthly Sales (Php)
January 400 100 40,000
February 250 100 25,000
March 300 100 30,000
April 300 100 30,000
May 500 100 50,000
June 700 100 70,000
July 500 100 50,000
August 500 100 50,000
September 500 100 50,000
October 400 100 40,000
Table 2.3. Historical Demand of Competitor 3 located in Laguna
For Competitor 3 located in Laguna, tote bags are sold for Php 100 each.
The two highest recorded sold tote bags are from June and August selling 700
units in June, and 500 for the rest of the period. On the other hand, the lowest
sales are in the month of February, that only sold 250 tote bags in a month. This
is the same with Competitor 1’s data, where they sold the lowest number of tote
bags in the month of February. This amounted to a total of Php 12,500. From
January to October, the monthly sales are already accumulating to Php 435,000.
Monthly Unit Totes Tote No. of est. Yearly

Sales price purchased bags customers Sales
(Ave (Ave per buyer sold (monthly) (PHP)
PHP) PHP) (Ave) monthly
Competitor 36,806 125 3 305 100 no data

1 provided
Competitor 1,500 250 1 6 6 No data

2 provided

3 provided
Competitor 6,000 120 5 50 10 60,000

4
Hiraya tote bags P a g e | 10


5 provided
Competitor 8,300 83 33 100 3 83,000

6
Competitor 60,000 75 1 800 600 800,000

7
Table 2.4. Summary of Historical Demand for all respondents
In summary of the data above, different competitors were able to sell around
hundreds of tote bags monthly, but the sales vary. The respondents who provided
January to October monthly data (Tables 1,2,3) commonly showed that tote bags
sold the most in the months of June and August. This was also supported by our
survey where respondents answered that all year round, they were able to sell tote
bags, but sold the most in quarters July to September and October to December.
Projected Demand
In this part of the paper, the monthly projected demand of the tote bag
industry from the data gathered is deemed to increase and to grow continuously
over the months. Based on the guidelines and template given by the Business Plan
Coordinators, computing the demand will be as follows:
Market Volume= No.of Buyers × Quantity of products purchased per buyer

Market Value= Market Volume × Average price paid per unit
Computed Projected Monthly Demand
No. of Qty Market Average Market Value

Buyers purchased Volume price per (PHP)
(Ave/est.) per buyer unit
(Ave/est.) (Ave/est.
PHP)
Competitor 100 3 300 125 PHP 37,500.00

1
Competitor 6 11 66 250 PHP 1,500.00

2

Competitor 22 20 440 100 PHP 44,000.00

3
Competitor 10 5 50 120 PHP 6000.00

4
Competitor 40 13 520 65 PHP 33,800.00

5
Competitor 3 33 99 83 PHP 8,217.00

6
Competitor 600 1 600 75 PHP 45,000.00

7
Hiraya 395 3 1,185 127.331 PHP150,886.05

Arts.Ph
Table 2.5. Projected Monthly Demand for each Competitor and Hiraya
Arts.Ph
Supply Analysis
In this analysis, the latest data of supplies from the competitors will be
used to discuss the number of supplied tote bags by different competitors in the
tote bag market in the Philippines. Data used in this analysis were derived from
the available information disclosed by the respondents of the survey.
Historical Supply
Month Monthly supply Monthly supply Monthly supply

(2021) Competitor 1 Competitor 2 Competitor 3
January 300 2 350
February 200 2 220
March 250 4 320
April 400 4 280
May 700 3 450

June 700 3 550
July 600 4 650
August 600 4 480
September 500 3 380
October 200 No data 370
Table 2.6. Historical supply of Competitors 1, 2 and 3.
Table 2.6 shows the monthly supply of Competitors 1,2, and 3. The supply
of Competitors 1 and 3 ranges from 200 to 700 units of tote bags. However, for
Competitor 2, it is significantly low compared to the latter competitors since the
company only needs a few supplies for its business.
Projected Supply
Monthly Monthly Monthly

Month supply Projected supply Projected supply Projected
(2021) Comp. 1 Supply Comp.2 Supply Comp. 3 Supply
January 300 2 350
February 200 2 220
March 250 250 4 3 320 297
April 400 283 4 3 280 273
May 700 450 3 4 450 350
June 700 600 3 3 550 427
July 600 667 4 3 650 550
August 600 633 4 4 480 560
September 500 567 3 4 380 503
October 200 433 2 370 410
November 350 2 375
Table 2.7. Forecasted Supply of Competitors 1, 2 and 3.
Based on the data provided by Competitors 1,2 and 3 for their monthly
supply of tote bags, the 3-month-moving average was used as the forecasting tool
to forecast November’s supply for the three competitors. Competitor 1 has an

average of 445 monthly supply of tote bags, 3 tote bags for Competitor 2, and 405
monthly tote bags for Competitor 3. The average supply of Competitor 1 and 3 who
supply hundreds of tote bags is 432 tote bags. On the other hand, the forecasted
supply for Competitor 1 and 3 for the month of November is 350 and 375,
respectively.
Demand and Supply Gap Analysis
This demand and supply gap analysis heavily relies on the supply and
demand information provided by the respondents in the conducted online survey
by the proponents of this study.
Month (2021) Monthly supply Demand Gap

January 300 250 50
February 200 100 100
March 250 150 100
April 400 150 250
May 700 300 400
June 700 500 200
July 600 400 200
August 600 500 100
September 500 300 200
October 200 400 -200
Competitor 1 is a business located in Pampanga. The results of the gap

analysis showed that supply exceeds the amount of demand. However, even if the
company’s supply is higher than the demand, it can be assumed that there is
indeed a demand in the market just by observing the number of tote bags sold in
a month. For competitor 1, the company can sell an average of 300 tote bags in a
month, based on the data provided in the survey. A study in Harvard discussed
that there are other factors that influence demand, depending on the culture,
population, existing competitors, popularity of the brand, and etcetera in a certain
geographical location. (Gallup, Sachs & Mellinger, 1999) Hence, the results of the
analysis do not represent the whole tote bag industry. This analysis also gave the
proponents an overview of the possible limit or range that the company should
produce in the first few months or years of business operation.


January 2 7 -5
February 2 6 -4
March 4 4 0
April 4 4 0
May 3 3 0
June 3 5 -2
July 4 10 -6
August 4 11 -7
September 3 4 -1
October no data no data -
Table 2.9. Demand and Supply Gap Analysis for Competitor 2.
The table above shows the gap analysis between the demand and supply
of tote bags for Competitor 2. Competitor 2 personally paints personalized designs
of tote bags as requested by the clients. According to our survey, as each design
takes days and weeks to finish, the owner of the business can only cater 3-15
projects a month.

January 350 400 -50
February 220 250 -30
March 320 300 20
April 280 300 -20
May 450 500 -50
June 550 700 -150
July 650 500 150
August 480 500 -20
September 380 500 -120
October 370 400 -30
The table above shows that the demands of the tote bag from this
competitor exceed the supplies that they have monthly. As you can see, there is
indeed a demand for tote bags in the market as this competitor receives a lot of
orders every month. The average tote bag supply of Competitor 3 is 405 and the

average for their demand is 435 pcs. It is clearly depicted that the demand is higher
than the supplies except for the months of March and July, wherein they have
stated in the survey that there was an excess in the produced tote bags. The
company also stated that they always lack supplies, since they do not get a hold
of the consistent number of clients in a month.
Projected Sales
Based on the DS gap analysis calculated in the preceding subsection, the
following are the sales estimates that Hiraya Totes can project within 5 years of
business operations. The projected number of tote bags sold in a year is based on
the lowest, highest, and average demand of tote bags sold by Competitors 1 and
3 in a month. Competitor 2 is excluded as a basis for this projection, since
Competitor 2 is a retailer that deals with a smaller range and number of tote bag
users that prefer hand painted tote bag designs.
Upon the computation of the demands from competitors 1 and 3, the lowest
demand for a year is 1,200 pieces of tote bags up to 8,400 pieces. The average
demand for both competitors is 4,400 pieces yearly, that is why this data will be
the basis for the projected sales of the Hiraya tote bags in a year. The monthly
average demand for Competitor 1 and 3 is used as the basis for the monthly
demand in projected sales. See Appendix 1 for the breakdown of projected
monthly demands.
Table 2.11. 5-year Projected Sales of Hiraya Tote bags

SWOT Analysis
Strengths Weaknesses
• Light-weight and eco-friendly product • No zipper /closure
• Fashionable cultural designs by indigenous tribes strap
• Multi-purpose • No inner pockets
• Elastic and sturdy handle
• Washing machine safe
• Incorporated with cultural textile from various parts
of the Philippines
• Affordability of price
• The smell of the rubber I the newly produced tote
bags.
Opportunities Threats
• More people use tote bags for everyday use. • Established high-
(Results of survey and research) end brands
• Opportunity to promote the talents and crafts of the • Covid-19
indigenous people of the Philippines. Pandemic
• The transition of businesses to online commerce or • Many competitors
e-commerce • Market’s priorities
• Continuous K-wave or influence of Korean culture on spending
among Filipinos, that highly influences fashion and
bag choices.
• Tote bag’s production helps many sectors of the
country
Table 2.12. SWOT analysis
Internal Factors (Strengths and Weaknesses)
As the Hiraya Arts. Ph company advocates for “hitting four birds in one
single stone,” which incorporates fashion, innovation culture and being eco-
friendly, this is where the Hiraya tote bag’s strength anchor. The tote bag has a
low capital which makes the cost of the product very affordable. It can be used for
any purpose on any occasion, and it is integrated with the cultural/ethnic fabrics of
the Philippines that gives a unique design for the bag. The handles are elastic, and
sturdy sewed on the body of the tote bag, giving support to the weight of the bag
when used.
However, customers might find it unappealing to smell the rubber handles
at first. The smell subsides as it is continuously used and washed. Hiraya Arts.Ph
wash the newly produced bags as part of quality control to lessen the rubber smell.
This rubber smell is also both a strength and an opportunity for this smell is proof

of the materials used in the tote bag. The newer the product, the stronger the smell
of the rubber. The bag can be handwashed or washed with a washing machine,
as long as it is air-dried and not dried under direct sunlight. Eventually, this rubber
smell diminishes in the long run. For the initial launch of the product, it has only
outer pockets and has no inner pockets or zipper. Some people might prefer
having such features. Hiraya Arts.Ph will be initially produced with the original
features, and eventually add inner pockets and even a zipper strap. The absence
of such features is based on the most common idea that tote bags do not have
zippers; they have a wide opening and many things can fit into a tote bag. The
presence of zippers will limit tote bags’ space.
External Factors (Opportunities and Threats)
The pandemic is a double-edged sword for starting a business since there

are threats of economic fluctuations and the people’s ever-changing priorities on
spending this crisis. Some may not prioritize buying the product due to economic
reasons. On the other hand, there are many high-end brands that design variations
of tote bags. People may prefer the latter. However, there are also many existing
competitors of distributors and sellers of mass-produced tote bags. Looking at the
positive side, the emergence of e-commerce and the use of social media sites and
applications where businesses can post their business listings change the
dynamics between the buyer and seller. Hence, taking this opportunity lessens the
cost of putting up a physical store right away, and it can cater to many customers
from different parts of the Philippines and even international orders.
It is also an opportunity for Hiraya Arts.Ph to address the problems in

disposing of rubber bicycle inner tubes, hence helping the environment to fight
pollution and problems of disposal. Furthermore, it is also a chance to help people
to bounce back from the economic repercussions of the pandemic, and at the
same time showcasing and highlighting the indigenous fabric of the Philippines.
The biggest opportunity is the existing K-wave or Korean Wave that highly
influences our country. Since this phenomenon affects people’s choices, tote bags
are one of the choices for Hiraya Arts. Ph to take advantage of this situation. The
manifestation of the Korean outfits and fashion among the fashion choices of
Filipinos are becoming more evident and noticeable. (Navarra, 2019)
Marketing Mix
This section discusses the 4Ps of marketing of Hiraya Tote bags. The gist
of strategies, product details, and computation of selling price will be shown in this
section to fully understand how Hiraya Arts. Ph plans to introduce the tote bag in
the market and increase its market share.

Product
BAG MODEL (in inches)

WIDTH LENGTH STRAP
14.5 15.5 26 x 3
OUTER POCKET (in inches)
WIDTH LENGTH
4 6
•BAG STYLE
Traditional all-around tote bag w/ outer pocket.
• CARRYING CAPACITY
10 - 15 LBS or 4.5 KG - 6.7 KG.
• Price
Php 130
• Maintenance:
Handwash, Washing Machine, Foldable
• Materials: Cotton, Traditional cultural textiles, Rubber, Pelon
• Style: Patterns, Plain, Mixed
• Perks of the Product:
• Fashionable
• Durable
• Lightweight
• Multi-Purpose
• Eco-friendly
Hiraya tote bags are tote bags made from traditional Filipino or cultural
textiles, used clothes, and a used inner bicycle tube for the handle. The bag varies
from one to another, having designs and colors unique for every production.
• Size
The standard measurement of the tote bag is 17’’ x 15’’. It is subject to
change for wider tote bags or other sizes of bags.
• Colors
The color variation of the Hiraya Tote bag highly depends on the availability
of chosen clothes to use as the base of the bag. Common colors of cloths would

be white, blue, black, red, yellow, etc. There would be a mix of colors, as well as a
mix of plain and printed designs.
• Cultural cloths
Hiraya tote bags may vary from different cultural cloths, so the customers
are free to choose from the available designs based on their own preferences.
Initially, Hiraya Arts. Ph has cultural design outer pockets from textiles of Batik
Malong from Mindanao, Inabel cloth from North Luzon, and Ramit from Mindoro,
South Luzon.
• Weight
The product weighs around an estimated 250-500 grams. It is light despite
that rubber is integrated with the handles and body of the tote bag.
• Packaging
The packaging will be made of used calendars or paper bags that are
aesthetically made for the customers. The product alone is not eco-friendly and
helps the environment, as well as the packaging as shown in the picture below.
Figure 2.2. Packaging of Hiraya Tote Bags

Promotion
The Hiraya Tote bags will be primarily marketed through social media sites
using Youtube, Instagram, Facebook, and Twitter. The “boost” feature of Facebook
can widen the market as the Facebook page makes posts and listings about the
product. The same goes for Instagram and Twitter.
Youtube will also be one of the social media platforms that we plan to utilize.
We will be posting videos of the product as content on the said platform rather than
using the advertisement option on Youtube which can be expensive.
We can also invite peers with numerous and stable numbers of followers to
be our brand’s ambassador or ambassadress.
First time customers will be offered vouchers and discounts for their next
purchase like 10-20 pesos off depending on the amount of their purchase, or even
free shipping for orders for more than 10 tote bags.
Aside from Social media platforms, we will also be using personal selling or
word of mouth to our peers and families. Alongside it is digital marketing through
different social media and e-commerce sites, promotion strategies by offering
vouchers and discounts for buyers.
Finally, for Hiraya Totes to stand out in the tote bag market, the company
will partner with different local government units (LGUs) and departments like the
Department of Trade and Industry (DTI), Department of Tourism (DOT), National
Commission for Culture and the Arts and even with the National Commission on
Indigenous Peoples. In this way, the Hiraya Tote bags can be marketed and sold
as souvenirs in different conferences and events led by the government.
Place
With the transition of businesses to e-commerce, Hiraya Tote bags can be
found on social media sites like Facebook, Instagram, and Twitter where
customers can easily inquire and place their order from their mobile phones,
computers, and desktops. In addition, Hiraya Tote bags are also available on
famous and widely used e-commerce applications like Shopee and Lazada. Hiraya
Arts. Ph will have its own pages and accounts for the primary launch of the product.
In the future, the company aims to distribute to airports, pasalubong centers, and
supermarkets to serve as souvenirs and also as a replacement for plastic bags.
Price
For the price of the Hiraya Tote bags, a value-based pricing strategy will be
used in order to have high profitable sales of the product. According to our survey,
173 respondents are willing to buy Hiraya Tote bags ranging from the prices 100-

250 pesos while 171 respondents are willing to spend a ranging 251-400 pesos
for the tote bag. To decide on the price of the Hiraya Tote bags, we also used the
data gathered from our competitors. Our competitors sell a single tote bag ranging
from 80 pesos to 125 pesos. Our market survey also showed that respondents are
willing to spend a little bit more on a product that has an environmental impact and
uses cultural cloths. We also considered the fact that most of the tote bags sold
were canvas that used less materials than our product. In addition, a uniform
pricing strategy for all three different variations of the tote bags will be used to
maximize the profits. A study of Luo, Tian, and Wang (2019) stated that uniform
pricing is better to use when products are highly marketed online. Hence,
considering all the factors, Hiraya tote bags will be sold for Php 150 each.
Competitors Analysis
In this section, Porter’s five forces model is discussed to fully understand
the position of the company in line with the presence of competitors through a
competitor’s analysis. Data used in this section were derived from the market
research survey and the survey among sellers and distributors, since data and
information about the industry were not available from different statistical
resources.
Rivalry Among Competing firms
The tote bags industry has quite a high rivalry with competing firms. As the
population of working women rises, the demand for tote bags also increasingly
shifts to cater to the bag choices of the latter. (Busineeswire.com) Firms started to
cater to different styles of tote bags ranging from denim, leather, nylon, and cotton
materials for the product. From high-end brands and firms that massively produce
tote bags, various distributors and sellers emerged in selling and distributing them
in the market. From sellers from e-commerce sites to social media applications,
tote bags are sold by an estimated more than 70 businesses in the Philippines
alone by solely checking e-commerce website and social media business pages
of the sellers. Tote bags are sold for as low as Php 20 to Php 200 on average.
However, Hiraya Tote bags are tote bags that are unique and have a high
differentiation with the use of their raw materials. Physically, it may look like any
other tote bag but Hiraya Tote bags, but it has a feature that makes it stand out
from the others like its uniqueness and advocacies. Since the price of Hiraya Tote
bags is at par with the average amount of tote bags in the industry, it will still be
profitable despite the number of competitors. It will not be easy at first, but
eventually, people will also get a hold of the features and benefits of using Hiraya
Tote bags.
Potential Entry of New Competitors

While other firms need high capital to produce their tote bags and can have
issues with their respective raw materials, Hiraya Tote bags present otherwise.
Hiraya Tote bags are produced under low capital including the packaging as well
as the labor. However, some firms are big enough to settle the legalities and the
requirements of a company to be established. Prices and the existence of
contracts for laborers will eventually change as Hiraya Arts. Ph enters the market
and registers the business to the government along with the new rising industries.
The idea of Hiraya Tote bags is subject to a design patent to protect the intellectual
property of the company. As for now, the entry of new competitors is high
compared to the current new entrants, the proponents see it fit to anticipate that
this factor will get higher.
Potential Development of Substitute Products
Every seller and distributor of tote bags is under the threat of being
substituted as preferences of the market and trends continue to change. Before
the tote bags, people are already using backpacks, sling bags, handbags, and
other types of bags. This means that the tote bags go with the same path of being
a choice just like any fashion accessory. To further make a strong presence in the
market and Hiraya Tote bags will not be easily substituted, unique designs will be
released according to what is trendy and go with where the people spend their
money on. Integrating what interests' people to the tote bags e.g., current famous
series like Squid Game design integrated with Hiraya Tote bags while staying with
the concept of cultural cloths and inner bicycle tube handles. Furthermore, another
strategy is to create a strong brand image and social media presence by raising
awareness of the advocacies that the product has.
Bargaining Power of Suppliers
Supplies of raw materials are widely available in souvenir shops, wet

markets and can even be bought directly from indigenous communities to lessen
the costs of raw materials. For other materials like inner bicycle tubes, bicycle
shops give out used such tubes for free. These inner bicycle tubes can also be
found in vulcanizing shops. Since the goal of the product is to lessen the problem
of disposal of inner bicycle tubes and used cloths, the supplies will depend on the
amount of waste produced by the aforementioned sources. Hence, costs for
supplies are low and will continue as they are in the future. Bargaining power for
suppliers is currently low and will stay slow in the future given the case.
Bargaining Power of Consumers
The buyers of tote bags sometimes buy in retail and bulk, depending on the
purpose. Some buy tote bags for events and giveaways for occasions. From our

surveys, some own one to more than five tote bags per user. On the other hand,
in our separate survey, sellers are able to cater with a minimum of 1 to 40
customers monthly who order a minimum of 10 and a maximum of 500 pieces of
tote bags produced a month. This is the case for almost every supplier, but we
already have over 380 respondents as the initial buyers of the Hiraya Totes bags.
The customer’s power is high since there are many competitors, but currently,
Hiraya Arts. Ph has a good set of prospective buyers of the product.
Market Research
In this section, the survey conducted is summarized and discussed to
further understand the market of Hiraya Tote bags. The following is the summary
of relevant results of the pre-survey conducted by the proponents to primarily know
the scope of the potential market geographically and demographically. The
company chose the whole Philippine population as its target market since the
company aims to establish a strong presence in social media and e-commerce
sites. In this way, the Filipino population can buy the product wherever they are in
the Philippine islands. In addition, the tote bag is for all ages and all genders and
has an aim to promote cultural cloth and the talents of the indigenous people of
the Philippines. In short, every Filipino can be the customer and ambassador of
the brand in joining the company’s socio-cultural and environmental initiatives.
Using Slovin’s formula, 385 respondents were drawn from the whole Philippine
population with a 95% confidence level and 5% margin of error as seen in the
computation below:
n = N / (1 + Ne2)
n= 111, 376,648 / (1+ 111,376,648 (.052))
n= 385
Wherein, n= sample size; N= population size; e= margin of error
People
In our survey, the majority of the respondents are from Central Luzon and
NCR, comprising 24% or 94 respondents and 20.7% or 81 respondents,
respectively. Tote bag-users are also evident in CALABARZON with 19.9% of our
respondents, Region 2 (Cagayan Valley) with 19.9% or 78 responses, MIMAROPA
at 13% or 51 respondents, and users present from regions 11,5,6 and 7. This data
shows that Hiraya Arts. Ph can accommodate users from different parts of the
Philippines, which covers a part of our target market. (See Appendix 2)
Furthermore, most of the respondents are female, comprising 58.2% of the

responses, while males with 29.8% and 10.7% from LGBTQIA+. Our product is for
all ages and genders thus, gender and age of the consumer are a few considerable

factors since everybody is part of the target market. The proponents assumed that
gender would not be a factor for the demographics, but age will be a good
representation of the specifics of the market. 295 respondents or 75.3% are under
the range of 19-25 years old, followed by 33 respondents from ages 18 and below,
7.4% or 29 respondents who are 36 and above. The minority in this result are those
26-30 years old, with a result of 6.1% or 24 respondents and 2.8% or 11
respondents from ages 31 to 35 years old. (See Appendix 3)
From the results of the market survey, the millennials and the Gen Z’s have
more attention and focus on marketing the tote bags. For the older generation, we
need to come up with a more traditional approach where we use methods and
techniques aside from the use of technology to introduce the Hiraya Tote bag to
the market. The proponents assumed that it is easier for the younger population to
have access to online market surveys rather than the older population. Thus,
arriving at a conclusion that the proponents will use market segmentation, focusing
on demographics and geographical location of the respondents through the use of
different and mixed marketing strategies like the use of social media platforms,
traditional but classic word of mouth, and e-commerce sites.
People: Market Segmentation
The identified target market of Hiraya Tote bags are all ages and all genders
of the Filipino population because any person uses a bag. People can use and buy
Hiraya Tote bags, emphasizing that Hiraya Arts. Ph will put effort into continuously
using both traditional and modern marketing techniques, starting from word of
mouth and use of technology to have a strong social media presence to reach all
potential customers. To keep the data realistic, the results of the survey will be
segmented, so that the company can concentrate highly on the market with the
highest potential of sales.
Product
Majority of the respondents or 96.9% of the total respondents are pleased

or amazed with the idea that the product will be using an inner bicycle tube for the
interior of the handle for sustainability and textile fabrics from the natives to help
them preserve their tradition and culture. (See Appendix 4)
96.7% or 379 of the respondents are considering buying our product when
it is released in the market. We also found out that the tote bag users who became
our respondents used their bags mostly in grocery shopping, traveling, going to
the market, everyday use and they even used them as office bags. Most of them
want it to be made from canvas, cotton, nylon, denim, and leather. (See Appendix
5 and 6)

Furthermore, most of our respondents also consider tote bags as suitable

bags for everyday use. We also ask the respondents the features they want.
Almost all of our features have the same numbers when we review the results.
Even though we use used clothes and inner bicycle tubes as raw materials for our
product, 96.9% or 380 of our respondents still find it appealing also with the
different designs of traditional Philippine textiles. Most of them also want
extraordinary tote bags like the ones we are planning to sell. (See Appendix 6)
Place
Hiraya Tote bags will be available on e-commerce sites such as Shopee

and Lazada, as 78.8% of respondents want the product to be available online. On
the e-commerce platform, shoppers may see products from various geographical
areas more easily. Hiraya Totes will also be viewed on business-oriented social
media sites such as Facebook, Instagram, and Twitter, allowing the product to
reach a wider audience. (See Appendix 7)
Promotion
Hiraya Tote bags will be advertised on Facebook, Twitter, and Instagram,

among other social media sites with large user bases and prospective audiences.
In order to advertise the product, the company will recruit brand ambassadors. In
addition, respondents expected to see the product on e-commerce sites, according
to the survey.
Price
173 respondents or 44.1% are willing to buy our product at the price range
of 100PHP-250PHP while closely in our survey is where 43.6% or 171 respondents
are willing to spend are at the price range of 251 PHP-400PHP. Most of the
respondents are students and since their buying capacity is based on their
allowances, they prefer a product that they can afford. 386 respondents believed
that it is worth it to spend a bit more on tote bags that promote environmental care
and advocate culture. Hiraya Totes provide cultural and environmental benefits
since it will raise awareness for the crafts of indigenous people and the growing
problem of rubber waste disposal. (See Appendix 8)

CHAPTER 3: OPERATIONS AND PRODUCTIONS STUDY
This section discusses how Hiraya Arts. PH produces and delivers Hiraya
Tote bags to customers and users.
Key Business Operations

This subsection discusses the four key areas of business operations of
Hiraya Arts.Ph in producing the flagship product of the company, which is the
Hiraya Tote bags.
• Location
Currently, Hiraya Arts. Ph does not have a physical location for the
operation of the business. Since the entire world is experiencing a
pandemic, the company initially put up the business online. However, the
production of the product takes place in the Garment capital of the
Philippines, Taytay Rizal.
• Equipment
Hiraya Tote bags require only the sewing machines as the main
machinery or equipment to finish a high-quality sewed tote bag.
• Labor
As for the labor, the production of the raw material like the traditional
woven fabric are produced by different indigenous people from different
parts of the Philippines, that are sewed by the tailors from Taytay, Rizal.
The procurement and sanitization of the materials, as well as ensuring the
quality of the tote bag is personally done by the proponents or
entrepreneurs of the business.
• Process
The company is agile, and the proponents are hands-on in ensuring
the quality of raw materials, end-product quality control, packaging and
even on the mailing or delivery of the product. From procurement to
delivery, each member of the Hiraya Arts. Ph company has different tasks
assigned from manufacturing and procurement, sales and marketing,
delivery, and logistics, as well as for feedback and development of the
product. In this way, all forms of communication, complaint, and feedback
can be closely seen by the company, and further improve and innovate the

product. The product may be perceived as simple, yet the process is rigid
and thorough to ensure the details and quality starting from acquiring the
raw materials to delivering the bag to the step of the door of customers.
Figure 3.1 Process of Hiraya Arts. Ph
Product Concept
As there are a lot of environmental and socio-economic issues that emerge
and affect every country in the world, companies are strategizing to provide
development and solutions to those problems. Chapter 1 discussed the existing
environmental problems, economic circumstances, and the advocacy of the
company as the Hiraya Arts. Ph aims to address and achieve results through the
tote bags.
Hiraya Totes is a product that addresses the environmental challenges of

waste disposal in our country as well as raises awareness of the Filipinos cultural
identity, creativity, and talent through their crafts. The product is chosen to have
an incremental innovation to increase the existing characteristics of a tote bag to
fit the changes in our environment and our society. The Hiraya Totes’ raw materials
are bicycle inner tubes, used clothings, and traditional fabric unlike the usual tote
bags in today’s industry. It revolutionizes the idea of being sustainable and stylish
at the same time. It is a tote bag that serves as an accessory, awareness, and
environment friendly. A product that proudly flexes the Filipino talents, identity,
traditional appreciation through creating fabrics and textiles. It is also a product
that reduces and minimizes the use of single-use plastics to help ensure and
protect the life of our own nature and environment.

Hiraya Arts. Ph sees that through the 3R’s initiative, namely: to reduce,
reuse and recycle the materials, we can slowly cut down the pollutants in the air
and water as well as the landfill wastes and greenhouse gases emissions that
exist. There has been an increase in the number of tons of loads containing rubber
waste, that is why it remains as one of the discerning concerns in waste disposal
as it contributes to the depletion of the ozone layer. Bicycle rubber wastes in the
environment can be reduced to help prevent the destruction of the earth’s ozone
layer. That is why the company is more than willing to be sustainable and to start
joining movements to prevent global warming. It is also to help reduce the rubber
and cloth waste that clogs our drainage systems.
Hiraya Totes in the future will also aim to add more sustainable materials to
further help the environmental and socio-economic problems that the country is
facing. It will also try to have a connection and deal with different business
industries like social media influencers, business, modeling, show business and
non-government organizations (NGOs) to further reach a lot of networks in the
benefit of the environment, economy, and the Filipino People. Hiraya Totes also
aspires to be advertised, promoted, and sold in every company, grocery shop, and
worldwide through various commercials, promotions, and recommendations. The
product also strives to provide a wider range of options. Starting with its colors,
texture, and even sizes, which are all based on consumer preferences. It will be
available for customization soon.
Production Requirements and Processes
The manufacturing of Hiraya tote bags involves the use of used raw
materials that are cleaned and processed for the safety of the clients. The following
key components were used to produce tote bags:
• Used cloth for the main body of the bag
The Hiraya tote bag incorporates raw materials that are unique to be
found in a typical tote bag, including a recycled cloth. Hiraya Tote bag emphasizes
not just creativity but also innovating or repurposing used clothes. Used cloths
serve as the primary material for the body of the product, that are manually chosen
to ensure its quality composition, stability, and ability to withstand weight. For the
raw material used clothing, these will be procured through used clothes that can
be donated or a pre-loved garments of people and from low-cost shops or from the
“ukay-ukay.” To assure that the product is safe from any virus or any threats from
used clothes may bring, these clothes are washed thoroughly, starting from
disinfecting the clothes in hot water, and eventually washing it completely.

Furthermore, the product's fundamental concept is incremental innovation,

and as a member of society who desires a cleaner and greener environment, this
is a small step to prevent textile waste and reuse into more useful and profitable
purposes. It is widely available and does not come with a shortage since people
have all the clothes and clothes that they do not use in their households. Also,
used clothes are completely washed, guaranteeing the product's cleanliness and
safety. Hiraya tote bags demonstrate that durability is not lost in the pursuit of
sustainability and innovation.
• Traditional woven textile
The Hiraya tote bag involves cultural textile fabrics throughout the Philippine
islands to ensure quality and uniqueness, while also promoting the country's rich
culture. The outer pocket of Hiraya Tote bags represents the different woven and
traditional cloths from diﬀerent areas of the Philippines, varying from Igorot cloth
and Inabel textile within North Luzon, to Ramit cloths of the Mangyan tribe in
Mindoro and even the Malong of Maguindanao and Maranao in the South. These
places can serve as the model design labels or names for every tote. Hiraya totes
do not only provide a dependable and stylish product for consumers, but also give
a way to make profit for the various ethnic groups. Quality wise, such textiles are
usually handwoven and manually crafted out of materials that are originally used
for producing such fabric. These traditional woven fabrics can be found or bought
either directly from the tribes for a cheaper price and we will assure to contact them
ahead of time and have an excess raw material.
• Inner Bicycle tube handle
Through the use of inner bike tubes for the handle, it guarantees that the
tote bag is strong and will not break easily. The raw materials stitched together
with this tube guarantee the quality and durability of the tote bag. These inner
bicycle tubes are carefully washed and sanitized before integrating it to the bag.
Hiraya totes promise consumers that they will have nothing much to think about
when transporting large objects, which may result in the detachment of the bag's
handle. Using Hiraya Tote Bag in your everyday life can give you convenience as
you will not be having a problem storing your essential things. In line with this, the
Hiraya Tote bag is a product that can be used for several different purposes and
events while making the world sustainable and greener by helping reduce the use
of single-use plastic bags.
In addition, rubber waste disposal is also one of the contributors to

environmental problems, hence using inner bicycle tubes that are available on the
bicycle shops, repair shops and vulcanizing shops for vehicles is a wise move for
the company. Inner bicycle tubes are often given for free, or some shops charge a
minimal price for these tubes from old vehicle tires.

Hiraya Tote Bag Process
Hiraya Tote bags are produced under a series of steps to ensure

cleanliness, safety, and quality in every manual production. Hence, this portion
discusses the process or procedures in making the tote bag.
Figure 3.2. Hiraya Tote bag Process
• Procurement and sanitization of materials.
Before undergoing the overall process of making the tote bag, e ach
raw material is sanitized after its procurement. Specifically, for used clothing,
customers are assured that these recycled clothes are thoroughly washed first in
hot water, before washing it completely to avoid any threat of viruses or sickness
that the clothes might bring. Then, the tailor needs the following: 17 inches x 15
inches used cloth, 56 inches x 1.5 inches inner bicycle tube, and 8 inches x 4
inches traditional woven fabric. The inner bicycle tubes are thoroughly sanitized
using a dishwashing liquid to remove any dirt or grease, and finally cleaned with
alcohol and a cloth designated for cleaning the bicycle tube handles.

• Sewing the handle and its cover.
The handle cover measures 112 inches by 3.5 inches, double the
measurement of the inner bicycle tube handle to fully cover the inside and out of
the rubber. After sewing and making the full jacket for the handle, insert the inner
bicycle tube to the sewed handle cover and set aside for the later processes.
• Making the body and attaching the outer pocket.
The chosen traditional woven fabric is first sewed to the middle of the front
side of the tote bag. These cloths were sewed half-inch from the edges to form a
pocket. Then, from the inside, sew the bases of the two used cloths to make the
initial structure and depth of the bag.
• Finishing and completing the tote bag.
First, attach and place the handles on the bag using pins and sew the
jacketed inner bicycle tubes starting an inch away from the top of the bag all the
way down to the base until reaching to the back side of the tote bag. Do these for
both handles and for both sides of the handles to ensure that the handle supports
both the base and the outer pocket. The one-inch allowance left for the top of the
bag is folded and sewed to have a clean finish. Finally, sew the sides of the used
cloth to completely close the tote bag from the sides.

Packaging
Figure 3.3 Hiraya Tote bag packaging (1)

The packaging of Hiraya Totes will
vary from different styles of calendar and
newspapers. It may be new or old, shiny, or
not, Hiraya totes will be tightly, safely, and
aesthetically packaged in sustainable
materials to stand with its purpose of being
greenvolved. There will be no constant
layout for the packaging as the materials
used will vary from the supplies and
resources. It will also differ on the quantity of
the ordered products. It can be packaged in
a go-to gift style, or it can be packaged
according to the clients’ preferences. Hiraya
Arts. Ph strategically used this kind of
packaging as it stands with the mantra of
four birds with one single stone. The price of
the packaging will not greatly affect the cost of the product as this can be bought
at a low price. In line with this, it is also to reduce the waste that we see in our
environment. As we value the aesthetic factor of the product, we ensure that it will
add to the product's salability as it encourages people to buy products that care for
the environment.
Quality Control and Safety Measures

Hiraya Arts. Ph has set its own specific standards in making sure that the
products that are created, along with the service provided for customers are high
in quality and duly upholds our goals and values as a company.
For the products:
• Being hands-on in sourcing the raw materials.
To ensure that our products are created with the best possible
resources and raw materials that provide both durability, sustainability, and
style, our company would design and assign a team or department that will
oversee and be present in the procurement of the raw materials of the
Hiraya Totes. By directly handling the sourcing of raw materials, the team
would conduct the necessary inspections and address any and all problems

that might appear from the source of the materials itself. The beginning of
the production of the tote starts with the procurement of materials, and
through having a hands-on team, possible concerns can be addressed even
before the production itself.
• Visiting the facilities daily.
Conducting daily visits to the manufacturing site and facilities would

provide the team with an opportunity to inspect the production process of
the Hiraya Tote and have face-to-face consultations with the manufacturers.
Since the tailors are at the front of the creation of the product, they would
be the first to know whether there are problems related to the sewing of the
product that need to be solved by the team. The equipment being used
would also be inspected for any damage to prevent delays in the continuous
production of the tote bag.
• Manually checking the quality of every finished product.
Prior to delivering the finished product to the hands of the customers,

it would go through a rigorous inspection by our assigned team to guarantee
its durability and the quality of its creation. It is Hiraya Arts. Ph’s promise to
deliver high-quality products to our customers, and by conducting a careful
manual evaluation of the final product’s condition, the team ensures that
customer satisfaction is warranted. The quality control officer, who is trained
and certified in quality management, will be the one who will check the tote
bag before sending the product to customers.
For the service:
• Providing a feedback form for the customers after every transaction.
After every customer transaction and with every product sold, our
company would provide a feedback form where customers could evaluate
the service that the team has provided. Through a direct source of feedback,
the company would gain insight into the thoughts of the customers
regarding our service and consequently provide the customers with the
opportunity to provide feedback. The feedback is important for us to know
whether the customers are satisfied with Hiraya Totes or if there is a need
for us to improve our products and services. It will also be a way for us to
know the lapses in the company’s internal factors and the systems.

• Assigning a Customer Service Representative (CSR).
We would assign a Customer Service Representative (CSR) that

would directly handle our company’s communication with the customers.
They would handle the inquiries of the company and any complaints or
feedback that we would receive. As the company sales and revenue
increases, the number of CSRs will increase in line with the demand of the
sales and the customers.
• Conducting training for the employees.
Hiraya Arts. Ph would conduct regular training for its employees that
directly face and communicate with the customers. The training would
include seminars and topics that would help them to provide excellent and
preferable service. Further, through the feedback forms that would be
provided as mentioned above, the company would know what aspects and
attitudes the various training sessions would need to focus on.

CHAPTER 4: MANAGEMENT STUDY
This section discusses how Hiraya Arts. Ph will be managed and

operated, given the required strengths and qualifications of staff and people who
will run the company and distribute the Hiraya Tote bags.
Business Model
The table below discusses the business model of Hiraya Arts. Ph in
manufacturing and selling Hiraya tote bags. This business model also tackles how
the company will thrive in the growing market and build customer relationships
through communicating and showing the value proposition of the Hiraya Tote bags.
KEY PART- KEY VALUE CUSTOMER CUSTOMER

NERS ACTIVITIES PROPOSITIONS RELATIONSHIPS SEGMENTS
A bag for To establish a
Indigenous As of now, anything and for customer Hiraya Tote
communities Hiraya Arts. everything. relationship, bags are for
provide Ph directly Hiraya Arts. Ph every
cultural sells and Hiraya Tote bags will seek feedback customer,
traditional produces the are for any from the customer regardless
cloths. tote bags to occasion, and it to ensure them of age,
the end-users. highlights its that we care and gender, and
Souvenir purpose as a trust them about social
shops for Generally, sustainable their opinions status.
cultural Hiraya Tote product that about our product.
clothes at a bags will be advocates for We will build up It is a bag
lower cost seen on e- different their trust and wherein the
than commerce communities and loyalty through target
standard and social sectors. exceeding their market
prices. media sites as customer service covers all
the main Hiraya Tote bags expectations to gender, for
Bicycle distribution do not just solve us. all ages here
shops and channels of the problems of in the
vulcanizing products and customers, but We can grow Philippines
shops for information. also countries. customers to
the inner Hiraya Arts.Ph through intensive continuously
bicycle Through helps fight to social media raise
tubes for different minimize the marketing and awareness
free or may preferred disruption of the eventually grow for the
impose courier environment as our market share. advocacies
minimal fees companies by we strive for a Customers also

for getting the sustainable and have free repair of the

bulk inner customers, a greener earth. services when the product.
bicycle Hiraya Arts. bag has issues.
tubes for the Ph will deliver Customers will They can return it According to
purpose of the product. get discount to us, and we will the market
trade. vouchers for the shoulder the survey,
These first purchase, a shipping fee. customers
methods will free bag on the are
be the fastest 20th purchase, Currently, we segmented
and most and free repair have existing in Luzon,
efficient since services in a customer featuring 19-
the company year. relationships with 25 years old
is still starting our peers, target
out in the Hiraya Totes families, and customers.
market. cater to the rising communities that
In addition, the trend and are the
company has demand of tote respondents to the
free repair bags as a survey we
services and fashion conducted as well
possible accessory and as the online
replacement on-the-go bag. community. They
of the product, are very important
in case the Partnership with to make the
bags had local government business going
great damage units for and profitable.
due to the promoting
negligence culture and arts
and of the country,
production of having Hiraya
the company. Totes promoted
and supported by
KEY the government CHANNELS
RESOURCES in its initiatives.
Customers want
Our key products that can
resources be found or are
include the available through
human different social
resources or media sites and e-
labor of our commerce sites.
tailors and the The transaction is
indigenous easier, and
people in inquiries are

crafting entertained faster.

traditional and It is more cost-
cultural cloth. efficient since the
In addition to audience and
this is the scope of these
significant sites are wider
contribution even with different
and geographical
willingness of targets.
the bicycle Advertisements
owners, can also be placed
vulcanizing through these
shops, and applications and
bicycle shops reach customers
to give out and better. Also, the
donate their proponents will
inner bicycle directly sell the
tubes. product to peers
and influence the
As for physical use of an eco-
resources, the friendly tote bag.
sewing
machines
from tailors
are also
important in
creating the
model of the
bag, since
some find it
challenging to
integrate
rubber into
cloths. The
company does
not need many
physical and
financial
resources
since the bag
can be
produced
under the

small capital
requirements.
COST STRUCTURE REVENUE STREAMS
The major drivers of cost are As a start-up, the company heavily relies on its sales
the cost of labor and the cost of tote bag products as its main source of revenue.
of traditional and cultural Also, repairs that are not due to the company’s
clothes. Since it is handmade negligence or production will have a service fee
and the bag's made through when the customer needs to mend the damage of
manual labor, it remains to be the bag. The company also caters to projects of bulk-
the driver of the selling price produced tote bags and a source of other project
of the bag. revenue.
The cost structure includes

labor cost, the raw materials
(cultural cloth), and for the
packaging cost.
Table 4.1. Hiraya Arts. Ph Business Model
Organizational Structure
Figure 4.1 Organizational Chart of Hiraya Arts. Ph
Hiraya Arts. Ph has an agile and lean organizational structure, wherein

every member of the partnership has an equal and assigned tasks of duties that
are crucial in the operations of the business.

The company has a procurement and manufacturing officer for the main
production process, marketing, and sales officer for making sure to reach and
communicate with our market and open communications for feedback and further
innovation and development, finance officer to monitor our sales and expenses, as
well as the human resource officer to manage all the employees and the laborers
of the company. In addition, a quality control officer is the one who is tasked in
ensuring that all products are produced within the standard of the company, and
finally, a distribution and logistics officer who is assigned to make sure that parcels,
orders, and all distribution channels have stock, or the orders are delivered safely
and conveniently at the customer's doorstep.
Management and Personnel

Management and Personnel in this part is where the job descriptions and
the job qualifications of every employee in the Hiraya Arts.Ph are thoroughly
discussed and mentioned. This is to assure every employee is taken care of and
that the company has its policies and standards in employees and the
organization.
• Procurement and Manufacturing Officer
The Procurement and Manufacturing Officer is in-charge of buying and

collating all the raw materials needed before sending them for production and
manufacturing to the tailors. Part of the job is ensuring that the raw materials are
thoroughly sanitized and organizing the needed number of inventory and materials
for the tote bags. In addition, this officer has the duty to negotiate prices and costs
with the laborers and producers of the raw materials.
Employees and management of this department must be a Bachelor’s

Degree Holder with a degree of Business Administration or anything related. Must
be knowledgeable in MS Excel for inventory and listing of procurement. Employees
must have high skills in negotiation and communication, as they will face the
suppliers and the manufacturers of the raw products. He or she must be diligent
and flexible. 18-40 with experience, any gender. He or she must be willing to be
trained to familiarize themselves with the raw materials and standards set by the
company.
• Marketing & Sales Officer
As a marketing and sales officer in the company, their responsibility is to

help to market the product, design and implement marketing designs. They are
also tasked to demonstrate the product and services to the clients and to the

customers and make the information about the products readily available for
everyone.
A marketing and sales officer is required to be a Bachelor’s Degree holder

with a degree in Business Administration or any related field, preferably a
Marketing major. Marketing is one of the best ways to get potential customers to
buy products or services. This job requires skills and techniques in selling the
product and service to customers. He or she must be computer literate, able to
manage social media and e-commerce websites like Shopee and Lazada. He or
she must be good in communication, assertive, able to make advertisements,
interpersonal skills, knowledge of Canva and able to multitask. No experience is
required, and fresh graduates are welcome to apply. All genders within the age of
18-45 are highly encouraged.
The marketing officer is also able to handle complaints and feedback from all lines
of communication (social media, feedback from e-commerce sites etc.). He or she
must have empathy, excellent communication skills, patience, problem-solving
skills, and have superior product knowledge of Hiraya Tote bags. A high self-
control is required to avoid arguments with the customers. He or she also must
have critical thinking skills to observe patterns and even recommend solutions,
improvements and both positive and negative feedback for the different
departments based on the complaints and suggestions by the customers.
• Finance Officer
Financial officers oversee the financial transactions of a company. These

professionals are tasked with developing budgets, monitoring transactions, and
preparing financial reports. They possess strong accounting and analytical skills.
This work will help budget expenditures on the use of materials and labor of
products, as well as develop the maintenance of employees' salaries and
monitoring of transactions, and preparation of financial reports. The qualification
of a finance officer is accounting professionals who are responsible for the financial
well-being of an organization. The finance officer may advise the corporate office
to determine how and where the company assets are acquired and allocated.
The Finance officer must be a degree holder of Business Administration

majoring in Finance, or a graduate of courses in Accounting Technology and
Accountancy, preferably a Certified Public Accountant. Fresh graduates are
accepted, and the National Certificate II holder for Bookkeeping is also an edge
for this position. At least 2 years of experience is required, since this job oversees
the overall financial statements and reports of the company.

• Human Resource Officer
Human Resource Officer is the one supporting the development and

implementation of HR initiatives. They will be handling the workforce and overlook
the payroll system, compensation, benefits and practice other HR functions or
activities. HR plans and executes roles in a business to avoid problems in the
company and assist with employee performance management. To be qualified as
an employee of human resource, a person must be a graduate of business
management with Human Resource as a major and experiences to handle
employees. Other qualifications for HRO are decision making skills, knowledge of
the Labor Code, and being able to resolve conflicts.
• Quality Control Officer
Quality control is one of the most important in an organization that works

well to ensure product quality and does not change the quality that customers like.
He or she is the who will be checking and controlling the quality of the products
and to fully identify the rejected products to the one who will decide what to
showcase in the market.
The people who are qualified for this job are those who have experience in
the field of quality control in a manufacturing company. Additional qualifications
required are: detail-oriented, patient, has knowledge or experience of sewing bags
or the like, and able to recommend further improvements to the tote bags. Can or
cannot be a degree holder but is willing to be trained and willing to learn the
components and process of producing the tote bags. In addition, a person who is
willing to undergo short courses for quality control management and other related
certification on quality management.
• Distribution and Logistics Officer (DLO)
A Distributions & Logistics officer is to arrange the operation and distribution

of goods to ensure the right products are delivered at the right time and location of
delivery and the cost of our product. They need to control the stocks and interact
with the material supplier and product manufacturer. In this job, a bachelor’s
degree is required relating to any business major or preferably has experience and
majors in logistics, supply chain management or operations management. This job
requires time management skills, inventory management, detail-oriented and
overall monitoring of the delivered parcel to customers.
• Tailors
Tailors will be the ones who will make the product into life by sewing
together the raw materials gathered. The qualification and requirement for this

work is not too demanding as we only need a tailor or a sewer who knows how to
use a sewing machine and can-do manual sewing. No need for a bachelor’s
degree and we will only need someone who has experience. Either a male, female
or any gender is welcome and accepted with the age of 18 years old and above.
Intellectual Property
To protect the idea and innovation made by the company, a design patent
or an industrial design patent will be applied through the Intellectual Property Office
of the Philippines. Filling out the Patent Application form to describe the title,
purpose, nature, brief description, how the idea or product was invented, the
drawing of the bag, and the specific scope of claims of the product. Patenting
Hiraya Tote bags will cost around an estimate of Php 6,000 or 100 USD.

CHAPTER 5: FINANCIAL STUDY
In this section, the capital requirement, 5-year projections of the different

financial statements of the company will be shown, analyzed, and interpreted. The
template, formula and spreadsheet provided by the FEU-IABF Business Plan
Committee was used for the computation of each subsection below.
Capital Requirements
REQUIRED FUNDING: AMOUNT IN PHP REQUIREMENTS
PROJECT EXPENSES 31,700.00 From 2|Project Expenses.

CAPITAL From 3|Capital
EXPENDITURES 211,000.00 Expenditures.
INITIAL DIRECT COSTS
AND OPERATING From 6|Production &
EXPENSES 266,132.08 Operating Expenses.
OTHER CONTINGENCIES 15,000.00
SOURCE OF FUNDING AMOUNT IN PHP
EQUITY 523,832.08
LOAN 0
TOTAL FINANCING 523,832.08
TERM OF LOANS (IN YEARS) 5.00
ANNUAL INTEREST RATE 12%
Withdrawals of Partners AMOUNT IN PHP
Year 1 -
Year 2 91,000.00
Year 3 91,000.00
Year 4 105,000.00
Year 5 -
© 2021 FEU-IABF Department of Accountancy. All rights reserved
Table 5.1. Financing Plan of Hiraya Arts. Ph
As Hiraya Arts.Ph is a starting business, the capital requirements for it will

be equally coming from the 7 partners. The resources of this capital will be equally
shared by the 7 partners from their own money and own pockets to finance the
business. For the first business year, the total amount of capital investment will be
PHP 523,832.08 (Table 5.1) and the 7 business partners will equally contribute an

amount of PHP 74,833.15. The company will not file for any type of loan to finance
the operations of the business. This is to see if the company will be able to gain
profits from selling Hiraya Tote bags.
Hiraya Arts. Ph will not add any investments for the next years since the
goal of the company is to maximize the initial investments and eventually make
profits from it and circulate back the money in the business. The proponents also
considered that additional investments mean that the cash is lacking to finance the
business operations, hence testing the initial investments to see if it would be
better off than adding yearly investments. Gradually, the partners will start
withdrawing money in Year 2 to Year 4. These are agreed periods as a form of
cash outs and compensation share, respective to the amount of sales and
expenses for each period. For the breakdown of the project expenses, capital
expenditures, cost, and other contingencies, see Appendix 9 & Appendix 10.

Statement of Financial Position
Table 5.2. Statement of Financial Position of Hiraya Arts.Ph

In this part, the current assets, and non-current assets of the Hiraya Arts.Ph
are listed and recorded with its total asset amount per year. Aside from the assets,
the liabilities and partner’s equity are also listed. The cash and cash equivalents
are the amount of all cash and other assets that are convertible to cash. Hiraya
Arts.Ph has a continuous increase in their assets that means that the company is
growing, and our sales are continuously improving over the years. The company
has no accounts receivable or other current assets. Over the years, the assets
acquired by the Hiraya Arts.Ph will depreciate and will also reflect on the financial
position of the company.
In addition, the company has no listed accounts payable and other liabilities
since the company did not plan to loan money or have debts. Overall, the company
has an increasing amount of cash and cash equivalents, that can be traced back
to the increasing yearly sales. The net worth of the company also increases yearly,
starting from Php 624,171 in year 1 and ending up with a net worth of Php
1,172,656 in Year 5.

Statement of Comprehensive Income
Table 5.3 Statement of Comprehensive Income/Profit or Loss Statement of

Hiraya Arts.Ph

In Hiraya Arts. Ph’s first year of business operations, the company is

projected to have a net profit of Php 100,339. The proponents perceived this as a
good start for the company. In the second year, the company will profit amounting
to Php 151,621 which increased by Php 51,282 as compared to the profit of Year
1. This is because the company started to focus on sales and did not acquire any
additional assets or additional expenses. In Year 3, the company’s profit increased
to Php 186,456, with a Php 37,835 increment compared to the previous year. In
the long run, the net profit increased to Php 228,064 and Php 266,344 in years 4
and 5, respectively. Despite the increase in operating expenses from years 1 to 5,
the company is projected to gain increasing profits each year, which is a good
indication that the company is doing well in settling the expenses and gaining
profits at the same time from selling Hiraya Tote bags.
Aside from cash outs, each employee or officer will receive compensation
for their assigned workdays in the office and field to fulfill the duties and
responsibility needed for the operations of the company. For the breakdown of
salary and wages, See Appendix 11.
Statement of Changes in Equity
Table 5.4. Statement of Changes in Equity of Hiraya Arts.Ph

In the Statement of Changes and Equity, our starting capital is

PHP523,832.08. It is divided into 4 parts which is project expenses of
PHP31,700.00, capital expenditures of PHP211,000.00 initial direct cost and
operating expenses of PHP266,132.08 and other contingencies of PHP15,000.00.
Hiraya Arts. Ph showed a consistent increase in the total equity every end of the
year, with 9.7% of increase in year 2, 14.38% in year 3, 15.71% in year 4, and
29.39% in year 5.
Despite the consistent increase in our withdrawals from Year 2 to Year 4,

the equity remains increasing over the years. The proponents would like to
perceive the effect of issuing initial investments as to fully sustain and to meet the
future needs of the company.
Statement of Cash Flows
Table 5.5. Statement of Cash Flows of Hiraya Arts.Ph

Hiraya Arts. Ph has an attractive cash flow with its yearly ending cash
balances that increases significantly every year. The net cash flow of Year 1 to 5
is affected by the operating activities that are also increasing every year. However,
the company has the highest capital expenditure in Year 1, for the company
acquired assets for the first year of business operations. See the breakdown of the
Year 1 capital expenditures in Appendix 10. The equal withdrawals of the 7
partners are agreed upon Year 2 to year 4, respective to the sales and capital
expenditures.
Financial Ratios and Analysis

Payback Period
Payback Period
No. of Years to Recover Initial Investment 2.30
Table 5.6. Payback Period of Hiraya Arts.Ph
For the Hiraya Arts.Ph, 2.30 years or 2 years and 3 months is the total
number of years needed to recover the initial capital investment used to start the
business. The total invested capital for the first year of the business amounts to
PHP 523,832.08. For the first business year, the money invested has not yet
recovered. The same goes with the second business year of the Hiraya Arts.Ph.
However, upon reaching the third year of operations, assuming that the company
is able to sell beyond or at the break-even point, the invested money will be fully
recovered in the third month of the third year of business operations. Between the
Total Sales in Pesos to Break Even, the amount of the invested capital lies
between the 2nd business year and the 3rd business year or 2 years and 3
months.
NPV
Table 5.7 NPV Calculation of Hiraya Arts. Ph

Hiraya Arts.PH used the NPV formula in order to compute the net present
values as guided by the calculation steps of Gaur (2019). The formula on solving
the present value of future cash flow has a discount or interest rate of 10%, and
the series of cash flows from year 1 to year 5.
The result of the NPV formula from the table above is Php 884,649.06
which is the sum of the series of present values of cash flows. In order to compute
the final NPV, the present value is subtracted to the investment value or the initial
capital requirement for the company to operate. The net present value or time
value of the investment is equal to Php 365,816.98
IRR
IRR
Year
0 -518,832.08
1 449,449.00
2 101,172.00
3 134,964.00
4 164,525.00
5 287,754.00
IRR 40%
Table 5.8 IRR of Hiraya Arts.Ph
Using the IRR function of Microsoft Excel, the IRR or internal rate of return
of Hiraya Arts.Ph is 40% According to the external consulting accountant of the
group, an IRR of 40% is not to low nor too high, and it is already appealing and
reasonable for investors. This makes the company appealing for investors since
the company has a good percentage of IRR, and investments will most likely return
to investors. The result of IRR is one of the positive indications that the Hiraya Tote
bags are profitable projects or products.

Profitability Ratios
The following are the profitability ratios listed and recorded by the FEU-IABF
from their given Business Plan Guidelines and Templates. It is to show and to
calculate the profitability of Hiraya Totes.
Profitability (Return) Ratios Year 1 Year 2 Year 3 Year 4 Year 5
Return on sales (Profit/Sales) 14% 19% 21% 23% 24%
Return on equity (Profit/Equity) 16% 22% 24% 25% 23%
Return on assets (Profit/Asset) 16% 22% 24% 25% 23%
Asset turnover (Sales/Average Assets) 237% 124% 122% 117% 105%
Percentage of EBITDA to gross

revenue (EBITDA/Sales) 35% 45% 49% 52% 55%
Table 5.9. Profitability of Hiraya Arts.Ph

Return on sales
The following are the profitability ratios listed and recorded by the FEU-IABF
from their given Business Plan Guidelines and Templates. For the first profitability
ratio, return of sales will be computed as Profit divided by sales yearly. The Hiraya
Arts.Ph Return on sales is computed as follow:
RETURN ON SALES = PROFIT / SALES
Return on
Profit Sales ROS Sales
YEAR 1 ₱ 100,339 ₱ 738, 750 13.58% 14%
YEAR 2 ₱ 151,621 ₱ 814,472 18.62% 19%
YEAR 3 ₱ 189,456 ₱ 897,955 21.10% 21%
YEAR 4 ₱ 228,064 ₱ 989,996 23.04% 23%
YEAR 5 ₱ 266,344 ₱ 1,091,470 24.40% 24%
Table 5.10. Return on sales of Hiraya Arts.Ph
Hiraya Arts. Ph shows that the company is efficiently generating profits from
its sales. A positive and increasing percentage indicates that the company uses its
resources because they can convert their sales into profits. The percentage of it is
also an indication that the company is profitable by the given percentages yearly.

Return on Equity
For the computation of Return on Equity, profit divided equity. The profit and
equity of the company also changes yearly.
RETURN ON EQUITY = PROFIT / EQUITY
Return on
Profit Equity ROE Equity
YEAR 1 ₱ 100,339 ₱ 624,171 16.08% 16%
YEAR 2 ₱ 151,621 ₱ 684,792 22.14% 22%
YEAR 3 ₱ 189,456 ₱ 783,248 24.19% 24%
YEAR 4 ₱ 228,064 ₱ 906,312 25.16% 25%
YEAR 5 ₱ 266,344 ₱ 1,172,656 22.71% 23%
Table 5.11. Return on equity of Hiraya Arts.Ph
Return on Equity is the return earned by the Hiraya Arts.Ph on their equity
capital. It shows that the company can efficiently generate profit. The range of the
ratios is relatively high, that is why it is a good indication that the business is doing
well. However, in year 5 of the business, there is a decrease in the percentage of
the ROE since the partners have a high amount of withdrawals at the end of the
4th year and the assets have depreciated resulting in a lower return on equity in
the year 5.

Return on Assets
To calculate Return on Assets, Profit will be divided by the Asset.
RETURN ON ASSET = PROFIT / ASSET
Return on
Profit Asset ROA Asset
YEAR 1 ₱ 100,339 ₱ 624,171 16.08% 16%
YEAR 2 ₱ 151,621 ₱ 684,792 22.14% 22%
YEAR 3 ₱ 189,456 ₱ 783,248 24.19% 24%
YEAR 4 ₱ 228,064 ₱ 906,312 25.16% 25%
YEAR 5 ₱ 266,344 ₱ 1,172,656 22.71% 23%
Table 5.12. Return on assets of Hiraya Arts.Ph
The ratios are interpreted as a good indication that Hiraya Arts.Ph is

profitable enough as they get to have an upward profit. The ratio is favorable to
everyone as it shows that Hiraya Arts.Ph is able to manage its assets and is
producing an increasing amount of income. The decrease in the percentage
indicated in the year 5 is because of the accumulated depreciation of the assets of
Hiraya Arts. Ph and the withdrawals made by the partners in the year 4.

Asset Turnover
For the Asset turnover of the Hiraya Arts.Ph, it will be computed as follow:
ASSET TURNOVER = SALES / AVERAGE ASSET
Average Asset
Sales Asset AT Turnover
YEAR 1 ₱ 738,750 ₱ 312,085.5 236.71% 237%
YEAR 2 ₱ 814,472 ₱ 654,481.5 124.45% 124%
YEAR 3 ₱ 897,955 ₱ 734,020 122.33% 122%
YEAR 4 ₱ 989,996 ₱ 844,780 117.19% 117%
YEAR 5 ₱ 1,091,470 ₱ 1,039,484 105.00% 105%
Table 5.13. Asset turnover of Hiraya Arts.Ph
Hiraya Arts.Ph generated a higher asset turnover ratio that indicates that
the company is making and producing revenues from the assets. From Year 1 to
Year 5, the ratio decline from 237% in year 1 to 105% in year 5. The assets
acquired in year 1 fully depreciated thus exhausting the estimated useful life of 5
years. In addition is the withdrawal happened at the end of Year 4 and the
continuous increase in inventories, making ROA decrease. The decrease in ROA
does not necessarily mean that the company is not doing well but has many factors
that may affect the ratio for every period.

Percentage of EBITDA to Gross revenue

To compute the EBITDA to Gross Revenue, the following formula will be
used:
PERCENTAGE OF EBITDA TO GROSS REVENUE = EBITDA / SALES
EBITDA = earnings before interest and tax + depreciation + amortization)

/Sales
PERCENTAGE OF EBITDA
EBITDA Sales TO GROSS REVENUE
YEAR 1 ₱174,786 ₱ 492,544 35.49% 35%
YEAR 2 ₱ 243,161 ₱ 544,839 44.63% 45%
YEAR 3 ₱ 294,608 ₱ 602,667 48.88% 49%
YEAR 4 ₱ 346,085 ₱ 666,611 51.92% 52%
YEAR 5 ₱ 402,126 ₱ 737,315 54.54% 55%
Table 5.14. EBITDA of Hiraya Arts.Ph

Percentage of EBITDA to Gross revenue measures the Hiraya Arts.Ph
operating profit as a percentage of the sales. In computing the EBITDA, what the
company needs to consider are its earnings before the deductions of interest,
taxes, depreciation, and amortization under the operating profit. A high EBITDA
means that the operating expenses of the company are smaller, relative to the
earned revenue, hence resulting in a more profitable operation of the company.
This is helpful for the company to gauge the effectiveness of the Hiraya Arts.Ph
cost-cutting efforts.

Liquidity Ratios
Liquidity Ratios Year 1 Year 2 Year 3 Year 4 Year 5
Current Ratio (Current asset/Current

liability) n/a n/a n/a n/a n/a
n/a n/a n/a n/a n/a

Quick Ratio ((Cash +
Receivables)/Current liability)
Table 5.15. Liquidity Ratio of Hiraya Arts.Ph
There are 2 ways to get the liquidity ratio of the company. First is the current
ratio wherein its formula is Current Ratio = Current Assets/ Current Liabilities. We
used the current ratio as it is the simplest liquidity ratio to use, to calculate and to
interpret the results. For the first business years of Hiraya Arts.Ph, its current
assets amounted to ₱ 454,171.00, and its current liabilities is ₱0. For the
succeeding year, the current assets of the company rose to ₱555,792.00, ₱
691,248.00, ₱ 856,312.00 and ₱ 1,144,656.00 respectively and its current
liabilities stays the same at no amount since we do not have any accounts payable,
debts or even loans to pay.
For the Quick ratio, the formula to use is Quick ratio = Cash + Accounts
Receivables + Marketable Securities / Current Liabilities. For the first business
year, the cash of Hiraya Arts.Ph amounted to ₱449,449.00 and the company has
no accounts receivables, market securities and even current liabilities. The same
situation of cash receivables, market securities and current liabilities remains at no
amount until the 5th year of the business. What is present with the succeeding
years is the changing amount of cash from ₱550,621.00, ₱685,585.00,
₱850,110.00, and ₱1,137,864.00 respectively.
With this, since the company has no amount of any liabilities and the other
factors to compute, the liquidity ratio will remain as blank. It only means that the
company has no outstanding debt or any liabilities to pay. Hiraya Arts.Ph shows
no short-term obligations, that is why it has no liquidity ratio recorded and listed.

Activity Ratios
Accounts Receivable Turnover
Accounts Receivable Turnover = Net Credit Sales / Average

Accounts Receivable
= 0/0
= undefined
Since Hiraya Arts. Ph will not sell tote bags on credit, there will be no credit
sales nor accounts receivable to be taken on account. Hiraya Arts.Ph will fully
operate and only make cash transactions.
Working Capital Ratio
Working Capital Ratio= Current Assets/ Current Liabilities
= 406,711/ 0
= undefined
Same with accounts receivable turnover, Hiraya Arts.Ph will not have a working
capital ratio since the company has no loans or any form of liabilities.
Solvency Ratios
Equity ratio and Leverage ratio are used to analyze the firm’s equity
structure and how Hiraya Arts.Ph acquires or finances its resources. The following
are the computed Equity Ratio and Leverage Ratio:
Solvency
Ratios Year 1 Year 2 Year 3 Year 4 Year 5
Equity Ratio
(Equity/Total
Assets) 100% 100% 100% 100% 100%
Leverage Ratio
(1-Shareholders'
Equity Ratio) 0% 0% 0% 0% 0%

Table 5.16. Solvency Ratio of Hiraya Arts.Ph
Under solvency ratio, we have the equity ratio and Leverage ratio. The use
of equity ratio allows the partners and the future investors to see the company’s
assets and that Hiraya Arts.Ph have been generating through issuance of equity
shares rather than having debts.
Equity Ratio
EQUITY RATIO = (EQUITY/TOTAL ASSETS)
Equity Total Assets Equity Ratio
YEAR 1 ₱ 624, 171 ₱ 624,171 100.00%
YEAR 2 ₱ 684,792 684792 100.00%
YEAR 3 ₱ 783,248 783248 100.00%
YEAR 4 ₱ 906,312 906312 100.00%
YEAR 5 ₱ 1,172,656 1172656 100.00%
Table 5.17. Equity Ratio of Hiraya Arts.Ph

The equity ratio is calculated by dividing the total shareholders' equity by
the total assets of the company. Hiraya Arts.Ph Total assets for the first year is ₱
624,171.00 divided by the shareholders equity which is ₱ 624,171.00 as well. The
calculated equity ratio of the company is 1 which will be converted to percentage
allowing the company to have 100% equity ratio. For the succeeding years, the
same event occurred wherein the company’s partners equity is equal to its assets
making its equity ratio 100%. ₱ 684,792.00, ₱ 783,248.00, ₱ 906,312.00 and
₱1,172,656.00 are the amount of partners' equity and total assets for the year

second up until the fifth business year. Since Hiraya Arts.Ph has reached 100%
equity ratio, it means that more assets have been financed with equity rather than
debt.
Leverage Ratio
LEVERAGE RATIO = 1-SHAREHOLDERS EQUITY

Shareholders Equity Leverage Ratio
YEAR 1 1 1 0.00%
YEAR 2 1 1 0.00%
YEAR 3 1 1 0.00%
YEAR 4 1 1 0.00%
YEAR 5 1 1 0.00%
Table 5.18. Leverage Ratio of Hiraya Arts.Ph
For the leverage ratio, it is often used to check how much capital and equity
are in the form of loans or debt and to evaluate the company’s ability to meet
pending financial obligations. To compute the ratio, the formula to use is 1 minus
the shareholders equity ratio. For the year 1, it will be computed as 1 less the
shareholders equity ratio for the first year which is 100% where in it is equal to 0%.
The same thing will apply for the succeeding years. With Hiraya Arts.Ph, we do not
have any debts to pay or loans to pay, so its leverage ratio is 0% as our funds did
not come from any of the following.
It is clearly indicated that Hiraya Arts.Ph capital resources came from the
partner’s equity and investment and not in the form of debts and loans.
Break-Even Analysis
Table 5.19. Break-even Analysis of Hiraya Arts.Ph

For Hiraya Arts.Ph to achieve the breakeven point in their first year, they
should have sold approximately 3,270 units of Hiraya Totes with ₱ 490,543 in
sales. On average, Hiraya Arts. Ph must sell approximately 273 tote bags monthly
to break-even for Year 1. For the succeeding year, the company needs 3,252
yearly units of tote bags that is equivalent to 271 units of tote bags
monthly. Starting Year 3, the company needs to sell at least 263 tote bags
monthly, at least 258 tote bags monthly for Year 4 and at least 259 tote bags
monthly for Year 5. The break-even units for each year range from 258-273. It is
quite consistent that the company is able to break even continuously with such a
range that has a small margin of differences. There are other factors that affect the
break-even point for the Hiraya Tote bags including economic factors that are
beyond the control of the company.
Referring to the results of our survey, 258 to 273 tote bags are within the
range of units sold by our competitors, wherein they can even sell 500-700 units a
month. This is a good indication that the company’s breakeven point is achievable
and realistic.

CHAPTER 6: SOCIO-ECONOMIC STUDY
Since the pandemic started, many have lost their jobs and the people are
laid - off in their respective work making every industry succumb to survival. In
connection to this, the textile industry from the indigenous people is struggling as
well as the tailors, as there are no people going out of their houses to promote and
buy their crafts. With the help of the Hiraya Arts.Ph, indigenous people and tailors
will benefit from the company and from the product as they will be able to show
their skills, talents and crafts and will raise awareness that Filipino people can
create a product that are in-par with foreign similar products. The indigenous
people and the tailors will benefit from our product because it is a product that
needs human skills and through it, we will be giving them employment as well as
raising awareness for them to be known around the nation. We are not just here
to contribute to the economic state of our nation but to also contribute to the social
and environmental factors of us through giving employment, awareness to the
indigenous people and the hardworking tailors while contributing to the sustaining
of a greener world.
Indigenous People
One of the beneficiaries of the product is the indigenous people who are
putting their best work in creating Filipino fabric and crafts as part of their livelihood.
Even though Philippine products are fairly traded, crafts and products of the
indigenous people are hardly noticeable and only used as a costume. Because of
this, their sales are not that great, and they are striving every day. With the Hiraya
Totes, we will be able to help the indigenous people to create more textiles and to
showcase our very own crafts and fabrics. In connection to this, the meaning of
the word “Bayanihan” will soon revolutionize from helping other people carry
houses to various locations or giving a helping hand when someone is in need.
From those common scenarios of Bayanihan to giving a new light to it by lifting
other people’s business and promoting their traditions and creativity through
wearing and associating their textiles to our crafts. Hiraya Arts.Ph ensures that in
order to preserve indigenous textiles, we obtain the approval and authorization of
the indigenous community in regard to their traditions and the stories behind their
textiles. In this way we are not only acknowledging the efforts and talents made by
the indigenous people but also to raise awareness that they are still in the market,
and we must try our best to promote and use our own locally produced products.
The Tailors
Philippine tailors benefit from the product as well, since they are the ones
who will turn the product from a dream to a reality. As the tailors are also greatly
affected by the pandemic, Hiraya Totes gives them an opportunity to earn their

livelihood through their exemplary sewing skills. Thus, Hiraya Arts PH provides job
opportunities for those who are greatly affected by the pandemic. They have a
chance to earn a decent livelihood. They will be adequately compensated for their
sewing and tailoring skills, and they will benefit from the Hiraya Totes' revenue
through commissions. In connection with this, it will give us the chance to
contribute to the economic factor of the nation as we get to give employment to the
people and lessen the unemployment rate in the country. We may not be able to
hire a lot of people, but we hope that in the future, we will be able to provide more
job opportunities for them.

APPENDICES
Appendix 1: Breakdown of Monthly Sold Tote bags for Sold Tote Bags
Appendix 2: Geographical Location of Respondents

Appendix 3: Age and Gender of Respondents

Appendix 4: Perception of the materials used in Hiraya tote bags
Appendix 5: Use of the tote bags

Appendix 6: Preferred material of the tote bag
Appendix 7: Market’s preference on where Hiraya Tote bags will be offered

Appendix 8: Average price that people willingly pay for tote bags
Appendix 9: Breakdown of Project expenses

Appendix 10: Breakdown for Capital Expenditures
Appendix 11: Breakdown of salary and wages
Total Worked Minimum

Work days in a Wage Total
Position Interval month (Php) (Php)
HR Officer once a week 4 303 1212
Marketing
Officer once a week 4 303 1212
DLO thrice a week 12 303 3636
FInance Officer once a week 4 303 1212
Manufac and
Procurement twice a month 2 303 606
Quality Control twice a month 2 303 606
Total Monthly 28 8,484
Total Yearly 101,808

Appendix 12: Breakdown of Cost per Unit

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FAR EASTERN UNIVERSITY

Institute of Accounts, Business and Finance

HIRAYA TOTE BAGS

A Business Plan Paper

RECOMMENDATION AND APPROVAL SHEET

BUSINESS PLAN REVIEW PANEL

Approved by the Committee on Oral Defense with a grade of ________.

EDGAR BRYAN CATAQUIS RODOLFO SARINGAN JR

Accepted and approved in partial fulfilment of the requirements for the

EARL JOSEPH M. BORGOÑA, CPA, MBA, LLB

Ms. Ali Fornillos, graphic designer who dedicated time to be of service to

Hiraya tote bags P a g e | ii

The proponents dedicate this paper to all young entrepreneurs and

Hiraya tote bags P a g e | iii

Hiraya tote bags P a g e | iv

Hiraya tote bags Page |v

RECOMMENDATION AND APPROVAL SHEET ......................................................................................... I

DEDICATION ...................................................................................................................................... III

EXECUTIVE SUMMARY ....................................................................................................................... IV

TABLE OF CONTENTS .......................................................................................................................... VI

LIST OF TABLES ................................................................................................................................ VIII

CHAPTER 1: INTRODUCTION ................................................................................................................ 1

FORM OF BUSINESS .......................................................................................................................................... 1

CHAPTER 2: MARKET STUDY ................................................................................................................ 8

MARKET ANALYSIS ........................................................................................................................................... 8

CHAPTER 3: OPERATIONS AND PRODUCTIONS STUDY ........................................................................ 27

KEY BUSINESS OPERATIONS ............................................................................................................................. 27

Hiraya tote bags P a g e | vi

PRODUCT CONCEPT ........................................................................................................................................ 28

CHAPTER 4: MANAGEMENT STUDY .................................................................................................... 36

BUSINESS MODEL .......................................................................................................................................... 36

CHAPTER 5: FINANCIAL STUDY ........................................................................................................... 44

CAPITAL REQUIREMENTS ................................................................................................................................. 44

CHAPTER 6: SOCIO-ECONOMIC STUDY ............................................................................................... 64

Hiraya tote bags P a g e | vii

Table 2.1. Historical Demand of Competitor 1 located in Pampanga.

Table 2.2 Historical Demand of Competitor 2 located in Bulacan

Table 2.3. Historical Demand of Competitor 3 located in Laguna

Table 2.4. Summary of Historical Demand for all respondents

Table 2.6. Historical supply of Competitors 1, 2 and 3.

Table 2.7. Forecasted Supply of Competitors 1, 2 and 3.

Table 2.8. Demand and Supply Gap Analysis for Competitor 1

Table 2.9. Demand and Supply Gap Analysis for Competitor 2.

Table 2.10. Demand and Supply Gap Analysis for Competitor 3

Table 2.11. 5-year Projected Sales of Hiraya Tote bags

Table 2.12. SWOT analysis

Table 4.1. Hiraya Arts. Ph Business Model

Table 5.1. Financing Plan of Hiraya Arts. Ph

Table 5.2. Statement of Financial Position of Hiraya Arts.Ph

Table 5.3 Statement of Comprehensive Income/Profit or Loss Statement of

Hiraya tote bags P a g e | viii

Table 5.4. Statement of Changes in Equity of Hiraya Arts.Ph

Table 5.5. Statement of Cash Flows of Hiraya Arts.Ph

Table 5.6. Payback Period of Hiraya Arts.Ph

Table 5.7 NPV Calculation of Hiraya Arts. Ph

Table 5.8 IRR of Hiraya Arts.Ph

Table 5.9. Profitability of Hiraya Arts.Ph

Table 5.10. Return on sales of Hiraya Arts.Ph

Table 5.11. Return on equity of Hiraya Arts.Ph

Table 5.12. Return on assets of Hiraya Arts.Ph

Table 5.13. Asset turnover of Hiraya Arts.Ph

Table 5.14. EBITDA of Hiraya Arts.Ph

Table 5.15. Liquidity Ratio of Hiraya Arts.Ph