THOUGHT-Y BAGS

A Business Plan

Submitted and presented to the

Faculty of Accountancy, Business and Management (ABM)

As partial fulfillment for the 2nd Semester, SY 2022-2023 in Business Ethics

Submitted by: G12 ABM – B

Submitted to:

MR. CHRISTIAN CASINO

Business Ethics Teacher

Date Completed

June 2023
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Executive Summary

A partnership between seven individuals has been formed to start a new business called

“Thought-y Bags” that will sell tote bags for future customers. According to Borromeo, Nathalie

Q, Aboga, Maricar, Sulapas, Leonilyn, Paraiso, Joreli, Nuguit, Mark Joshua, San Pascual, Vince

Andrue, and Vibal, Albert whose creative idea was put into action, the business is expected to do

well as the product is very well accepted around the are that they ought to launch it.

The seven individuals that leads this business have developed numerous designs that will

make customers interested about the product. The designs mainly revolve around the minimalist

yet colorful vibes that is very in-trend nowadays. The business owners plan to acquire suppliers

that will maintain the nature of the parts to be used in the product to assure consumers the

safeness of it.

Distribution of the “Thought-y bags” products will start at Kasiglahan Village and

Southville 8C to ensure that the business will be well taken care of as these places are near the

business owners’ living space.

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Table of Contents

Executive Summary........................................................................... 2

Background and History .................................................................... 4

Description of Products ..................................................................... 4

Market Description ............................................................................ 5

Competition........................................................................................ 5

Marketing Strategies.......................................................................... 6

Manufacturing Plans.......................................................................... 6

Financial Projections.......................................................................... 7

Income Statement ..................................................................... 9

Cash Flow Analysis.................................................................. 11

Balance Sheet............................................................................ 12

Financial Ratios ........................................................................ 14

Contingency Plans ............................................................................. 15

Appendices......................................................................................... 16

Resumes of Management.......................................................... 16
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Background and History

One could argue that the 1960s marked the transition of tote bags from being simple

everyday bags to becoming vibrant and fashionable accessories. In the subsequent decades, tote

bags increasingly became utilized as advertising tools for businesses. The bag gained significant

popularity in the 1980s, along with its expanding range of uses. Tote bags have gained significant

popularity in recent years due to their practicality, strength, and versatility. Whether you're

heading to the grocery store or running errands, tote bags are always reliable and

accommodating. With this, the people behind the making of “Thought-y Bags” gather around

and come up with the idea of making their own business about Tote bag and make their own

unique designs.

Description of Products

Tote bags are generally open at the top, allowing easy access to the contents without the

need for zippers or closures. Are known for their roomy interior, offering ample space to carry a

variety of items such as groceries, books, laptops, or everyday essentials. Tote bags feature long,

sturdy handles that can be comfortably carried over the shoulder or in hand. The people behind

the business intend to make the product “Thought-y Bag” customable and also intends to make

the designs mostly minimalistic and colorful yet still elegant and fresh to the eyes.

The owners also intend to make the product eco-friendly. Made from eco-friendly

materials or are reusable, serving as an environmentally conscious alternative to single-use

plastic bags.
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Market Description

The designs of the tote bags that “Thought-y Bag” will launch, falls into two different

uses of the product. The ones for Light Duty Scenes Purposes and one for Heavy Duty Scenes

Purposes. This business plan will look at these two markets separately.

Light-Duty Scenes Purposes: This basically consists of Tote bags that are not so big in

size and has a very elegant look on them which is specifically tailored for light weight duties.

Some examples are tote bags for school purposes, for wandering around and/or for shopping

purposes only. They are not meant for any heavy weight duty but is made only for aesthetic

theme uses only that helps the customers feel as beautiful and elegant as the bag.

Heavy-Duty Scenes purposes: These tote bags, however, is tailored and made for heavy

weight duties such as for traveling and can also be used whenever customers wants big stuffs to

be moved around in one place to another. Although they aren’t made to be aesthetically pleasing

to the eyes, the bags will also have unique designs attached onto them that will make the

customers want to use it for such heavy duties without feeling down about its looks.

Competition

Tote bags are fashionable products that experience frequent changes in demand due to

evolving fashion trends and customer preferences. They can be made from a variety of materials,

including cloth, leather, plastic, and even paper. Tote bags serve as secondary packaging and are
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open bags with parallel handles for easy carrying. The growth of the global tote bags market is

influenced by the expansion of the packaging and retail industries. There is a rising trend towards

using sustainable materials like kraft paper, jute, and fabrics in tote bag manufacturing.

AVON Philippines Inc., VF Corp., Samsonite International, Adidas, and other companies

are significant competitors in the market. These companies compete based on key factors such as

pricing, product quality, functionality, and their presence in retail outlets.

The weakness of these products is in the lack of variety. None of these companies

produce or market a Heavy-Duty Scenes purposes tote bags that are made from eco-friendly

materials.

Marketing Strategies

Entrepreneurs are interested in giving customers access to their products. We can set up a

box near our entrance where customers may leave their feedback, or we'll set up a forum where

they can do so. They will be asked to provide any feedback for our items as well. Give away free

stuff; emphasize creativity; emphasize service; emphasize speed of market entry; and emphasize

fun. The owners behind the idea also intends to invest in commercials. In doing so, wide range of

people can be aware about the business and therefore help us gain more profit.

Manufacturing Plans
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Because the owners of the product do not have any facilities available where they can

produce the product, the entrepreneurs intend to rent a place where they can facilitate and

manufacture safely and in accordance to every law made for businesses.

The machineries needed to make the product such as the sewing machines will be properly

picked and distributed for the workers to easily produce units of them. The threads and paints

that will be used will be bought from trusted suppliers which are recommended by past

entrepreneurs who are faithful to delivering good materials for the owners’ workers to use.

The workers will be hired according to the needs of the business. Properly trained with

amazing skills and talent will be the workers and employees of the business. Those who can

maintain calmness and produce amazing and creative ideas will be hired in accordance to the

business’ needs.

Financial Projections

We are pleased to present the financial statements of “Thought-y Bags” for the months of

January to December , reflecting the initial operations of our business. These statements provide

an overview of our financial position, performance, and cash flows during this early stage. As a

newly established company, our financial statements serve as a snapshot of our initial activities

and are crucial in assessing our progress, evaluating our financial health, and making informed

decisions moving forward.

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It is important to note that as a startup, our financial statements may be limited in terms of

historical data and comparative analysis. However, they offer valuable insights into our initial

financial standing and provide a foundation for future reporting and analysis as we

continue to grow.

We have prepared these financial statements in accordance with generally accepted

accounting principles. These principles ensure the accuracy, consistency, and comparability of

our financial information. Such as income statements, cash flow statements, balance sheets, and

estimated financial ratios.

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Thought-y Bags

Income Statement

January 2022 – December 2022

Net Sales P330,000.00

Less: Cost of Goods Sold P213,170.00

Gross income P116,830.00

Operating Expenses

Salary P13,000.00

Labor P15,000.00

Utilities P7,000.00

Insurance P3,500.00

Sales Promotion P20,000.00

Delivery Transportation P12,700.00

Miscellaneous P2,000.00
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Total Expenses P60,200.00

Net Income Before Taxes P56,630.00

Less Income Taxes P10,000.00

Net Income After Taxes P46,630.00

Assumptions:

1. Net sales based on price of P109.00 per

unit,

17,130 units sold in Kasiglahan Village 3,426 units each month

23,110 units sold in Southville 8C 4,622 units each month

2. Cost of goods sold includes cotton fabric, canvas strap, scissors/ rotary cutter, sewing

machines, threads and iron.

3. Salary will be drawn by the owners/managers in the second year.

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Thought-y Bags

Balance Sheet

December 31, 2022

Current Assets

Cash P3,000.00

Accounts Receivable P20,000.00

Inventory P37,500.00

Pre-Paid Expenses P1,500.00

Total Current Assets P62,000.00

Fixed Assets

Building P50,000.00

Equipment P23,000.00

Gross Fixed Assets P73,000.00

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Less Accumulated Depreciation P13,500.00

Net Fixed Assets P59,500.00

Total Assets P75,500.00

LIABILITIES AND OWNER’S EQUITY

Liabilities

Current Liabilities

Accounts Payable P300.00

Accrued Payables P7,000.00

Total Current Liabilities P7,300.00

Long Term Liabilities

Mortgage payable P3,000.00

Total Liabilities P10,300.00

Owner’s Equity P65,200.00

Total Liabilities and Owner’s Equity P75,500.00

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Thought-y Bags

Financial Ratios

December 31, 2022

Return on equity = Net Profit before Taxes = P56,630.00 = 86.86%

Net Equity P65,200.00

Current ratio = Current Assets = P62,000.00 = 3.58

Current liabilities P17,300.00

Quick Ratio = Current Assets – Inventory = P62,000.00 – P37,500 = P24,500.00 = 1.42

Current Liabilities P17,300.00 P17,300.00

Debt to Equity = Total Liabilities = P30,300.00 = 0.67

Net Equity P45,200.00

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Contingency Plans

Although "Thought-y Bags" had undergone meticulous planning to establish its strategic goals,

there is a possibility that these objectives may not be achieved. To address this, the owners have

chosen to establish an acceptable range for meeting sales and financial targets. Within this range,

a deviation of up to 20% below the anticipated sales and projected returns on assets will be

considered acceptable. However, if the sales objectives and returns on investment fall below 80%

of the projected figures, specific actions will be implemented. These actions encompass:

In cases of inadequate business liquidity: "Thought-y Bags" will take measures to

address the issue. They will assess their accounts receivable procedures to ensure that payment

terms are fair and that payments are being received promptly. Additionally, they will review cash

flow projections to identify any unforeseen cash outflows or expenses that may be negatively

impacting the financial stability of the company.

In cases where business is barely surviving: The business shall seek out strategic

partnerships or collaborations with other businesses or organizations that can provide access to

new markets, resources, or expertise. This can help create synergies, reduce costs, and increase

market reach.
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In cases of bad sales in business: The business will develop a realistic and

comprehensive financial plan and forecast for the future. Set achievable goals and establish a

clear roadmap to monitor progress and make necessary adjustments. Regularly review and

update your financial projections based on actual performance and market conditions.

APPENDIX
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MANAGEMENT HEIRARCHY

CEO
Nathalie Borromeo

Finance Department HR Management

Maricar Aboga Leonilyn Sulapas

Sales and Marketing Production

Vince Andrue San Pascual Albert Vibal
and and
Nuguit Mark Joshua Joreli Paraiso
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