1
Plantify by IDEAL
Arnielle Dasha B. Baylon1, Eron Gabriel G. Diadula1, Angelique S. Glorioso1, Isaiah C. Miranda1, Lorine Ann D. Noguera1*
1De La Salle University Integrated School (Laguna) : [email protected]
Nerrise G. Estrada1, Research Adviser
1De La Salle University Integrated School (Laguna)
2
Executive Summary: The isolation brought by the pandemic encouraged everyone to find a new
hobby that helped the gardening industry grow and flourish. Due to this opportunity, IDEAL created a sustainable gardening kit named Plantify to promote sustainability and motivate everyone to have a positive environmental impact. The primary venture of the business is selling gardening kits to experienced gardeners and people who want to try a new hobby. IDEAL is a sole proprietorship business with a horizontal structure where each member is responsible for managing the business, depending on their roles. Each member has been assigned to their designated parts aligned with their skills, which helps the team be efficient. The team's skills complement each other as they have leadership abilities, strong communication, great situational judgment, artistic abilities, and openness to various knowledge. IDEAL is in the gardening industry. Its target market is the people under Generation Z, Y, and X interested in starting their gardening career or further developing it.
The market penetration used by the business is market-skimming pricing. Furthermore, IDEAL’s major competitors have established businesses offering the same product IDEAL offers; however, IDEAL shows their competitive advantage as they have a lower price and much more sustainable items in their Plantify kit. IDEAL invested ₱25,000.00 as its starting capital, where each member contributed
₱5,000.00. As IDEAL sells its products, the team reinvested the money earned for its product
diversification and development. IDEAL spent no money on marketing as they took advantage of free marketing on Facebook and Instagram pages. After the business simulation, the funds will be equally distributed to the investors, who are the team members.
Keywords:
gardening; sustainability; environmental responsibility; Philippines; green product
1. Business Registration and Organization
Business registrations secure the business's reputation and avoid any legal issues that may arise during business operations (Villafuerte, 2017). In the Philippines, business operations will be permitted once all legal documents are fulfilled: DTI business name registration form, Mayor’s permit, and BIR registration form. However, Plantify by IDEAL is not officially registered, as they were only asked to fill out the forms as a way of practice for their business simulation.
Figure 1:
IDEAL’s Organizational Chart
IDEAL is under a sole proprietorship structure, meaning only the owner manages and takes all good care of the business (Twin, 2021). The owner of the business also
3 handles all assets and liabilities. Since IDEAL is a new business, a sole proprietorship is the best fit for the team as it is simpler and easier to manage than other structures, and the owner has complete control over the business and all its decisions. Furthermore, the team has a horizontal structure that allows each management to have the same hierarchical level.
Even though there are different management positions, all officers are essential and related to one another. This guarantees that everyone is working for the growth of their business.
2. Business Plan Implementation
2.1. ProductionFigure 2:
IDEAL’s Production Flowchart
Table 1:
IDEAL’s List of Suppliers and Prices of Product Items
Product Items Price (₱) Supplier Coco pots ₱18.70 per piece
(1st)
₱21.04 per piece (2nd)
Pilipinas Eco Fiber (1st) EcoGreen (2nd)
Coco twine ₱14.00 per
bundle Kuya Joseph
Spray bottle ₱24.00 per piece bottlestudio21(S hopee)
IDEAL started with 55 gardening kits produced for their first production, and all members were involved in ordering the supplies. Each member needed the following: 11 wooden crates, three kinds of seeds, which account for 33 ziplock bags after the repack, 11 sets of gardening tools, 33 coco-pots, four bundles of coconut twine, 20 katsa bags, 11 kilograms of gardening soil, which also accounts for 11 pieces of plastic labo, and 11 pieces of spray bottles. As a result, the team sold all fifty-five gardening kits, totaling
₱26,345.00 in sales.
During their second production, only 3 members were involved in reordering supplies. The team still had an inventory of 45 katsa bags, 75 kilograms of soil, six and ¼ bundles of coco twine, and 145 pieces of plastic labo.
Moreover, IDEAL shifted from round coco pots to square coco pots resulting from a change of suppliers from Pilipinas Eco Fiber to EcoGreen as the former has closed down. The following are the reordered supplies by the HR
Wooden crate ₱145.00 per crate ENC Woodworks and Handicrafts
Seeds Greek Oregano -
₱19.00 per 50 seeds Sili Panigang-
₱12.00 per 10 seeds
Tomato Athena -
₱14.00 per 40 seeds
Harvest Fresh (Shopee)
Tools ₱17.00 per set potstop (Ms.
Averion, Shopee)
Soil ₱60.00 per 26 kg Hasmin
Sunflowers Katsa bag ₱32.00 per bag Birosel Ziplock bag ₱17.00 per 100
pieces
nissez (Shopee)
Coco fiber plant hangers (PD)
₱150.00 per piece
EcoGreen
4 Officer: 45 wooden crates, 45 sets of gardening tools, 45 spray bottles, ten bundles of twine, and 135 coconut pots. The team also introduced their product diversification, a coco-fiber plant hanger. Furthermore, the team offered a 10% discount for the first five purchases of the retooled gardening kit. As of March 27, 2022, the team has sold 17 out of the 45 produced kits and 18 out of 20 plant hangers, which total
₱8,143.00 and ₱4,140.00, respectively.
Figure 3:
IDEAL’s Flagship Product
2.2. Marketing
IDEAL offers a sustainable gardening kit and plant hanger to the market as gardening recently became a trend due to the pandemic. The kit and plant hangers promote sustainability as they are made from sustainable materials. The products were formulated as they can significantly aid in the development of the environment. As some gardening practices cause detrimental effects on the environment, it is crucial to look for sustainable methods to prevent worsening environmental problems (Long, 2021). Additionally, these items are locally sourced as IDEAL’s suppliers are all from the Philippines, and the materials used by the suppliers were also sourced from the Philippines.
IDEAL’s gardening kit is worth ₱479.00, and the plant hanger is worth ₱230.00. These are the selling prices as the group wanted to make their products affordable for individuals who want to start gardening or become a plantito or plantita. The product is distributed among the five members of IDEAL, which are situated in the three cities of Laguna:
Calamba, Sta. Rosa, and Binan City.
IDEAL utilizes social media to promote its products on a broader spectrum. Using Facebook and Instagram enables them to reach more customers interested in availing of their products. These platforms are also convenient for the business as IDEAL could easily
communicate with their customers. Furthermore, various apps and websites are maximized to make creative marketing collaterals to entice potential customers into buying IDEAL’s gardening kit and/or plant hangers. Lastly, the members use word-of-mouth marketing when promoting their products to people they have close relationships with or are acquainted with (e.g., family, friends, and classmates).
Figure 4:
IDEAL’s Publicity Materials
2.3. Human Resources
IDEAL’s business owner is mainly responsible for supervising general operations and evaluating performance within the business. She ensures that all business activities run smoothly and that constant communication with other team members is observed.
The Operations Officer keeps track of the business's inventory, checking whether every product item still has adequate stocks. He also works alongside the Human Resources Officer to procure the required product items and conduct quality control on them before assembly.
The Marketing Officer is responsible for creating publication materials for IDEAL, handling IDEAL’s social media platforms on Facebook and Instagram, and devising ways to attract more potential customers.
The Finance Officer deals with monetary matters and financial progress within IDEAL. These include preparing financial statements such as income statements, cash flow statements, balance sheets, etc. She also updates every individual sale of products made.
The Human Resources Officer works mainly in procuring, outsourcing, and communicating accordingly with suppliers. He is also actively and continuously devising ways to ensure product sustainability.
5 He is also primarily in charge of product quality control along with the Operations Officer. As compensation, the HR Officer will ensure that each member receives equal portions of the profits made by the end of IDEAL’s business operations.
2.4. Finance Figure 5:
Projected vs. Actual Sales (Monthly)
The graph above shows IDEAL's sales projections and actual sales over the months the business has been in operation. In its first year of operation, the business launched its product, the Plantify kit, and its product diversification, the plant hanger. Suggestive selling was used to continue selling the gardening kits and plant hangers on hand. As of March 2022, 72 gardening kits and 18 plant hangers had been sold, amounting to ₱38,393.00. As it expands its operations beyond Santa Rosa, Binan, and Calamba, Laguna, the business expects to grow rapidly in the coming years.
Figure 6:
Projected vs. Actual Income (Monthly)
The income projections and actual income for the business are shown in the graph. IDEAL will profit if the estimated number of gardening kits and plant hangers are sold during the first year of operation. The coming years will be profitable as sales continue to rise. However, in the coming months, the business will use digital advertising to attract more customers, resulting in higher business operating expenses.
The actual income of IDEAL, as shown in the graph above, changes over time. The month of November brings in the most revenue for the business. As the holiday season ended, the business's income decreased from December to January due to the sudden surge of COVID-19 cases. From February to March, there was a slow increase in revenue.
Figure 7:
Profitability Ratios
By the end of March 2022, IDEAL was able to achieve a 36 percent (₱13,846.98/₱38,393.00) gross profit margin ratio despite being a small business, which is considered a good gross profit margin. IDEAL's net profit margin reached 36 percent (₱13,846.98/₱38,393.00), which is similar to their gross profit margin and is also considered a positive outcome. It is generally regarded as favorable since a reasonable profit margin for small businesses like IDEAL typically ranges between 7 percent to 10 percent (Parker,
6 2021). Additionally, the current return on investment for IDEAL is 17 percent (₱4,203.77/₱25,000.00), but if the team can sell all remaining stocks, the business will have a 73 percent return on investment. On the other hand, the return on assets for IDEAL is 74 percent (₱25,415.85/₱34,189.23). With each acquisition, the team has steadily increased its profits.
Despite experiencing slow sales in recent months, IDEAL has made significant financial gains that would help maintain business stability.
3. Product Diversification
On their official Instagram page, IDEAL introduced coco-fiber plant hangers for their product diversification on December 18, 2021. These plant hangers are made from pure coconut fiber twine and reinforced with metal wires.
Moreover, it is exceptional at maintaining moisture and guarantees constant aeration of hanging plants like anthuriums and orchids. These plant hangers further amplify a plant’s overall aesthetic appeal and dazzle any room. Likewise, they are advantageous for plants or other items when they run out of floor or shelf space (Heath, 2017).
Regarding their branding, IDEAL agreed upon stapling their tags that show their logo and a QR code that redirects customers to their social media platforms. A plant hanger was purchased for ₱150.00, but its shipping fee is
₱190.50. Twenty coco-fiber plant hangers were purchased, amounting to ₱3,190.50. These plant hangers are sold for
₱230.00 after having a markup of 44 percent. The profit from selling each was ₱70.48.
Figure 8:
Plant Hanger
4. Future Plans
IDEAL plans to expand its business outside Santa Rosa, Biñan, and Calamba, Laguna. Regarding IDEAL’s digital channels, the team has not considered using online e- commerce sites such as Lazada and Shopee. Although this
may be the case, these are not ruled out as potential channels for selling IDEAL’s products to a wider variety of people.
To reduce costs and adhere to the business’ mission towards sustainability, biodegradable cassava bags will be incorporated into the product for succeeding production batches. These cassava bags are completely compostable and biodegradable in under 105 days (EcoNest, n.d.). They are also soluble in hot water and are printed with soy-based ink, which does not harm ecosystems after consumption. IDEAL is currently discussing how they can replace the current plastic ziplock seed packaging, and they have considered using kraft paper envelopes for the seeds. With this, IDEAL is continuously searching for sustainable yet cost-effective alternatives for seed packaging to achieve its goal of being a completely sustainable business creating and providing environmentally-friendly products.
5. Acknowledgments
IDEAL is grateful to the people who have supported them from the beginning until the end, starting with Ms.
Nerisse Estrada, their research adviser, who has provided the team with sound input, guidance, and advice on proper business execution. IDEAL would also like to thank its former marketing and entrepreneurship professor, Ms. Maya Magiliman, for solidifying the team’s marketing strategy and providing the required knowledge on how to function as social entrepreneurs.
The researchers would also like to thank their respondents, customers, friends, and families for making time to understand the team’s mission and service. They have given valuable feedback to the business and also supported the team in every way possible. Lastly, IDEAL would like to thank God for giving them the guidance, wisdom, and knowledge to continue striving despite their obstacles.
6. References
EcoNest. (n.d.). CassaBag Griphole. EcoNest Philippines.
Retrieved October 31, 2021, from https://www.econestph.com/collections/retail-eco-p ackaging-needs/products/cassabag-griphole-mediu m-in-cassava-natural-with-i-am-a-cassava-bag-print
7 Heath, O. (2017, April 15). Plant trend: How to make a
macramé plant hanger. House Beautiful.
https://www.housebeautiful.com/uk/garden/plants/h ow-to/g113/macrame-plant-hangers-sophie-lee-ind oor-gardening/
Long, E. (2021, April 2). Why Is Sustainable Gardening
Important? Renovated.
https://renovated.com/why-is-sustainable-gardening -important/
Parker, T. (2021, May 12). What's a good profit margin for a
new business? Investopedia.
https://www.investopedia.com/articles/personal-fin ance/093015/whats-good-profit-margin-new-busine ss.asp
Twin, A. (2020, October 30). Sole Proprietorship.
Investopedia.
https://www.investopedia.com/terms/s/solepropriet orship.asp
Villafuerte. (2017, February 28). 5 benefits of registering or legitimizing your business. Ready To Be Rich.
https://fitzvillafuerte.com/5-benefits-registering-leg itimizing-business.html.
