I.

Introduction

After identification of the target market, and analysis and evaluation of the
different factors that influence the proposed business, EALA Inc. brings form
and structure to the proposal by identifying its technical aspects.

The proposal involves the establishment of PantSaloon, a boutique

specializing in the customization and tailoring of jeans for the fashionable
young Filipino. It will be positioned as a specialty shop that offers a twist to
the basic jeans by allowing it to be customized according to one’s own style
and whim, as well as assuring its customers of a perfect fit all the time.

This principle is the central focus of the entire technical process. From the
raw material selection and design conceptualization to the actual production
process and visualization of the structural designs and perspectives,
everything about PantSaloon would translate to comfort, fashion and
individualism.

The initial stage of PantSaloon’s business plan involves opening its first store
at J&R Commercial Center in Katipunan. With over 75 fabrics, 11 cuts, 16
pocket types, 4 waistband types, and infinite possibility of designs,
PantSaloon will produce 600 different jeans per month, meeting about 6.37%
of the projected demand. PantSaloon shall strive to acquire a larger share in
the big “pie” over the years, as the business gradually makes a name in the
jeans market.

With much care and consideration given to the plans, projections, procedural
requirements and legal practices needed in setting up the store, EALA Inc.
deems PantSaloon technically feasible and operational in the market.

1
A. Executive Summary

Through the analysis of the crucial processes and costs involved in production
flow, human resources management, store operations and construction, and
legal requirements to be complied with before operation, EALA Inc. endeavors
to determine the technical feasibility of PantSaloon.

What the group has done is to study the process of manufacturing jeans, and
from here build the production program which PantSaloon shall adhere to in
its quest to produce perfectly-fitted jeans. In the course of building this
production program and establishing PantSaloon’s own production process,
decisions on outsourcing, supplier selection, and equipment to be used had to
be made.

The first major decision was whether to outsource tailoring services, or to hire
personal tailors and invest in jeans manufacturing equipment to produce the
jeans. A cost-benefit analysis on these two options led to the conclusion that
hiring in-house tailors and investing in equipment, while more costly, is better
for the business in the long run because it will enable the business live up to
its promise of producing high quality and perfectly fit jeans, with quality
control better exercised when production is done in-house.

Purchasing of materials will also be done by PantSaloon. This is also to ensure

that only the best materials are used in the production of jeans. Also pursuant
to its commitment to quality, tailors, cutters, and designers shall undergo a
strict selection process and a more rigorous training. Only the most precise
and meticulous tailors and cutters shall be hired, while the most dedicated,
professional, flexible and creative designer will take on the job of assisting
the customers in conceptualizing their jeans.

Accordingly, the store structure has also been designed to reflect what the
PantSaloon experience would be all about. The group plans to maximize 25
square meters of less expensive but well-visited leased space in J&R

2
Commercial Center, located just beside Shakey’s and McDonalds-Katipunan.
An all-white industrial interior, complemented with splashes of color shall
further enhance PantSaloon’s idea of adding twist to something basic.
Designed with modern minimalist comfort, the space will cater to the needs
of its customers, their companions, and the store employees. Construction
and renovation costs would reach approximately P 293,629.00 while total
monthly operating costs are estimated to amount to P 316,266.67.

Before the business can be fully operational, the mayor’s office has to issue
the business an official permit to operate. Before this issuance however,
certain legal requirements such as barangay clearance, community tax
clearance, sanitary permit, and other clearances have to be secured.

Furthermore, to ensure smooth operations, the group focused on EALA Inc.’s

organizational structure. Department managers, directly reporting to the
Chief Executive Officer, shall have responsibilities specific to their
department. Because of this, EALA Inc. will provide these various positions
job descriptions and qualifications to guarantee a dynamic group of people
working for the constant growth and improvement of the PantSaloon brand.
To aid in the proper implementation of individual duties, basic regulations for
inventory, cash and sales management are also made available.

Finally, rough estimates of all required costs were summed up to find out the
initial investments and operating funds needed to run the PantSaloon
boutique.

II. Plant Capacity

3
Capacity refers to the attainable rate of output that can be produced. EALA
Inc.’s plant capacity largely depends on the number of jeans a tailor can
make per month.

PantSaloon shall invest in a total of three sewing machines, with exactly one
tailor stationed at each machine. With this, a tailor can manufacture a
maximum of 10 jeans per day, or 900 jeans per month (30 working days).
This theoretical capacity was obtained under the assumption that all the
equipment will function properly throughout the entire 8 hours of work and all
three tailors will work for 7 days a week, with no day-offs. However, since the
store will be giving tailors two day-offs per week, only two tailors are
expected to report to work each operating day, reducing the production
capacity to 67%, or 600 jeans per month.

The store will maintain the production volume rate required to meet 6.37% of
the projected demand throughout the ten years. The increases in demand will
be offset by gradually increasing capacity utilization.

III. Total Yearly Production Schedule

A. Production Volume

4
Production will be based on the projected annual demand and the computed
market share in the Market Appraisal. To get the production volume, the
projected annual demand for PantSaloon products was multiplied by the
market share that EALA Inc. can meet given its present capacity. The figures
are shown below:

Table 1 | Production Volume 10-year forecast

Y Annual Production Volume
ear Demand
Maximum capacity
2 128,925 Present
006 12,312 Capacity
2
007 131,334 12,542 8,213
2
008 133,790 12,777 8,366
2
009 136,292 13,016 8,522
2
010 138,838 13,259 8,682
2
011 141,434 13,507 8,844
2
012 144,082 13,760 9,009
2
013 146,781 14,018 9,178
2
014 149,526 14,280 9,350
2
015 152,327 14,547 9,525
2
016 155,181 14,820 9,703

IV. Production Process

A. Product Design

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PantSaloon believes that when it comes to jeans, fit is everything. Handmade
and carefully crafted, each pair of jeans aims to provide a fusion between
fashion and comfort by producing jeans that are not only individualistic,
stylish and hip, but also tailored to perfection.

PantSaloon will be offering jeans in every imaginable cut, fabric, color,

embellishment and design, with the limit going as far as the customer’s
imagination. Every pair shall be customized according to the customer’s
demands, assuring them that they get the perfect fit everytime. Whether it
be classic cuts or the latest in jeans design, all cuts, fabrics, styles and
designs are purely the reflection of the customer’s individual taste.

Jeans will be the central theme of PantSaloon’s product line, with designs as
diverse and dynamic as its different customers strive to keep up with the
swiftly changing world of fashion. As mentioned before, PantSaloon shall
present a wide array of fabrics, cuts, styles and designs to ensure that the
store has something for everyone. The challenge to PantSaloon now is to
deliver every pair of jeans in its finest quality – perfect stitching, premiere
fabrics, and flawless fitting that makes it distinguishable from every other
pair in the market.

The preproduction stage of PantSaloon’s jeans adds a service dimension to its

line. Beginning with design conceptualization, the customer has the option to
seek the help of an in-house designer in selection of the fabric, cut, style,
color and design. After measurements are taken, a special software shall
further aid in the visualization by combining the ideas and measurements,
simulating the actual look of the jeans on the customer. After the design idea
has been finalized, jeans undergo a meticulous cutting, sewing, washing and
designing process to make sure that the jeans are no less than perfect when
finished.

1. Cuts

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The cut refers to the actual shape of the jeans. It is a matter of pattern
design. Not all fits work with all possible cuts. Some combinations may
seem to work today (a possible trend), but in a few years, may just
look funny or dated. Still, this is where the fun begins. No amount of
washes or embellishments can make up for a bad cut.

This is probably the most important styling decision. Leg cuts that
PantSaloon will offer can be summarized as follows:
• Straight Leg Jeans: Traditional cut with a straight narrow leg
that does not flare at the ankles
• Flared Leg: Jeans narrow at the knee, and an extra wide flare at
the leg. Most common leg type on low rise jeans.
• Boot Cut Jeans: Cut to skim the thigh with a slightly flared lower
leg
• Tapered Leg: Jeans narrow towards the ankle
• Capri: A leg cut that usually ends just below the knee or at
midcalf. The term "crops" is sometimes used interchangeably with
capris, but should actually refer to pant legs that fall about three
fourths of the way down the calf
• Tight / Skinny: A close fit throughout the leg
• Stove Pipe: As the name implies, an oversized straight leg cut
• Bell Bottoms: A wider, more exaggerated flare named and
made popular in the 1960’s, often used with low rise jeans and
ultra low rise jeans
• Cropped: Jeans can be cropped any length from the midcalf to
the knee. Ankle Length Cut just above the ankle is used for a
summery look
• Gaucho: Denim gaucho pants may be a passing fancy, but they
sure are fun and can look great paired with the right boots.
• Cuffed: A fold at the end of the legs. Not strictly a leg cut, but a
common finish, sometimes added by the designer and sometimes
by the user of the jeans for a personal touch.

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 Straight Flared Boot Cut Tapered Tight Capri
Figure 1 | Denim cuts available at PantSaloon

In keeping with the stores image of modishness and fashionability, new

cuts will be added as the market’s taste evolves.

2. Fit
Fit refers to the general “looseness” or “tightness” of a pair of blue
jeans. Fits that PantSaloon shall offer on its opening include the
following:

For Men's Jeans:

• Regular / Traditional / Classic Fit: Slim seat, slim thigh,
usually with tapered leg. (Western variation of this fit is same
but with a boot-cut leg)
• Loose Fit: Full seat, loose thigh, tapered leg. Lots of room to
move around in for active men, and very comfortable for laid
back, relaxed types. Includes anywhere from 1 to 4 inches of
additional fabric in the thighs and butt.
• Relaxed Fit: Relaxed seat, relaxed thigh, often matched with
a tapered leg. Includes an extra inch in the rear. This is the
style for the guy who is too busy to worry about his look and is
the most popular fit for men.
• Baggy: Refers to extra loose legs, very popular in the 1960’s
with tight low rise waists.

8
 • Tight / Skinny: An upcoming, edgy trend. Tight fit through-
out.

Classic Fit Relaxed Fit Western Cut Loose Fit

Figure 2 | Denim fit designs for men available at PantSaloon

For Women's Jeans:
• Slim Fit Jeans/Skinny: Close fit through the seat and thigh,
usually accentuated by tapered leg cut.
• Easy Fit Jeans: Similar to relaxed fit with a lower rise and
more room in the seat and thigh
• Natural Fit Jeans: Slightly fuller fit through hips and thighs

As it is with cuts, more fits will be added to PantSaloon’s portfolio in

order to keep up with trends.

3. Fabrics
The selected cut can only be perfected and achieved if the right fabric
is selected. To avoid problems in the construction of pants, the in-
house designer must advise the customer early on which fabric will
work best for the design they are looking for. Because designs are
expected to be diverse, PantSaloon intends to have a wide array of

9
fabrics to choose from. PantSaloon will likewise make certain that they
will procure the finest fabric at the most reasonable prices.

Fabric for pants can range from twill and suede, to corduroy and khaki.
However, as mentioned before, special attention shall be given to
denim, as jeans will be the product specialty of PantSaloon.
Specifically, PantSaloon’s fabric line will include the following:
• Canvas
• Army
• Denim - Ordinary
• Denim - Stretch
• Corduroy
• Twill
• Suede

Fabrics can also be selected according to their feel preference. There

are those who like their jeans soft and flowing, while some prefer theirs
stiff and crisp. Because of this, the texture of denim fabrics shall be
given attention to because the feel of the pants is also deemed to be
very important to the customer.

4. Pocket Types
Some pocket type options include:
• 4-pocket: No change pocket

• 5-pocket: This is the most widely used pocket configuration,

with the fifth pocket being the small coin pocket.
• Fashion Pocket: Embellished, decorated

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 • Flap Pocket: Can be very flattering on a woman with a small
rear
• Front Patch Pocket: Attached to the exterior of the pants

• Multi-pocket: As used in carpenter/cargo styles

• Rear Patch Pocket: Attached to exterior of pants

• Seamed Pocket: Pocket in inside pants, opening finished with a

seam
• Utility Pocket: As used in cargo and carpenter pants

5. Waistband and Back Yoke

The waistband is made of a double layer of denim: it is more rigid,
Figure 3| Pocket designs available at PantSaloon
allowing it to hold one’s tummy much like a girdle. A wider waistband
will help even more.

11
Jeans with waistlines that are cut higher in the back, and lower in the
front, are figure-flattering. The most flattering jeans have 1% to 2%
Lycra or spandex in it. This elasticity allows them to hold everything in
place without totally sacrificing comfort.

The back yoke allows designers to play with perceptual illusions that, if
used for the right reason, can enhance the look. The size and shape of
the back yoke directly affects the size and placement of the rear
pockets, and this is crucial.

Here are some of the options:

• Inverted Arc: Gives the illusion of a fuller rear.
• Straight (Horizontal): This yoke line will make the waist
appear wider.
• “V” Shape: Most widely used and most flattering back yoke
cut.
• Sweet Heart: This yoke type can truly enhance a small
derrière, as the cut is clearly outlining a curvy heart shape. It
works very well with stretch tight jeans since it allows the pants
to conform to your figure
• Extra Wide: This cut is used to achieve the “falling pants” look.
The illusion is enhanced by the placement of the pockets way
below the butt. This look is great for some guys, though not very
flattering to any woman’s figure.
• No Yoke: Usually combined with seamed pockets. The garment
is contoured by the use of darts. This look is very conservative,
and with a proper fit can work very well for women with large
rear ends.

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 No Yoke With
Inverted Arc Straight "V" Shape Sweet Heart Wide Yoke
Seamed Pockets

Figure 4 | Waistband and back yoke designs

6. Fly Types
• Zippered Fly
• Button Fly With Hidden Buttons
• Button Fly With Exposed Buttons
• Laced Fly

7. Waist Types
The most obvious variation in waist type comes in the “rise”, which
means nothing more than how far below the belly button the jeans will
sit. It is measured from the crotch to the waist. Some designers use
this as a major styling category, because of the unparalleled popularity
of low and super low rise jeans in the last few years. It is nonetheless a
subcategory of the type of cut.
• Regular Rise Jeans: Waistband is located precisely on the
waist
• Low Rise Jeans: Waistband is located typically 2-3 inches
below the belly button. The most popular rise in most denim
brands, especially for women.
• Super Low Rise Jeans: Dangerously low, 3-5 inches below the
belly button.

13
 • Brazilian Low Rise Jeans: Brazilian jeans have almost come to
define a waist type of their own: Ultra Low Rise Jeans. Brazilian
jeans are growing in popularity and are renowned for their
daring sexy cuts, high quality, and original embellishments.
They are unique and worth looking into.

Slightly Below Ultra/

Natural Waist Low Rise Brazilian Low
Navel
Rise
Figure 5 | Waist types available at PantSaloon

8. Embellishments
While there are those who are satisfied with simple, unadorned jeans,
there are also those people who like embellishments on their pants. A
variety of materials have been selected to provide ornamentation to
jeans. These materials include the following:
• appliqués
• patches
• beads
• embroidery
• sequins
• rhinestones
• Swarovski crystals
• metal studs
• lace

9. Sample designs

14
 Figure 6| medium wash peacock embroidered
jeans

15
Figure 7| dark natural vintage patch bootcut
jeans
 Figure 8| medium wash beaded jeans

16

Figure 9| medium bootleg skull jeans

B. Raw Materials
Raw materials comprise about 37 % of the total production cost, while 46 %
goes to labor costs attributed to the in-house designer, jeans engineers /
tailors, and cutters. The remaining 17 % shall be allocated to overhead
expenses. Because raw materials are important determinants of quality, the
selection of a supplier which will provide for the finest quality of materials at
a reasonable price is of utmost importance to the business.

17
Pants come in a variety of fabrics, and which among these fabrics to be used
is actually the choice of the customer. However, not all fabrics are suitable for
pants. Only when a fabric achieves an over-all tailored look does it become
appropriate for pants. These fabrics include corduroy, canvas, denim,
leather/suede, twill, and woolen tweed. While all these are readily available at
the store, jeans are PantSaloon’s specialty. Henceforth, an extensive denim
fabric line shall be arranged.

Any other fabrics not immediately available in the store can be requested for
or brought in personally by the customer.

Likewise, threads, buttons, rivets, zippers, labels and other accessories add
value to the pants. Threads to be used are those which have an established
reputation of strength, buttons and rivets are those which don’t tarnish
immediately, and zippers should glide smoothly. Other accessories such as
beads, crystals, and embroidery shall be unique and interesting in order to
maximize the possibility of making each pair of jeans unique.

1. Suppliers
Suppliers of raw materials will come from Divisoria, since they have an
abundance of textiles, fabrics and other materials needed in the
production of jeans. Aside from the overwhelming variety, these
materials also come in very affordable prices.

Selection of fabric suppliers will depend primarily on the (1) quality of

fabrics provided, (2) extent of fabric offerings and (3) the reasonability
of the prices by which these fabrics come. Several fabric suppliers will
be obtained as one supplier cannot possibly have all the fabrics
needed. Also, the expected competition between them is expected to
drive the prices down and give the business more bargaining power in
terms of acquiring discounts on materials.

18
However, for other materials such as threads, buttons, zippers, and
embellishments, only a couple of suppliers will be selected, since
product offerings are similar and the price differences are insignificant.
The only difference between suppliers lies in the depth of their product
lines, and hence, the two suppliers with the most complete and diverse
lines would be selected.

The following are some of the possible suppliers who can provide the
necessary materials needed for production input:
Table 2 | Possible suppliers
MATERIAL SUPPLIER ADDRESS CONTAC
T NO.
Fabrics M & P Commercial 107 Ylaya Center 247-
market, 593 CM 4617
Recto Ave, Divisoria
Good Morning Pasilio C, Stall no. 245-
Textile 72-74, Ent. 577-585, 2478
CM Recto Ave., 245-
Divisoria 5194
Bull Magic Pasilio A, Stall No. 245-
Merchandising 14-16, Ent. 488-491, 0142
CM Recto Ave.,
Divisoria
Supplies Marwin Trading 601 CM Recto Ave., 245-
Tondo, Manila 2517
Fashion Rev 577 General 245-
Shopping Center, 0128
Divisoria
Embellishmen Carolina’s Lace Pasilio S Stall No. 9, 241-
ts Shoppe 14, 16, Yangco 8284
Market, Divisoria 243-
1740
Label Los Amigos & Sons, 928 Ilaya St. Tondo, 245-
Inc. Manila 0267
244-
5266
245-
0252
Paper Bags Plaza de Amigos LS -03 Tutuban Prime 252-
Block Center, Tondo, 2122
Manila 253-
4928
0917-
8117500

19
 Credit terms and discounts on transactions between PantSaloon and all
the abovementioned suppliers will be included in the terms of
agreement between the company and the respective supplier, and
determined on a per transaction basis.

Fabric purchases will be in portions, because purchases requirements

depend on the demand for these fabrics. However, should one fabric
prove to be more popular than others, a larger amount will be bought
so discounts on bulk purchases can be availed of.

Purchases of the remaining materials will be in bulk, since their

suppliers don’t engage in anything but wholesaling. Furthermore, it
would be more practical to buy them in large quantities as they are
materials that are hardly dependent on the customer’s preference.

C. Production Arrangements
1. Cost Benefit Analysis
In-house manufacturing
Advantages. PantSaloon promises its customers a perfect fit all the
time, and it is important for the business to get everything right in
order to preserve the integrity of its name. The main advantage of in-
house manufacturing for the business is the close supervision of the
pants-making process. Being a business that banks primarily on
quality, this is a very important consideration. Closely supervised
manufacturing will allow for constant quality checks to ensure that the
jeans are being made exactly the way the customer wants it.

Since PantSaloon is in the business of customizing, none of its products

are mass produced. Because of this, attention to detail is necessary,
and in-house manufacturing paves the way for meticulous monitoring
of products.

20
Aside from excellent quality control, in-house manufacturing also
provides control over deadlines and production schedules. Delays can
be avoided, since everything that needs to be delivered is on hand.
Also, worries over late deliveries can be completely eliminated. The
production schedule can move exactly as planned or be changed
immediately to meet deadlines, since all aspects of production are
under the control of the management.

Lastly, in-house manufacturing will benefit PantSaloon by eliminating

the costs that subcontractors can impose in production orders. Such
costs include delivery, labor and overhead costs that the company
might incur.

Disadvantages. The main disadvantage of in-house manufacturing

would be the large initial investment costs, as well as the operating
costs that the business would need to sustain.

Establishing in-house manufacturers would require the business to

procure sewing machines, edging machines, buttonholing machines,
and other materials needed for manufacturing jeans. Not only would
this constitute a big part of the capital, but it would also result to
added warehousing, inventory and maintenance costs. It would also
require the company to hire in-house tailors, designers and cutters,
whom the company will have to compensate with salaries and benefits.
All these things would translate to substantial increases in overhead
costs for the company.

Outsourcing
Advantages. Outsourced production will rid the business of the costs
brought in by purchasing and maintaining equipment and other
auxiliary materials such as thread, etc. It would also reduce overhead
costs of the business, since expenses for electricity, warehousing, and
inventory will not be shouldered by the company. There would also be

21
a significant cut in the salary expenses allocated for tailors and cutters,
as the business would no longer need to hire them. Furthermore, costs
of training will be completely eliminated.

Disadvantages. Once labor is outsourced, the business automatically

puts product quality at risk. Without the direct supervision that in-
house manufacturing offers, jeans may not be manufactured as well as
the customers expect to since quality cannot be constantly monitored.
This would translate to repair costs and revenue losses because of
discounts offered for substandard products.

Also, delays on delivery could result because subcontractors have a

tendency to go beyond the expected deadline. This is fatal to the
business’ goal of maintaining customer loyalty, since prompt delivery
is essential to any service-oriented enterprise.

Analysis
Because PantSaloon banks highly on the quality of jeans it produces,
the company deems in-house manufacturing more suitable for its
operations. While investment costs could pile up initially, the long-term
benefits of in house manufacturing far outweighs the initial outlay.
Furthermore, since PantSaloon promises to produce jeans that are
exactly to the customer’s liking, attention to detail is necessary, and
this can only be done properly if the company engages in in-house
manufacturing.

22
Table 3| Cost Benefit Analysis
IN HOUSE SUBCONTRACTING DIFFEREN
Pre- production PRODUCTION Production CE Production
Post

INITIAL CASH OUTLAY

Materials
Leasehold purchase
Improvements Serging
Storage
Pre-washing and drying Cutting
Working Tables and chairs 5,710 5,710 0 0Delivery 5,710
(subcontract) Sewing
Equipment Fitting
Design conceptualization Seam finishing
Alterations
Materials
Sewing Machinesselection 30,000 Topstitching 0 Final delivery0
Measurements Closures and Hems
Edging Machine
Design simulation and 15,000 Additional designs 0 0
adjustment
Buttonholer 5,000 Quality inspection
50,000 0 0 50,000
Final design Production adjustments
Supplies
Costing and pricing
L-square 220 0 0
curved ruler 220 0 0
Figure 10| Product Flow
scissors 600 1,040 0 0 1,040
Training Costs 15,000 0 15,000
TOTAL INITIAL CASH
OUTLAY 71,750 0 0 71,750

OPERATING COSTS
VARIABLE COSTS
Direct Materials
Fabric 31,124 31,124 0
Thread 264 0 264
Zipper 1,962 0 1,962
Buttons 210 0 210
Rivets 325 0 325
Labels 3,000 3,000 0
Total Direct Materials 36,885 34,124 2,761
Direct Labor 0 50,000 -50,000
Indirect Labor (washing) 15,000 15,000 0
Total Variable Cost 51,885 99,124 -47,239
FIXED COSTS
Direct Labor 48,000 0 48,000
Factory Overhead
Factory Supplies
embellishments 3,000 3,000 0
Depreciation of
Equipment 416.67 0 416.67
Utilities 9,090 6,630 2,460
Repair and Maintenance 0 0 0
Insurance 1,875 0 1,875
Total Factory Overhead 14381.67 9630 4,751.67
62,381.6
Total Fixed Cost 7 9,630 52,751.67
114,266.
TOTAL OPERATING COSTS 67 108,754 5,512.67

23
 Costing

a. Pre-production.
The pre-production stage involves all the necessary procedures before
the actual construction of the jeans.

The first two procedures involve materials preparation, the first of

which is the purchase of materials from the suppliers. As mentioned in
the preceding sections, all materials other than fabric will be purchased
in bulk. This is followed by pre-washing, since denim has a tendency to
shrink, stretch and fade when washed. This also removes any sizing,
which can cause skipped stitches, and softens the fabric. (If the label
on the end of the bolt indicates the fabric is Sanforized, then the fabric
has been treated, and the shrinkage will not exceed 1% in any
direction). Pre-washing shall be outsourced, as this is the norm in the
jeans manufacturing industry.

When a customer enters the store, the service begins by

conceptualizing the design. Design conceptualization includes the
selection of cut, style, wash, and embellishment of the jeans. The
customer may already have a design in mind, or he or she may want to
consult with the in-house designer as to what cut and style would best
enhance the customer’s figure.

24
After the design has been selected, materials for the construction of
the jeans will be selected. Fabrics will be catalogued so that the
customer can actually get a feel of the fabric. Threads, buttons, zippers
and embellishments can be selected by the customer in a separate
catalogue. During this procedure, the designer advises the customer on
which fabric will work for a particular design, and which materials
would adhere to the selected fabric. This is to minimize adjustments
and reproductions during the production process.

After the materials to be used are finalized, measurements of the

customer are taken twice. The first measurement involves the
customer trying on the “dummy jeans” which is an oversized pair of
jeans, which the tailor will use to determine the tightness or looseness
of fit that the customer wants. The tailor tapes the jeans according to
the desired fit, and afterwards proceeds to take the 7 key measuring
points for jeans.

1 – crotch
2 –
length
3 – waist
4 – hips
5 – thighs
6 – knee
7 – hem

25
3

Figure 11| 7 Key Points for 5Measuring

2 Pants
 1
4

After the key measurements are taken, the tailor then encodes the
design, material and measurements into the special computer software
to simulate the over-all look of the jeans on the customer. Final
adjustments on the design are made at this point, after which the
design is finalized and submitted to the cutter to start the production
process. The customer is also given a specific finishing date, when he
or she would come back to claim and fit the jeans.

b. Production
The production process begins with serging or cutting the fabric in a
zigzag manner to avoid raveling. The jeans shall then go to the master
cutter and be cut. When cutting out the pattern, a withnap cutting
layout is used, and facings are cut from lining or contrast fabric in order
to reduce bulk.

Sewing immediately follows after cutting. All projects, especially those

involving denim, begin with new needles as denim dulls needles
quickly. The heavier the denim, the larger the needle required.
Table 4 | Required needles

26
 Heavyweightdenim 100/16
needle
Mediumweight denim 80/14 needle
Lightweight 75/11 needle

Denim needles, having longer, sharper points that penetrate the close
weave of cloth more easily, and larger eyes that accommodate
decorative topstitching thread, will be purchased for best results. As for
threads, polyester or cotton-wrapped polyester thread will be used for
standard sewing, while decorative threads will be used for topstitching.

Denim is actually sewn like any other firmly-woven fabric. However, it

frays easily so seam finishing is essential to the process.

To seam finish denim pants, a test seam is stitched to determine the

best stitch size. Heavier fabrics need fewer stitches per inch than
lighter weight versions. Heavy denim is sewn with about 10 stitches per
inch and lighter denim with about 12 stitches per inch (3 mm). For even
feeding of the fabric, thread tension and presser-foot tension is reduced
slightly.

Denim can be sewn with a standard 5/8" (1.6 cm) seam. However, most
denim garments feature flat-fell and topstitched seams. Stretch denim
requires a stretch stitch. The most popular denim seam is the flat-fell
seam because it’s very durable and gives a nice, clean finish on the
inside of the garment.

Topstitching gives denim its trademark look, as well as decorative

appeal. Heavy contrasting threads such as buttonhole twist or
decorative thread designed for topstitching will be used.

After topstitching, attention is now given to closures and hems.

Machine worked buttonholes, zippers, and decorative snaps are the

27
most popular types of garment closures on denim. Hems are most
often stitched by machine with one or two rows of narrow topstitching.

All other additional embellishments and finishing touches are added to

the jeans before they undergo the first quality inspection. With quality
inspection, the jeans are closely scrutinized and examined for any
damages or diversions from the fit and design that the customers
specified. Production adjustments follow, with all imperfections ironed
out and fixed to get the jeans as close as possible to perfection. Only
after these tedious processes shall the costing and pricing of the jeans
be done. The total costs for constructing every pair of jeans including
direct and indirect raw materials, labor and overhead are computed to
determine the price. A gross margin of 35% of manufacturing costs will
be added to the total costs to determine the final selling price of every
pair of jeans.

c. Post Production
After the jeans are priced, they will be stored in the storage units
located within the store premises. No more additional warehousing is
needed, as these jeans will not be stored for long periods of time.

When the customer comes back on the specified delivery date, jeans
are given out for fitting. Because PantSaloon assures that jeans are
always a perfect fit, any flaws duly faulted to the failure of the business
to meet quality standards shall be altered for free, and the jeans will be
sold for 50% off the original sale price. Once the alterations are
finished, the jeans can finally be taken home and enjoyed by the
customer.

Table 5| Production Schedule

Steps DAYS
1 2 3 4 5
Design conceptualization
Materials selection

28
 Measurements
Design simulation and adjustment
Serging
Cutting
Sewing
Seam finishing
Topstitching
Closures and Hems
Additional designs
Quality inspection
Production adjustments
Costing and pricing
Storage
Delivery
Fitting
Alterations
Final delivery

3. Costing
Table 6| Direct materials
Cuts (1.25
yards per unit total
Fabric kinds cut) price unit order unit total
per
Canvas 10 3 108 yard 37.5 yards 4050
Army 4 3 120 15 1800
Denim - Ordinary 9 3 108 33.75 3645
Denim - Stretch 8 3 76.8 30 2304
Corduroy 22 3 120 82.5 9900
Twill 20 3 100 75 7500
Suede 5 2 154 12.5 1925
31,1
24
Thread
white 35 per roll 4 rolls 140
colored 31 4 124
264
Zipper
per
7" 5.3 piece 100 pieces 530

29
 8" 5.5 100 550
per
YKK 7" 180 dozen 3 540
YKK 8" 114 3 342
1,96
2
Buttons
per
USA 60 order 2 orders 120
Metal 90 1 90
210

per
Rivets 65 order 5 orders 325

per 3,00
Labels 0.6 piece 5000 pieces 0
Table 7| Supplies
per
Shears 150 piece 4 pieces 600
L-square 220 1 220
Curved Ruler 220 1 220
Tape Measure 30 2 60
Embellishments 3,000
Dummy Jeans 250 2 500
4,600

30
Table 8| Monthly Production Costs
Variable
Direct Materials
Fabric 31,124
Thread 264
Zipper 1,962
Buttons 210
Labels 3,000
Rivets 325
Total 36,885
Indirect Labor (Washing) 15,000
Total Variable Costs 51,885
Fixed
Direct Materials
embellishments 3,000
Direct Labor (wages)
tailor 36,000
cutter 12,000
Total Direct Labor 48,000
Indirect Labor
designer 20,000 68,000
Rent Expense 12,500
Depreciation of Equipment 416.67
Utilities
electricity 8,390
water 700 9,090
Transportation 3,000
Repair and Maintenance 0
96,006.6
Total Fixed Costs 7
147,891.
Total Production Costs 70

31
V. Store Operations
A. Organizational Structure

Chief
Executive
Officer

Human
Finance Operations Marketing
Resources
Manager Manager Manager
Manager

Market
Jeans
Accountant Cashier Designer Cutter Researcher/
Engineers
Purchaser

Figure 12| EALA Inc. Organizational Structure

1. Functions
Chief Executive Officer
General Function: in-charge with the overall management of the firm
Duties and Responsibilities:
• Formulates overall policy for PantSaloon

• Sets goals and objectives for the company

• Acts as the primary decision-maker regarding ideas and
suggestions proposed by the managers
• Conducts regular meetings with managers to discuss business
issues as well as to ensure smooth operations of the business
• Keeps Board of Directors and stock owners posted on the status
of the business

32
Finance Manager
General Function: In-charge of investment and financing decisions for
EALA Inc.
Duties and Responsibilities:
• Takes charge of the budgeting, capital allocation, and cost
control
• Handles credit management
• Forecast funds
• Allocates dividends and incentives
• Prepares long-range plans which include capital budgeting
decisions on expansion, replacement, etc., and cost
appropriations
• Determines the financing mix and sources of funds optimal to
the needs of the firm
• Coordinates with the accountant and cashier regarding the firm’s
financial status

Accountant
General Function: In-charge of generating financial reports and
documents to the stockholders and regulatory agencies
Duties and Responsibilities:
• Handles bookkeeping responsibilities
• Prepares financial statements
• Prepares payroll for employees
• Handles the receivables and payables account

Cashier
General Function: In-charge of daily sales transactions
Duties and Responsibilities:

33
 • Gives receipt to customer after every payment of purchase
• Calculates daily sales
• Assists Operations Manager in generating monthly sales report
• Turns over daily sales to the Finance Manager
• Acts as receptionist inside the store

Human Resources Manager

General Function: In-charge of all Human Resources activities which
include recruitment and selection, training and development, performance
appraisal, compensation, benefits and incentives regulation, among others
Duties and Responsibilities:
• Administers recruitment and selection of employees
• Conducts examinations and interviews for applicants
• Implements personnel rules and regulations
• Conducts performance appraisals
• Approves staff loans
• Manages work hours, day-offs, and leaves of employees
• Spearheads planning of recreational activities for the employees
• Studies current wage levels in the industry
• Ensures compliance with labor laws regarding compensation and
benefits
• Decides on resignation or termination of an employee

Operations Manager
General Function: In-charge of the overall management of the
production and operations
Duties and Responsibilities:
• Manages the store’s daily operations
• Generates monthly reports on sales, inventory, utilities, and
other necessary items concerning the store
• Receives and records incoming supplies delivered to the store

34
 • Acts as the cashier whenever the cashier is out
• Assists the cashier and designer in dealing with customers in
periods of high customer traffic
• Performs quality checks
• Updates finished jeans checklist on a daily basis

• Ensures that store personnel act according to EALA Inc. rules

and policies
• Generates monthly reports on store employees attendance
• Performs necessary sanctions for store employees’ offenses in
tardiness and absences by issuing memos or by oral reprimand

Designer
General Function: In-charge of conceptualizing designs for PantSaloon
Duties and Responsibilities:
• Studies the latest trend in denim jeans
• Submits designs subject to the approval of the managers
• Handles pre-production procedures such as getting customers’
measurements and recommending fabric type and style of the
jeans as well as post-production procedures like checking the fit
of the jeans to the customers and deciding whether it needs
alteration

Cutter
General Function: In-charge of cutting the fabric for each denim jeans to
be sewed
Duties and Responsibilities:
• Cuts the fabric for each jeans after the customer’s vital statistics
are measured
• Assists the designer in getting customers’ measurements in case
of high customer traffic

Jeans Engineers / Tailors

35
General Function: In-charge of sewing denim jeans
Duties and Responsibilities:
• Sew denim jeans
• Assist the designer in getting customer measurements
• Alter denim jeans whenever applicable

Marketing Manager
General Function: In-charge of marketing activities for PantSaloon
Duties and Responsibilities:
• Formulates marketing strategies such as product, pricing, place
and promotional strategies for PantSaloon to gain a favorable
share of the market
• Evaluates PantSaloon products’ market performance

• Studies PantSaloon’s competitors

• Analyzes marketing opportunities for PantSaloon

• Determines the type/s of promotional activities

• Determines the most appropriate marketing communication
medium in order to increase market awareness and market
performance
• Identifies the cost of advertising and promotional activities
• Estimates the growth in sales after executing promotional
program
• Performs cost-benefit analysis on promotional expenditures and
increased sales expected as a result of such
• Compares target and actual sales
• Monitors sales and expenses

Market Researcher / Purchaser

General Function: In-charge of doing marketing research for PantSaloon
and purchasing supplies needed for the production of denim jeans
Duties and Responsibilities:

36
 • Assists and coordinates with the marketing manager in studying
and investigating PantSaloon’s closest competitors
• Forecasts appropriate pricing scheme
• Assesses demand and supply forecast
• Handles purchasing of raw materials
• Ensures the replenishment of production supplies

2. Qualifications
Since the business is just starting, the qualifications of the officers would
be simple enough for them to do their functions in the organization.

Chief Executive Officer

• Male/female
• Must be a graduate of any business course
• Should be knowledgeable in the apparel industry
• Work experience is an advantage
• Must possess excellent communication skills in English and
Filipino
• Must have strong leadership and decision-making skills

Finance Manager
• Male/female
• Must be a graduate of any business course, preferably
major in Finance
• Must be familiar with investment management and
analysis
• Must be familiar with financing, loan and credit
management

Accountant
• Male/female

37
 • Must be a Certified Public Accountant
• Must be hardworking and willing to work long hours if
necessary

Cashier
• Male/female
• Must have attained at least 2 years of any college or
vocational course
• Must possess good communication skills in English and
Filipino
• Must be customer-oriented and with pleasing personality
• Must be trustworthy in handling daily sales

Human Resources Manager

• Male/female
• Must be a graduate of Psychology, Behavioral Science or
any business course
• Must be knowledgeable in employee relations, in making
compensation packages, and in other HR functions
• Must have strong leadership qualities

Operations Manager
• Male/female
• Must be graduate of any undergraduate degree, preferably
any business course
• Must possess excellent communication skills in English and
Filipino
• Must have strong leadership skills to manage subordinates
• Must be customer-oriented

38
 • Preferably has knowledge and experience in apparel
business
• Must be willing to work long hours if deemed necessary

Designer
• Male/female
• Must be graduate of Clothing Technology or any related
course
• Must be creative and full of innovative ideas
• Must be customer-oriented
• Work experience is an advantage

Cutter
• Male/female
• Highly-skilled in cutting fabrics for denim jeans

Jeans Engineers / Tailors

• Male/female
• Highly-skilled in denim jeans production
• Work experience as a tailor is an advantage
• Must be able to meet deadlines

Marketing Manager
• Male/female
• Must be graduate of any business course, preferably major
in Marketing
• Must be familiar with the apparel industry

39
 • Knowledgeable in advertising and marketing
communications strategies, consumer behavior, product
and brand management, distribution management, and
other marketing principles
• Must be updated with the latest fashion in denim jeans
• Must possess excellent communication skills in English and
Filipino

Market Researcher / Purchaser

• Male/female
• Must be graduate of any business course, preferably major
in Marketing and/or Operations
• Knowledgeable in market research methods and consumer
research studies
• Knowledgeable in purchase and supplies management

3. Recruitment and Training

EALA Inc. assumes that the incorporators themselves will occupy all
top positions, and all other unoccupied positions will be filled in by
hiring people.

Interested applicants must first submit a copy of their updated resume,

which the HR Manager will go through to select potential hires. Chosen
applicants will then be asked to appear for an initial interview. Short-
listed interviewees will undergo one-week training to further hone their
skills, as well as be briefed with the company’s mission, vision, policies
and guidelines. Those applicants whose workmanship and work ethics
are at par with PantSaloon’s standards shall be hired.

All newly hired applicants will be asked to submit NBI, Police, and
Barangay Clearances. They must also have their SSS numbers and
submit a medical certificate stating that they are fit to work.

40
4. Compensation and Benefits
The company shall follow the compensation package outlined below:
Table 9| Compensation Package
Position Monthly Compensation
CEO PHP 35,000 plus shares in the
company
Operations Manager PHP 25,000
Finance Manager PHP 22,000
Human Resource Manager PHP 22,000
Marketing Manager PHP 22,000
Accountant PHP 18,000
Cashier PHP 12,000
Market Researcher PHP 18,000
Jeans Engineers PHP 12,000
Master Cutter PHP 12,000
Designer PHP 20,000

Salaries will be paid every 15th and 30th of every month. Salary
increases will be dependent on the current year’s performance.

As mandated by the Philippine government, all employees are entitled

to SSS, PhilHealth, Pag-ibig Fund and ECOLA. Other compensation
benefits such as holiday pay and service incentive leaves will be
applied based on the rules and regulations stipulated on the Labor
Code of the Philippines.

Jeans engineers or tailors are entitled to two days off from work. The
schedule was designed to ensure that there are at least two tailors
present in the store every working day.

On the other hand, the operations manager, cashier, designer and

master cutter are required to report seven days a week. All employees
are entitled to a sick leave of seven working days.

41
B. Daily Operations
To give time for store preparation and clean up, the call time for all
employees is 30 minutes before the opening time.

During weekdays, the store opens at 11:00 am, while store hours begin at
10:00 am on weekends. At these hours, the Operations Manager, cashier and
designer are expected to be at the reception area, attending to customers. In
the meantime, the cutter and two jeans engineers are expected to be found
at the workroom behind the store, making the jeans.

The Operations Manager, Designer, and Cashier also double as receptionists

as they are expected to cheerfully greet all customers who enter the store.
They are all obliged to ensure the comfort of the customers by assisting them
in whatever way possible.

The store’s policy will be on a first come first served basis. This means that
the customer who arrives first shall be first in line with the designer’s or
cashier’s services, whichever he or she might need.

Once a customer gets his consultation turn with the designer, the first matter
of consideration will be the cut and style, followed by selection of fabric. The
fabric is selected from a fabric catalogue so that the customer is able to get
the feel of the fabric. He or she will also be advised as to what fabric will work
best for the selected cut and design. After the fabric has been selected, any
additional designs shall be selected.

The designer shall then take the measurements of the customer, and encode
the design, fabric and cut to the special software program that simulates the
over-all look of the jeans. Tailors/jeans engineers can also take the
measurements of the customer when store traffic is high. The design
undergoes necessary adjustments before finalized and submitted to the
master cutter.

42
Only after performing all these services, shall the designer move on to the
customer next in line.

The cashier situated at the cashier’s counter is first expected to show the
voucher to the customer and confirm item/s listed in the receipt. Once the
customer agrees, the cashier tallies the amount and announces the total
payment required. As soon as the customer hands the payment to the
cashier, the cashier should read out to the customer the amount of the
transaction and the payment received. The cashier should count the change
out loud to the customer. The copy of the voucher is kept for recording of
daily sales. After payment, the items will be placed inside a paper bag and
the cashier should thank the customer. This way the buyer will recognize
PantSaloon to be a boutique that has honest, warm, and courteous
employees.

During lunchtime, the employees will take turns at having lunch. If there is no
customer to assist, all employees in the store are expected to keep the place
neat, clean, and orderly. The store closes at 8:00 pm on weekdays and 8:30
pm on weekends. Before leaving, the store must be cleaned and the cash
must be balanced by the cashier. The cash for the day will be handed to the
Operations Manager who will, in turn, deposit it in the bank. If, for any reason,
the cash is not balanced then it should immediately be reported to the
manager.

1. Scheduling
Scheduling is one of the most important tasks of store management,
yet it is often one of the most neglected. Many Operations Managers
simply repeat the same schedule each week, neglecting to analyze
changes in store traffic

For PantSaloon, all store employees are required to report thirty

minutes before the scheduled opening time. This is to provide ample

43
time for cleaning, stock replenishment, and cash wrap counter
preparation. Furthermore, breaktime during lunch should also be
scheduled to ensure that there are employees to attend to customers
during the lunch hours.

Table 10 | Sample Weekly Schedule for PantSaloon employees

Mon Tue Wed Thu Fri Sat Sun

Operations
OC OC OC OC OC OC OC
Manager
Cashier OC OC OC OC OC OC DO
Designer OC OC OC OC OC OC OC
Cutter OC OC OC OC OC OC OC
Jeans Engineer 1 OC OC DO OC OC DO OC
Jeans Engineer 2 OC OC OC DO OC OC DO
Jeans Engineer 3 OC DO OC OC DO OC OC

Table 11 | Lunch Break Schedule

Time In Lunch Time Out

11:00-12:00 / 12:00-
Weekdays 11:00 am 8:00 pm
1:00
11:00-12:00 / 12:00-
Weekends 10:00 am 8:30 pm
1:00

Table 12 | Sample lunch break schedule

11:00 am - 12:00 12:00 nn -1:00
nn pm
Operations Manager X
Cashier X
Designer X
Cutter X
Jeans Engineer 1 X
Jeans Engineer 2 X
Jeans Engineer 3 X

44
2. Policies on Tardiness and Absences
All employees will be required to be at the store at 10:30 am during
weekdays and 9:30 am during weekends. They would be considered
late if they come 15 minutes after the call time. Any fraction after that,
they will be considered under time and there would be a corresponding
deduction from their pay. An overtime cannot offset an under time. An
employee will only be allowed to be late for a maximum of three times
per month. Should they exceed, a memo will be issued to call their
attention.

In the event that they would absent themselves from work, they must
call before or one hour before the call time to inform the Operations
Manager of their absence. All store employees will only be allowed a
maximum of one absence every month. Should the maximum be
reached, a memo will be issued to call their attention. An absence
without leave will be considered a serious offense. A memo will be
issued upon returning to work.

3. Uniform and Dress Code

The Operations Managers and all store staff will be provided with
official uniforms. Uniforms will vary and will depend on the season and
budget. These employees are expected to wear their uniforms at all
times. The store staff will enjoy free uniform privileges. The prescribed
color and style of shoes will be provided by the employee themselves.
Stockings shall be worn when the uniform consists of skirt. Female
staff should maintain their hairstyles neatly combed and make-ups
should be appropriate for daywear and theme of the season.
Accessories should be minimized. Body marks, including tattoos, body
paints or stickers are not allowed.

4. Inventory Management
Since all of PantSaloon’s products are custom-made, fabrics will be the
only items in the business’ inventory. Even then, the fabrics that the

45
store shall keep in its inventory will only be for purposes of keeping
safety stocks. When the store runs out of a certain kind of fabric, the
purchaser is in-charge of replenishing this stock. The average rate of
replenishment is once a month, because the amount of fabric kept in
storage is a close approximation of monthly demand.

Finished goods shall be kept in the finished good inventory for an

average of one day, as the jeans are expected to be finished a day
before the customers are expected to claim them. These finished jeans
are labeled by customer’s name, and are neatly arranged in storage
cabinets supervised by the operations manager until such time that
they are claimed. The storage area shall also house the supplies and
utility equipment of the store.

A checklist of finished items shall be kept on hand, and updated at the

end of the day to keep track of the jeans that have already been
claimed. This way, it would be easier for the boutique to keep track of
its inventory.

5. Cash Management
For the first few years of operations, PantSaloon shall make use of
vouchers / sales invoices as proofs of payment. Payments will be in
cash, and kept at a safety deposit box placed under the careful
supervision of the cashier.

The store will have an opening fund in the safe of P2,000 in different
denominations:

Table 13 | Opening Fund

Denominations Quantitie Total
s
P 1.00 100 P100
P 5.00 10 P50
P 10.00 5 P50
P 20.00 15 P300
P 50.00 10 P500
P 100.00 5 P500 46
P 500.00 1 P500
This opening fund, counted and managed by the Operations Manager,
will be used in the daily operations of PantSaloon. In the meantime, the
cashier will record the cash at the end of each operating day. The same
thing will apply to daily sales receipts.

Substantial amounts of cash would not be allowed to accumulate, so

the Operations Manager shall be responsible for depositing the cash in
the bank under the store’s bank account. This account will serve as the
depository of all sales.

6. Sales Management
A daily sales report is made to keep track of merchandise and account
for every peso received. This report would aid the Operations Manager
in monitoring what items are in demand and what are slow-moving.
Orders for stocks and sales trends can be easily determined because of
this. The boutique will be able to order those materials that are fast-
moving and will not have the error on ordering those that are hardly
saleable.

7. Store Expenses
Rental. Monthly rental statements will be issued by the building
operator to the operations manager, who in turn is responsible for
checking the accuracy of all the information and figures written on the
statement. Affixing his signature on the bottom portion of the
statement signifies that the statement has been screened and
reviewed. The rental statement is finally faxed to the Accounting
Department for payment processing.

47
Electricity and Water. The electricity and water charges will be
incorporated in the rental statement. The operations manager ensures
that the consumption readings of each are reviewed and tallied against
the previous month’s reading.

Petty Cash. A petty cash fund of P500 shall be allocated for the
business. They are not required to finish up the entire funds, and are
even encouraged to minimize spending, without sacrificing operational
efficiency.

Replenishment of Store Supplies. The quantity ordered to replenish

supplies must be enough for a month’ supply. Hence, the average
monthly consumption for each supply will be monitored in order to peg
a safe reorder point.

Table 14| Monthly General and Administrative

Expenses
Office Supplies
petty cash 500
Others 500 1,000
Salaries
35,00
CEO 0
25,00
Operations 0
22,00
Finance 0
22,00
Marketing 0
22,00
HR 0
18,00
Accountant 0
18,00
Market Researcher 0 162,000
Insurance
Table 15| Operating Costs 1,875
Communications
Production 1,500
Utilities
Variable 51,885
Electricity (Office)
Fixed 1,500
96,006.6
Water 5007
Total
Total Administrative 147,891.
Costs 168,37567
Administrative 168,375
TOTAL MONTHLY OPERATING 316,266.
COSTS 67
48
VI. Structural Requirements

A. PantSaloon Boutique Layout

Design Concept: Adding interest to basics
The interior of the store will be ultra modern and dominantly white, to make
the place look more expansive. However, to break the monotony and add
accent and interest to the space, splashes of bright and cheery colors such as
orange and neon green shall be added, via the store accessories and
furniture.

White also projects an image of easy sophistication, and cleanliness. Being a

neutral color, it can be easily made attractive by adding points of interest.
The same applies to PantSaloon’s jeans – a splash of color is all you need to
make something basic stylish, individualistic and interesting.

Rationale: Utmost comfort and sophistication for the valued customer

Since the target market of PantSaloon is the higher end market, EALA Inc.
aims to imbibe a sense of modern luxury into its interiors. EALA Inc. wants to
achieve a clean and organized look for PantSaloon by adopting a minimalist
attitude in its choice of interiors. To add interest and comfort however, unique
pieces that are still comfortable have been selected. More importantly, EALA
Inc. wants a space that would allow them to serve their customers in the best
way possible.

Design Style: Modern Industrial Style

Simple lines, neutral colors and geometric figures have been selected to
achieve the clean and organized look. Silver metal shall accompany the
white walls and furniture, while bright orange and green items shall accent
the white scheme. The flooring caps off this theme by applying acrylic
emulsion to the floor finish.

49
Design Objectives:
• To be able to meet all the client’s necessities and wishes
• To be able to come about with a design that would attract customers in
and keep them coming back
• To be able to translate the concept of the clothing line to the
boutique’s interior
• To be able to design a space that would make for comfortable fitting of
jeans
• To be able to make a design that would cater to the comfort of both
clients and employees
• To be able to create a vibe conducive for generating creative ideas for
jeans

1. Initial Location
PantSaloon shall be located at the second level of J & R Commercial
Center in Katipunan, Quezon City. The proposed space, 25 square
meters big, is currently unoccupied and is available for leasing
anytime.

Figure 13| Front View of J & R Commercial Center

50
 Figure 14| Proposed Shop Location

51

Figure 15| Floor Plan of J & R Commercial Center 2nd floor

2. Proposed Layout
The proposed layout of PantSaloon is designed to maximize the ease of
movement within the store. To maximize the limited floor area, the furniture

52
shall be pushed away to the sides to make room for movement across the
store. Also, furniture will be kept at a minimum, extending only to the
receiving/waiting area sofas and table.

Lighting. The lights that will be installed inside the store are bright
white lights that further accent the whiteness of the scheme. They will
also help in getting an accurate view of the jeans, and provide further
contrast to the colored pieces of furniture within the store. Moreover, a
square glass floor lamp shall be situated at one corner of the sitting
area to serve as additional lighting, accent piece and decoration. All
the lights will be strategically positioned to highlight the different
portions of the store.

Display Area. PantSaloon shall utilize its suspended cabinets,

industrial rack and center table for displays. The suspended cabinets
shall showcase folded fabrics, while the display racks underneath it will
contain finished jeans that the customers can actually emulate. The
center table at the sitting area shall hold the swatches of fabric,
catalogued in a unique and creative manner to also serve as
decorative pieces.

Fitting Rooms. The fitting area is situated at the leftmost corner of

the store covered by an attractive cloth. Inside the fitting room is a
hanging full length mirror so the customer can see the jeans in its
totality. A floor-to-ceiling mirror wall shall be situated at the opposite
side of the fitting room so that the customer may see the jeans from all
angles at the same time, if he or she wishes. Warm white lighting shall
be utilized inside the fitting room to accentuate the color of the skin,
making the customer look better.

The fitting room should be comfortably big, so that customer will have
room to move around and turn without feeling cramped. The hooks by

53
which they would hang their clothes would likewise be big and ample,
so that the customer does not run out of space to hang their clothes.

Waiting Area. The store’s main attraction, facilities-wise, is its sitting

area. Composed of colorful sofas, stylish center table and a floor lamp,
the sitting area will function as the designer’s consulting area, as well
as a place where other customers can comfortably wait for their turn.
The sitting area will be the store’s centerpiece, embodying the vibe
and character that PantSaloon wants to suggest.

Cashier Counter. The cashier counter shall contain the logo of the
store, and be located at the right of the customer upon entering the
store. The counter is strategically positioned to observe all the
activities happening within the store. It will contain the cash safe,
vouchers and the phone, for entertaining store inquiries.

Work Area and Stockroom. The work area and stock room shall be
located at the back of the store concealed from the customer’s view by
a curtain wall. All the equipment for working and storage are pushed to
the sides, thereby facilitating free movement within the work area.

Added Features. Mannequin displays and hanging jeans shall be

placed at the display mirrors on the rightmost side of the entrance
door, as these are the only places where displays can be actually
placed. The displays will include uniquely designed jeans that are sure
to attract the attention of passersby, enticing them to come into the
store and see what PantSaloon has to offer them.

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Figure 16| Proposed Floor Plan of PantSaloon

3. Construction of the Boutique
The construction of the boutique would take about 22 days to finish.
EALA Inc.’s contractor, JGC Trading and Construction, presented a
schedule of construction and itemized costing for the materials an
labor to be used in furnishing and refurbishing the store. Needless to
say, the prepared schedule took into consideration the rules of the

55
building operators on construction that is, contractors will only be
allowed to work from 8pm to 12 mn, or four hours every day. Lastly,
the calculated costing for the construction would reach P293, 629.
Table 16| Construction Costs
Materials Labor Cost TOTAL
Cost
u
qty nit unit total unit total
A. General Requirements
Mobilization/
Demobilization 1 lot 5,000
Power and water
consumption 1 lot 15,000
Permit and Fees 1 lot 10,500
Hauling and Lifting 1 lot 8,900
Final cleaning/ clearing 1 lot 5,000
44,400
B. Demolition Requirements
1
Concrete 2.6 m2 350 4,410 4,410
1
Wood 6.8 m2 150 2,520 2,520
Hauling and Disposal of
Debris 1 lot 2,500 2,500
9,430
C. Carpentry Requirements
18,50 18,50 7,40
Cashier counter 1 0 0 0 7,400 25,900
Floating shelves 6 1000 6000 833 5,000 11,000
1
Storage cabinets 2 2500 5000 350 2,700 7,700
2
Worktables 1 1500 1500 000 2,000 3,500
48,100
D. Painting requirements
1200
Ceiling - enamel 25 m2 480 0 240 6,000 18,000
2100 15,75
Walls - semi gloss latex 175 m2 120 0 90 0 36,750
2
Cashier counter - duco 1 4500 4500 100 2,100 6,600
2
Storage cabinets - duco 2 1500 3000 500 2,500 5,500
2
Floating shelves - duco 6 500 3000 500 2,500 5,500
Worktables - flat 1 120 120 90 90 210
72,560

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E. Wall finishing
Working area partition
(fabric) 1 lot 1480 1480 500 500 1,980
Fitting room partition
(fabric) 1 lot 1000 1000 500 500 1,500
Mirror on plywood 1045
backing 11 m2 950 0 380 4180 14,630
18,110
F. Floor finishing
Cement laying 25 m2 150 3750 50 1250 5,000
Acrylic emulsion 25 m3 200 5000 100 2500 7,500
6 5312.
Carpet roll .25 m4 850 5 100 625 5,938
18,438
G. Ceiling works
Flat ceiling using 1/4 1200
plywood 25 m2 480 0 240 6000 18,000
18,000
H. Bathroom Requirements
Tiling 200 pcs 12.5 2500 50 1000 3,500
Sink and Toilet 6
Installation 1 lot 4000 4000 000 6000 10,000
13,500
I. Electrical Works
12,33 12,33 9,85
Wiring and Conduit 1 lot 0 0 0 9,850 22,180
2,15
Switches and Outlets 1 lot 4,500 4,500 0 2,150 4,650
pc
Fluorescent- Cove Light 5 s. 275 1,375 150 750 2,125
Panel Box and 4,50
Accessories 1 lot 7,500 7,500 0 4,500 12,000
40,955
J. Other Finishes
Laminated Cashier 1 1,05
countertop .92 m2 3,500 6,720 0 2,016 8,736
Aircon provisions 1 lot 900 900 500 500 1,400
10,136
293,62
TOTAL 9

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Table 17| Construction Schedule
Duration: 22 Days
1 1 1 1 1 1 1 1 1 1 2 2
1 2 3 4 5 6 7 8 9 0 1 2 3 4 5 6 7 8 9 0 1 22
Demolition Requirements
Concrete
Wood
Hauling and Disposal of
Debris
Carpentry Requirements
Cashier counter
Floating shelves
Storage cabinets
Worktables
Ceiling works
Flat ceiling using 1/4
plywood
Electrical Works
Wiring and Conduit
Switches and Outlets
Fluorescent- Cove Light
Panel Box and Accessories
Panting requirements
Ceiling – enamel
Walls - semi gloss latex
Cashier counter - duco
Floating shelves - duco
Storage cabinets - duco
Worktables – flat
Floor finishing
Cement laying
Acrylic emulsion
Carpet roll
Wall finishing
Working area partition
(fabric)
Fitting room partition (fabric)
Mirror on plywood backing
Bathroom Requirements
Sink and Toilet Installation
Tiling

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B. EALA Inc. Office Layout
The office of EALA Inc shall be located at the 4th floor of 33 P. Burgos St.
corner G. del Pilar Street, West 10th Ave., Caloocan City. The building is
conveniently located along the boundaries of Quezon City, Malabon, Navotas
and Manila. It is also 45 minutes away from Katipunan, where the store will
be located. The total space area available for occupancy is 36.7 square
meters.

1. Proposed Layout
The office space is intended for conducting business transactions,
generating reports, receiving customers and job applicants, and
providing storage for documents essential to EALA Inc. Because of this,
the office space shall be divided into 4 areas: conference, computer,
receiving and storage.

The office unit is already furnished with wall paper, air conditioner,
cabinets, and tables.

Additional fixtures and furniture, office equipment included, shall be

acquired for usage in company transactions.

59
 TP

Office
Figure 17| Proposed Office Layout of EALA1234
Inc.

60
Table 18| Costing of Office Investments
EXPECTE
OFFICE EQUIPMENT Qty. COST TOTAL D
LIFE
4 in 1 office machine
1 12,000.00 12,000.00 5 years
(printer, scanner, copier, fax)
Computer Set 2 30,000.00 60,000.00 5 years
P
TOTAL
72,000.00

EXPECTE
FURNITURES & FIXTURES Qty. COST TOTAL D
LIFE
Filing cabinets 2 2,500.00 P 5,000.00 10 years

Conference chairs and tables (set) 1 20,000.00 20,000.00 10 years

Sofa leather 1 4,000.00 4,000.00 10 years

Office tables 2 2,500.00 5,000.00 10 years

Office chairs 4 1,000.00 4,000.00 7 years

Fire extinguisher 1 1,700.00 1,700.00 10 years

TOTAL P 39,700.00

Straight line method shall be used to depreciate the aforementioned

items. Except for the computer set and 4-in-1 office machine, all other
items shall be given an expected life of ten years. While the company
believes that the furniture and fixtures would be durable enough to last for
the specified durations, the specified office equipment would only last half
as long because of the need to keep up with the fast-paced change in
technology. The risk of obsolescence therefore is also higher for
equipment rather than for furniture and fixtures.

VII. Business Requirements

61
The following permits have to be processed:
1. Barangay Clearance
2. Mayor’s Business Permit
3. DTI Certificate of Registration
4. DOLE Registration
5. BIR Registration
6. BIR POS Permit
7. BIR Authority to PrintThe law requires the execution of the Articles of Incorporation so as to endow the
corporation the capacity to transact the business for which it was created.
Articles of Together with the Treasurer’s Affidavit and upon payment of filing and publication
Incorporation fees, the Securities and Exchange Commission shall then issue the Certificate of
While the following permitsIncorporation
have to to be thesecured
business entity.
from the City / Municipality:
1. Building Permit
2. Electrical Permit
Barangay The business must then secure a certification from the barangay to where it will
operate. The Barangay Clearance shall include the name of the owner, the name,
Clearance
3. Wiring Permit nature, and address of the establishment, and the date when the form has been
Fee: P400.00 approved by the Barangay Chairman.
4. Occupancy Permit
5. Locational Clearance
6. Sanitary Permit The Community Tax Certificate can be obtained from the Bureau of Internal
Community Tax
Revenue after accomplishing the Application of Registration and payment of
7. Certificate of Fire Safety
Certificate AnnualInspection
Registration Fee and Documentary Stamp requirements.
8. Certificate of Electrical Inspection

The Community
Coordinate with building operators forTax
theCertificate can be obtained from the Bureau of Internal
following:
Sanitary Permit Revenue after accomplishing the Application of Registration and payment of
1. Final building inspection
Annual Registration Fee and Documentary Stamp requirements.

2. Permit to Move-in
3. Overtime / Work Permit
The establishment must then be registered to specific zoning areas as assigned
Locational by the Local Zoning Board in the Planning Department of the City/Municipality.
4. Permit to Pull-out Garbage
Clearance Upon application and approval, the business shall be classified as belonging to
the Residential, Commercial, or Institutional Zones, whichever it is deemed
Fee: P425.00
included.

As persuant with the fire safety and and protection requirements of the Fire Code
Fire Clearance of the Philippines (PD-1185), the business must obtain a Fire Safety Inspection
Certificate before it could operate. The building or occupancy must be inspected
Fee: P356.10 and should be subject to the recommendation and approval from the Chief
Inspector of the Municipal Fire Marshal.

A. Requirements
Building for Businessmust
The establishment Application
then request for a certification of tenancy from the
Administrator’s building or mall to where it shall locate its business at. The certificate should
To be accomplished include
at thetheBusiness Permit
name of the stall and the and
levelLicense Office
where it is placed, the space code and
Certificate the its approximate floor area.

Upon completion of the necessary requirements presented above, the documents

shall then be presented to the Business Permit and License Office for further
Permit to Operate inspection and assessment. Required Taxes and Regulatory Charges must 62also
be accomplished before the the Municipal Administrator, through the authority of
the Mayor, could grant its approval in the issuance of the Permit to Operate.
Table 19| City/Municipal Taxes, Fees, and Charges

Assessments Reference Amount Due

Sec. 15-19,37&44,
Local Taxes
RCMM
Local Business Sec. 34, RCMM

63
 Tax on Delivery Vans/Trucks Sec. 19(25), RCMM
Tax on Signboards/ Bill Boards Sec. 40, RCMM
Regulatory Charges
Mayor’s Permit Fee Sec. 105, RCMM 450.00
Garbage Charges Sec. 63, RCMM 100.00
Delivery Vans/Trucks Permit Fee Sec. 105(b), RCMM
Business Registration Plate 180.00
Inspection Fees
Sanitary Inspection Fee Sec. 109, RCMM 36.00
Building Inspection Fee P.D. 1096
Electrical Inspection Fee P.D. 1096 175.00
Mechanical Inspection Fee P.D. 1096
Plumbing Inspection Fee P.D. 1096
Signboard/Billboard Inspection
Sec. 105(b), 13, RCMM 50.00
Fee
Penalty (Surcharge & Interests)

** Mode of Payment: QUARTERLY

** To be paid for Current License Period

B. Leasing Requirements
a. Legal Requirements (Corporation)
1. Articles of Incorporation and By-Laws

64
 2. Board Resolution authorizing the Contract of Lease and designating
the Authorized Signatory
3. Community Tax Certificate of the Corporation and the Authorized
Signatory
4. Registration of Business Name with DTI
5. Certificate of Registration with BIR
6. Business Permit

b. Technical Aspects
1. Floor Plan
2. Ceiling Plan
3. Front Elevation
4. Longitudinal Section
5. Cross-Section
6. Perspective
7. Signage
8. Electrical Load Schedule
8a. Electrical Layout
8b. Lighting Fixture
8c. Power
8d. Signage
9. Color Scheme
10. Scope of Work

Table 20| Initial Investment Costs

Registration Fees
SEC 3,189
BIR 500
DTI 515
Business Permit 7,472
Total Registration Fees 11,676

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Fixed Assets
Office
Equipment
4 in 1 machine 12,000
Computer Set 60,000
Furniture and Fixtures
Cabinets 2,500
Chairs and table 29,000
Sofa 4,000
Fire extinguisher 1,700
Leasehold Improvements 15,000
Total Office Assets 124,200
Store
Equipment
Sewing machine 30,000
Edging machines 15,000
Buttonholers 5,000
Jeans software 20,000
Computer set 30,000
Chairs and worktables 5,710
Phone 2,000
Safety deposit box 1,700
Furniture and Fixtures
Display materials 15,000
2-seater sofa 6,000
Chair 2,000
Center table 4,000
Floor lamp 1,500
Lighting system 8,000
Fire extinguisher 1,700
Air conditioning unit 17,000
Leasehold Improvements 293,629
Vehicle 300,000
Total Store Assets 758,239
Total Fixed Assets 882,439

Initial Advertising Costs

Print Materials 80,500
Ribbon Cutting 30,000
Total Initial Advertising Costs 110,500
Initial Working Capital
Current Assets
Cash on Hand 500,000
Supplies 53,500
Materials 39,885

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 Prepaid Rent 75,000
Total Current Assets 668,385
Production Costs
Variable
Indirect Labor (Washing: Outsource) 15,000
Total Variable Costs 15,000
Fixed
Direct Labor (wages) 48,000
Indirect Labor (Designer) 20,000
Rent Expense 12,500
Utilities 9,090
Transportation 3,000
Repair and Maintenance 0
Total Fixed Costs 92,590
Total Production Costs 107,590
Administrative Costs
Office Supplies 1,000
Salaries 162,000
Insurance 1,875
Communications 1,500
Utilities 2,000
Total Administrative Costs 168,375
Total Initial Working Capital 944,350
TOTAL INITIAL INVESTMENT COST 1,948,965

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