Technical feasibility Study

Table of Contents

I. II.

Introduction

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A. Executive Summary …………………………………………………… Production Process A. Product Design 1. Description

2. Sizing …………………………………………………………… 3. Sample Designs ….... B. Raw Materials 1. Suppliers … C. Production Arrangements • • • • • III. 1. Cost-Benefit Analysis …………………………………………… In-house Manufacturing Subcontracting

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2. Subcontractor

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Terms of Contract …………………………………………… …………………………………………………… ……………………………………

3. Product Flow

Production Scheduling Costing

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Store Operations …………………………………………………………… A. Organizational Structure 1. Functions … 2. Qualifications …………………………………………………… 3. Recruitment and Training …
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4. Compensation and Benefits …………………………………… B. Daily Operations 1. Staff Scheduling …………………………………………………… ……………………………………………………

2. Uniform and Dress Code ……………………………………………

C. Inventory Management D. Cash Management E. Sales Management IV.

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Structural Requirements …………………………………………………… A. Store Layout …………………………………………………………… B. Office / Warehouse Layout …………………………………………… ……………………………………

V.

Business Requirements B. Lease Application

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A. Application for Business Permit VI. VII.

Endnotes …………………………………………………………………… Appendix ……………………………………………………………………

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Introduction
After being able to analyze and evaluate the different factors that evolve around thee business proposal, and after identifying the targeted market through which the study shall focus on, En Cima, Incorporated would now try to identify the technical aspects that would enable the business to fully substantiate its form and structure. En Cima proposed the establishment of Lilliput, a clothing boutique that would cater to the petite size of the typical Filipina woman. As for its positioning statement
Lilliput shall be known as a specialty shop that offers chic, sleek, timeless, and naturally fashionable apparels designed to complement petite bodies. This principle would then become the central focus of the entire technical processes spanning from the conceptualization of designs, selection of fabrics and raw materials, down to visualization of structural designs and perspectives of the store that would translate the essence of Lilliput’s target market. In the initial phase of the business plan, Lilliput shall open up its first boutique at Shoppesville Arcade in Greenhills. It aims to supply approximately 1.11% of the projected demand for its products by being able to generate approximately 20 designs with 120 units

each for tops (blouses, shirts, and dresses), and with 10 styles with 100 units each for bottoms (pants and skirts). Over the years, Lilliput would strive to aim for the bigger share in the big “pie” as the business gradually creates its niche in the market. After the third year, the company will open up branches in Robinson’s Galleria, Glorietta Center, and The SM Mall of Asia.

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Considering all the plans and projections for the business, and after evaluating necessary procedural requirements and complying with the legal practices needed in setting up the store, En Cima Incorporated deems that Lilliput is thereby technically feasible to operate in the market. Executive Summary En Cima, Inc. attempts to determine the technical feasibility of the Lilliput boutique shop by analyzing the crucial processes and costs in the entire production flow, human resources management, the store operations as well as its construction, and complying with the legal requirements before the business can operate. First and foremost, the group chose to apply a simple and realistic approach in considering the alternatives of whether to produce Lilliput products in-house or to subcontract. By means of performing a cost-benefit analysis between the two options, the group finally concluded that subcontracting is the most practical step that a starter can do given especially the high overhead costs of acquiring and maintaining the equipment, plant site, and labor required in executing the whole production process. On the other hand, En Cima will take care of the purchasing of materials and setting the specifications of the Lilliput clothing line. The corporation will employ professionals who can best determine how the Lilliput products will be differentiated from other brands in terms of enhancing the physique and stature of the customers. This can be best done by carefully studying what fabrics, designs, and colors are suited to the target market that would not only provide the right fit and style, but also further enhance and elongate the built of petite women. With the help of professional guidance, the group also formulated an adjusted size chart containing dimensions attuned to the varied body sizes of petite women whose height fall under the 4’10 to 5’3 range. This has been done since the Lilliput size structure will definitely differ from the usual sizing schemes that most apparel shops utilize.

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Accordingly, the store structure has also been designed to reflect what Lilliput experience would be all about. Presenting a touch of difference that would set the boutique apart, the group planned to maximize a leased space in a less expensive but well-visited Greenhills mall. The group then adopted an entirely different and hip interior design which aims to present a “refined look for the masses”. Also, the space itself would also cater to the needs and comfort of the petite shoppers, their companions, and employees as well. The construction and renovation required to come up with the whole idea would approximately cost the group P 573,562.00. The estimated total monthly fixed cost for the initial location will amount to P55,000.00. Certain legal requirements shall be followed before having the business operations started. Among these requirements are barangay clearance, community tax clearance, sanitary permit, and other clearances necessary before the issuance of the official mayor’s permit. Moreover, the group focused as well to the organizational structure to ensure the smooth operations of the business. Department managers would be recruited, who will directly report to the General Manager according to the responsibilities assigned to them. It is fair enough that En Cima, Inc. will provide for the qualifications of the candidates for the said various positions to guarantee a dynamic group of people working their best for the Lilliput brand. Basic regulations for the inventory, cash, and sales management of the store were also made available for the proper implementation of individual duties. Lastly, rough estimations of all the necessary costs were taken into account to determine the initial investment and additional funds needed to run the Lilliput boutique shop.

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Production Process
Product Design

In its line of clothing, Lilliput will offer the basics with a splash of the latest fashion trends that petite women would surely love. Lilliput aims to provide fashionable and practical clothes that fit the petite figure perfectly. Lilliput’s line of clothing is designed to suit and enhance the height and the physical attributes of the typical Pinay, providing the right fit, the right form and the right proportions. The theme for Lilliput’s line of clothing is dynamic as it constantly keeps up with the latest fashion trends. However, projected fashion styles that would be followed are noted to tailor to flattering the petite figure. The currently trendy “lady-like” theme is incorporated in the designs of Lilliput’s clothing line as this trend ultimately flatters the lithe form of petite women. The ethic-bohemian style and volume (layered) look are fashion trends featured in the designs as such draws attention upwards, thus making the petite figure look taller and slimmer. In designing for the product, Lilliput’s in-house designers have put down basic fashion tips and advices that should be noted for petite women. Although petite women can have the same look as with regular women through clothes that are scaled down to their size, Lilliput offers a line of clothing that would elongate the petite figure’s silhouette, giving a “taller” and fuller look to the petite figure. Each design of the product

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line varies in colors and in materials. Fabrics and patterns are chosen to suit the smaller frame of the petite women.

Colors Lilliput’s apparels are characterized by cleaner, discreet, and vibrant colors and shades. Monochromatic color scheme is advised by fashionistas to elongate the petite figure but Lilliput offers a dash of fun to the otherwise boring color scheme. Vibrant colors are matched in low contrast so as to provide a hint of vibrancy while still flattering the petite figure. Lilliput also provides the basic colors that women of all body types prefer in their wardrobes. Basic black and whites will still be present to go well corporate functions and sexy outfits for evening wear. However, to tailor to the petite figure, Lilliput makes use of pattern designs that flatter the figure, such as V-lines and vertical lines. Fabrics Fabrics that are soft and flowing would be used in making the Lilliput’s line of clothing so as to elongate the silhouette, while keeping it simple and feminine. Large prints are avoided since such styles tend to make the petite figure look bulky.1 Heavyweight fabrics are only used for selected bottoms. Light fabrics with minimal pattern are chosen for the tops.2 For the tops, the materials often used in high quality-oriented similar boutiques come in knitted or weaved cotton, rayon, and wool. A little bit of lace, silk and chiffon materials will be added to other items for a more sultry and sexier look.

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For the bottoms, a significant amount of denim will be utilized. Cotton and other similar lightweight fabrics for tops will be used as well in more formal slacks, comfort khakis and skirts.

Lilliput’s Product Line Tops For the tops during the introduction phase of the business operations, Lilliput’s line of Sleek and Chic clothing aims to elongate the petite-sized women’s silhouette. Horizontal patterns are avoided since such make petite-sized women appear wider and shorter than they are. Instead, vertical lines are used such as pleats, v-necklines, open jackets and stacks so that the petite figure would not look “cut up.” Similar colors are also chosen so as to elongate their silhouette.3 In designing for collared tops, the collars are detailed with interesting prints so as to attract attention towards the face. This style makes the petite woman appear taller. Boleros or short jackets are provided also in Lilliput’s line since these would flatter the petite figure.4 Bottoms For the bottoms during the introduction phase of the product line, Lilliput aims to provide the petite-sized women with fashionably timeless denim jeans that they would find practical and stylish at the same time. Stretch denims are offered in this line since they work best for petite-sized women. Stretch denims hug the figure whereas just regular denims can be too baggy or too long for the petite figure.5

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Lilliput’s line of skirts is designed to lengthen the look of the petite women as well. A bias cut skirt is chosen as this also works best for the petite figure. Such a pattern would not overwhelm the women with too much fabric. A bias cut skirt flares at the bottom, keeping the hem fluid and flowing. Thus, this type of style accentuates the hips, making the petite-sized figure appear sexier.6 Other Wears Expansion of product lines is expected during the growth and maturity stages of the businesses to provide more excellent shopping experience to the target market. During the growth stage of the business operations, full body casual and semi-formal dresses would be introduced in the product line. Also, a new line of intimate wear will be offered as well as basic footwear. Full body casual and semi-formal dresses are designed in low contrasting and monochromatic colors to flatter the petite figure. Underwear and nightgowns are also mass customized to fit the smaller torso of petite women. Although outsourced, basic footwear such as slippers and sandals will range from size 5 to size 8, which are average foot sizes of petite Pinay women. More footwear items such as stilettos, pumps, and sneakers would be introduced in the maturity phase of the business operations. These would also range from size 5 to size 8, also outsourced. Other items to be introduced at this stage are signature perfume and colognes, hair and body accessories, and basic cosmetic line. For Lilliput’s line of accessories, slim narrow belts are offered.7 Wide belts are avoided as these emphasize the short torso of petite-sized figures. Also offered in this line are necklaces or large-scale earrings that would attract attention towards the face, making the petite women look taller. Large-scale earrings would also frame the face.8 Sizing

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Lilliput’s clothing line will offer sizes proportionate to the Pinay petite. These sizes are averaged accordingly in proportion to the height range of 4 feet, 10 inches to 5 feet, 3 inches. The sizing chart is created based on professional dressmakers’ opinions on averaging the sizes of the Pinay petites. The sizing chart is as follows:

Lilliput Size Chart9 Measurement (in) Shoulder Bust Waist Hip I Hip II Figure Shirt Length Armhole Sleeve Length Sleeve Width Bust Distance Tiro Length Small 14-15 29-31 25-26 33 34-35 15 20-21 15 6 11.5 6.5 9 36-37 LS 20 Medium 15-16 32-34 28-29 36 38 16 23-24 16-17 LS 7 22 12 7 10-10.5 38-39 Large 16-17 35-37 30-32 38 40 17 25 18 7.5 13 7.5 11 40-41 LS 23

Sample Designs Lilliput’s vision is to provide the petite Pinay fashionistas with practical yet fashionable styles that would flatter their figure, elongate their silhouette and give a slimming and taller look that regular merchandise from leading retailers cannot offer. The sample designs exemplify this vision of Lilliput.10 :: Sample Design 1. A detailed long-sleeved brown blouse with a V-lined pleated neckline is paired with a light pink knee-length pencil skirt. The low contrasting colors
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give a taller look to the petite figure. The V-lined pleated neckline draws attention to the face as the pencil skirt gives a slimming look to the figure. The silhouette of the petite figure is elongated as attention is drawn upwards. :: Sample Design 2. The outfit typifies a layered look, with a short, cropped jacket worn over a plain top to accentuate the curves of the petite figure. The pink jacket with puffed sleeves to trim the arms draws attention to the curves of the waist to the hipline. With matching low riding black pants to emphasize the hips, a slimming look is fully established. :: Sample Design 3. A colorfully printed flounce skirt is paired with a black shortsleeved shirt to provide color relief. The outfit is a perfect casual wear with a touch of vibrancy and femininity. The detailed skirt is cut above the knee with a flowing hemline, making the legs look slimmer and longer. :: Sample Design 4. A brown body dress with flowing hemline topped with a pink bolero with puffed sleeves add vibrancy to the informal look as well as emphasizing the curves of the petite figure. The cut of the dress accentuates the legs as well as elongates the silhouette of the figure. The asymmetric belt gives definition to the waist, thus giving a slimming look to the figure. :: Sample Design 5. The outfit is comprised of a white round-necked top paired with a printed black skirt, perfect for the casual dressed-up look. The petite figure is accentuated through the belt that is in contrast with the vertical look of the skirt, emphasizing the curves of the petite figure. :: Sample Design 6. Printed top with detailed neckline and sleeves paired with a pair of knee-length capri pants within the color scheme to provide an almost monochromatic look to elongate the petite figure. The detailed top draws the attention upwards, giving

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more emphasis to the face, rather than to the height. The cut of the capri pants also accentuates the legs, giving a taller look to the petite frame. :: Sample Design 7. The outfit gives a layered look with a touch of femininity in vibrant colors. The green short-length jacket in contrast with the pink blouse worn underneath shows a splash of colors while adding curves to the petite figure. The printed flounce skirt with the detailed belt also gives emphasis to the curves of the figure. :: Sample Design 8. The outfit gives an ultrafemine look through the sheer blouse under which a plain top is worn to accentuate the details such as the black bow through the waistline and the interesting details on the neckline and sleeves. To keep up with the color scheme, paired with the yellow top is the softly pleated brown skirt that maintains the femininity of the look. :: Sample Design 9. Similar to the previous design, the top is a printed blouse with interestingly detailed neckline and collar to draw attention upwards. Paired with a white flounce skirt with a flowing hemline, the slimming look is perfected as emphasis is given to the curves of the hips to the legs.

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Sample Design 1

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Sample Design 2

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Sample Design 3

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Sample Design 4

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Sample Design 5

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Sample Design 6

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Sample Design 7

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Sample Design 8

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Sample Design 9

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Raw Materials The raw materials comprises up to 60% of the finished product. Another 20% goes to labor costs. This, in turn can be attributed to the subcontractors who will be responsible for supplying the services needed in the conversion of the raw materials into finished products. The remaining 20% of the costs is allotted to the other overhead expenses of the business. Therefore, the textile or fabric acquired from suppliers is a very important input that will contribute to the quality of the finished product. With the target market in mind, there are certain considerations as regards the type of textile or fabric that will be used in production of the clothes. Not all fabrics would flatter the proportion of a petite frame. For example, fabrics with too-large prints would tend to drown a small figure. According to Petite Style by Susan Ludwig, the following fabrics would be complimentary: • • • Fabrics that drape, flow and hang softly on the body, such as knits Smooth, lightweight fabrics, such as cotton and silk Natural fabrics, such as cotton, silk, wool, linen

Conversely, the following should be avoided when choosing fabrics: • • • Stiff fabrics, like taffeta Bulky fabrics like mohair, or terry cloth, or any heavily textured fabric or knit Fabrics that reflect light, like satin and velour, as they tend to make the wearer look heavier
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In addition, the book suggested a list of fabrics which includes notes about how each flatters petites (See Appendix 1). However, the list is not a definitive guide in fabric or clothing shopping since the style and cut of the clothes and figure of the wearer would also be contributing factors to the over-all effect of the apparel. Suppliers Raw materials for the products will be obtained from the different suppliers in the areas of Divisoria and Tutuban. The place is abundant with suppliers of various textiles, fabrics and other materials needed for the manufacture of clothes, such as buttons, laces, trims, etc. In addition, Ms. Tina Navarro of Ilaya mentioned that most designers and clothing manufacturers buy their supplies from these areas because of the variety of materials available as well as the very affordable prices. The following are some of the possible suppliers who can provide the necessary materials needed for production input: • New State Lace Center  • Branch KX – 5 Cluster II, Tutuban Center

Mega Bride Collection  K-10 Ground Floor, Cluster II, Tutuban Center

Goldrich Textile  Stall #16-18, Tutuban Center

Fine Cuts Merchandising  C-39, Tutuban Center

Sean & Stacey Barong Selection  C25 & C26 Cluster I, Tutuban Center

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Supplies are selected based on the type of material and fabrics needed for each design of the clothes. Since the suppliers cannot possibly have all the required fabrics and materials needed, there is a need to have several suppliers on hand who can provide such fabrics and materials so as not to compromise the quality of the clothes that will be manufactured. The number of suppliers can be an advantage to the company since competition between them will tend to drive down the prices of the goods. The company can have more bargaining power in terms of acquiring discounts on supplies. Credit terms and discounts will be determined on a per transaction basis which would be included in the terms of agreement between the company and the supplier. Since there are numerous suppliers of the materials needed by the company, there are no foreseeable problems in terms of future supply availability. However, in terms of the quality of materials such as fabrics, there may be some difference between the products of one store. Because of this, it is imperative for the company to look for suppliers with more or less the same quality of goods. Purchase will be in bulk since designs will be seasonal. The quantity will depend on the production capacity as determined by the subcontractors. As mentioned, this will allow the company to have more bargaining power in terms of credit terms and discounts since most stores will provide discounts when customers buy in bulk. The company should definitely take this opportunity in order to obtain more cost savings.

Production Arrangements Cost-Benefit Analysis Since the Lilliput Boutique is only a starting company, there are various concerns that need to be given attention to especially with regard to its manufacturing processes. The company has taken into consideration several aspects of the processes and weighed

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the pro’s and cons’ of whether to have in-house manufacturing or outsourcing subcontractors. Upon duly evaluating these, the company has decided to have a small-scale subcontractor for the production of their clothes for the first three years of its operations. Eventually, a large-scale subcontractor would be deemed proper and practical for the company.

In-House Manufacturing Advantages Having an in-house manufacturing of the products gives several benefits for the company. One of this would be the closely supervised production of the clothes. Quality would not be compromised. It is very important to take into consideration this aspect because quality increases value for the product. With this, deadlines will also be easily met. This won’t pose as a problem with regard to the production schedule. Everything will be under the control of the management in terms of the making of the products. Also, another benefit would be that there won’t be added costs that a subcontractor could impose in our production orders. Part of this would be the additional costs in delivering the goods as well as the other variable costs in producing the garments such as inventory and warehousing costs. In the long run, having their own in-house manufacturing, the company would have lower production costs in the future. Disadvantages Establishing our own in-house manufacturers also entails costs for the company. With regard to the production itself, the company would have to procure big and expensive equipment such as the sewing machines and ironing machines. Not only would this constitute a big part of the capital, but it would

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also result in added warehousing and inventory costs. In addition, there would also be maintenance costs on both the production plan and equipment to take care of. This would easily translate to substantial overhead costs for the company. With the plan of having ten sewers and sewing machines, there would be a threat of idle human resources since the company would not be producing in mass production. Also, having to keep regular sewers as regular employees would mean providing them of mandatory benefits required by law. Subcontracting Advantages The can get away with the problems of purchasing and maintaining equipment and other auxiliary materials such as thread, etc. Although these items have small increments in the finances of the company, these will entail costs which are variable by nature and cannot be compromised, especially with the quality of these materials. Also with regard to the costs, manufacturing’s overhead costs are not to be shouldered by the company. Expenses such as the plant and warehouse rental, electricity, etc. constitute a big bulk of the budget of the company. In addition to this, subcontractors do not have the privilege of receiving fringe benefits from the company. These benefits are usually given to employees of companies. Although they are only small increments to the salary and compensation of the workers they also add up to a big chunk of the expenses of the company. Disadvantages Apart from the advantages of having subcontractors, disadvantages are also present and are necessary to keep in consideration. Since subcontractors are outsourced agencies, their products cannot be well-supervised, therefore the quality of their work can be compromised, especially when the due date is already

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near. They might have the tendency of delaying their production until such time that the products are near delivery date. Also, subcontractors tend to go beyond the stated deadline of the finished products. Without close supervision among the workers, manufacturing and production by subcontractors have the inclination of lower quality as compared with in-house manufacturing.

Costing In-house Expenses Fixed Costs Equipment Plant Electricity Total Fixed Costs P 330,000 20,000 25,000 375,000

Variable Costs Fabric/Textile* For blouses For jeans For non-jeans For shirts Supplies/Miscellaneous Materials Labor (P 8,000 x 10 employees) Total Variable Costs 255,600 48,000 56,800 37,500 14,980 80,000 474,880
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TOTAL EXPENSES

849,880

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*Costs are estimated according to the designer and confirmed by the suppliers of fabric

Subcontracting Expenses

TOPS P 150 at 120 units each of the 20 designs 960 units Small (40%) 960 units Medium (40%) 480 units Large (20%) 144,000 144,000 72,000 360,000

BOTTOMS P 170 at 100 units each of the 10 styles 400 units Small (40%) 400 units Medium (40%) 200 units Large (20%) 68,000 68,000 34,000 170,000

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TOTAL EXPENSES

849,880

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Subcontractors

The company will be availing of the services of St. Claire Apparel (SCA) which is located in Obando, Bulacan for its subcontracting needs. Among all the subcontractors En Cima has contacted and discussed the agreements of the contract with, SCA has so far been the most qualified and fit for the job. Good subcontractors are generally located within the outskirts of the Metro. They could actually go as far as Pampanga, but the company had decided do business with SCA because the quality of their work has already been established as proven by their transactions with popular clothing brands like Osh Kosh B’Gosh, Tommy Hilfiger, and etc. SCA also suits our specifications for subcontractors quite well.

Basically, the contract with SCA include the terms of payment, production schedule and other terms of agreement which are all discussed and agreed upon by actual transactions. Based on the group’s interviews, it takes an average of one week for a subcontracting agency to determine the whole process of making any product. This learning curve of one week also gives time for the manufacturer’s to test the fabric, how long they will take to finish such project as well as their capacity, which is how much they can make for a certain period of time. Also, on the average, it takes about three weeks for a skilled sewer to make around 120 units of a piece of clothing, since the method suited for Lilliput boutique would be a piece-wise method. This means that instead of an assembly line, a single article of clothing would be produced by one sewer, all alone. The logic behind this is that assembly lines only work for mass-produced manufacturing, which at the minimum makes 10,000 units of clothing for the said method. From this, the subcontractor can base their assessment of the lead times and production capacity which will then be the elements of the contract.

As with any contract, any violation would require proper penalty. As much as there are deadlines for the subcontractor to meet, there will also be deadlines for the
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company as to the payment scheme as well as the submission of pre-cut patterns and delivery of fabric. Any defects would then be returned to the subcontractor to be reworked. Terms of Contract The production arrangement will be discussed during a meeting between En Cima’s Production Manager and St. Claire Apparel’s representative. It is during the initial meeting that En Cima will present to SCA the materials and designs of the clothes to be produced, discuss the proposed production deadlines, negotiate labor fees and talk about the payment terms. The production schedule, labor fees, and payment terms vary depending on the specifications and details of the design. Designs with intricate details or delicate materials are more difficult to make, therefore, require more time to finish and higher labor fees. En Cima will be the one to choose and purchase the materials needed for the apparels, while SCA creates the clothes depending on the specifications of the designs provided. Production will immediately start after the first meeting. SCA will be given one week to evaluate the expected pacing of their production. With this, the initial payment of 25% of the total amount of the labor fees will be paid to SCA.

After one week, the representatives of En Cima and St. Claire Apparel will have a second meeting to discuss the final deadline of production and conduct the actual contract signing. The actual capacity and time period of manufacturing would already be determined by then. By this, deadlines would be set and put in the contract. Upon signing of the contract, 50% of the total fees would be paid to SCA. The remaining 25% will be given at the date when the products are due. En Cima would not require delivery services from SCA since they own their own service vehicle for that purpose. The finished goods will be double-checked and counted upon due date. In case there is delay in the production schedule, SCA would be held responsible to deliver on time. A penalty of at most 10% of the total amount per day would be imposed to SCA. For cases of factory defects, on the other hand, SCA would have to rework on the said finished goods without added costs for En Cima.

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PRODUCT FLOW This portion will discuss the stages of how Lilliput’s products (i.e. various clothes) are made available to the market. The product flow process for Lilliput involves four (4) general stages, as presented in Figure 2.2. For the first few years of the business, most of the stages are designated to few persons, but as Lilliput undertakes expansion, various stages would be departmentalized.
Figure 2.2

Lilliput’s Product Flow

Conceptualization Research Market Assessment Design Specification

Pattern Making/ Sampling Pattern Drafting Material Sampling Sewing Standard Identification Costing and Pricing Design Adjustment

Production Demand Forecast Materials Purchase Subcontract Quality inspection

Distribution / Storage Delivery Warehousin g

Conceptualization stage involves researching for new fashion trends both locally and internationally to serve as basis for developing new designs and collections. Assessment of the market must also be done prior to developing new designs so as to know the needs and wants of the market, and which products would probably be most saleable. From these researches, the in-house designer would then develop the designs to be approved and sampled. Design specifications include possible materials to be used, add-ons to be placed such as types of buttons, biases, laces, stones, etc., and other design details such as inside pockets, special stitches and the like. En Cima opts to hire an inhouse designer as opposed to buying designs to different designers because of the additional value it adds to the product process. The designs are more monitored, having a

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similar design style and that in the early stage of the business, designer serves as the researcher for conceptualization stage. Once designs are approved, patterns are then drafted to serve as a guide for fabric cutting. A sample is then made so as to assess the proper materials (fabric, accessories/add-on) and the sewing standards or requirements needed for the specific designs. This is very important especially to intricate designs or uncommon cuts. This will also be the basis for costing and pricing of the product. Necessary design or materials adjustments are done if cost is too high. Having the designs sampled by the company, the next stage would be the production process. Production stage involves several steps as seen in figure ___. It starts with forecasting the demand or sales (in units) for the specific design to be used as the production figure. The bill of materials is then drafted and materials are purchased. These materials, together with the designs are then passed-on to the subcontractors for production. Quality inspection is done upon delivery. If the delivered products do not meet the quality requirement of En Cima, the products are returned and re-worked by the subcontractors without additional cost. The last stage of the product flow would be the distribution and storage of the products. Some of the products would be delivered immediately to the boutiques and stored at the stockroom while the rest would be kept at the warehouse. A more detailed presentation of the product flow or production process is presented in figure ___ as a flowchart model. Once the pattern is done, purchasing personnel scouts for the possible materials, as indicated by the design specification to be used for creating sample or test product. This test product would serve as the standard for the correct quality in terms of stitching and other details, and at the same time would determine the production time per unit.

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At the start of the business, solely the in-house designer handles the conceptualization stage, while another personnel, known as the patternmaker, handles pattern making and sampling. Costing and pricing as well as demand forecasting is determined by another personnel, who either approves the design for production or sends the design to the patternmaker for design adjustments. Once Lilliput begins to expand into various outlets, the said stages will be broken down into departments, otherwise known as Marketing department, which will handle demand forecasting and market assessment; Creative department, the one that will handle the product design conceptualization and pattern making; the Purchasing department, which will be chiefly responsible for the purchasing of sample materials as well as the materials to be delivered to the subcontractors. People from the Purchasing department will also handle the logistic aspect of the product; the Production department on the other hand, shall create sample specimens and will be in charge of contacting subcontractor as well as the quality inspection of the product upon delivery. Figure 2.4 presents the process flow for a departmentalized set-up. Every stage of the production process adds value to the growth of the business in ensuring a high quality product, which is in line with the wants of the market. This is primarily brought about by the conceptualization stage, of not only doing the designs solely based on the creative mind of the designers, but also backed up by trends and market assessment. The option of going into subcontracting also adds value to the chain as it gives the company a better advantage as compared to maintaining its own manufacturing plant as presented in the cost-benefit analysis discussion. Sampling the design prior to going full scale allows further assurance to the quality of the product. As stated, sampling stage creates a standard that subcontractors must adhere to, as well as adjust designs to be less costly, in order to gain a higher profit.

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Production Schedule Lilliput will release new designs quarterly, which will be in store for at least three (3 months). Start of quarter will be on the months of January, March, June and September. The succeeding Gantt chart seen in figure __ shows the production schedule of Lilliput’s product from conceptualization until the release of the product to the market.
Figure 2.3

Quarterly Production Schedule (Release months : January, April, July, October)

Task Conceptualization Sampling Release Design Production Assessment of Production Delivery Quality Inspection Storage
Legend:

1st month 2nd month 3rd month release month 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4

Once per quarter Monthly

Conceptualization and finalization of design until the assessment time of the subcontractors occurs only once per quarter starting from the 1st week of the release month of the previous quarter. Hence, for example, designs for April are conceptualized starting from the 1st week of January. However, production until the delivery at the stores occurs monthly, as arranged with the subcontractors. Likewise, a single design will be in production for 3 months, following the number of weeks allotted in the schedule.

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Figure 2.4

Lilliput’s Expanded Production Schedule

Marketing Department
Deliver patterns, design specifications, and materials t o subcontract ors Manufacture clothes according to design requirements

Logistics Department

Subcontractors

Researches on latest trends and analyze current market demand

Marketing

Purchasing Department Logistics Department
Buy raw mat erials from the suppliers

Technical feasibility Study

Fashion Designers

Develop design specifications

Picks up finished clothes

Finance Department

MICROS OFT CORPOR ON ATI

Pattern Makers
$ F inance

Approves purchase orders and prepares budget

Production Department

Create patterns for the designs
$
$
$

Purchasing Department

Inspect products and check qualit y of subcontract or’s work
Quality Assur ance

Prepares purchase order

Sales Department Production Department
Forecast sales requirements

Logistics Department

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Prepares materials specifications and requirements

Dist ributes finish products t o store outlets

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Technical feasibility Study

Store Operations
Organizational Structure
Figure 3.1

Lilliput’s Organizational Diagram

General Manager CEO

Operations Manager

Marketing Manager

Finance Manager

Purchasing / Logistics Manager

HR Manager

Production Manager

Store Personnels

Controller

Treasurer

Supervisors

Creative Staff

Press Relations

Market Researcher

Purchasing Personnels

Logistics Personnel

Functions and Responsibilities :: The General Manager / CEO will be in charge with the over-all management of the business. He shall formulate the over-all policy, set goals, and plan for the company. Those below him will have to increasingly focus on the details of his plans. He shall coordinate with the executive officers to ensure the smooth operation of the business. This can be done through regular meetings. Also, the General Manager shall be the major decision maker with ideas and suggestions coming from top officers. :: The Marketing Manager takes care of all the marketing activities of the company. He or she makes sure that the Lilliput brand will pop up in every petite woman’s mind every
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time they plan to buy clothes. This way, the brand will have a greater chance in increasing its share of wallet from consumers. The Press Relations Officer’s job is to take care of all the advertising activities of the company and to see to it that the advertising messages are all aligned and integrated. He or she is also the one in charge of promotion activities and sponsorship deals. The Market Researcher will be the one who will study and investigate our closest competitors. He or she will also forecast the appropriate pricing scheme and discounts in the future. Moreover, the Market Researcher is the one who does the demand and supply forecast. Part of his job also includes anticipating for possible market changes. :: The Finance Manager takes charge of the budgeting, capital appropriations and cost control. Other responsibilities include credit management, forecasting funds, and allocation of dividends and incentives. The Controller is in charge of making the financial reports and accounting records while the Treasurer handles the bank accounts, billings and collections, payment to suppliers and payrolls. :: The Operations Manager is in charge of the over-all management of operations. He or she also serves as the Store Manager of the first boutique. Also, the Operations Manager is responsible for the overall operations of the boutique and is in charge of the store’s daily operations and generation of monthly reports for the owners. These reports include inventory levels, sales, utilities, compensation and other miscellaneous items. The manager is the custodian of the boutique keys and is the one who would deposit sales in the bank. He or she is tasked to make the staff’s schedule and compensate them. He or she is in charge of the store’s displays, quality of merchandise, and promotions. Also, the Operations Manager acts as the cashier when the cashier is off and would also, at times, assist the salesladies in dealing with the customers. The Store Manager is the only one who could void or cancel a particular transaction. He or She is also the one who would generate reports regarding tardiness and absences. Moreover, he or she would be the first to solve problems of his store and employees before these are escalated to higher authorities. Lastly, he or she would issue memos to tardy employees and talk to them

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regarding the matter. During the growth stage of the business where Lilliput will be having more than one branch, a distinct Store Manager directly reporting to the Operations Manager, will be in-charge of handling the other stores. :: The Sales Staff is composed of the salesladies and the cashier. The salesladies attend to customer needs. They are responsible for handling merchandise and assisting the customer. They should always be alert and courteous in dealing with the customers. They are tasked to arrange, maintain display items and assure the quality of merchandise. They will also generate reports for the manager regarding inventory levels and what items the customers are always looking for. The cashier is tasked with handling cash of the business. Only the cashier and the manager can operate the cash register. The cashier must seek the manager’s assistance in voiding a particular transaction. She must always give a receipt to every transaction that has occurred. She is tasked on counting the day’s sales and giving them to the manager. She would assist the manager in generating reports regarding the monthly sales. She should always stay at the counter to secure the cash register. :: The Purchasing Manager is in-charge of inventory control, make or buy decisions, investments, supplier relations, contracting, leasing, scheduling, process specifications and production control. The Purchasing Personnel handles centralized purchasing of raw materials. He or she is also involved in materials handling and procurement. The Logistics Manager works hand in hand with subcontractors. He or she is also in-charge of quality control and plant supervision. Part of his job is taking care of the distribution, receiving and warehousing. The Logistics Manager is assisted by a driver. The driver is tasked to procure and deliver materials and stocks. Both the Purchasing and Logistics Personnel will be provided with assistants upon branching out of Lilliput stores. :: The Human Resources Manager is in-charge of recruitment and selection of employees, regulating compensation, benefits and incentives, approval of loans, set hours of work, vacations, leaves and termination. He or she shall also be in charge of planning

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Technical feasibility Study

recreation, transfer and relocation of employees as well as training and development. The Supervisor is the one directly reporting to the manager regarding employee absenteeism, complaints, manpower utilization, and working conditions. :: The Production Manager is in-charge of the over-all production planning and control. He or she works hand in hand with the Logistics Manager and subcontractors. The Production Manager also provides product specifications, quality standards, and cost estimates. The Creative Staff will consist of the pattern makers and the fashion designers. The fashion designer is tasked to research on the latest trends. He or She will assess the market’s needs and conceptualize the designs that will be made. The pattern maker is the one who will draft the patterns and suggest on what materials will be utilized. He or She will estimate the cost of materials and labor that will be used in a particular design. During the first two years of the operation, there will be two pattern makers and two fashion designers as well. These numbers will continually grow when the group deems it necessary. 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. The Chief Executive officer • • • • Must be male/female and must be a graduate of any four-year business course and should be knowledgeable in the apparel industry. Must possess excellent communication skills in both English and Filipino. The CEO must be elected by the Board of Directors and must have strong leadership and decision-making skills. He or she must have the skill to create aggressive strategies that would benefit the company as a whole for a long period of time.

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The Operations Manager / Store Manager • • • • Must have an eye for fashion. Preferably graduated Bachelor’s degree in Business or Engineering and must possess excellent communication skills both in English and Filipino. He/She must have strong leadership skills to manage his/her staff. The manager must also be customer-oriented and preferably has knowledge and experience in clothing and retailing business. He/she must also be dynamic and enthusiastic in meeting sales targets. The Salesladies • Must be 18-22 years old and must have attained at least 2 years of any college or vocational course and must also possess good communication skills both in English and Filipino. • • She must be willing to work in shifts and preferably must have experience in working in a boutique for at least a year. Just like the manager, the salesladies must be customer-oriented and must have a pleasing personality. The Cashier • Must be 18-22 years old and must have attained at least 2 years of any college or vocational course and should possess good communication skills both in English and Filipino. • She must be knowledgeable in operating a cash register and must be worthy of trust in handling finances. She must be willing to work in shifts and preferably must have experience in working in a boutique for at least a year. • The cashier must be customer-oriented and must have a pleasing personality.

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The Marketing Manager • • • Must be a graduate of any college course preferably marketing and must be familiar in the apparel industry. He or She must be knowledgeable in advertising and promotions, consumer behavior and must be updated with the latest trends in fashion. He or She must possess excellent communication skills and must be a team player. The Press Relations Officer • • Must be a graduate of any college course preferably Business or mass communication. He or she must be familiar with public relations and events management and of course, should have an excellent grasp of his communication and people skills. The Marketing Researcher • • Must be a college graduate of any college course preferably business, engineering or statistics. He or she must be knowledgeable in market research methods and consumer research studies. The Finance Manager and the Controller • • Must be a Certified Public Accountant. He or she must be familiar with investment management and analysis and must be keen in details and would be willing to work long hours when needed.

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The treasurer must be a graduate of any business related course

preferably finance or economics and must be familiar with financing, loan and credit management.

The Purchasing Manager • • • Must be a graduate of any Bachelor’s degree preferably in Business or Engineering. He or She must be knowledgeable in the apparel industry and must have existing connections with suppliers. Also, the Purchasing Manager must be familiar with inventory management and product evaluation. He or She must have excellent communication and negotiating skills. The Logistics Manager • • Must be a graduate of any Bachelor’s degree preferably in Business or Engineering. He or She must be familiar with inventory management and must have good negotiating and communication skills. The Human Resource Manager • • • • Must be a graduate of Psychology or Business Administration. He or She must be knowledgeable in employee relations, training and in making compensation packages. The HR Manager must have strong leadership qualities. HR Supervisors should have a Bachelor’s degree in Psychology or other equivalent courses.

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The Production Manager • • • Must have a Bachelor’s degree preferably in Engineering.

He or She must have skills in product evaluation and quality assurance. The Creative Staff must have attained any Bachelor’s degree or vocational course.

Recruitment and Training En Cima Inc. assumes that the incorporators themselves will occupy all top positions. The company will hire additional people to fill up unoccupied positions. As for the lower level position like the sales ladies, standard recruitment processes will be employed by the company. Applicants must first submit a copy of their updated resume. The HR manager and supervisors will go through the resumes and choose potential hires from the pool of applicants. All those chosen are then scheduled for an interview. After the interview, the HR will evaluate which applicant to hire. All newly hired applicants will be asked to submit an NBI, police, and Barangay Clearance. They must also have their SSS numbers and must submit a medical certificate stating that they are fit to work. The newly hired personnel will undergo basic brand training for a week. This is to introduce them to the products that Lilliput has to offer. In this training, they will also be briefed about the company’s vision and mission, policies and guidelines, rules and regulation. During training, they will be evaluated to make sure that they are prepared to take on their jobs. Compensation and Benefits Since Lilliput is just starting, the compensation packages designed for the company would be a lot smaller as compared to those that are already established. All employees of Lilliput will get all benefits mandated by the Philippine government like
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the Social Security System (SSS) contribution, PhilHealth, Pag-ibig Fund and ECOLA. All compensation benefits like holiday pay, service incentive leaves and the like will be applied based on the rules and regulations stipulated by the Labor Code of the Philippines. All salaries are paid on the 15th and 30th of the month. The CEO will receive a monthly salary of Php30,000 plus a share on the profits of the company. The Operations/ Store Manager will be paid a salary of Php18,000. All other managers will be paid a salary of Php15,000. The fashion designers, controller, treasurer, press relations officer and market researcher will be paid Php12,000 each. The pattern maker will be compensated Php9,000, the salesladies Php8,000, the cashier Php8,500 and the driver Php7,150. All salaries will increase after one year of operations. All top-level employees will be entitled to 2 days rest every week. Salesladies, cashiers and the driver will be given 1 rest day a week. All employees will be allowed a sick leave of 5 working days.

Daily Operations The call time for salesladies is at 9:30am. This will give them time to prepare and clean the store for the customers. At exactly ten, the mall opens and so the store is expected to be open for customers by then. There will be a total of three people manning the store, the Manager and two salesladies. All of them will be working in shifts to avoid overstaffing and understaffing. When a customer enters the store, the salesladies are expected to greet them with a smile. One saleslady will assist one customer if possible. The cashier is stationed at the counter. If traffic is high, the Manager will help in assisting the customers. Once a customer will make a purchase, the cashier is expected to ask the customer if payment

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will be made in cash or card. As soon as the customer hands the payment to the cashier, she should read out to the customer the amount of the transaction and the payment she received. She should count the change out loud to the customer. Tags must be removed from the merchandise. These tags will help keep track of the items sold during the day. After payment, the items will be placed inside a paper bag and the cashier should thank the customer. This way the buyer will recognize Lilliput to be a boutique that has warm and courteous employees. During lunchtime, the employees will take turns at having lunch. The same policy applies to 30-minute coffee breaks. If there is no customer to assist, the salesladies are expected to clean the place and fix clothes on display. The store closes at 8:30pm. 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 store 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. Scheduling Scheduling is one of the most important tasks of store management, yet it is often one of the most neglected. Many Store Managers simply repeat the same schedule each week, neglecting to analyze changes in store traffic For Lilliput, Store Staff on the opening shift are required to report thirty minutes before the scheduled opening time while those in the closing shift are extended thirty minutes after closing time. This is to provide ample time for cleaning, stock replenishment and cash wrap counter preparation.
Table 3.1

Sample Weekly Schedule for Lilliput Boutique

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Mon Store Manager Sales Staff 1 Sales Staff 2 O DO O

Tue OC O DO

Wed DO O C

Thu DO O C

Fri C O O

Sat C O O

Sun C O O

Time In O – Opening C – Closing OC – Opening/Closing 9:30am 12:30pm 9:30am

Lunch 12:30-1:30pm 1:30-2:30pm 12:30-1:30pm

Snacks 4:00-4:30pm 4:30-6:00pm 4:00-4:30pm

Time Out 6:30pm 9:30pm 9:30pm

Policies on Tardiness and Absences All employees will be required to be at the boutique at 9:30AM. 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 within the hour of their shift to inform the manager of their absence. All 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. Uniform and Dress Code The store 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

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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.

Inventory Management The salesladies of Lilliput are in charge in making sure that the items are in tiptop condition. In their free time, they are expected to maintain and clean the clothes. The display must have all the designs, sizes, colors. When a displayed item is purchased, it must be replaced with the same size and color. The store has a stockroom wherein all the new arrivals can be stocked. All items must be properly tagged, labeled and arranged for easy access. The stockroom must be kept clean and organized. Tops should be placed on the topmost shelves while bottoms will be placed on the bottom shelves. Clothes must be arranged by color and each color will be arranged by sizes, smallest to biggest. This stockroom also serves as the storage area for the things of the sales ladies and the utility equipment of the store. Upon closing, the items will be checked by counting the tags that were accumulated during the day from the items sold. This way, it would be easier for the boutique to keep track of its inventory. Deliveries should be closely monitored. The Store Manager must count the boxes that have arrived. Only one box must be opened at a time and the contents must be checked. Deliveries must only be made when needed or when there is enough space in the stockroom. It is the manager’s duty to assess whether deliveries are to be made or not.

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Employees must keep track of customer returns. These items must be properly accounted for so the necessary adjustments will be made in the records. In the event that a customer returns an item with a factory defect, an apology letter written by the Store Manager himself/herself should be given along with a small token. The damaged item must be kept and the reports should be made regarding the matter.

Cash Management Lilliput is equipped with a Point of Sale (POS) terminal registered with the Bureau of Internal Revenue (BIR). All transactions done in the boutique must be entered in the POS. Receipts should always be issued to avoid problems with the BIR. Sales invoices will be issued in lieu of the receipt issued by the POS. this will only be done in the event of power failure, POS malfunction, and if it is requested by the customer. The store has an opening fund in the POS of Php 1,000 in different denominations:

P1.00 – P100.00 P5.00 – P100.00 P10.00 - P100.00 P20.00 – P200.00 P100.00 – P 500.00

This opening fund will be used in the daily operation of the boutique. Only the Store Manager can manage this fund. At the end of the day, the cash will be counted and will be recorded. Same thing will also be done for the sales. The cash will then be given to the Store Manager for safekeeping. Substantial amount of cash should not be allowed

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to accumulate. The Store Manager will be the one who will deposit the cash in the bank under the store’s ATM account. This account will serve as the depository of all sales, both cash and credit. Sales Management A daily sales report is made to keep track of merchandise and account for every peso received. This report would aid the Store Manager in monitoring what items are in demand and what are slow moving. Orders for stocks can be easily determined because of this. The boutique will be able to order those items that are fast-moving and will not have the error on ordering those that are not saleable. Lilliput must achieve monthly sales targets. In this way, the employees will be motivated to perform their duties. These targets are given to them at the start of each month so that they will have time to think of ways to boost sales. The Store Manager will lead his staff in achieving this goal. Recognition will be done to those who have achieved more than what is asked of them. A simple award like a certificate or a token will be given to acknowledge their efforts.

Store Expenses Rental The Store Manager will receive rental statements from the Mal operator on a monthly basis. In line with this, he or she is responsible in checking the accuracy of all the information and figures written on the statement. After doing so, the Store Manager will affix his signature on the bottom portion of the statement to signify that it has been screened and reviewed. The rental statement is faxed to the Accounting Department for payment processing.

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Electricity and Water The electricity and water charges are usually incorporated in the rental statement. Whether incorporated or not, the Store Manager ensures that the consumption readings of each are reviewed and tallied against the previous month’s reading. Petty Cash Each store is given a monthly budgeted petty cash expense. Store managers are tasked to keep within budget by finding ways to recycle supplies and limit purchases to the minimum without sacrificing operational efficiency. Replenishment of Store Supplies When ordering replenishment of supplies, stores see to it that the quantity ordered is enough for a month’s or two weeks’ supply. Thus, it is expected that the average monthly consumption for each supply be monitored in order to peg a safe reorder point which is usually half of the average monthly consumption.

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Structural Requirements
Lilliput Boutique Design Philosophy: Accommodating Filipina Sizes On the average, Filipina women stand 5 feet in height. According to research, this particular trait has been identified to have caused problems on the size and fit of the clothes that Filipinas would buy. However, this concern is not only confined to the apparels but also to spaces that sell them. Often, boutique designs overlook the fact that petite forms dominate the average Filipina frame. Hence, petite customers would find themselves dealing with structures that overlook vertical considerations in their design. Oftentimes, the presence of hangers and display racks which are a bit high for reach, and counters that are quite lofty would give customers that are short in height a really uncomfortable shopping experience. Lilliput’s Design Philosophy aims to change that. As the store dedicates itself in giving petite women more option in clothing, this philosophy presents a plan that would be most appropriate in giving ease and comfort to the petite shoppers. Design Concept: Girl Power Kaleidoscope The wide use of colors in the space will liven up the interior and make it appealing and eye-catching to prospective clients. From pastels to vibrant colors, the interior of the boutique will characterize the many facets of women – feminine, graceful, ethereal, corporate, strong, and a lot more! Rationale: A Refined Look for the Masses

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Since the location is well known for shoppers, En Cima would want their store to be unique and to stand out from the rest of their vast competition. The company would like to establish a look that is clean and organized-looking, but not intimidating to the target B and C clients – meaning, a “refined look for the masses” is thus being envisioned. En Cima aims to provide a boutique that reaches out to its market thereby creating structural designs and plans which would not only serve as mere space to sell merchandises but would function as one the store’s primary advertisement that would lure customers to come in and discover what the Lilliput brand has to offer. And since their target customers are from the petite sizes, they want their shop’s interior to accommodate these particular customers and assure their comfort. They want the store to embody the same concept as that of the clothes they offer. Design Style: Feminine Contemporary Style The clean and organized look is easily achieved with this design style for it takes on simple lines and forms. Feminine colors, which complements with the color selection of the clothes in the boutique, will be infused with the interior to avoid the space from being dull and boring. Design Objectives: • • • • • To be able to meet all the client’s needs and wants To be able to come up with an effective design that would attract customers to come 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 cater to the petite sizes. To be able to make a design that would see to the comfort of the shoppers and their shopping companion(s).

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To be able to make a design that would also cater to the needs and

comfort of the staff/employees.

Interrelationship Matrix       Display Area Fitting Rooms Waiting Area Cashier Baggage Counter Lounge for the Staff
Figure 4.1

Bubble Diagram

Fitting Rooms Display Area

Cashier

Waiting Area

Baggage Counter

Lounge for Staff

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Initial Location The proposed Lilliput boutique shop shall be initially located at the second level of Shoppesville Arcade in Greenhills Mall, San Juan, Metro Manila. The space currently occuppied by a boutique called “Babo” is the one chosen by the group since it is located in front of one of the entrances of the said mall. The space is also found strategically at the intersection next to the escalator. The total space area is 25 square meters. The contract of the current lesee will end at December 31, 2005.
Figure 4.2

Greenhills Shopping Center

y in le K Mc
To Sa n Ju an

n ilso W
W

Or tiga
N

Greenhills Shopping Center

ut ctic e onn La Salle C Greenhills

sA ven
E

ue S E D
Robinson’s Galleria

A Ort iga

S

sA ven

ue

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Figure 4.3

Second Floor Plan: Shoppesville, Greenhills
Technical feasibility Study

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Existing Layout The existing layout of the space which is currently being leased by “Babo” can be seen at Figure 4.5. The outer walls of the store are made of glass which displays the mannequins and some of the clothes inside the boutique. Currently, it has two fitting rooms and a stockroom extending from one end to the other of the boutiques inner side. The display section for the clothes consists of the walls and center area of the store. This kind of arrangement had noticeably made the store look very crowded and disorganized. It is also very difficult for customers inside “Babo” to have an overall view of the items found in the store because the displays at the center area are in the way. Proposed Layout The proposed floor plan of Lilliput is presented in Figure 4.6. The group’s interior designer, Ms. Christine Realingo suggested a minor increase in the elevation of the whole area inside the store so as to attract shoppers, especially the ‘first timers’. According to her, elevating the store would give a distinct look that would set Lilliput apart from other clothing shops in the mall that are typically at the floor level. The minor elevation would immediately give customers a feeling that they are in a different place--- with a different level, ambiance, and setting, once they enter the store. The fitting rooms and mannequin display areas are also further elevated to add an over-all unusual eclectic look. Different floor finishing for each mannequin, display and fitting areas shall also be utilized to be able to distinguish the different areas of the boutique. The store itself will not just serve as a place for inventory display and sales but will also be reminiscent of a museum where Lilliput clothes are highlighted.

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Lighting The lights that will be installed inside the store are all warm white Eurolux lighting with varying size and illumination. The group was advised by Ms. Christine Santos of Plains and Prints to use this kind of lighting in order to enhance the effect of clothing fabric on skin. Moreover, the yellowish luster that these lights create to the garments makes one more relatively stunning and flattering. This kind of lighting will also add to the cozy ambiance that gives customers a more comfortable and welcoming feeling. In addition to that, the main display area will also feature a chandelier-like lighting in a circular drop ceiling form (an example can be found at Vinzon Hall’s Food Center). Pendant lights (see picture in Appendix 4) will fill both the said area and the counter area. The angles of these lights will be strategically positioned to highlight different sections of the boutique. Display Area The clothes will be displayed in a manner similar to art pieces and will be arranged in such a way that colors and shades will blend perfectly well. As planned in the marketing study, a faultless ‘come-on’ advertisement is done through the utilization of the front-hang procedure of displaying where clothes are directly facing customers at eye level. This is in contrast to what is normally seen in other stores where the side-hang procedure is more common. However, there is a drawback in the front-hang display because it takes more space as compared to the side-hang display. But then, the front-hang display allows people to get a full view of the design and details of the apparels. This is also very helpful because it enables customers to look at the clothes as how they would see it fit on their bodies. The latest collection in variation shall be displayed facing the store’s
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entrance for added curiosity. This will help in attracting customers to come in and check out the new designs inside the boutique.

In contrast to the existing layout of Babo, Lilliput will not have any clothes hung or displayed at the center section of the store to allow continuous traffic flow of people going around the boutique. All apparels will be displayed at the sides of the boutique. According to Architect Nap Ibanez, each person maintains an average of 1 meter “comfort bubble”. This means that people prefer to have their own space of 1 meter around them to be able to move freely and comfortably. With the proposed layout of Lilliput, the boutique is estimated to hold an average of 10 people at any one time during ordinary store operations, meaning there are no sales or holidays. The side displays will also allow customers to have a better view of all the clothes inside Lilliput. This kind of arrangement makes the store look more spacious and organized.

Fitting Rooms The fitting area will be relocated at the inner section of the store where Babo’s stockroom is formerly located (see Figure 4.6 for). There will be three rooms divided by plywood and enclosed by thick curtains. The interior designer mentioned that a clothing material is more preferred than a plastic or wooden door because it absorbs more noise. Warm white lighting will be used inside the rooms to create a yellowish glow on skin and fabric. This will make customers look relatively better as compared to what will be seen under the normal halogen lighting. Aside from the full body mirrors found in each room, the entire wall facing the fitting rooms, starting from the elevated part upon entering the fitting area, will also be covered with full body mirrors so that customers can walk around outside the fitting room. This will allow a full view of their bodies from different angles. The mirrors surrounding the fitting area can also make this section look bigger.

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The group decided to give extra importance to the fitting area because ordinary boutiques catering to our target market rarely have likable and comfortable fitting rooms. Likewise, the group believes that the fitting area of a boutique shop should be one of the best part of a store. This will make the female customers comfortable enough to try on a number of clothes increasing the possibility of purchases that they will make. This is especially true given that females are proven to have the weakness of buying everything that looks good on them. This strategy will be used by the group to gain more customers, and this will of course be reflected on increased sales revenue. Waiting Area Another main attraction of the store is the stylish customized sofa located at the center of the display section. The circular structure is specially designed to allow free-flowing movement of people inside the store. It would be easier for customers to go around and move from one area to another. The central location of the sofa will also enable the people who are seated to view the entire boutique from a better angle. The seat will serve as the waiting area for customers who have their boyfriends/husbands and other companions with them. Magazines for both men and women will likewise be provided. Waiting should not be a problem anymore especially for the guys. Counter and Stockroom Area The cashier’s section will be relocated at the edge of the fitting area, at the focal point of the store where the staff could oversee all the customers and at the same time look after the merchandise stored in the stockroom. The stockroom will be relocated at the former fitting room area to allow easy access on the part of the staff whenever customers ask for a different size or a new item. The proposed place of the stockroom is deemed safer because it is not very near the entrance

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door. A curtain will serve as a divider to keep the clutter of inventory stock from the customer’s view.

Added Features Additional mannequin displays shall be placed at the other side of the entrance door. Furthermore, the group has noticed that the glass wall at the side of the aisle which is more visible from the mall entrance is not well utilized. This is why the interior designer decided to put in some mannequin displays as well in this area to maximize the display capacity of the store from two different angles. The mannequins will sport the latest collection of Lilliput.

A baggage counter will also be placed opposite the counter area for security and convenience purposes. It will be good for Lilliput because it could help avoid the occurrence of shoplifting. On the other hand, it is also beneficial for customers because they won’t have any plastics or paper bags that they have to hold while going around the store. The baggage counter where they could leave some of their belongings will enable them to move freely and easily.

Construction of the Lilliput Boutique

The construction of the proposed layout of Lilliput boutique would take about 31 days to finish. En Cima’s contractor, AUF Trading and Construction, presented a detailed daily schedule of the construction and an itemized costing for every material and labor that will be needed as shown in Appendix 2. The schedule prepared by the contractor took into consideration the rules and requirements of the Leasing Department of Shoppesville Shopping Arcade which only allows 4 hours of on-going construction per day for a
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maximum of 2 months. Contractors will only be permitted to work after mall hours, which is from 8:00 PM to 12:00 MN. The calculated costing for the construction would reach a total of Php 573,562.

Figure 4.4

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Figure 4.5

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Figure 4.6

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Figure 4.7

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Figure 4.8

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Figure 4.9

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Figure 4.10

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Figure 4.11

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Figure 4.12

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Figure 4.13

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Costing The initial location shall be at the Shoppesville Greenhills Mall. The leasing department does not disclose any information on the charges of spaces at the mall unless the proposed business shall truly exist and will surely rent the place. According to Babo, the current occupant of Lilliput’s would be space, the average monthly fixed charges for their store amounts to P55,000 including utility rates. The contract states that charges per month will compose the following: • • Fixed rent – which will be determined by the management according to the location and marketability of the space CUSA (Charges for Common Usage and Service Area) – this charge represents the lessee’s share of the maintenance and operating costs of the common areas of Shoppesville Arcade facilities, utilities and services as the lessor may solely and reasonably determine. According to the leasing contract, these shall include but shall not be limited to administrative and overhead expenses, sanitation, garbage fees, security services, cost of repair and maintenance of equipment and facilities, lighting of common areas, etc. Therefore, for the purpose of this study, the group shall assume that: Total Monthly Expense = Fixed Rent + CUSA Total Monthly Rent Expense = P 55,000 (inclusive of 10% tax) Other expenses chargeable to the lessee are the following:
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• • • • •

Repairs and maintenance of improvement inside leased premise Cost of Roll-up door and/or Cost of Glass Panel/door Cost of Stall Signage (design and material subject to lessor’s approval) Cost of electric meter and installation Interior improvement

For the next two years of the operation, the group will expand to Robinson’s Galleria, Glorietta Mall, and SM Mall of Asia. The leasing department of the three malls refused to disclose leasing information to the group. Thus, the best alternative that the group can do is to interview an owner of a store located in each mall. For Glorietta mall, the group have assumed that the following costs, given by the interviewee from a Nokia store located there, will be applied to the Lilliput store in the future: • • • • • Fixed rent Average electricity rate per month Average air conditioning rate Common Area Utilities Telephone = P1,040 per square meter = P 8,000 = P 3,500 = P 3,700 = P 1,880

Therefore, the total rent expense for a 40-square meter space, which the group wishes to lease will be: Fixed Rent Average electricity rate per month Average air conditioning rate Common Area Utilities Telephone Monthly Rent Expense P 41,600 8,000 3,500 3,700 1,880 = P 58,680 ( P 1,040 x 40)

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plus 10% EVAT Total Monthly Rent Expense = P 64,548

5,868

In determining the fixed rate of a space in SM Mall of Asia, the group decided to use the existing rate of a Penshoppe boutique in one of the SM malls provided by the store manager: • • • • • Basic Rent CUSA Air conditioning = P 775 per square meter (plus 3% gross sales) = P 80 per square meter = P 85 per square meter

Monthly electricity = P 2,600 Monthly telephone = P 1,880

The group will now assume that these rates will be applicable in spaces on SM Mall of Asia though there is a possibility of much higher rate because the said mall will be newly opened. Thus, the total monthly rent expense for a 70-square meter store for Lilliput is: Basic Rent CUSA Air conditioning Monthly electricity Telephone Total Monthly Rent Expense (exclusive of 3% of gross sales) The same procedure will be followed in estimating the rate of a space in Robinsons Galleria. The following rate was given from a manager of an 80 square meterstore: • Fixed rent = P 96,000 P 54,250 ( P775 x 70) 5,600 ( P80 x 70) 5,950 ( P85 x 70) 2,600 1,880 = P 70,280

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• • • •

CUSA Monthly electricity Telephone Air conditioning

= P 5,150 = P 2,600 = P 1,880 = P 5,500

Store for starters with areas of 25-30 square meters and 30-40 square meters are available in Robinsons. The group wishes to occupy at least a 40 square meter space. Since the utility fee for air conditioning is relatively high, it is safe to assume that this rate is of per square meter basis. Hence, using the previous rates, the total monthly fixed cost will be approximately: Fixed rent CUSA Monthly electricity Telephone Air conditioning Total Monthly Rent Expense P 48,000 ( P 96,000 x 40/80 sq.m.) 5,150 2,600 1,880 2,750 ( P 5,500 x 40/80 sq.m.) P 60,380

Office/Warehouse The office of En Cima Inc. will be located at 219 Regalia Park Condominium, P. Tuazon Boulevard corner EDSA in Cubao, Quezon City. The building is conveniently situated along EDSA which is a main thoroughfare for vehicles coming to and from various cities in the metropolis. It is also within an hours drive to the Greenhills Shopping Center where the Lilliput boutique will be located. The total space area is 27.56 square meters. The space is currently available for occupancy.

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Proposed Layout The main purpose of the office space is to provide a place for the officers of the company to conduct business transactions, generate reports as well as to provide a storage space for the materials and products of the Lilliput boutique. The office space will be divided into different areas: conference area, receiving area, and storage area. The office unit is already furnished with wall paper, air In addition the following office equipment and conditioner, cabinets, and tables.

furniture & fixtures will be acquired by the company to be used in its transactions.

Figure 4.14

Proposed Office/Warehouse Layout

TP

O ffice 1234

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OFFICE EQUIPMENT 4 in 1 office machine (printer, scanner, copier, fax) Computer Set TOTAL

Qty. 1 1 P

COST 15,000.00 30,000.00 P P

TOTAL 15,000.00 30,000.00 45,000.00

EXPECTED LIFE 10 years 10 years

FURNITURES & FIXTURES Filing cabinets Conference chairs and tables (set) Sofa leather Office tables Office chairs Fire extinguisher TOTAL

Qty. 2 1 1 2 2 1 P

COST 1,500.00 16,000.00 4,500.00 2,200.00 1,300.00 1,200.00 P

TOTAL 3,000.00 16,000.00 4,500.00 4,400.00 2,600.00 1,200.00 P 31,700.00

EXPECTED LIFE 10 years 10 years 10 years 10 years 10 years 10 years

The aforementioned items shall be depreciated using the straight line method for the period of ten years. The period was arbitrarily appointed by the company because it believes that these items will be durable enough to last the duration of the period. In addition, risk of obsolescence is low for the equipment and furniture.

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Business Requirements
Process the following permits: 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 Print Secure the following permits from the City / Municipality 1. Building Permit 2. Electrical Permit 3. Wiring Permit 4. Occupancy Permit 5. Locational Clearance 6. Sanitary Permit 7. Certificate of Fire Safety Inspection 8. Certificate of Electrical Inspection Coordinate with the Mall Administration for the following: 1. Final Mall Inspection
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2. Permit to Move-in 3. Overtime / Work Permit 4. Permit to Pull-out Garbage Requirements for Business Application (To be accomplished at the Business Permit and License Office)
The 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. Together with the Treasurer’s Affidavit and upon payment of filing and publication fees, the Securities and Exchange Commission shall then issue the Certificate of Incorporation to the business entity.

Articles of Incorporation

Barangay Clearance
Fee: P400.00

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, nature, and address of the establishment, and the date when the form has been approved by the Barangay Chairman.

Community Tax Certificate

The Community Tax Certificate can be obtained from the Bureau of Internal Revenue after accomplishing the Application of Registration and payment of Annual Registration Fee and Documentary Stamp requirements.

Sanitary Permit

The Community Tax Certificate can be obtained from the Bureau of Internal Revenue after accomplishing the Application of Registration and payment of Annual Registration Fee and Documentary Stamp requirements.

Locational Clearance
Fee: P425.00

The establishment must then be registered to specific zoning areas as assigned by the Local Zoning Board in the Planning Department of the City/Municipality. Upon application and approval, the business shall be classified as belonging to the Residential, Commercial, or Institutional Zones, whichever it is deemed included.

Fire Clearance
Fee: P356.10

As persuant with the fire safety and and protection requirements of the Fire Code 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 and should be subject to the recommendation and approval from the Chief Inspector of the Municipal Fire Marshal.

Building Administrator’s Certificate

The establishment must then request for a certification of tenancy from the building or mall to where it shall locate its business at. The certificate should include the name of the stall and the level where it is placed, the space code and the its approximate floor area.

Permit to Operate

Upon completion of the necessary requirements presented above, the documents shall then be presented to the Business Permit and License Office for further inspection and assessment. Required Taxes and Regulatory Charges must also En Cima, Incorporated 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.

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City/Municipal Taxes, Fees, and Charges (to be paid for the Current License Period) Mode of Payment: QUARTERLY Assessments
Local Taxes Local Business Tax on Delivery Vans/Trucks Tax on Signboards/ Bill Boards Regulatory Charges Mayor’s Permit Fee Garbage Charges Delivery Vans/Trucks Permit Fee Business Registration Plate Inspection Fees Sanitary Inspection Fee Building Inspection Fee Electrical Inspection Fee Mechanical Inspection Fee Plumbing Inspection Fee Signboard/Billboard Inspection Fee Penalty (Surcharge & Interests)
Sec. 109, RCMM P.D. 1096 P.D. 1096 P.D. 1096 P.D. 1096 Sec. 105(b), 13, RCMM Sec. 105, RCMM Sec. 63, RCMM Sec. 105(b), RCMM

Reference
Sec. 15-19,37&44, RCMM Sec. 34, RCMM Sec. 19(25), RCMM Sec. 40, RCMM

Amount Due

450.00 100.00 180.00 36.00 175.00

50.00

TOTAL Amount Payable

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Leasing Requirements A. Legal Requirements (Corporation) 1. Articles of Incorporation and By-Laws 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. Door 9. Electrical Load Schedule a. Electrical Layout b. Lighting Fixture c. Power d. Signage e. Neon Lights 10. Color Scheme 11. Scope of Work

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End Notes

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“Petite Women.” [Online] Available. http://www.hgtv.com/hgtv/ah_shop_clothing/article/0,1801,HGTV_3201_1399200,00.html. September 2005.
1

Fujii, Donna. “Petite Women In Style.” [Online] Available. http://www.donnafujii.com/stylespa/imagemaking/petite2.html. September 2005.
2

“Fashion Tips.” [Online] Available. http://www.fashion-411.com/Petite_size_Clothing.htm. September 2005.
3

Fujii, Donna. “Petite Women In Style.” [Online] Available. http://www.donnafujii.com/stylespa/imagemaking/petite2.html. September 2005.
4

“Forever in Blue Jeans.” [Online] Available. http://www.hgtv.com/hgtv/ah_shop_clothing/article/0,,HGTV_3201_1389163,00.html. September 2005.
5

“Matching a Skirt.” [Online] Available. http://www.hgtv.com/hgtv/ah_shop_clothing/article/0,1801,HGTV_3201_1399200,00.html. September 2005.
6

“Petite Women.” [Online] Available. http://www.hgtv.com/hgtv/ah_shop_clothing/article/0,1801,HGTV_3201_1399200,00.html. September 2005.’
7

Fujii, Donna. “Petite Women In Style.” [Online] Available. http://www.donnafujii.com/stylespa/imagemaking/petite2.html. September 2005.
8 9

Magdalena Navarro, professional Dressmaker and Patternmaker

10

Hannah Saab, UP College of Technology

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