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SOFT HEAD PILLOW CASE

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An Undergraduate Project Feasibility StudyPresented to the Faculty of the

College of Business and Entrepreneurial TechnologyRIZAL TECHNOLOGICAL UNIVERSITY

Boni Avenue, Mandaluyong City

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In Partial Fulfillmentof the Requirements for the Degree

Bachelor of Science in Business AdministrationMajor in Management

By

Rolando B. Siodena Jr.

Elias Manuel Sarona

Jessa Mae Achame

Ellen May Sulapas

Karina Eunice Rasco

January 2015

APPROVAL SHEET

In partial fulfillment of the requirements for the degree, Bachelor of Science in Business Administration, major in Management, this feasibility study entitled “SOFT HEAD PILLOW CASE”, prepared and submitted by Rolando B. Siodena Jr., Elias Manuel Sarona, Ellen May Sulapas, Katrina Eunice Rasco, and Jessa Mae Achame.

DR. PRECY BAUTISTA Adviser

APPROVED as partial fulfillment of the requirements for the degree, Bachelor of Science in Business Administration, major in Management by the Committee on Oral Examination with a grade of ____

DR. ELENITA P. STA.ANAChairman

PROF. Rosa F. Diestro PROF. Emmanuel L. Crisostomo Member Member

ACCEPTED as partial fulfillment of the requirements for the degree, Bachelor of Science in Business Administration, major in Management, at Rizal Technological University.

PROF. AMELIA M. ARGANDA Dean, College of Business and

Entrepreneurial Technology

ACKNOWLEDGEMENT

We offer our sincere gratitude to our families, Mr. and Mrs. Siodena, for

supporting our needs to make our feasibility study for financial suport and moral support.

We would like to thank our group mates, who spare their time and cooperation. We

would like to thank DR. Precy Bautista, who encouraged us to do better for our product.

Finally, above all, to thank to our ALMIGHTY GOD, for the blessings, wisdoms, will

and strenght that enable us to overcome all the trials and hardships encountered during

the entire course of this study to Mr. Helbert A. Prado for helping us, shared some

knowledge, time and effort.

R.B.S

E.M.S

J.M.A

E.M.S

K.E.R

DEDICATION

We dedicate this study to our Parents for supporting us in our financial needs and

also we dedicate this to our fellow students who will might use this feasibility study to

help for their feasibility study. To our Professor that leads us to be able to finish and to

make this feasibility study bring on to real life. This feasibility study was made possible

through the encouragement and assistance of some persons who have given their time.

R.B.S

E.M.S

J.M.A

E.M.S

K.E.R

TABLE OF CONTENTS

PageTITLE PAGE ……………………………………………………………………………iAPPROVAL SHEET .…………………………………………………………………..iiACKNOWLEDGEMENT.……………………………………………………………..iiiDEDICATION ………………………………………………………………………….ivTABLE OF CONTENTS ………………………………………….………………...….vLIST OF TABLES …………………………………………………………………….viiiLIST OF FIGURES …………………………………………………………………...viii

CHAPTER I – SUMMARY OF THE PROJECT

Name of the Enterprise …………………………………………………………………...1Logo ……………………………………………………………………………………....1Location …………………………………………………………………………………..2 Descriptive Definition of the Project ………………………………………………….….3Project Long-Range Objectives ………………………………………………………….3Project Timetable and Status ……………………………………………………………..4Nature of the Industry …………………………………………………………………….4Mode of Financing ………………………………………………………………………..5Investment Costs ………………………………………………………………………….5Feasibility Criteria

Market Feasibilty………………………………………………………………….6Management Feasibilty……………………………………………………………6Technical Feasibilty……………………………………………………………….6Financial Feasibilty………………………………………………………………..7Socio-Economic Feasibilty………………………………………………………..7

CHAPTER II –MARKET STUDY

General Market Description….……………………………………………………………8 Size of the Target Market…...…………………………………………………………….8Past 5 Year Demand………………………………………………………………………9Projected 5 Year Demand…………………………………………………………………9Study of the Competitors……...…………………………………………………………10Demand-Supply Analysis…………..……………………………………………………11Market Share……………………..………………………………………………………11Proposed Marketing Program / Strategies….……………………………………………12Advertisement………………………..………………………………………………….12Pricing ………………………………………..………………………………………….13Factor Affecting Market…………………………………………………………………13Distribution Channel Design ………………….....………………………………………15

CHAPTER III – TECHNICAL STUDY Page

The Product/s or Services………………………………………………………………16The Quality and Quantity of the Product/Services to be Produced/Sold……………17

Capacity, Design and Sources…………………………………………………………17The Production/Service Process………………………………………………………17Raw Material and their Resources……………………………………………………19

Machinery/Tools needed………………………………………………………………19Plant/Store Location

Plant/store Lay-out……………………………………………………………………23Structure Specification ………………...……………………………………………..23

CHAPTER IV – MANAGEMENT STUDY

Basic Consideration Informing the Organization………………...……………………24Form of Ownership ………………...………………………………………………….25

Organizational Structure………………...………………………………………………25Job Titles ………………...…………………………………………………...............26Job Description ………………...…………………………………………………......26Job Specification………………...………………………………………………….....26Policies………………...…………………………………………………....................27Salaries, Wages, and Benefits ………………...………………………………………30

CHAPTER V – FINANCIAL STUDY

Major Assumptions………………...………………………………………………….32Total Project Cost………………...…………………………………………………....33 Initial Working Capital Requirements………………...………………………………33

Project Financial Statement (5years)Income Statement ………………...…………………………………………………...37Balance Sheet………………...…………………………………………………..........38

Statement of Changes in Equity ………………...………………………………………39Cash Flow………………...…………………………………………………................40Financial Analysis………………...…………………………………………………....41

Cash Payback Period ………………...………………………………………………....41

CHAPTER VI – SOCIO-ECONOMIC STUDY Page

Employement Income ………………...…………………………………………………42Government Revenues ………………...………………………………………………43Development of Industries ………………...…………………………………………..43

Social and Environment Rate………………...…………………………………………44

APPENDIXESSurvey Questionaire ……………………………………………………………………..45Resume of Partners ………………………………………………………………….…..46 Forms and Attachment…………………………………………………………………..51

LIST OF TABLES Page

TABLE 1.0 Gantt Chart ………………...………...……………………………………...4TABLE 1.1 Investment Cost ………………...…......…………………………………….5TABLE 2.0 Past 5 year demand………………...……...…………………………………9TABLE 2.1 Projected 5 year demand……………….....…………………………………9TABLE 2.2 Study of competitors ………………...……...………..…………………….10TABLE 2.3 Demand supply analysis………………...……...…………...………………11TABLE 2.4 Advertisement………………...….…………………………………………12TABLE 2.5 Pricing………………...…………..………………………………………...13TABLE 3.0 Raw Materials………………...…….………………………………………19 TABLE 3.1 Machinery and Equipment…………..……...………………………………19TABLE 3.2 Office Supply………………...………..……………………………………20TABLE 3.3 Other Expense………………...………...…………………………………..21TABLE 3.4 Furniture and Fixture………………...…..…………………………………21TABLE 3.5 Legal Requirements………………...………………………………………22TABLE 4.0 Duties and Responsibility…………………..………………………………26TABLE 4.1 Daily Rate of Partners........…………………....……………………………30TABLE 4.2 Benefits………………...………………………..………………………….30TABLE 5.0 Revenue Breakdown………………...…………...………………………....34TABLE 5.1 Cost of Sales………………...………………………………………………35TABLE 5.2 Inventory………………...……………………….…………………………36TABLE 5.3 Income Statement………………...…………………………………………37TABLE 5.4 Balance Sheet………………...……………………...……………………...38TABLE 5.5 Statement of Changes in Partner’s Equity………………..…...……………39TABLE 5.6 Cash Flow………………...………………………………...………………40TABLE 5.7 Financial Analysis………………...…………………………...……………41

LIST OF FIGURES PageFIGURE 1.0 Logo………...…………………………………………………...…..............1FIGURE 1.1 Location………………...……………………………………………..…….2FIGURE 2.0 Distribution Channel..……………………………………………...….......15FIGURE 3.0 Plant / Manufacturing…………………………………………….......…..23FIGURE 3.1Organizational Structure………………………………………….......….....25

CHAPTER I

SUMMARY OF THE PROJECT

Name of the Enterprise

The firm itself gains its name from the names of proponents for easily and quick

identification in the trading market target for the customer’s awareness. The name is

“SOFT HEADS PILLOW CASE”.

Logo:

FIGURE 1.0

The Logo came from the Walt Disney animated character the head of “Baymaxxx”

Robot which has a soft body and it is the characteristics of the pillow case. Besides, the

partners are fan of this movie. The red color emphasized that the partners are aggresive to

attain the business goals.

Location of the Firm

The proponents used to put up their business venture in Barangay Palatiw, Pasig City

where they make and distribute the product to the different stores. they will up the

distribution to NOVO Department Store because it is near the manufacturing location and

it is more convenient.

Location

FIGURE 1.1

Remarks: Red color indicates the manufacturing and distribution of Soft Head

Pillow Case.

St. Gabriel internatioanal Laconsolasion

college

Robinsons

supermarket

One mercedes plaza

Pasig City Mega Market

Pinagbuhatan high school

x

novo

bolante

Descriptive Definition of the Project:

In putting up a business, making profit is a paramount one. But for the first timer who is

not that knowledgeable with the ups and down of a business, running a business is not

that easy as ABC. Hurdles are there that every small scale or businesses even large scale

have to face.

Pillow cases are often made from a fabric that feels comfortable against the skin, like soft

cotton, satin, flannel or a jersey knit fabric. Pick out fabric that matches the color scheme

in the bedroom, especially the bed covering and sheets.

To make a set of standard pillow cases, you will need 2 yards of fabric are needed. Pillow

case should be washable, Choose any type of fabric that should complement the color

scheme of the bedroom.

Project Long-range Objective:

To expand the business and to excel in other manufacturing venture related to pillowcase

manufacturing like bed sheets, linen, furniture and others.

Gantt chart

TABLE 1.0

Project Timetable and Status

Nature of the Industry

This business venture manufactures pillowcases that runs into different sizes,

designs and fabrics. The proponents directly distributes to wholesalers, businessmen and

middlemen which had direct contacts to prime buyers.

2014 2015

ACTIVITIES JULY AUG SEPT OCT NOV DEC JAN FEB MAR

Project Study Preparation

Business Registration

Construction of Company

Acquisition of Machinery, Office Equipment and Furniture

Hiring and Recruitment

Start of Operation

Dry run of the business

Mode of Financing

The initial investment will come from the contribution of the partners. This will also

come from their personal savings.

Investment Costs

SOFT HEAD PILLOW CASE will have an initial capital of one hundred thousand pesos

PhP100,000. which came from our proponents Rolando Siodena Jr. will contribute

PhP20,000.00 from his personal savings, Elias Manuel Sarona will contribute

PhP20,000.00 from his personal savings, Ellen May Sulapas will contribute

PhP20,000.00 borrowed from her parents, Karina Eunice Rasco will contribute

PhP20,000.00 borrowed from her relatives, and lastly Jessa Mae Achame will agreed to

contribute PhP20,000.00 borrowed from her parents and her relatives. The amount will

be used to organize and operate by the business.

TABLE 1.1

INVESTMENT COST

Proponents Capital contribution Percentage Mode of financing

Rolando B. Siodena Jr.

PhP 20,000.00 20% Personal savings

Elias Manuel Sarona 20,000.00 20% Personal savings

Ellen May Sulapas 20,000.00 20% Borrowed from parents

Karina Eunice Rasco 20,000.00 20% Borrowed relatives

Jessa Mae Achame 20,000.00 20% Borrowed from relatives & parents

TOTAL PhP 100,000.00 100%

Table 1 shows the contribution of each partner. Each equally contributes for the capital of the business.Feasibility Criteria – This proves whether the businesses is feasible or net.

Market Feasibility

The business will be able to sell its products such as pillowcases in different

varieties of designs and colors to different types of market and will be distributed to

different businessmen, wholesaler and directly committed to retail supermarket who are

selling the same products as well as in the manufacturing site of Barangay Palatiw, Pasig

City . Since there is a big competition, the business will also sell its product directly to

the potential buyers.

Finally, the business will attempt to have a direct contact to customers to gain their trust

as well as to penetrate a wide market.

Management Feasibility

Since the proponents groups themselves into a partnership form of business

organization, they work as a team to give their utmost effort to gain more profit for this

business venture.

Technical Feasibility

The Manufacturing site of “SOFT HEADS PILLOW CASE”.and warehouse is

located at Barangay Palatiw, Paig City. About 15 square meters allotted area will be used

in the business operation. Machineries will also be acquired to maximize the production

and the transportation of the business. Water, electricity and telecommunications

facilities will also be using in the manufacturing site.

Lastly, in terms of producing a pillowcases, the proponents will just focus less from the

effectiveness of the produced product in order to reach the satisfaction of the customer.

Thus, it is not hazardous for the environment and near from the site.

Financial Feasibility

This project starting capital is PhP 100,000.00 that will be used for the production

of the proposed business. This aspect also provides the financial future of the business

and aiming to minimize the risk and eliminate the chances of losses. This study projects

how much start-up capital is needed, sources of capital, returns on investment, and other

financial considerations. It looks at how much cash is needed, where it will come from,

and how it will be spent.

Socio Economic Feasibility

Due to the floating inflation rates of our financial condition, the economy is

merely affected. In this regard, every business regardless of its nature, are extremely

affected. Added to this, were the calamities that gravely threats the small entrepreneurs.

Correspond with these problems, this business had potentially survives and successfully

maneuvering the business factors.

CHAPTER II

MARKET STUDY

Marketing aspect can be considered as one of the big factor that needed in a

business. That’s why we need marketing in order for us to identify who will be the target

market, there is a need to determine the projected demand and supply of the people where

the business is located to know the amount of pillow case that we will produced and most

importantly to design a good marketing promotion and strategy that may help in selling

the product.

General Market Description

As a manufacturing industry of pillowcases, the partners believed that the product

will be able to compete with other well known brands in the market because we know

that it is necessary need in terms of designing, manufacturing and by producing high

quality product at the lowest possible cost and to distribute it effectively, efficiently and

directly to the market. The pillowcase business is either plain or decorative which runs in

different designs and quality of fabrics. The proposed project SOFT HEADS PILLOW

CASE aims to fulfill the demands of young professional are individuals working and

considered a white collar in nature and who are within a specified age bracket between

20-65, years old and house wives.

Size of the Target Market

The size of the target market is based on the 60% of passersby in Novo

Department Store Pinagbuhatan, Pasig Palenke Branch. Out of 630,200 population of

passersby, only 378,000 is the target market.

TABLE 2.0

PAST 5-YEAR DEMAND

YEAR DEMAND

2009 76,288

2010 78,534

2011 80,847

2012 83,227

2013 85,677

Past Five-year demand shown on the table above was computed based on the number of population taken from Barangay Pinagbuhatan pasig city with yearly increase of 2.86%.

TABLE 2.1

PROJECTED 5-YEAR DEMAND

YEAR % INCREASE DEMAND IN UNITS

2014 2.86% 88,200

2015 2.86% 90,723

2016 2.86% 93,318

2017 2.86% 95,987

2018 2.86% 98,732

Source: NSO Growth rate of Brgy. Palatiw, Pasig City

The 5-year projected demand is computed as follows:

(250 per hour observe x 14 hours of Department Store Hours)

3,500 – population of passersby per day

2,100 - Adjusted population (3,500 * 60%)

The respondents conducted a survey of 250 respondents to the passersby in Novo

Department Store

Result – 70% of population will buy

= 2,100 * 70%

= 1,470

According to the results of the survey people will buy pillow 5 pillows once a month (see

APPENDIX

= (1,470 * 5 *12)

= 88,200

The increase of the population per year is based on the 2.86% increase of population

growth rate of Brgy. Pinagbuhatan, Pasig City.

TABLE 2.2

STUDY OF COMPETITORS

COMPETITORS NO. OF PILLOW CASE SOLD PER DAY

NO. OF PILLOW CASE SOLD PER YEAR (360)

TEDDY’S PILLOW BEST ENTERPRISE

3X14=42 15,120

3AS MUSKETEERS ENTERPRISE

4X14=56 20,160

ANGEL’S DELIGHT MFG. INC.

2X14=28 10,080

TOTAL 45,360

(SOURCE: this company are near at the area, we observe 3 competitors of our competitors near at NOVO Department Store, Pinagbuhatan Pasig City) DEMAND AND SUPPLY ANALYSIS

In computing the demand and supply analysis, the total projected demand in each

year is deducted to the total projected supply in each year.

TABLE 2.3

Demand – Supply Analysis

YEAR DEMAND SUPPLY(2.86%)

UNFILLEDDEMAND

PROJECTED SALES

MARKET SHARE

2014 88,200 45,360 42,840 38,400 44%2015 90,723 46,657 44,066 40,800 45%2016 93,318 47,991 45,327 43,200 46%2017 95,987 49,364 46,623 45,600 47%2018 98,732 50,776 47,956 46,800 47%

Table shows to get the projected sales.

The proponents decided to produce 500 pieces of pillow case per week and multiply it by

4 (no. of weeks per month), and multiplied by 12 (no. of months per year) which is

equivalent to 24,000 (capacity to produce a year). In 2014 the capacity of business to

produce is only 60% of 24,000 which is equivalent to 14,400 and add 24,000 (capacity to

produced a year) to make it 38,400 in the next year 2015, the business produce 70% of

24,000 which is equivalent to 40,800. In 2016 the business will produce 80% of 24,000

which is equal to 43,200. In 2017 the business will produce 90% of 24,000 that is equal

to 45,600. In 2018 the business will produce 95% of 24,000 that is equal to 46,800.

Formula:

Market Share = Projected Sales / Total Demand x 100

Unfilled Demand = Demand - SupplyProposed Marketing Program and Strategies:

In business, the quality of their product is their number one priority. We will

encourage the customers to buy our product by having a good advertisement. The

advertisements that we will use are the media types like newspaper magazine and

television commercial.

Social media and other commercial advertisements in vernaculars such as newspaper and

television will help a lot in the campaign for the product.

TABLE 2.4

ADVERTISEMENT OF SOFT HEAD PILLOW CASE

ADVERTISEMENT

QUANTITY PRICE TOTAL

LEAFLETS

2400pcs PhP 0.65 PhP 1560.00

TARPAULIN 6pcs PhP 150.00 PhP 900.00

TOTAL ADVETISING PER QUARTER

PhP 9,840

TOTAL ADVERTISING PER ANNUM

PhP 29,520

TABLE 2.5

PRICING OF SOFT HEAD PILLOW CASE

FACTORS AFFECTING MARKET

DEMOGRAPHICAL

The business consider this as a big factor that will affect the market because in

order for to be known in manufacturing pillow case and can compete to the other brand of

pillow case, there is a need to know the population where the business is located to know

the demand and the total amount of product that needed to produce to supply the needs

of the people and to see if people can afford and are willing to buy the products that may

lead them to patronize it.

SOCIOCULTURAL

Pricing Pillow case

Direct cost of Raw Materials P 3,800

No. of Units Produce 150

Labor Cost (10%) 15

Cost per unit 25

Producing Pricing

Cost Per unit 25

Add: Mark Up (20%) 5

Price per Unit P 30.00

Add: 12% VAT 4

Distributors Price P 34.00

This factor affects both the business and the market. The partners must examine

the cultural values, practices and languages of the place and the population where the

business is located. It affects the business in promoting the product to communicate

effectively whether in publication, broadcasts and commercials by using the languages

needed for the market so that they will understand what the product is. The market is

affected in terms that they will respond more positively to the business that may lead to

patronize the product if they see that we respected their cultural values, languages and

practices

TECHNOLOGY

In order to survive the business in today's competitive world, technological

changes from time to time through upgrading and improving the machines and equipment

that will be used in producing the product to more advance technology must be adopted,

But having that advancement, it will affect the price of our product because the target

market will be choosing the produced goods.

ECONOMY

This factor affects the business and the market, because of economic conditions

wherein the raw materials to be used in making Pillow Case will have higher price in the

world market, so there is a need to increase also the price of the product that will affect

the market and also if the country is suffering from inflation, In inflation, if the availability

of our pillow case in the place is declining, we need to increase the price of our product because

of that, market is affected.

POLITICAL / LEGAL

This factor affects our business and the market. In our business, the rules and

regulations and laws imposed by the government. In rules and regulations, it can be the

limitation or restriction to import and export in the place or country that we wanted to sell

our product, because of that; we cannot serve the market that want and need our product.

In laws, it can be the payment of tax given by the government to our business, as a result

of that; we need to add tax in every product that we will produce. If the tax to our

business is higher, the added tax to the price of our product is higher also that may affect

our customer in choosing our product.

Distribution Channel Design

FIGURE 2.0

END USER

NOVO DEPARTMENT STORE

(RETAILER)

SOFT HEADS

PILLOW CASE MANUFACTURING

END USER

CHAPTER III

TECHNICAL STUDY

SOFT HEADS PILLOW CASE is a manufacturing business. This aspect

shows the production of quality fabrics to its highest attainable level in accordance to the

quality that will be served within our target market. It shows also the procedures or

methods in making a pillow case, the production flow of the business, the needed raw

materials and different equipment in doing the products.

It is helps in utilizing properly the factors of production that will be used in producing

good quality products and also the equipment that will be use in the office. It also shows

the number of technical workers needed in the operation and the proper waste disposal.

The Products or Services

A fabric product in Pillow case making are often made from a fabric that are

comfortable against the skin, like soft cotton, satin, flannel or a jersey knit fabric. Pick

fabrics that match the color scheme in the bedroom, especially the bed sheets. To make a

set of standard pillow cases, 2 yards of fabric is needed.

The Quantity and Quality of the Product/Services to be produced/sold

Item: SOFT HEADS PILLOW CASE

Description: soft fabric pillow which helps to relief the stress

Price: PhP 34

Sales in Units: 150

Sales (PhP): 5,100

Manufacturing Process

First, cut out your pattern pieces. I use butcher paper, bought on a roll at Costco.

Standard Case: Cut 2 pieces 44" x 36".

Now, lay out pattern pieces as shown on the right. Cut out fabric pieces. Remember that

your fabric, after shrinking, may no longer be the full 44" wide. That is ok as long as it is

still 1" larger than the circumference of your pillow (measures 1" more than twice the

width of your pillow).

1. Prewash Fabric

This is important - otherwise your pillowcase will shrink when it is first washed and

might not fit your pillow. This is one of the bonuses of sewing items yourself - no worry

about shrinking.

2. Fold Right Sides Together

Fold fabric lengthwise, right sides together. Pin down the long, open side, and across one

short end.

3. Stitch Sides And End

Stitch across the pinned short end and the pinned long side.

* If your fabric was not wide enough to fold, stitch two pieces right sides together.

Instead of one folded edge and one seamed edge, both side edges will be seamed. . I

stitched my seam, then ran around it again using my serger to finish off the seam edges. I

could have used the serger only, but added the extra line of stitching so that my seam

thread would be black (this way I didn't have to change serger thread).

4. Prepare Hem

With pillowcase still wrong side out, turn the hem under ½". Press. Turn hem under 4".

Press and pin. Use a ruler to make sure the hem is an even 4" all the way around.

The photo on the right shows the hem pressed under. Notice that I lined up the hem side

seam with the side seam of the pillowcase. This ensures that the hem lines up straight.

After I was sure my hem was straight, and 4", I pinned it into place all the way around.

5. Stitch Hem

Stitch hem in place using a straight stitch (this is called top stitching). I stitch on the

wrong side, close to the edge of the hem. This is best because if you stitch on the right.

side, you cannot see the edge of the hem. If you have a free arm machine, stitching will

be easier. If you do not have a free arm, take care to not stitch through both layers of your

pillowcase.

At this point, you can sew a satin ribbon or lace over the hem stitch line. Applique or

embroidery adds a nice touch, as well.

Benefit Of Sewing One of the benefits of sewing is quality. I find many improperly

constructed pillowcases. They look ok at first glance, from the outside, but if you look

inside the hem area you will see a seam that runs all the way to the outer edge of the hem.

The reason is that it is much quicker to construct that way. Time is money in the retail

TABLE 3.0

RAW MATERIALS OF SOFT HEAD PILLOW CASE

Raw Materials Quantity Price Total Price

Design Fabric 100 yards(good for 150 pillow case)

50 per yard 2,000

Needle 6 150 900

2 450 900

Total 3,800(Note: This Raw Materials are good for 150pcs of pillow case. Canvass in Divisoria, Manila)

TABLE 3.1

MACHINERY AND EQUIPMENT OF SOFT HEAD PILLOW CASE

Machinery and equipment

Quantity Price Total Price

Electric sewing machine(OMI SM1)

3 PhP1,629 4,887

Electric fans 2 678 1,356

Total 5 2,307 6,243

TABLE 3.2

OFFICE SUPPLY OF SOFT HEAD PILLOW CASE

Office Supply Quantity Price Total PriceReceipts 12 (100leaves) PhP100 PhP1,200

Ball pen 12pcs 15.00 180.00

Record book 12pcs 50.00 600.00

Bond paper 12 reams (divided in short and long)

150.00 1,800.00

Scissors 3pcs 50 150

Cutter

Total

3pcs 100 300

PhP 4,355

TABLE 3.3

OTHER EXPENSE OF SOFT HEAD PILLOW CASE

Other expenses Total PriceCustomization allowance

(If the customer want to customize their pillow case)

10,000

Total 10,000

TABLE 3.4

FURNITURE AND FIXTURE OF SOFT HEAD PILLOW CASE

Furniture and Fixture

Quantity Price Total Price

chair 3 PhP1,000 PhP 3,000

Desk 2 1,000 2,000

Computer 1 3,500 3,500

Table3 500 1,500

Total 9 PhP 6,000 PhP 10,000

Legal Requirements

The table below shows the cost of taxes, permits, and licenses needed in the business.

TABLE 3.5

LEGAL REQUIREMENTS OF SOFT HEAD PILLOW CASE

Legal Requirements Amount Expense (PhP)

Articles of Co-Partnership PhP 500.00

DTI Registration Fee 3,000.00

Business Permit 5,000.00

Mayor’s Permit 2,000.00

Sanitary Permit 650.00

Fire Permit 800.00

Barangay Clearance 750.00

BIR Annual Registration 5,000.00

SEC Filing Fee and Documentation 5,000.00

Total Amount Expense of Legal Requirements

PhP 22,700.00

Labor skilled and Unskilled

Skilled

Manager – set the business strategy and vision of the company

Marketing Professional – formulate strategic and long-term business plan and it is in

charge of distribution of the product as well as the monthly visitation on the store outlet.

Manufacturing supervisor – oversees the production process and draws up the

production schedule.

Sewer specialist – sew the pillow case needed by.

PLANT/MANUFACTURING LAYOUT

`

30 square meters

30 square meters

FIGURE 3.0

Prepared by :Helbert Alvarez Prado

Location:415 Villa Rosario Barangay Palatiw, Pasig City

COMFORT ROOM

MALE/FEMALE

STORAGE OF PILLOW CASE

entranc

table

CHAPTER IV

MANAGEMENT STUDY

Basic Consideration in Forming the Organization

The business organization of SOFT HEADS PILLOW CASE is a partnership

form of business consisting five person who are willing to invest an equal amount. To

start a business means to encourage oneself in business activity and work. Every work

performance before starting a new business is a part of its promotional activities. Anyone

entering into a partnership must remember that each general partner is liable for all debts

of the partnership

In this aspect, management is important because it will discuss how the business

will operate in the period of pre-operating to operating, the flow of authority through the

organizational chart, the different identification of every employee in the company

through their job specification and description and most importantly, the salary and

benefits packages that they will give and offered to them.

This aspect also finds the form of business organization and also the days to finish

the production in making pillowcases. The partners who are responsible in managing the

business, should be able to plan all the activities or operations effectively and efficiently

to become productive and competitive industry.

Forms of Ownership

The proposed business is a general partnership composed of five partners who

will serve as co-owners of the business. A general partnership involves two or more

owners carrying out a business purpose. General partners share equal rights and

responsibilities in connection with the company itself, and any individual partner can

bind the entire group to a legal obligation. The proponents decided to form a partnership

because it is easy to establish, raising funds may be easier with more owners.

The partners are the one who are responsible in the management during pre-

operating period of the business. We are in-charge for the completion of all necessary

registration requirements for the legality of our business. This involves the Security and

Exchange Commission (SEC), Social Security System (SSS), Bureau of Internal Revenue

(BIR), Department of Trade and Industry (DTI), Philhealth, PagIbig (HDMF), Pasig City

Hall and Barangay Hall (palatiw).

We also have task to recruit and select people who will be their employees that will work

in the company and to settle the transactions to suppliers of raw materials that will be

used in making the pillowcase. The partners are responsible also in buying machineries

and equipment and furniture that will be used in the company.

ORGANIZATIONAL STRUCTURE

FIGURE 3.1

MANAGER

ROLANDO B. SIODENA JR

PRODUCTION

DEPARTMENT

SALES & MARKETING STAFF

Ellen May Sulapas

PRODUCTION STAFF

Elias Manuel SaronaJessa Mae Achame

Karina Eunice Rasco

TABLE 4.0

DUTIES AND RESPONSIBILITY

POSITION DUTIES QUALIFICATION RESPONSIBILITY

MANAGER He/she must communicate the wishes of his superiors -- specifically you -- to administrative employees, so that your business functions according to your wishes. Decision-making is another important duty, because the manager has to analyze situations and determine the best course of action.

a bachelor's or master's degree in business administration. Through his education, he will have taken courses in finance, accounting, management or industrial relations. This knowledge and experience makes him a valuable asset to any small business.

responsible for overseeing all administrative functions in your business. A major part involves leading and directing employees. She delegates administrative tasks, such as accounting, paperwork and payroll, while giving you the freedom to deal with other issues. In doing so, she ensures administrative efficiency, proper procedure, implementation of policies and employee morale.

SALES&MARKETING STAFF

He/she duties of a marketing assistant depend upon the needs of the individual marketing manager or company, but most duties fall into the administrative assistance and office support realms. Tasks may include, but are not limited to, handling travel arrangements for the marketing department, scheduling conferences or meetings, organizing data and gathering information .

A bachelor's degree opens the possibility of promotion into a marketing manager. Bachelor's degrees with a focus in marketing, communication or administration were the most widely reported undergraduate degree

responsible for promoting and driving the sales of a company's goods or services.upports the marketing department by carrying out the daily tasks to keep the department functioning and facilitate the duties of the marketing manager and account executives.

PRODUCTION STAFF

production staff are professionals who work on a production line in a manufacturing environment and perform a variety of duties to ensure production goals are met for an organization.

Most employers require a high school diploma or GED for this occupation. Because of the work involved in a production line, manual dexterity as well as the ability to lift, push or pull heavy items may also be required.

Production staff may perform one or several functions on a production line such as assembly or fabrication of parts and products, testing finished products, transporting materials and equipment to other areas or cleaning production areas.

COMPANY RULES AND POLICIES

1. Unauthorized persons are not allowed within the working area unless they are permitted

to enter.

2. Employees and workers must present their I.D. before entering the company.

3. Visitors are required to fill-in all the details in the logbook and have to claim visitors I.D.

4. Employees are not allowed to take any of the company’s property without an

authorization.

5. Smoking is not allowed inside the company especially in the working area.

6. Prior to absent, employee must show valid reason or medical certificate to be exempt in

salary deduction.

7. Employees must wear their uniform based on the uniform assigned to them.

8. Private calls and using internet just for Facebook and Twitter site where strictly

prohibited unless it is really needed.

9. Employees must log-in every time they enter the company to prevent absences.

10. Employees should work at least 8 hours, if they exceed on working hours, they are

entitled to 30% of the compensation additional to their regular wages.

11. If they work on special holidays, they are also entitled to 30% additional to their regular

wages.

12. All employees will be given a right for paternity for men with 7 days leave with pay and

for women; they will be given maternity leave of atheist 3 months with pay.

MANUFACTURING PROCESS

Pillow cases are often made from a fabric that feels comfortable against

the skin, like soft cotton, satin, flannel or a jersey knit fabric. Pick out fabric that matches

the colour scheme in your bedroom, especially your bed covering and sheets. To make a

set of standard pillow cases, you will need 2 yards of fabric.

• If you're going to sleep on the pillow cases, be sure to choose a washable fabric.

• If you're making pillow cases that are more decorative in purpose, the fabric you

choose doesn't have to be soft or quite as easily washable. Choose any type of fabric

you'd like to complement the colour scheme in your bedroom.

Cut the fabric to size. To make a standard pillow case, use a scissors or a rotary cutter to

cut out a piece that is 45" x 36". If you're using a patterned fabric, take care to cut it so

that the pattern is straight.

Fold the fabric in half. Fold it length-wise with the finished sides, or "right" sides, of the

fabric together. The unfinished sides, or "wrong" sides, should be facing out.

Stitch the long side and one short side. Use a sewing machine or a threaded needle to

make a straight stitch up the long side of the fabric. Turn the fabric and continue stitching

one of the sort sides. When you're finished, turn the fabric right side out.

• Use a thread that matches your fabric or a contrasting thread to add a little flair.

• If you're stitching by hand, take your time and make sure your seam is

completely straight. You can pin the fabric with straight pins to help guide to stitching if

necessary.

Hem the open side. Start by folding the fabric back to create a 1/2-inch hem. Iron the

fabric to create a crease. Fold the fabric back again, this time creating a 3-inch hem. Iron

the fabric again and use your sewing machine or a needle and thread to stitch around the

base of the hem to keep it in place.

Decorate the pillow case. You can add ribbon, decorative lace, or other decorations to the

finished pillow case. Consider sewing a colourful contrasting ribbon over the hemline to

hide the stitches.

OPERATING PERIOD

In this period, the proponents have already completed all the registration

requirements that they need to be accomplished in order to operate the business.

Subsequently, the hiring of employees that will work in the company with their

respective department and position is on going and purchases of machinery that will be

needed in the production of the product and equipment needed in every office are

existing.

FORM OF BUSINESS ORGANIZATION

The business organization is Partnership. Operating in the form of general

partnership. The partner must make an Articles of Co-Partnership that will be submitted

in the Securities and Exchange Commission (SEC) in order for the issuance of licenses

for the formal establishment of the business.

Partnership is easy because by partners will have smaller investment since the capital is

divided. The partnership also has its own legal personality, separate and distinct by its

partners because of that the business would clearly know each partners rights, powers and

duties as partners and they can avoid conflict in the organization.

Salaries, Wages and Benefits

TABLE 4.1

Daily Rate and Monthly salary of the partners

TABLE 4.2

Benefits

Benefits Monthly contributionYearly

contributionSocial Security System (SSS) 133.3/ Month PhP1,600.00

PAG-IBIG (fixed rate) 100/ Month 1,200.00

PHILHEALTH (fixed rate) 100/ Month 1,200.00

13th month pay PhP4,000.00

Mandatory Benefits required by the government

PartnersSalary

No. of partners

RatePer day

Days of work

Partners monthly

allowance

Gross annual

allowance

Manager 1 200 5 1,000 12,000

Sales and marketing staff 1 200 5 1,000 12,000

Production staff 1 200 5 1,000 12,000

SewerStaff

3 (3x200)600 5 3,000 36,000

Total 6 1200 6,000 72,000

Social Security System- It is a government agency that provides retirement and health

benefits to all enrolled employees in the Philippines. Members of the SSS can also make

'salary' or 'calamity' loans. Salary loans depend on the monthly salary of the employee.

Phil Health-creates a universal health coverage for the Philippines. It is a tax-exempt,

government-owned and government-controlled corporation (GOCC) of the Philippines,

and is attached to the Department of Health.

PAG-IBIG-To provide its members with adequate housing through an effective savings

scheme, Pag-IBIG Fund harnesses these four sectors of Philippine society: financial

institutions, the industrial sector, the government, and the Filipino people. The Fund was

created to address two of the nation's basic concerns: (a) the generation of savings and (b)

providing shelter for Filipino workers.

13th month pay- is a form of monetary assistance equivalent to the monthly basic

compensation received by an employee, computed pro-rata according to the number of

months within a year that an employee has rendered service to an employer (basic

monthly pay/12 x number of months actually worked).

CHAPTER V

FINANCIAL STUDY

This chapter tackle the financial statement, balance sheet and cash flow. It will

also out when the capital will be recovered or how many years would it take to get the

return of investment (ROI).

Major Assumptions

The proponents decided that inventory is fixed at 5% of the projected sales

annually; The rent is P30,000 annually it covers the rent for space in NOVO Department

Store; Expenses is P222,438 annually until the 5th operation of the business; The

transporation expense is P 15,000 which includes the delivery of the product to Novo

Department Store and lastly other expense, which is P10,000.

Total Project Cost

List of estimated production overhead cost, operating expenses,

Equipment P 16,243

Pre-operating cost

Permits 22,700

Pre-operating expenses (quarterly)

Salaries allowances 76,000

Rent 30,000

Utilities 24,863

Travel 15,000

Advertising 29,520

Office expense 4,355

Raw materials 6,800

Initial working capital

The main source of funds will be taken from the capital contribution of each

partners. The proponents agreed to have the initial contribution of PhP 20,000 each with a

sum of PhP 100,000. there are several operational cost associated in running and

producing pillow case. These operational expense include such as utilities, payroll and

allowances, marketing and advertising, travel and other expenses.

Revenue breakdown

Projected sales for 2014, 2015, 2016, 2017 & 2018

Price: P 34.00

TABLE 5.0

Year Projected sales Price Revenue

2014 38,400 P 34 P 1,305,600

2015 40,800 34 1,387,200

2016 43,200 34 1,468,800

2017 45,600 34 1,550,400

2018 46,800 P 34 P 1,591,200

In year 2014, the projected sales is 38,400 multiplied by its price which is

PhP34.00 is equal to PhP 1,305,600. In year 2015, the projected sales is 40,800

multiplied by its price which is PhP 34.00 is equal to PhP 1,387,200. In year 2016, the

projected sales is 43,200 multiplied by its price which is PhP 34.00 is equal to PhP

1,468,800. In year 2017, the projected sales is 45,600 multiplied by its price which is PhP

34.00 is equal to PhP 1,550,400. In year 2018, the projected sales is 46,800 multiplied by

its price which is PhP 34.00 is equal to PhP 1,591,200.

Cost of sales

Price before tax and mark-up = PhP25.00

TABLE 5.1

Year Projected sales Unit cost Cost of production

2014 38,400 P 25 P 960,000

2015 40,800 25 1,020,000

2016 43,200 25 1,080,000

2017 45,600 25 1,140,000

2018 46,800 P 25 P 1,170,000

In year 2014, the projected sales is 38,400 multiplied by its price before tax and

mark-up which is PhP25.00 is equal to PhP960,000. In year 2015, the projected sales is

40,800 multiplied by its price before tax and mark-up which is PhP25.00 is equal to

PhP1,020,000. In year 2016, the projected sales is 43,200 multiplied by its price before

tax and mark-up which is PhP25.00 is equal to PhP1,080,000. In year 2017, the projected

sales is 45,600 multiplied by its price before tax and mark-up which is PhP25.00 is equal

to PhP1,140,000. In year 2018, the projected sales is 46,800 multiplied by its price before

tax and mark-up which is PhP25.00 is equal to PhP1,170,000.

Inventory

TABLE 5.2

YEAR PROJECTED SALES

PERCENTAGE OF INVENTORY

PRICE TOTAL

2014 38,400 5% P 34 P 65,280

2015 40,800 5% 34 69,360

2016 43,200 5% 34 73,440

2017 45,600 5% 34 77,520

2018 46,800 5% 34 P 79,560

In year 2014, the projected sales is 38,400 multiply by desired inventory

percentage and multiply it again to the price which is PhP34.00 is equal to PhP65,280. In

year 2015, the projected sales is 40,800 multiply by desired inventory percentage and

multiply it again to the price which is PhP34.00 is equal to PhP69,360. In year 2016, the

projected sales is 43,200 multiply by desired inventory percentage and multiply it again

to the price which is PhP34.00 is equal to PhP73,440. In year 2017, the projected sales is

45,600 multiply by desired inventory percentage and multiply it again to the price which

is PhP34.00 is equal to PhP79,560.

TABLE 5.3

SOFT HEADS PILLOW CASE

Income Statement

YearFor the year ending Dec

2014

For the year ending Dec

2015


2016


2017


2018Revenue P 1,305,600 P 1,387,200 P 1,468,800 P 1,550,400 P 1,591,200

Less : Cost of Sales 960,000 1,020,000 1,080,000 1,140,000 1,170,000

Gross Profit P 345,600 P 367,200 P 388,800 P 410,400 P 421,200

Less : ExpensesRent/Lease 30,000 30,000 30,000 30,000 30,000Telephone/ Utilities

24,863 24,863 24,863 24,863 24,863

Payroll 76,000 76,000 76,000 76,000 76,000General Operations

14,355 14,355 14,355 14,355 14,355

Professional Fees

22,700 22,700 22,700 22,700 22,700

Marketing & Advertising

29,520 29,520 29,520 29,520 29,520

Trasportation15,000 15,000 15,000 15,000 15,000

Other Expense

10,000 10,000 10,000 10,000 10,000

Total Expense P 222,438 P 222,439 P 222,440 P 222,441 P 222,442

EBITDA 123,162 144,762 166,362 187,962 198,762Depreciation 3,249 3,249 3,249 3,249 3,249

Profit/Loss Before Taxes 119,913 141,513 163,113 184,713 195,513

Income Taxes 30% 35,974 42,454 48,934 55,414 58,654

Net Profit/Loss P 83,939 P 99,059 P 114,179 P 129,299 P 136,859

TABLE 5.4


Balance Sheet

as of Dec 2014

as of Dec 2015

as of Dec 2016

as of Dec 2017

as of Dec 2018

Assets

Cash & Equivalents P 202,416 P 213,638 P 323,737 P 323,737 P323,737

Inventory 65,280 69,360 73,440 77,520 79,560

Equipment 16,243 - - - -

Total Assets P 283,939 P 282,998 P 397,177 P 401,257 P 403,297

Equity Investment P 100,000 - - - -

Retained Earnings 183,939 282,998 397,177 401,257 403,297

Total Equity 283,939 282,998 397,177 401,257 403,297

Total Equity/Liability P 283,939 P 282,998 P 397,177 P 401,257 P 403,297

SOFTHEADS PILLOW CASE

Statement of Changes in Partner's Equity

for the year ended Dec 31, 2014 to Dec 31, 20182014 2015 2016 2017 2018

Rolando Siodena beginning capital P 20,000 P 36,789 P 56,601 P 79,436 P 105,296

Add Net Profit Distribution 16,789 19,812 22,835 25,860 27,372

Rolando Siodena Ending Capital P 36,789 P 56,601 P 79,436 P 105,296 P 132,6682014 2015 2016 2017 2018

Elias Manuel Sarona Beginning Capital P 20,000 P 36,789 P 56,601 P 79,436 P 105,296


Elias Manuel Sarona Ending Capital P 36,789 P 56,601 P 79,436 P 105,296 P 132,668

2014 2015 2016 2017 2018 Ellen May Sulapas Beginning Capital P 20,000 P 36,789 P 56,601 P 79,436 P 105,296


Ellen May Sulapas Ending Capital P 36,789 P 56,601 P 79,436 P 105,296 P 132,6682014 2015 2016 2017 2018

karina Eunice Rasco beginning capital P 20,000 P 36,789 P 56,601 P 79,436 P 105,296


karina Eunice Rasco Ending Capital P 36,789 P 56,601 P 79,436 P 105,296 P 132,668

2014 2015 2016 2017 2018 Jessa Mae Achame Beginning Capital P 20,000 P 36,789 P 56,601 P 79,436 P 105,296


Jessa Mae Achame Ending Capital P 36,789 P 56,601 P 79,436 P 105,296 P 132,668

SOFT HEADS PILLOW CASE 2014 2015 2016 2017 2018

Beginning Capital 100,000 183,939 282,998 397,177 526,476

Add Net Profit Distribution 83,939 99,05

9 114,17

9 129,29

9 136,85

9

Ending Capital 183,939 282,998 397,177 526,476 663,335

TABLE 5.6


Cash Flow

as of Dec 2014

as of Dec 2015

as of Dec 2016

as of Dec 2017

as of Dec 2018

Operating Activities

Net Profit / Loss P 83,939 P 99,059 P 114,179 P 129,299 P 136,859

Inventory (65,280

) (4,080

) (4,08

0) (4,08

0) (4,08

0)

Net Cash Operating (65,280

) (4,080

) (4,08

0) (4,08

0) (4,08

0)

Investing Activities

Equipment (16,243

) 16,24

3 - - -

Equity Investment 100,000 (100,000

) - - -

Net Cash Investing 83,757 (83,757

) - - -

Financing Activities Net Cash Change For Period 102,416 11,222 110,099 125,219 132,779 Cash at Beginning of Period 100,000 202,416 213,638 323,737 448,956 Cash at end of Period P 202,416 P 213,638 P 323,737 P 448,956 P581,735

TABLE 5.7

FINANCIAL ANALYSIS

Return on Investmentas of Dec

2014as of Dec

2015as of Dec

2016as of Dec

2017as of Dec

2018

Net Profit After Tax P 83,939 P 99,059 P 114,179 P 129,299 P 136,859

Total Investment P 100,000 P 100,000 P 100,000 P 100,000 P 100,000

Return on Investment 0.84 0.99 1.14 1.29 1.37

CASH PAYBACK PERIOD

average annual profit (ANP) = Sum of the five years net profit

I=Total investmentCash Payback Period=I/ANP

(=100,000/565,335)(=2 1/2years)

the payback period will be 0.18 or 2 1/2 years the investment will return in the business

CHAPTER VI

SOCIO-ECONOMIC STUDY

The socio-economic aspect can possibly help the Philippine Society. With the

making of Soft Heads Pillow Case, this business will contribute to society in a way in

which there will be job openings that doesn’t require people who graduated in a 4-year

course or even studied at all. Also, the business will be able to promote the country’s

fabric business, which will be able to increase the country’s economic value.

The major aspect of the business is to raise the economic stability of the country not only

through profit but also through social and economic benefits. The proposed business

describes the benefits of the chosen business field.

Employement Income

1. The objective of establishing the business is by serving the society and the economy

through benefits in generating employment in order for them to improve their living and

increase government revenues.

2. Tax is the major source of the government’s fund. By implementing the proposed

business the government will benefit from the business in a way that the business will be

able to generate additional funds through taxes for government projects such as

establishment of infrastructures, schools, hospitals, highways, and other mission.

Nowadays, there are increasing numbers of Filipino people who are still unemployed. In

time, when the business is stable and have expanded, it will give opportunities to employ

more people so that it can help the government decrease the unemployment crisis in the

country.

Government Revenues

Everyone must be aware of the vital responsibilities and roles in the society. The

proposed business can provide employment and job training.

Socio-economics is one of the main concerns of “Soft Heads Pillow Case”; the economic

contributions like payment of taxes to the government can be counted, giving jobs and

personal income. It is also important to recognize every family member’s social

contributions, the potential support of the business as to government, adults, and students.

The business will be able to give and enhance self-esteem to the people who will be

applying in the proposed company. Management Organization skills will play a major

role in building a stronger future in manufacturing and retailing the products to solely

support the family of employees.

Development of Industries

The study relates the project’s specific contribution to the community and to the

government. This also shows the social desirability of the project to make it more

feasible. The business does not only focus in gaining profit but it will also attain its

responsibilities to the government and community. The business will not only assure the

consumption of the target consumers but it will also be equally concerned with the

demand of the fast changing society.

Benefits to Consumers

Consumers are the reason in establishing this kind of business. They are the

lifeblood of the business, without them the business won’t exist. The proponent could

assure the consumers that the products have quality and excellent services at an

affordable price that suits their budget and needs.

Benefits to Suppliers

The suppliers materials will have an added value to its products to increase and

advertise to their potential clients.

Their profit will increase when the proponents purchase raw materials from them.

Benefits to Employees

The proposed project will generate income to the owners and employees to make

a living and give a brighter future for their families

Benefits to Partners

The partners will increase their earning capacity.Their entrepreneurial skills and

knowledge will be showcased by creating unlimited opportunities for growth and

development in every individual endeavor.

Social and Environmental Rate of Return

The business seeks to provide a Pillow Case that has good quality for the

consumers Pillow. The proponents ensure an environment friendly enterprise that follows

good advocacy.

Documents

CD Burning