Business Plan on;
READYMADE GARMENTS MANUFACTURING By; Sheikh Mohd Yasir
[email protected]
INTRODUCTION
Readymade garment industry has occupied a unique place in the industrial scenario of our country by generating substantial export earnings and creating lot of employment.
This project report is prepared for the manufacture of gents shirts, gents trousers as they find wide acceptance in local and international markets.
MARKET POTENTIAL
The demand for Readymade Garments is increasing at around 18-20 % annually in the country.
The domestic market and the export market are growing rapidly
Process of Manufacture
Cutting and Sewing
Labeling
Packing
Finishing and Packing
Quality Control and Standards
Our Vision
To become a globally prominent readymade garment manufacturer and be ranked amongst the top garment manufacturers in the country in terms of quality, service standards and ultimately customer satisfaction.
FINANCING
Promoters Contribution
Seed Capital lacks
Bank Loan
0.15 lacks 3.00
5.85 lacks
PROJECT COST SUMMARY S.NO
PARTICULARS
AMOUNT(LACS)
1
Land
NIL
2
Civil Works
NIL
3
Plant & Machinery
1.86
4
Miscellaneous Fixed Assets
1.10
5
Preliminary & Preoperative expenses
0.50
6
Working Capital
5.54 9.00
MEANS OF FINANCE 1
Seed Capital (Maximum for this Category)
3.00
2
Promoters Contribution
0.15
3
Loan from Bank
5.85
DETAILS OF LOANS A
Long Term Investment
3.46
1
Seed Money
1.21
2
Term Loan From Bank
2.25
B
Working Capital Requirement
5.54
1
Seed Money
1.94
2
Working Capital Finance From Bank
3.60
Details of Machinery and Equipments Sl.
1.
Description
Power operated
Nos.
Rate
Amount
No.
(Rs.)
(Rs.)
1
35,000
35,000
8
5,000
40,000
1
6,000
6,000
1
25,000
25,000
1
25,000
25,000
1
25,000
25,000
cutting machine 2.
Power operated SNLS stitching
machine 3.
Overlock stitching machine with motor and accessories
4.
Garment washing machine 15kg capacity
5.
Hydro extractor 15 kg. capacity
6.
Tumbler dryer 15 kg. capacity
7.
Potable steam press
1
20,000
20,000
9.
Other miscellaneous
LS
20,000
10000
assets
DETAILS OF PRELIMMINARY & PREOPERATIVE EXPENSES S.NO
PARTICULARS
AMOUNT(LACS)
1
Traveling & Conveyance
0.05
2
Printing & Stationary
0.05
3
Professional Charges
0.05
4
Misc. Expenses including fee etc.
0.15
5
Interest during Moratorium Period
0.20
0.50
DETAILS OF MISCELLANEOUS FIXED ASSETS
S.NO PARTICULARS
AMOUNT(LACS)
STEEL LOCKER, TABLE, CHAIRS 1
for 12 persons
LS
0.50
2
FIRE EXTINGUISHER
4
0.20
3
Electric Fitting and Lighting
0.30
TOTAL
1.10
INSTALLED CAPACITY AND PRODUCTION PROGRAMME Keeping in view the climatic conditions and other factors prevailing in the valley into consideration, the operational hours shall be assumed as:RAW MATERIAL REQUIREMENT and SALES AT 100% INSTALLED CAPACITY
S.no
particulars
A)
LADIES SUITS COTTON
1
Qnt. Req per item in meters
No. of items produced per day
No. of items produced per annum
Total quantity of material required per annum
Rate per meter
Amount in Rs.
5.00
10
3000
15000
53.00
795000
B)
CHILDREN SETS
1
COTTON
1.5
12
3600
5400
65
351000
2
WOOLEN
1.5
12
3600
5400
125
675000
C)
SHIRTS
1
COTTON
2.25
10
3000
6750
90
607500
2
TERI WOOL
2.25
10
3000
6750
130
877500
MISCELLANEOUS ITEMS MATERIAL, EMBROIDERY, BUTTONS, PACKING, STICKERS, ETC.
TOTAL AMOUNT IN RS.
SAY IN RS. LACS
LINING THREAD, ZIPS
Sale price per piece Rs.
Revenue per annum Rs.
490
1470000
200
720000
300
1080000
320
960000
335
1005000
100000
3406000
5235000
34.06
52.35
SALES REALIZATION AND PURCHASES IN PHASED MANNER YEAR
CAPACITY
SAL/WAG
UTILISATION
PURCHASE
UTILITIES
SALES (lacs)
(Lacs)
1ST
50.00
2.22
17.03
0.13
26.18
2ND
55.00
2.44
18.73
0.14
28.79
3RD
60.00
2.66
20.44
0.16
31.41
4TH
65.00
2.89
22.14
0.17
34.03
5TH
70.00
3.11
23.84
0.18
36.65
6TH
75.00
3.33
25.55
0.20
39.26
7TH
80.00
3.55
27.25
0.21
41.88
8TH
80.00
3.55
27.25
0.21
41.88
STATEMENT OF MANPOWER REQUIREMENT & THEIR REMUNERATION
S.No.
PARTICULARS
SALARY PER MONTH Nos.
TOTAL(PA)
1
Manager
5000.00
1
60000.00
2
Skilled Workers (Cutters)
4000.00
1
48000.00
3
Tailors
3000.00
8
288000.00
4
Sales/Marketing Executive
2500.00
1
30000.00
5
Chokidar
1500
1
18000.00
Total
12
444000.00
Say
4.44 Lacs
PAY BACK PERIOD Pay back period is the length of time in which, the unit recovers its initial investment. It may also be defined as the number of months or years required for the unit to generate commutative gross operating surplus equal to the fixed capital investment in the project. The payback period of the unit is estimated in the following table
Year 1st 2nd 3rd 4th 5th 6th 7th 8th 1 year
CFAT 4.90 5.37 5.88 6.44 7.03 6.87 7.40 6.61 +
.
Cumulative Cash inflow 4.90 10.27 16.15 22.59 29.62 36.49 43.89 50.50 10
Months
Projected Profitability Statement The annual cost of sales and profitability during the first eight years of operation of the plant is estimated in the following table.
S.no
Particulars
1 2 3
Year of operation Capacity Utilization (%) Sales realization
A:
Cost of production
1
Raw Material
2
Operating Years 50.00 26.18
2nd 55.00 28.79
3rd 60.00 31.41
4th 65.00 34.03
5th 70.00 36.65
6th 75.00 39.26
7th 80.00 41.88
8th 80.00 41.88
17.03
18.73
20.44
22.14
23.84
25.55
27.25
27.25
Salary & wages
2.22
2.44
2.66
2.89
3.11
3.33
3.55
3.55
3
Utilities
0.13
0.14
0.16
0.17
0.18
0.20
0.21
0.21
4
0.06
0.09
0.12
0.15
0.15
0.18
0.18
0.18
5
Repairs & Maintenance Administrative expenses
0.26
0.29
0.31
0.34
0.37
0.39
0.42
0.42
6
Selling expenses
1.05
1.15
1.26
1.36
1.47
1.57
1.68
1.68
7
Total
20.75
22.85
24.94
27.04
29.11
31.21
33.28
33.28
8
Gross profit
5.43
5.95
6.47
6.98
7.53
8.05
8.60
8.60
B:
Financial expenses
1st
1 2 3 4 5 6 7 8 9 10 11 12
Interest on term loan Interest on WCL Depreciation (SLM) Total Profit before tax Taxation Profit after tax Withdrawals Profit carried to B/S Cumulative profit Add back depreciation Total cash surplus
0.20 0.32 0.35 0.87 4.55 0.00 4.55 0.00 4.55 4.55 0.35 4.90
0.20 0.37 0.35 0.92 5.02 0.00 5.02 0.00 5.02 9.58 0.35 9.93
0.16 0.42 0.35 0.93 5.54 0.00 5.54 0.50 5.04 14.62 0.35 14.96
0.12 0.42 0.35 0.89 6.10 0.00 6.10 0.50 5.60 20.21 0.35 20.56
0.08 0.42 0.35 0.85 6.68 0.00 6.68 0.50 6.18 26.39 0.35 26.74
0.04 0.42 0.35 0.81 7.24 0.72 6.52 1.00 5.52 31.91 0.35 32.26
0.00 0.42 0.35 0.77 7.83 0.78 7.05 1.00 6.05 37.96 0.35 38.31
0.00 0.42 0.35 0.77 7.83 1.57 6.27 1.00 5.27 43.23 0.35 43.58
C: 1 2 3
Less payment Term Loan Withdrawals Total payments
0.00 0.00 0.00
0.45 0.00 0.45
0.45 0.50 0.95
0.45 0.50 0.95
0.45 0.50 0.95
0.45 1.00 1.45
0.00 1.00 1.00
0.00 1.00 1.00
4
Net Cash accruals
4.90
9.48
14.01
19.61
25.79
30.81
37.31
42.58
PROJECTED BALANCE SHEET The balance sheet of a unit is a very important feature of the working of the unit. In a healthy unit, there is always a growth in total assets and liabilities every year. In a projected balance sheet on the liabilities side the reserves and surplus and on the assets side the cash and bank balances should show healthy growth.
S.no A: 1
Particulars
Liabilities Promoters Contribution
2
Share Capital
3
Reserves & Surplus
4 5
Year
1st
2nd
3rd
4th
5th
6th
7th
8th
0.15
0.15
0.15
0.15
0.15
0.15
0.15
0.15
3.00
3.00
3.00
3.00
3.00
3.00
3.00
3.00
4.55
9.58
14.62
20.21
26.39
31.91
37.96
43.23
2.25
1.80
1.35
0.90
0.45
0.00
0.00
0.00
3.60
4.14
4.68
4.68
4.68
4.68
4.68
4.68
13.55
18.67
23.80
28.94
34.68
39.75
45.80
51.06
3.46
3.11
2.77
2.42
2.08
1.73
1.38
1.04
0.35
0.35
0.35
0.35
0.35
0.35
0.35
0.35
3.11
2.77
2.42
2.08
1.73
1.38
1.04
0.69
5.54
6.08
6.62
6.62
6.62
6.62
6.62
6.62
4.90
9.82
14.75
20.24
26.32
31.74
38.14
43.75
13.55
18.67
23.80
28.94
34.68
39.75
45.80
51.06
Term Loan WCL Total
B:
Assets
1
Gross Block
2 3 4
5
Depreciation Net Block Current Assets Cash and bank balance Total
Target market We are going to focus on baby wear, children clothing and youth clothing (both boys and girls).
Market Segmentation The garments industry can be categorized in many segments, however our target market consists of; Baby Wear. Children Clothing. Youth Clothing (Boys & Girls)
Competitive Strategy
To establish a system of recording feedback and complaints of customers in order to meet the need of customers in better way. To provide quality garments at best available price in the market. To provide new policies related to return and exchange of clothes which assists the customers in the event of need for return.
