business proposal for setting up of a jacket 2003
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8/3/2019 Business Proposal for Setting Up of a Jacket 2003
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Business proposal for setting up of
a jacket manufacturing company
NISHANT
ROHIT KUMAR
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Introduction
The men's Jackets is, without question, the mostuniversal and steadfastly appropriate item in a
gentleman's wardrobe. There are few occasionsat which a man in a quality Jackets will be out ofplace, particularly if the wearer has a firm graspof fashion and an established personal style.
The path to elegant style begins with the jackets,the cornerstone of men's fashion.
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Business Plan/Proposal
For Jacket Manufacturing company (SilverSparks)
Compiled by Rohit Kumar and Nishant of SilverSparks
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Aims & Objectives
To Provide best fashion at cheapest price.
To target the common people & make jackets a common attire in everywardrobe.
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Market Share of Men’s Jackets The men’s suits, jackets and blazers market in India is valued
at Rs 4,100 crore, which is 8.9 per cent of the total men’swear market in the country.
This market is growing at a rate of 16 per cent and isexpected to reach Rs 7,400 crore by 2012.
In terms of volume, this market is 1.5 crore pieces, which is 1per cent of the total men’s wear market. It is expected to growto 2.1 crore pieces by 2012.
Premium suits, jackets and blazers are priced at an averageof Rs 12,282. They contribute 1.3 per cent to the men’s suits, jackets and blazers market in terms of value, and 2.2 per centin terms of volume.
Low-priced suits, jackets and blazers are priced at an averageof Rs 1,252. They contribute 29.6 per cent to the men’s suits, jackets and blazers market in terms of value, and 57.2 percent in terms of volume.
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Executive summary
In a nutshell, this is the overview to our business. It definesthe market our company will operate in and lists the productsor services we will deliver.
Garment industry is one of the fastest growing sectors in thecountry with huge orders for suit making because of theadvent of western companies in India and also huge ordersfor the ‘make to measure’ jackets.
It is very imperative that one company comes which is Indianin nature, suits Indians to the core and understands theirdemands expectations and fulfills them.
The most important thing about this company is that it has
been brought into existence after much study into demands of jacket. We are unique because we are the first to come intothis market after such a study and have huge experience inthis field.
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Administration Information
Name of business : Silver Sparks
Type of business activity: Manufacturing
Type of business ownership and the legalstructure ; Private - all disputes under DelhiHigh court jurisdiction.
Physical and Postal address of business ; A 202sector 51, Noida 567890, UP
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Contact numbers of key
persons Person : ROHIT &NISHANT
Involvement : G.M
Telephone : 93232226989619683435
Fax : 011 2345678
E-mail : [email protected]
Name(s) of partners
and their percentage
shareholding :ROHIT &NISHANT
50:50
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Introduction & BackgroundInformation
Intended starting date of operations :31October
The project and for which finance is required:
Jacket Manufacturing Total amount of finance required:60 crores
Period over which the finance is required:mentioned later on
The primary source of financing: Bank loan
Internally generated funding investment to thetune of 2 crores.
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Management Team
Highly qualified and experienced
Product of NIFT
Work experience:25 years in RMG and 10
years in export and merchandising of suits. Both partners highly experienced and have the
ability to get their work done in extreme of theconditions. They have great understanding of
this sector and have done a lot in this sectorover the years.
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Marketing Plan
Products and Target market/s, (geographically ifpossible) - Jackets and India
The size of this market, its growth prospects and factorsthat influence it. - Huge, Bright weather
Main competitors, their strengths and weaknesses andtheir market shares. – MADURA - PRICING - OLD
MACHINERY 20% Anticipated market share in percentage terms and
explanation of believe that we can successfully capturethis section of the Market. - 15%in 5 years because of
the pricing and new attitude.
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Marketing plan in detail
Jackets to be made in four lines, ASTM standards, the jackets will have hand sewing in critical operations tomake it better and more attractive than that of ourcompetitors.
The selling price is double of the cost price and thisprice is lower to that of our competitors.
Our promotional efforts will be done in all major print andelectronic media. For sale promotions we will tie up withdifferent retail brands. etc.
Distribution agreements with these channels have yetnot been finalized though blue print is ready.
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Market Potential
Great potential just because of the fact that men now-aday’s wanted to dress as smartly as possible and with
the advent of white collar jobs in India this has just
increased. There are very few units in the State which
are engaged in manufacturing jackets. The export of
readymade garments to different countries has alsobeen increased. There is good scope if some units come
forward for manufacturing of jackets.
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We intend to sell 6,00,000 units of jacket a year.Turn over is mentioned in the document. Our
50% sell will be in metropolis of India and then20% in small cities, 10% as MTM and rest forexports.
A break down of our selling expenses is given in
the document.
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Manufacturing Production
Plan Our factory size, (sq mtrs) and suitability, taking into
account our proposed project has been furnished.Details of the current cost per month per square meter
has been given. Details of the owners of the propertyhave been mentioned.
The layout and production flow of the factory has beenIncorporated.
Description of each new machine cost and supplyquotes have been mentioned. A plant manager alongwith a project manager will commission the plant and thetime period required. Maintenance contract will be therefor house keeping.
Any further machines that will have to be purchased inthe next three years : Cutters
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List of people currently employed in the factory havebeen supplied and breakdowns of the salaried,permanent and casual labor force have been given. Weare using an average wage per category. No laborcouncils and unions but company will adhere to the Govt
rules. – SALARY
A breakdown of the quantity and price of raw materials(including packaging) required, to producing productrange has been given
Salaries and wages (detailing salary has been given)
Production expenses (rent, insurance, light & water,maintenance, consumables, etc.).
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Financial and Administration
Plan Audited financial statements of our business for the past
two years and detailed interim accounts not older thantwo months are provided . Company has to be started sono interim accounts available.
Bank account holder(s)’ contacts - 9987654321 and Auditor’s contact numbers - 9876567878 A budget for our administrative expenses, e.g. audit
fees, bank charges, telephone, stationary, levies, etc. in
time periods to match the other budgets has been given. Budgeted balance sheets and income statements, by
month for the first year have been given.
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Attachments and supportingDocumentation
Copy of detailed curriculum vitae or resume of all partners. Copy of identity documents of directors and shareholders. Copies of quotations and / or plans for building. Copies of title deeds and / or leases. Details of any municipal requirements and SABS / ISO 9000
requirements. Copies of patents / trademarks and royalty agreements. Copies of proof of own contribution. Layout sketch. Organogram (plan of who will do what in the business). Copies of financial statements. Copies of proof of orders or letters of commitment. Maps showing location. Any other relevant substantiating documentation.
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Production Capacity
Qty: 6,00,000 (per annum)Value: Rs. 24,00,00,000(taking rs 400 as
cost price)
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Basis and Presumptions
The scheme has been prepared on the basis of 75%efficiency on single shift considering 25 working days in amonth.
The rate of 12% interest in the scheme has been workedout on the basis of 12% on an average however, this figureis likely to vary depending on the financial out-lay of theproject as well as location of the unit.
The break-even point in the scheme has been calculatedon the full capacity utilization basis.
The cost of machinery and equipment as indicated areapproximate which are fueling locally at the time ofpreparation of the scheme when a tailor cut project profileis prepared, necessary changes are to be made.
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The rate quoted in respect of salaries andwages for workers and others are the minimumrates in the State, neighboring states.
After the initial gestation period of one and halfyear, it will require approximately 2.5 years topay back the loans.
Working capital for 2 months has been takeninto consideration for smooth running of theproject.
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Pollution Control
Effluents are required, since the process involves manyprocesses which can cause pollution. So, there is a
requirement of installation of effluent plant.
Energy Conservation
Energy Conservation has become essential in thesedays. It becomes the individuals duties to realize itsnecessity.
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Financial Aspects
A. Fixed Capital
(i) Land and Building Value (Rs.)
130680.98 sq.ft.@ Rs. 2000 sq.ft.
Rs. 26,13,61,960
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SALARY
(i) Staff and Labor (per month) (Rs.)
Administrative and Supervisory
1. Vice president 1 100000 100000
2. G.M 4 75000 300000
3. Manager 15 35000 525000
4. Supervisor/Accountant 15 6000 900005. Peon/Watchman 22 3500 77000
Skilled/Unskilled Worker
1. Operators A 70 5000 350000
Skilled/Unskilled Worker
2. Operators B 250 4000 1000000
3. Helpers 80 3000 240000
Total 2682000
prerequisites@20% 533600
Total
Say 3215600
BACK
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RAW MATERIAL COST
(ii) Raw Material (per month) (Rs.) Shell fabric @200 1,00,00,000 lining @90 4,50,000 Felt @15 7,50,000 trims @12 6,00,000 INTERLINING @75 3,75,000 Total 1,21,75,000
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OTHERS
(iv) Other Contingent Expenditure (Rs.)
2. Postage and stationery 3000000
3. Repair and maintenance 36000004. Telephone 5400000
5. Transportation charges/cartage 2400000
6. Insurance 5000000
7. Office expenditure 3600000
9. Packing expenses 3000000
10. Sales & Marketing Expenses 1200000
Total 35200000
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(v) Working Capital (per month) (Rs.)
Staff and Labour 22,82,000
Raw Material 1,21,75,000
Utilities 8000000
Other expenditure 20,00,000
Total 2,44,57,000
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(1) Cost of Production (per annum) (Rs.)
Raw Material 14,61,00,000
Staff and Labour 2,73,84,000
Utilities 9,60,00,000
Other contingent expenses 14,76,000
Depreciation on Machinery @ 10% 30,15,900
Interest on total investment @ 12% 101564030
Depreciation on Office furniture. 40,000
Total 27,43,60,780
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(2) Turnover (per annum) (Rs.)
By sale of : 6,00,000 @ 800 48,00,00,000
(3) Net Profit (per year) (Rs.)
Profit = Sales - Production Cost= 48,00,00,000-27,43,60,780 215639,220
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Net Profit Ratio
Net Profit per year ×100-----------------------------
Turnover per year
215639,220------------ x100
48,00,00,000 44.9%
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Net Rate of Return
Net Profit per year-------------------- ×100
Total Investment
215639,220------------ x100
84,63,66,920
=25.47%
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Break-even Point
Fixed Cost (per annum) (Rs.)
1. 40% of salaries 109536002. 40% of utilities 3200000
3. 40% of other expenditure 800000
4. Depreciation on machinery 30,15,900
5. Depreciation on office furniture 40000
6. Interest on total investment 101564030
Total 119573530
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B.E.P.
=Fixed Cost ×100---------------------
Fixed Cost + Profit= 2862400
-------------x100
3962520= 72.2%
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PAY BACK PERIOD
Rs. 21,56,39,220 profit per year.
Rs. 84,63,66,920 investment in year.
Pay back period= 84,63,66,920/ 215639,220
3.92 years
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Internal rate of return
STEP 1
846366920={4(215639220)-(3055900)4}/4
=212583320
STEP 2
846366920/ 212583320
=3.9813
PVIFA table gives the value as
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The prices of the machinery are correct in the maximumpossible manner. They have been taken from theinternet.
This whole endeavor is for a jacket factory that will havefour jacket lines. The data for the machinery has beentaken from the records of silver spark ltd. For rawmaterial lining has been taken as Rs 6 per meter andthus 1.5 meter per jacket.
Interlining as Rs 75 Trims which consist of thread, labels and buttons have
been taken to be around Rs 15. Maximum effort have been paid to have the data as
possibly correct as possible and as close as possible tothe factory we saw.
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