Business Proposal for Setting Up of a Jacket 2003

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



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.



Business Plan/Proposal

For Jacket Manufacturing company (SilverSparks)

Compiled by Rohit Kumar and Nishant of SilverSparks



Aims & Objectives

To Provide best fashion at cheapest price.

To target the common people & make jackets a common attire in everywardrobe.



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.



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.



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



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



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.



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.



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.



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.



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.



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.



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



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.).



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.



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.



Production Capacity

Qty: 6,00,000 (per annum)Value: Rs. 24,00,00,000(taking rs 400 as

cost price)



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.



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.



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.



Financial Aspects

A. Fixed Capital

(i) Land and Building Value (Rs.)

130680.98 sq.ft.@ Rs. 2000 sq.ft.

Rs. 26,13,61,960



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



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



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



(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



(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



(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



Net Profit Ratio

Net Profit per year ×100-----------------------------

Turnover per year

215639,220------------ x100

48,00,00,000 44.9%



Net Rate of Return

Net Profit per year-------------------- ×100

Total Investment

215639,220------------ x100

84,63,66,920

=25.47%



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



B.E.P.

=Fixed Cost ×100---------------------

Fixed Cost + Profit= 2862400

-------------x100

3962520= 72.2%



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



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



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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Business Proposal for Setting Up of a Jacket 2003

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