Business Plan on;

READYMADE GARMENTS

MANUFACTURING

By;

Sheikh MohdYasir

yasirsheikh99@gmail.com

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 0.15 lacks

Seed Capital 3.00

lacks

Bank Loan 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. Description Nos. Rate Amount

No. (Rs.) (Rs.)

1. Power operated 1 35,000 35,000

cutting machine

2. Power operated 8 5,000 40,000

SNLS stitching

machine

3. Overlock stitching 1 6,000 6,000

machine with motor

and accessories

4. Garment washing 1 25,000 25,000

machine 15kg capacity

5. Hydro extractor 1 25,000 25,000

15 kg. capacity

6. Tumbler dryer 1 25,000 25,000

15 kg. capacity

7. Potable steam press 1 20,000 20,000

9. Other miscellaneous LS 20,000 10000

assets

Total 186000.00

DETAILS OF PRELIMMINARY & PRE-

OPERATIVE 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 L S 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 Qnt. No. of No. of Total Rate Amount Sale Revenue

Req items items quantity per in Rs. price per

per produced produced of meter per annum

item in per day per material piece Rs.

meters annum required Rs.

per

annum

A) LADIES

SUITS

1 COTTON 5.00 10 3000 15000 53.00 795000 490 1470000

B) CHILDREN

SETS

1 COTTON 1.5 12 3600 5400 65 351000 200 720000

2 WOOLEN 1.5 12 3600 5400 125 675000 300 1080000

C) SHIRTS

1 COTTON 2.25 10 3000 6750 90 607500 320 960000

2 TERI 2.25 10 3000 6750 130 877500

WOOL

335 1005000

MISCELLANEOUS ITEMS LINING 100000

MATERIAL, EMBROIDERY, THREAD,

BUTTONS, PACKING, STICKERS, ZIPS

ETC.

TOTAL AMOUNT IN RS. 3406000 5235000

SAY IN RS. LACS 34.06 52.35

YEAR CAPACITY SAL/WAG PURCHASE UTILITIES SALES

UTILISATION (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

SALES REALIZATION AND PURCHASES IN PHASED MANNER

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

STATEMENT OF MANPOWER REQUIREMENT & THEIR REMUNERATION

PAY BACK PERIODPay 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 CFAT Cumulative Cash inflow

1st 4.90 4.90

2nd 5.37 10.27

3rd 5.88 16.15

4th 6.44 22.59

5th 7.03 29.62

6th 6.87 36.49

7th 7.40 43.89

8th 6.61 50.50

1 year + 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 Operating Years

1 Year of operation 1st 2nd 3rd 4th 5th 6th 7th 8th 2 Capacity Utilization (%) 50.00 55.00 60.00 65.00 70.00 75.00 80.00 80.00 3 Sales realization 26.18 28.79 31.41 34.03 36.65 39.26 41.88 41.88

A: Cost of production

1 Raw Material 17.03 18.73 20.44 22.14 23.84 25.55 27.25 27.25

2 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 Repairs & Maintenance 0.06 0.09 0.12 0.15 0.15 0.18 0.18 0.18

5 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

1 Interest on term loan 0.20 0.20 0.16 0.12 0.08 0.04 0.00 0.00 2 Interest on WCL 0.32 0.37 0.42 0.42 0.42 0.42 0.42 0.42 3 Depreciation (SLM) 0.35 0.35 0.35 0.35 0.35 0.35 0.35 0.35 4 Total 0.87 0.92 0.93 0.89 0.85 0.81 0.77 0.77 5 Profit before tax 4.55 5.02 5.54 6.10 6.68 7.24 7.83 7.83 6 Taxation 0.00 0.00 0.00 0.00 0.00 0.72 0.78 1.57 7 Profit after tax 4.55 5.02 5.54 6.10 6.68 6.52 7.05 6.27 8 Withdrawals 0.00 0.00 0.50 0.50 0.50 1.00 1.00 1.00 9 Profit carried to B/S 4.55 5.02 5.04 5.60 6.18 5.52 6.05 5.27

10 Cumulative profit 4.55 9.58 14.62 20.21 26.39 31.91 37.96 43.23 11 Add back depreciation 0.35 0.35 0.35 0.35 0.35 0.35 0.35 0.35 12 Total cash surplus 4.90 9.93 14.96 20.56 26.74 32.26 38.31 43.58

C: Less payment 1 Term Loan 0.00 0.45 0.45 0.45 0.45 0.45 0.00 0.00 2 Withdrawals 0.00 0.00 0.50 0.50 0.50 1.00 1.00 1.00 3 Total payments 0.00 0.45 0.95 0.95 0.95 1.45 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 Particulars Year

1st 2nd 3rd 4th 5th 6th 7th 8th

A: Liabilities

1 Promoters Contribution 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

2 Share Capital

Reserves & 4.55 9.58 14.62 20.21 26.39 31.91 37.96 43.23

3 Surplus

2.25 1.80 1.35 0.90 0.45 0.00 0.00 0.00

4 Term Loan

3.60 4.14 4.68 4.68 4.68 4.68 4.68 4.68

5 WCL

13.55 18.67 23.80 28.94 34.68 39.75 45.80 51.06

Total

B: Assets

3.46 3.11 2.77 2.42 2.08 1.73 1.38 1.04

1 Gross Block

0.35 0.35 0.35 0.35 0.35 0.35 0.35 0.35

2 Depreciation

3.11 2.77 2.42 2.08 1.73 1.38 1.04 0.69

3 Net Block

5.54 6.08 6.62 6.62 6.62 6.62 6.62 6.62

4 Current Assets

4.90 9.82 14.75 20.24 26.32 31.74 38.14 43.75

Cash and bank

5 balance

13.55 18.67 23.80 28.94 34.68 39.75 45.80 51.06

Total

Target marketWe 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.