BUSINESS IDEA FOR MAKING SCHOOL BAGS IN UGANDA
Introduction
The idea is premised on production and marketing of 20,800 bags per month which translates into 249,600 bags per year. The revenue potential is estimated at USD 41,600 per month which translates into USD 499,200 per year. The business has a good market demand throughout the year especially at the beginning of term. This kind of investment can cost about US 122,116 in the first trading year.
Production Process
The manufacturing process calls for skill in cutting the raw material, followed by stitching and fixing accessories before it is packed for dispatch. An internal lining is fixed to prevent easy tearing from the inside.
Capital Investment required in US$
| Item | Unit | Qty | @ | Total |
|---|---|---|---|---|
| Industrial Sewing machine | No. | 2 | 2,650 | 5,300 |
| Pair of scissors | No. | 5 | 6 | 30 |
| Measuring tape | No. | 1 | 3 | 3 |
| Delivery van | No. | 1 | 5,000 | 5,000 |
| TC of Machinery | 10,333 |
Production and Operating Costs in US$ Direct Materials, Supplies and Costs
| Cost Item | Units | @/ day | Qty/ day | Prod. cost/ day | Prod. Cost/ month | Prod. Cost/ year |
|---|---|---|---|---|---|---|
| Tarpaulin | Mtrs | 1.3 | 100 | 125 | 3,250 | 39,000 |
| Zips | No. | 0.3 | 800 | 200 | 5,200 | 62,400 |
| Threads | Bundles | 1.5 | 3 | 5 | 130 | 1,560 |
| Sub-total | 9,737 | 116,844 |
General costs (Overheads)
| Utilities (power) | 150 | 1,800 |
|---|---|---|
| (Utilities (water) | 20 | 240 |
| Packaging | 50 | 600 |
| Salaries | 150 | 1,800 |
| Renting | 150 | 1,800 |
| Depreciation (Assets write off) Expenses | 215.27 | 2,583 |
| Sub-total | 735.27 | 8,823 |
| Total Operating costs | 9,315 | 125,667 |
- Production costs assumed are for 312 days per year with a daily capacity of 800 School bags.
- Depreciation (fixed assets write off) assumes 4 years life of assets write off at 25% per year for all assets.
- Direct costs include: materials, supplies and other costs that directly go into
- production of the product.
Product Costs and Price structure in US$
| Item | Qty/ day | Qty /yr | @ | Prod. Cost / yr | UPx | TR |
| School bags | 800 | 249,600 | 0.50 | 125,667 | 2 | 499,200 |
Profitability Analysis in US$
| Profitability item | per day | per month | per year |
| Revenue | |||
| School bags | 1,600 | 41,600 | 499,200 |
| Less Prod & Operating Costs | 402.77965 | 10,472 | 125,667 |
| Profit | 1,197 | 31,128 | 373,533 |
Market Analysis
With the growing numbers of school-and-college-going children, the demand for these bags is on the rise. Hence, there is a ready market for neatly stitched bags. The plant may also incorporate in other bags like transport bags. These are all easily marketable in Uganda.
Government Incentives Available
Government has reduced taxes on scholastic materials to boost the Education sector. In a bid to eradicate poverty, government is encouraging small scale businesses through PROSPERITY FOR ALL programme.
Suppliers of Plant and machinery
SENGA Sew Co Ltd, Plot 7 Luwum Street. P.O. Box 24901 Kampala Uganda.
Tel: 256-414-235832, +256-772-863857
Shoprite Lugogo Kampala