Introduction
Paper envelopes are stationery products that can easily be marketed as the users and consumers are very many such as government organizations, schools, courier organizations and individual consumers.
The establishment of this project requires total operating costs of US$122, 412, generating revenue of US$ 312,000 in the first year of operation. The net profit margin is 61%.
Production Capacity, Technology &Process
A paper cutting machine is used to cut different paper pieces to sizes as wanted by the operator for the type and size of envelopes to be produced. Binding glue is then applied to the cut sides of the paper and later they are joined together. Labeling can be done thereafter. The envelopes are then packed ready for distribution.
| Capital investment item | units | Qty | @ | Total |
|---|---|---|---|---|
| Paper Cutting machine | No | 1 | 250 | 250 |
| Rulers | No | 100 | 0.4 | 40 |
| Pencils | No | 300 | 0.04 | 12 |
| Glue Sticks | No | 125 | 1.6 | 200 |
| Scissors | No | 34 | 4 | 136 |
| Furniture | No | – | – | 300 |
| Other tools | No | – | – | 400 |
| Total | 1,338 |
| Labour | 250 | 3,000 |
|---|---|---|
| Utilities | 150 | 1,800 |
| Rent | 100 | 1,200 |
| Selling & distribution | 100 | 1,200 |
| Cleaning & toiletries | 50 | 600 |
| Miscellaneous expenses | 100 | 1,200 |
| Depreciation | 100 | 1,200 |
| Sub-total | 850 | 10,200 |
| Total Operating Costs | 10,201 | 122,412 |
Production and Operating Costs in US$
Production costs assumed are for 312 days per year with daily capacity of producing 5,000pieces of paper envelopes.
- Depreciation (fixed asset write off) assumes 4-years life of assets written off at 25% per year for all assets.
- Direct costs include materials, supplies and other costs that directly go into production of the product.
- Total monthly days assumed are 26-days.
- The valuation currency used is United States Dollars.
Direct Materials, Supplies and Costs Market Analysis
| Cost Item | Units | @ | Qty/ day | Pdn cost/day | Pdn cost/ mth | Pdn cost/Yr |
|---|---|---|---|---|---|---|
| Direct Costs | ||||||
| Wall Paper Samples | Mtrs | 1.5 | 20 | 30 | 780 | 9,360 |
| Bonded Paper | Mtrs | 2 | 34 | 68 | 1768 | 21,216 |
| Decorative Paper | Mtrs | 10 | 22 | 220 | 5720 | 68,640 |
| Printer Paper | Reams | 1.5 | 10 | 15 | 390 | 4,680 |
| Glue | Ltrs | 4 | 3 | 12 | 312 | 3,744 |
| Old Calendars Pictures | Mtrs | 2 | 5 | 10 | 260 | 3,120 |
| Other materials | – | – | – | 121 | 1,452 | |
| Sub-total | 143 | 355 | 9,351 | 112,212 | ||
Stationery products have a high demand by many institutions such as: schools, Government bodies, Stationery shops, NGOS and individual buyers.
Project Product Costs and Price Structure
| Item | Qty/day | Qty/yr | @ | Pdn cost/yr | UPx | T/rev |
|---|---|---|---|---|---|---|
| Paper Envelopes | 2,500 | 780,000 | 0.08 | 119,884 | 0.4 | 312,000 |
Profitability Analysis Table
| Profitability Item | Per Day | Per Month | Per Year |
|---|---|---|---|
| Revenue | 1000 | 26,000 | 312,000 |
| Less: Production &Operating Costs | 392 | 10,201 | 122,412 |
| Profit | 608 | 15,799 | 189,588 |
Government Facilities & Incentives
Some Stationery products are zero rated products.
