This business idea is for production and marketing of pottery products on a small scale investment. Pottery is the process of mixing clay with water; and shaping the mixture into pottery products/Pottery ware such as: pots, cups, plates, bowls, urns and candleholders. The market structure and demand for pottery products is generally wide because they are sold in places like curio shops, Art Kiosks and other places. They are used for various purposes such as: decorations, flower vases in workplaces, schools, lodges and households; while some products can be exported. The business idea aims at production of 104 pottery products per month which translates into 1,248 pottery products per year. The revenue potential is estimated at US$1,560 per month, translating into US$18,720 per year with a sales margin of 5% and total investment capital of US$9,141 for the first year of project operation.
The production capacity depends on the intended number of products a manufacturer is willing and able to make, their sizes and the quantity of raw materials used in the production process. In this case, the TC of this project is US$ 526.
Technology and Process Description
The technology used is relatively simple as it involves modeling red clay by use of hands, shaping tools and paint for decorating. Pottery is the process of mixing clay with water; and shaping the mixture into pottery wares. The modeled objects are then exposed to heat to dry then put in a kiln for burning to get the final product.
Scale of Investment, Capital Investment Requirements and Equipment
The scale of investment generally depends on the interests of the manufacturer and the demand for the products.
Capital Investment Requirements in US$
|Capital Investment Item||Units||Qty||@||Amount|
|Medium Working table||No||2||150||300|
Production and Operating Costs
Direct Materials, Supplies and Costs in US$
|+||Units||@||Qty/day||cost/ day||cost/month||cost/ year|
|Depreciation(Asset write off)Exp||7||84|
|Total Operating Costs||761.8||9,141.4|
- -Production costs assumed are for 312 days per year with a daily capacity of 4 big pots but the business unit can also make other pottery products in different sizes and shapes.
- -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.
A production month is assumed to have 26 days.
Product Cost and Price Structure in US$
|Item||Qty/day||Qty/Yr||@||Pdn cost/ Yr||UPx||T/rev|
Profitability Analysis in US$
|Profitability Item||Per day||Per Month||Per Yr|
|Less: Production and Operating Costs||29.29936||761.8||9,141|
The Market for pottery products is wide since they are multipurpose and the products can be sold for many different users.
Source of Supply of Machinery, Equipments and Raw Materials
Both the raw materials and machinery are readily available on the local market.