Introduction
This business idea is for making cotton knitted wears. Cotton knitted would serve a big section of low income communities. Cotton knitted outwears such as pullovers, slipovers and children suits etc are substitutes for woolen garments which are expensive. They have a relatively high demand in middle class and low income people areas. The business idea is premised on production of 2,600 pieces per month which translates into 31,200 pieces per Year. The revenue potential is estimated at US$ 13,000 per month which translates into US$ 156,000 per year with a sales margin of 10%.
Total Investment requirement is US$3,588.53.
Capital Investment Requirements
This Business Idea is for both small scale and medium scale investment, and capital injected depends on the desired production capacity.
Capital Investment Requirements in US$
| Capital Investment Item | Units | Qty | @ | Amount |
|---|---|---|---|---|
| Over lock stitching machine with motor | No | 1 | 750 | 750 |
| Sawing machine with motor | No | 2 | 1,500 | 3,000 |
General Costs(Overheads)
| Labour | 1,498 | 17,976 |
|---|---|---|
| Rent | 250 | 3,000 |
| Utilities( water & power) | 100 | 1,200 |
| Miscellaneous Costs | 100 | 1,200 |
| Depreciation(Asset write off)Exp | 256.45833 | 3,078 |
| Sub-total | 2,204 | 26,454 |
| Total Operating Costs | 11,362 | 136,340 |
Production Capacity
The production capacity depends on the labour, materials and equipments used in the production process. The business idea is premised on three hundred and twelve working days single shift of 8 hours per day; the unit is designed to have a minimum production of 10 pieces per day which translates into 2,600 pieces per month.
Technology and process Description
Cotton knitted cloth in various designs and colors combination is purchased from the knitting units. The cloth is spread on the cutting table and required size of garments is cut. These cut pieces are first stitched with lock stitching sewing machines and then over locked. The stitched garments are pressed and then packed for marketing.
Production and Operating Costs
| Cost Item | Units | @ | Qty/ day | Pdn cost/ day | Pdn cost/ month | Pdn cost/ year |
|---|---|---|---|---|---|---|
| Direct Costs | ||||||
| Knitted fabric | meter | 1.5 | 175 | 262.5 | 6,825 | 81,900 |
| Internal lining | meter | 0.5 | 120 | 60 | 1,560 | 18,720 |
| Buttons | kg | 1 | 0.5 | 0.5 | 13 | 156 |
| Zips | No | 0.4 | 58 | 23.2 | 603 | 7,238 |
| Hooks | kg | 1 | 0.5 | 0.5 | 13 | 156 |
| Cardboard boxes | No | 0.5 | 10 | 5 | 130 | 1,560 |
| Packing materials | No | 0.005 | 100 | 0.5 | 13 | 156 |
| Sub-total | 464 | 352.2 | 9,157 | 109,886 |
- Production costs assumed are for 312 days per year with a daily capacity of 100 Pieces of cotton Knitted wears.
- Different knitted wears in different sizes and designs can be made.
- 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 workdays.
Project Product Costs and Price Structure in US$
| Item | Qty/day | Qty/Yr | @ | Pdn cost/ Yr | UPx | T/rev |
|---|---|---|---|---|---|---|
| Cotton knitted wears | 100 | 31,200 | 4.37 | 136,340 | 5 | 156,000 |
Profitability Analysis in US$
| Profitability Item | Per day | Per Month | Per Yr |
|---|---|---|---|
| Revenue | 500 | 13,000 | 156,000 |
| Less: Production and Operating Costs | 437 | 11362 | 136340 |
| Profit | 63 | 1638 | 19660 |
Market Analysis
Their market potential is high because there is readily available market all over the country and for export to the neighboring countries.
Source of Supply of Machinery, Equipments and…….
