M/S.

FASHION APPREAL

A Business Plan submitted for partial fulfillment of

the requirements for the Degree of Bachelor of Technology
Under Biju Pattnaik University of Technology

By

Deeptimayee Swain 0701259211

March - 2011

Under the guidance of

Prof. C.R.Panda

Mahavir Institute Of Engineering & Technology

 CONTENTS

INTRODUCTION 1

INFORMATION ABOUT THE ENTREPRENEUR 1

INFORMATION ABOUT THE PROJECT/PRODUCT 2

GENERAL INFORMATION ABOUT THE PRODUCT 3

MARKET POTENTIAL 4

BASIC OF PRESUMPTION 4

IMPLEMENTATION SCHEDULE 5

PRODUCTION TARGET 5

TECHNICAL DETAILS 5

FINANCIAL DETAILS 6-9

FIXED CAPITAL 10

Land and Building 10

Machinery & Equipment 11

Miscellaneous Fixed Assets 11

Preliminary & Preparative Expenses 11

WORKING CAPITAL PER MONTH 11

Raw Materials 12

Salaries and Wages 12

Overhead expenses 12

TOTAL CAPITAL INVESTMENT/COST OF THE PROJECT 13

COST OF PRODUCTION PER ANNUM 13

TURNOVER PER ANNUM 13

PROFIT BEFORE TAX 14

BREAKEVEN POINT (BEP) 14

PROFITABILITY RATIO 14

RATE OF RETURN OF INVESTMENT 14

CONCLUSION 14
INTRODUCTION

A nation is considered developed, if it is developed entrepreneurially. In

other words the development of a nation is dependent upon the supply of

entrepreneurs in a nation.

An entrepreneur is a person who takes risk of setting of his own venture

for perceived rewards. He is a person who initiates the idea formulates a plan,

organize resources and puts the plan into action to achieve his goal.

INFORMATION ABOUT THE ENTREPRENEUR

Name : Deeptimayee Swain

Qualification : B.Tech

Skills : C, C++

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INFORMATION ABOUT THE PROJECT/PRODUCT

Name of the Product : All types of traditional and modern

fashionable garments, bags, money purses, bed sheets, pillow covers & other

accessories.

Proposed Location : ROURKELA

Type of Organization : SMALL SCALE INDUSTRY (SSI)

A) GENERAL INFORMATION ABOUT THE PROJECT

M/s. FASHION APPAREL is a unit established to carry out the business of

manufacturing of all types of traditional and modern fashionable garments,

bags, money purses, bed sheets, pillow covers and other accessories basing upon

the requirement of the customer .

The entrepreneurs are six friends who have completed their degree and now

they intend to set up the unit at their own home town - ROURKELA. The town

ROURKELA is populated with people belonging to diverse communities and

religions. The entrepreneur has selected the project as the same is a profitable

one at the present setup.

In the proposed project there are facilities to provide employment to the ladies,

having the technique for the product, but sitting idle at home.

The entrepreneurs have keen interest to manage the project. The project will be

profitable for their managerial talent and for the design making also.

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All the products are produced at the proposed location. This manufacturing unit

has several machines and tools for manufacturing the traditional and modern

fashionable garments, bags, money purses, bed sheets, pillow covers and

accessories. For e.g. -

• Usha Sewing machine

• Usha Embroidery machine
• Usha Lock stitching machine
• Scissors
• Master scissors
• Iron
• Scale
• Tape
• Needle

The manufacturing of the decorative goods are done as per the design samples

and leaflets. Apart from that, whenever an order is placed by the customer, the

detailed measurements and specifications are collected from the customer .After

getting the order and detailed specifications from the customer the

manufacturing process starts in the unit with the help of above machinery.

Various design samples and leaflets are available for designing the goods.

The pricing of the goods are made as per the cost of the raw materials, time

taken to finish the goods, labour cost and analyzing the cost of the product

manufactured by other competitors in the market.

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 B) MARKET POTENTIAL

This manufacturing unit is a purely production unit. The goods manufactured

here are as per the demands of the customer in the market. The goods produced

are of better quality and they are very attractive, cheap and durable in nature.

The production is always completed in a stipulated time period. Hence the

customer can get the product as per their requirement, in appropriate time. For

this reason, this unit has always a work overload on it due to high demand for

good work. The workers never get any idle time to sit and relax, during their

duty time. This unit also offers a negotiable rate for regular customers who

prefer bulk purchase. This has been done in order to satisfy the customers.

The goods are sold in the daily markets, shops and exhibitions. The goods are

sold in various exhibitions conducted by District Industries Center, Khadi &

Village Industry Board (KVIB) and Khadi and Village Industry Centre (KVIC).

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 C) BASIC OF PRESUMPTION

(a) Average working hours:

I. Per Day-----------------8 hrs

II. Per Month--------------208 hrs

III. Per Year----------------2496 hrs

During a Peak Period and Off Peak Period

(b) The plant will operate in its full capacity in the peak period from:

--------------------------------------- 9 a.m. to 5 p.m.

(c) Pay back period of the term loan will be:-------------------------------paid

(d) Percentage of margin money provided by the entrepreneurs:-------30%

(e) Rate of interest for working capital: ------------------------------------11%

Long tem loan: -----------------------------------------------------------------NIL

Working Capital loan: ------------------------------------------Rs. 3, 50,000.00

(f) Cost of land

I. It includes the cost of the land for the plant

:----------------------Own

II. Cost of the building:---------------------------------------Own building

III. Gardening:--------------------------------------------------------------NIL

IV. Shipping Cost:----------------------------------------------------------NIL

Total Project Cost: ------------------------------------------- Rs. 5, 00,000.00

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 D) IMPLEMENTATION SCHEDULE

The table below indicates the implementation activities & their duration.

Sl.
Item Cost Start date Finish date
No.
1 Preparation of project report August , 2009 September, 2009
September ,
2 Selection of site September , 2009
2009
September ,
3 Registration September , 2009
2009
September ,
4 Sanction of loan October , 2009
2009

5 Procurement of Machinery October, 2009 February , 2010

6 Equipments & Installation March , 2010

7 Construction of Building - -

Arrangement of Utilities
8 March , 2010 March , 2010
Water & Electricity

Procurement of Raw material,

9 March , 2010 March , 2010
Recruitment of labour, staff, etc.
Commissioning of plant &
10 - -
trial Production

Total time required: - 8 months

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 E) PRODUCTION TARGET

Sales Volume/year Capacity

Items
(Rs.) Utilization
Traditional
decorative
dresses, Rs 23,75,000.00 90%
bags etc.

Sales Value of the product (turn over):- Rs. 23, 75,000.00

F) TECHNICAL DETAILS

The machinery and other raw materials used in this press are of good quality

and eco-friendly materials. The after work waste materials are recycled for

further use. The materials which are recycled are like the cotton clothes, plastic

materials, velvets, waste papers, etc. So the unit is eco-friendly and doesn’t cause

much harm to the environment.

G) FINANCIAL DETAILS
 i) FIXED CAPITAL

a. Land and Building

Type Area Value (Rs.)

Land 1100 Sq Ft Own
Building 950Sq Ft Own

b. Machinery & Equipment

Sl. No. Equipment Qty. Price/unit(Rs.) Total Price
01 Usha Sewing machine 12 Rs. 4170.00 Rs. 50,040.00
02 Usha Embroidery 3 Rs. 7385.00 Rs. 22,155.00
machine
03 Usha Lock stitching 3 Rs. 4390.00 Rs. 13,170.00
Machine
04 Scissors 15 Rs. 210.00 Rs. 3,150.00

05 Master scissors 1 Rs. 440.00 Rs. 440.00

06 Iron 5 Rs. 510.00 Rs 2,550.00

07 Scale 7 Rs. 18.00 Rs. 126.00

08 Tape 7 Rs. 11.00 Rs. 77.00
09 Needle 10 Rs. 15.00 Rs. 150.00

Total Value Rs. 91,858.00

Installation and Electrification charge: - Rs. 14,736.00

Now Total = Rs. 91, 858.00 + Rs. 14,736.00 = Rs. 1, 06,594.00

c. Miscellaneous Fixed Assets

(i) Steel Almirah @ Rs. 4,500.00 X 1 nos. = Rs. 4,500.00

(ii) Steel Almirah

(With Glass door) @ Rs. 4,500.00 X 2 nos. = Rs. 9,000.00

(iii) Cutting

Table (Steel) @ Rs. 1,000.00 X 2 nos. = Rs. 2,000.00

(iv) Show case @ Rs. 5,000.00 X 2 nos. = Rs. 10,000.00

(v) Rack @ Rs. 2,500.00 X 3 nos. = Rs. 7,500.00

(vi) Chair @ Rs. 400.00 X 5 nos. = Rs. 2,000.00

(vii) Stool @ Rs. 150.00 X 15 nos. = Rs. 2,250.00

Total = Rs. 37,250.00

V.A.T. 12.5% = Rs. 4,656.00

Sub Total = Rs. 41,906.00

Transportation Charges: - Rs. 1,500.00

Total Miscellaneous fixed assets: - Rs. 42,056.00

d. Preliminary & Preparative Expenses

1. Registration & License cost

:-------------------------------------Rs.5,000.00
 2. Permission from various

regulation boards(i.e. water, pollution) :-------------------- Rs.800.00/year

3. Security Deposit

:-------------------------------------------------Rs.25,000.00

4. Traveling and allied expenses to get

license permission, registration etc :-----------------------------Rs.500/year

5. Amount Payable to architects, consultants etc.

:-------------------------NIL

Total Preliminary & Preparative expenses: ----------------------Rs.31, 300.00

ii) WORKING CAPITAL PER MONTH

a. Raw Materials
1. Velvet cloth = Rs. 52,000.00

2. Colored Cloth = Rs. 35,000.00

3. White Cloth = Rs. 13,000.00

4. Lace = Rs. 5,000.00

5. Chumki = Rs. 1,600.00

6. Zip = Rs. 400.00

7. Pieces of glass = Rs. 1,500.00

8. Thread, Button, Needle = Rs. 1,500.00

9. Paste, Cloth, Astra cloth = Rs. 3,000.00

Total = Rs.1, 13,000.00

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 b. Salaries and Wages

Sl No. Post Nos. Salary/month Total

Self (Any one
Manager cum Master
01 01 of the -
Craftsman and designer
entrepreneur)
02 Skilled Worker Grade-1 05 Rs. 3,000.00 Rs. 15,000.00
03 Skilled Worker Grade-2 10 Rs. 2,500.00 Rs. 25,000.00
04 Semi-skilled worker 05 Rs. 2,000.00 Rs. 10,000.00
Total Rs. 50,000.00

c. Overhead expenses

1. Electricity charges Rs. 2,000.00

2. Repair and Maintenance Rs. 2,500.00

3. Printing and Statuary Rs. 1,500.00

4. Other Expenses Rs. 3,000.00

5. Packing Material Rs. 3,000.00

Total Rs. 12,000.00

Total Working Capital = (Rs. 1, 13,000.00 +Rs. 50,000.00 + Rs. 12,000.00)

= Rs. 1, 75,000.00

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H) TOTAL CAPITAL INVESTMENT/COST OF THE PROJECT

i) Working Capital (pm) × 3 = Rs. 1, 75,000.00 × 3 = Rs. 5, 25,000.00

 ii) Fixed Capital = Rs. 1,48,650.00

iii) Preliminary Expenses = Rs.31, 300.00

Total Cost of the Project = Rs. (5, 25,000.00 + 1, 48,650.00 + 31, 300.00)

= Rs. 7, 04,950.00

I) COST OF PRODUCTION PER ANNUM

i) Working Capital (pm) × 12 = Rs. 1, 75,000.00 × 12

= Rs. 21, 00,000.00

ii) Depreciation

Plant and Machinery @ 10% = Rs. 15,000.00

iii) Interest per annum on the total investment @ 11% = Rs.77,544.50

Total Cost of the production per annum

= Rs. (21, 00,000.00 + 15,000.00 + 77,544.50)

= Rs. 21, 92,544.50

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J) TURNOVER PER ANNUM

 By sale of traditional decorative dresses, bags, money-purse, canopy and

other decorative items = Rs. 23, 75,000.00

K) PROFIT BEFORE TAX

Profit before tax = (Turnover per annum) – (Cost of production per annum)

= Rs. (23, 75,000.00 – 21, 92,544.50)

= Rs. 1, 82,455.50

L) BREAKEVEN POINT (BEP)

T o ta _l F ix e d_ C o st
B.E.P. = ×100
T o ta_l F ix e d_ C o s +t P ro fit

Rs .1,48 ,650 .00

= ×100 = 44.89
Rs .1,48 ,650 +Rs .1,82 ,455 .50

M) PROFITABILITY RATIO

Pr ofit
Profitability = ×100
Turnover

Rs .1,82 ,455 .50

= ×100 = 7.68
Rs .23 ,75 ,000 .00

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N) RATE OF RETURN OF INVESTMENT

 Pr ofit
R = Total_ Investment× 100

Rs .1,82 ,544 .50

= ×100 = 8.32
Rs .21 ,92 ,544 .50

CONCLUSION

Through this study of the entrepreneur, we can now able to know about

the working schedule of “FASHION APPAREL”, their total investment, total

return with there annual profit. Moreover the machinery and other utilities are

also studied so that we can easily know the design and making process of all type

of goods which are being made in this unit.

By the preparation of this report the proprietor is also kind to see all his

documentation so that further he can be able to rectify any mistakes in the swift

running of the unit. Studying this report the proprietor planned to improve his

whole unit so that the dream for the new machines can be fulfilled easily.

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