Shubham Parsekar PGDM2/1539 DATE : - 26-02-2016

PAPER AND CLOTH BAGS (PAC Bags) BUSINESS PLAN

Table of Contents EXECUTIVE SUMMARY

COMPANY OVERVIEW -------------------------------------------------------1

- Introduction --------------------------------------------------------1

- Mission --------------------------------------------------------1

- Market and product --------------------------------------------------------1

- Company goals and objectives --------------------------------------------------------1

PRODUCT DESCRIPTION --------------------------------------------------------2

- Introduction --------------------------------------------------------2

- Production description --------------------------------------------------------2

- Problem solving --------------------------------------------------------4

- Market comparison --------------------------------------------------------4

INDUSTRY AND MARKETPLACE ANALYSES --------------------------------------------------5

- Industry analsys ---------------------------------------------------------5

- Marketplace analsys ---------------------------------------------------------5

- Customer analysis ---------------------------------------------------------6

- Competitor analysis ---------------------------------------------------------6

- SWOT Analsys ---------------------------------------------------------7

MARKETING STRATEGY ---------------------------------------------------------8

- Introduction ----------------------------------------------------------8

- Target market strategy -----------------------------------------------------------8

- Product strategy -----------------------------------------------------------9

- Pricing strategy -----------------------------------------------------------9

- Distribution strategy -----------------------------------------------------------9

- Advertising and sales promotion -----------------------------------------------------10

- Sales strategy -----------------------------------------------------------10

- Sales forecast -----------------------------------------------------------10

OPERATIONS ------------------------------------------------------------11

- Introduction ------------------------------------------------------------11

- Value chain ------------------------------------------------------------11

- Cloth bag manufacturing process ---------------------------------------------------12

- Paper bag manufacturing process ---------------------------------------------------14

- Production capacity ------------------------------------------------------------15

- Location -------------------------------------------------------------16 - Inventory -------------------------------------------------------------17

FINANCE --------------------------------------------------------------18

- Capital requirement -------------------------------------------------------------18

- Sales estimate -------------------------------------------------------------18

- Funding -------------------------------------------------------------18

- Profit and loss -------------------------------------------------------------19

- Balance sheet -------------------------------------------------------------20

- Break even -------------------------------------------------------------21

HUMAN RESOURCE ----------------------------------------------------------22

- Organisation Structure ----------------------------------------------------------22

- Personnel planning ----------------------------------------------------------22

- Recruitment process ----------------------------------------------------------24

- Training ----------------------------------------------------------24

REFERENCE ----------------------------------------------------------26

EXECUTIVE SUMMARY

PAC Bags (Paper and Cloth bags Private ltd) have come up with a perfect substitute for

plastic carry bags, keeping in mind the ill effects of the plastic. PAC Bags will initially deal in

manufacturing of two products i.e. paper bags and cloth bags. The distinctive feature which

sets us apart from other small scale competitors is that we provide customize option as well the

option of promoting their brand. The Paper bag also will be better quality product with a

strong base.

Manufacturing of Paper and cloth bag idea is considered taking into consideration the harmful

effect of plastic bags. Due to plastic ban in Goa, our business has a better opportunity to

bridge the gap created due to the ban.

We will be catering to Business 2 Business (B2B) segment i.e. all the Retailers, pharmacies,

showrooms, etc.

The project report includes a detailed descriptions of the production of the bags, the materia ls

that we will be requiring, how we are going to go about the manufacturing process, a detailed

description of the personnel planning how we are going to train our employees and how we are

going to recruit the employees and the financials.

pg. 1

COMPANY OVERVIEW

INTRODUCTION

“PAC Bags” – Paper and Cloth Bags Pvt Ltd Will engage in production and selling of

customized cloth and paper bags. The basic function will include giving of clients the type of

bag they want may it be in shape, size, colour and print. We will be using some old material

like newspaper, cloth for additional strength and to reduce our cost, the outer layer will be of

a good quality and presentable thus delivering our clients with durable yet presentable bags.

We provide a solution to the problem of pollution due to disposing plastic carry bags.

“PAC Bags” is guided by a simple philosophy, strong values and high ethical standards. In

everything we do, we strive to help people live better lives. Through the Eco friendly

Approach.

MISSION STATEMENT

“To Provide customized and Quality products to all our Clients and cater to their needs by

taking into consideration the best ways to reduce pollution and safeguarding our environment.

MARKETS AND PRODUCTS

Product – Newspaper Bags and Cloth bags.

Target Location – Goa

Type of operation – Business 2 Business

Target customers - supermarkets, pharmacy, general provisional stores, Clothing and electronic

showrooms, event management companies.

The location which we will target is Goa and since there has been a plastic ban all over the

state, we “PAC Bags” will provide a alternative of paper as well as Cloth bags

COMPANY GOALS AND OBJECTIVES

Goal - We aspire to be the market leaders in providing quality products within 5years from the

inception.

- Expand to other states and diversify into more eco-friendly products.

Objective - is to create awareness and try to influence people to use a eco-friendly product and

reduce the usage of Plastic bags.

pg. 2

PRODUCT DESCRIPTION

INTRODUCTION

PAC Bags pvt ltd is introducing 2 biodegradable and eco-friendly products initially, which

varies in sizes and the Unique thing which we are providing an option of customized message

of label on our product as per customers requirements along with general products offered.

DESCRIPTION OF PRODUCT

1. Paper Bag

General Newspaper bags

Customized Craft Paper Bags

To Make paper bags Newspapers will be procured from the local

Radiwala in bulk and process it convert it into a carry bag. This will be

available in various sizes. We also will be offering a customized paper

bag option where as per clients request pertaining to size , quality , shape

, design texture , handle and advertisement to be placed , we will be

sourcing craft paper instead of general newspaper.

pg. 3

2. Cloth Bag

Normal cloth bag Quality cloth bag

Cloth bag will be done initially with the help of used cloth from households

and for premium orders high quality raw material will be purchased as

per the demand . The differentiating feature which PAC Bag is providing

to its customers is we are providing them with the advertisement on the

bags or their business name.

Paper & cloth bag manufacturing ( general size)

- General sizes for paper bags- 10*7, 12*9, 3*2

- General sizes for cloth bags- 24*14, 16*12

All general size bags can be with custom designs or names as per the choice of the clients. The

clients will also have an advance custom option wherein they can choose the quality, size,

thickness, shape, texture, handle and the design of the bags.

The advance custom option will be depend on the order size placed by the clients, where in

each batch will have a different option for Print, graphics and material.

To increase the strength of the bags PAPER MACHE will be used.

Paper for customized bags will be procured from local suppliers.

pg. 4

PROBLEM SOLVING

1. Less Pollution

Since the raw material used for making this product is paper and cloth and there is no

wastage and is easy disposable as it is biodegradable , whereas in the production of

plastic bags which causes land pollution when it is thrown after use , air pollution

when it is produced in factory.

2. Re-use

One of the main problem of plastic bag is of Re- usability , which often people don’t

prefer to do with plastic bags as it most of the times could not handle the weight of

grocery. Whereas PAC bag cloth bag will ensure that it handle the weight of grocery.

3. Alternate medium of advertising

It’s a alternate medium of advertising and cheap source to spread the word for both

the client as well for PAC Bag comparatively to other source of advertising.

MARKET COMPARISON

Competition

- Small scale players producing small paper bags, they are not established and not

organised.

- House wife’s producing cloth bags.

- Plastic bag dealers.

Point of Parity – Similarity between the other plastic bags and PAC bags are its use , the core

purpose of bags is to carry the materials and is convenient while shopping.

Point of Difference – The differentiation of our product is its Eco-friendly and can be Re-

used and Re-cycled whereas in case of plastic being non biodegradable its dangerous for

enviroment. Other differentiation is that we provide a customized product with added feature

of client advertising , logo or symbol can be placed on the cloth bag.

pg. 5

INDUSTRY AND MARKETPLACE ANALSYS

INDUSTRY ANALSYS Due to legislation of ban on plastic bags in various states particularly Goa, a huge opportunity

for a substitute has cropped up. Such a substitute has to provide minimum features, which were

provided by plastic bags. For e.g. the substitute has to be strong enough to bear weight of

grocery, durable enough to be used multiple times, cheap enough to be given almost free of

cost by retailers, malls etc. A cloth and paper bag fit well as substitute of plastic bag as it carries

weight, stays long and cost a little.

Currently there is a huge Scope for cloth and paper bags in Goa, so much that supply comes

nowhere near to market demand.

One of reasons for this huge demand-supply gap is lack of any big player in manufacturing of

cloth bags. There are fundamental reasons due to which a large player cannot sustain in this

business. Cloth Bag manufacturing is meant only for tiny fragmented micro-enterprises.

Grocery bags do not carry any brand. This lack of branding makes local tiny players eligib le

for manufacturing. The Indian Paper Industry accounts for about 1.6% of the world’s

production of paper (Rs. 25,000-crore). Source: Business Line

In India, paperboard accounts for nearly 47.3% of the total market size, followed by writing

and printing paper (29.6%), newsprint (19.5%) and specialty paper (3.6%) according to

CRISILResearch.

MARKET PLACE ANALSYS Following are the findings which we got after a Personal interaction and observation with the

Retail owners and their staff with regards to use of plastic bags. It covered supermarkets, mini

supermarkets, brand stores, provision stores, and Pharmacy’s and takeaway retail outlets etc.

we surveyed 10 retailers in different stores.

The study showed that approximately more than 1000 customers cater to these outlets every

month, which provide bags for its customers who come for shopping, while a small minor ity

does not offer the same because of the reasons like ‘no demand’ or ‘less demand’. Most of

these outlets provided plastic bags for its customers because of its easy availability and high

demand.

pg. 6

When asked “Would you be willing to replace the plastic bags with eco-friendly and

customized paper bags?” almost all the outlets responded positively by saying ‘Yes’. But only

60% of the total believed in providing their customers with reusable cloth bags at a price

ranging from Rs. 5-10.

On an average the demands for reusable cloth and paper bag is quite good, and as far as the

customer’s point of view is concerned, he will always look for something which is eco-

friendly. So with an increased use of cloth and paper bags (which can be reused) over a

period of time can play a vital role in the right benefit of the environment and cater to the

needs of our customers. We get an added advantage of customizing in designing and adding

of the company name which ads as a part of their advertisements.

CUSTOMER ANALSYS

We would offer our products to the commercial users i.e. B2B

Retail outlets like Bata, Westside, and Monginis etc.

Supermarkets and general stores.

Pharmacies

COMETITOR ANALSYS

1. Existing small local suppliers of paper bags and cloth bags artisans

2. existing plastic bag manufacturers etc.

3. NGOs who do the manufacturing of paper bags.

pg. 7

SWOT Analyses

STRENGHT

- Eco friendly , re-usable and is can be easily disposed off.

- Customized bag as per requirement of clients.

- Promotion tool for both the PAC bag as well as the client.

- Better and tough product compared to other small scale suppliers.

WEAKNESS

- Not well know , since PAC Bag is a new company.

OPPORTUNITY

- Plastic ban has resulted in an opportunity for a substitute for customers, which

is a eco friendly product and would hold the weight of items.

- Promotional tool for client , so this will increase PAC Bag’s sales.

THREATS

- Potential entrants in the market with same products.

- Existing small scale producers like small artisans or housewifes.

- Existing Plastic bag producers.

pg. 8

MARKETING STRATEGY

INTRODUCTION

PAC Bag will be giving customized bags based on need of the client like colour, design and

size, with the option of printing the clients name or wording which they demand to print on it.

We will be targeting all retail outlets like grocery stores, pharmacies, supermarkets and branded

outlets.

We will position the product as complimentary service eco-friendly in nature which will aid

our client in the promoting their brand.

We will use personal selling as major marketing strategy where our sales team will contact the

clients and explain the product and service hence getting the orders.

TARGET MARKET STRATEGY

Location – Goa

Reason to select Goa , good opportunity for our product due to the ban on Plastic carry

bags and there are small scale paper and cloth bag manufacturers.

Target industry – Retail

Target Customers – All Retailer’s like jewellery showrooms, mobile shop owners,

General provisional stores, grocery stores , etc

Target Consumers – People who shop from this Retailors.

Satisfying Need

- Clients – Need for replacement of Plastic bags as there is plastic ban in the state.

Also it will help in promoting company brand as it will be a less expensive way

of advertising.

Demand for our product – Looking at the current scenario in Goa the demand for our

product will eventually increase as it’s a eco friendly option , its re-usable and can be

used as fashionable item to potray the image of stylish person.

pg. 9

PRODUCT STRATEGY

Product Our products will include cloth and paper bags which can be used as carry bags or carry out

bags.

Features Customizable- the bags will be customized for the client as per their need

Eco-friendly- the bags will be made of environment friendly material.

Benefits The clients will be able to promote themselves.

They can give an added service to their customer.

The product i.e paper bag is much stronger compared to other paper bags as we have a strong

base and less chance of paper getting damage.

Differentiating Factor The base of the paper bags will be much stronger compaired to other existing products and we

will producing in different size according to the need of customers.

Promotional Tool for the customers i.e. Retailers

Eco-Friendly as compared to Plastic polythin bags, as we can re-use it as well as it is

biodegradable

PRICING STRATEGY

We will go for Target Costing as we will be competing against the small scale producers ,

which are not well established and we are going for large scale production.

Prices will vary according the size of the carry bag demanded by the customers and accord ing

to the printing cost and all raw material .

DISTRIBUTION STRATEGY

Personnel Selling

Sales team will deal with the delivery of the orders received and follow up to check on

reordering the stock from the clients. We choose personnel selling as having a distribution

network will not be a viable option for the company. The advantage of Geographical location

is it small and connecting to them personaly is not much problem.

pg. 10

ADVERTISING AND SALES PROMOTION

Advertising – In the initial stage we will be using print media like newspaper, B-

magazine, posters, Web page and emails.

Personal selling – Sales team will be engaged in promoting the product and the value

we give and getting the orders.

Public relations – we intend to post write-up of the company, the ideology and

advantages to clients and society.

Direct Marketing- this component will comprise of interactive consumer websites,

catalog distribution and promotional letters

SALES STRATEGY

Personnel Selling – we are going for personnel selling as Goa state being small as well as it’s

a new start up. Personnel selling will be looked upon by Internal Sales people.

SALES FORECASTS

Sales forecast (Figures in units)

Best guess

Years Year 1 Year 2 Year 3 Year 4 Year 5

Cloth bags 2000000 2100000 2200000 2300000 2400000

Paper bags 1300000 1365000 1430000 1495000 1560000

Worst case

Years Year 1 Year 2 Year 3 Year 4 Year 5

Cloth bags 1200000 126000 1320000 1380000 1440000

Paper bags 900000 945000 990000 1035000 1080000

pg. 11

OPERATIONS

INTRODUCTION

The manufacturing process will not completely be labour intensive nor capital intensive. The

process will differ from client to client based on quality requirement. As there are two products

that our company deals in, the process for each differs. These process will be explained in

different parts. This plan assumes that the machinery is utilized at 85% capacity and the labo ur

is trained. The production of the custom bags will be done in batches and the general sizes will

be done at a continuous scale or if there is no custom bag to me manufactured. We will have

only 1 shift per day and if there are order to be completed then only the company will run

overtime. The supervisors present at the site will be in charge of the quality and consistency

wherein every 10 bag will be rechecked for any defects. The manpower and machinery taken

in this plan is based on the production target requirement and on the time taken for each process.

ODERING PROCESS ( VALUE CHAIN)

Step 1 – Receive order from client including Logo’s for printing

Step 2 – Placing order for the material

Step 3 – Material print if demanded

Step 4 – production is carried out

Step 5 – After completion , Bags are Dispatched

pg. 12

CLOTH BAG MANUFACTURING PROCESS 1. The cloth required will be taken from the store based on the request of the client of

texture color and graphic. This material will be prior printed if required. This process

will also get the required old cloth that will be used in the product.

2. CUTTING

here the fabric is arranged in layers & cut according to the product

pattern and size demanded by the customers. Cut fabric is marked

according to product coding & handed over to the next department.

3 employees will be required here.

3. STITCHING AND FINISHING

All the body parts such as front back body, gusset, and handle of a

bag are stitched together in stitching machine. Based on the request

of the customer it will be changed if they require a non-stitched then

that will be done at this stage. 6 employees will be required here.

The making of handles will also be done at this stage

4. CHECKING & PACKING

Finished bags are quality checked for any kind of errors. If any error is found then it is

mended & rectified. The bags are tied with the help of a cloth zip

tie and put in a big cloth bag which will include the name of the

client for whom the order has been placed. 2 employees will be

required here.

Production Capacity of Cloth Carry Bags

By utilizing an average of 200 meters of cloth can be produced in a day’s operation out of

which an average of 500 carry bags can be produced per day. Thus, a total of 16666 bags can

be produced in a month.

pg. 13

Total cost of the department

Nos. Name of machine Quantity Rate

(Rs.)

Amount

(Rs.)

3 Cutting machines 20000 60000

6 Stitching machine 30000 180000

1 Attachment machine 40000

12 Furniture (chairs and tables) 50000

Fixtures 10000

Total 250000

Ultrasonic Non-Woven Bag Sealing Machine

Ultrasonic Manual Handle Attachment Machine

pg. 14

PAPER BAG MANUFACTURING PROCESS 1. The paper required will be taken from the store based on the request of the client of

texture color and graphic. This material will be prior printed if required. This process

will also get the required old paper that will be used in the product for strength.

2. Paper sheering

In this process paper is arranged in layers & cut according

to the product pattern and size demanded by the

customers. Sheered paper pieces is marked according to

product coding & handed over to the next department. 2

employees will be required here.

3. Eyelet punching process

At this stage based on the request of the client paper bags will earthier have a handle or

a hole in order to make it easy to carry. The holes will be punched and

eyelet will be attached to the semi-finished product. 1 employees will

be required here.

4. Paper creasing

In this stage the cutout paper bags will be placed in layers and will be creased in order

to make the folding and sticking process more efficient. 2 employees

will be required here.

5. Hard Press

This stage will depend on the request of the client if the bag is of

thick and high quality then the paper will go through this process.

Here the glue will be applied to layers and the paper will be made

thick for durability and quality.

6. Folding, Sticking And Finishing

All the body parts such as front back body, gusset, and handle of a bag

are folded in the required manner and stuck together. The making of

handles will also be done at this stage and put for the bags. 5 employees will be required

here.

pg. 15

7. CHECKING & PACKING

Finished bags are quality checked for any kind of

errors. If any error is found then it is mended &

rectified. The bags are tied with the help of a cloth zip

tie and put in a big cloth bag which will include the

name of the client for whom the order has been placed.

2 employees will be required here.

Production Capacity of Paper Carry Bags

By utilizing an average of 500 meters2 of paper can be produced in a day’s operation out of

which an average of 4000 carry bags can be produced per day. Thus, a total of 120000 bags

can be produced in a month.

Total cost of the department

Nos. Name of machine Quantity Rate

(Rs.)

Amount

(Rs.)

2 Paper sheering machines 10000 20000

1 Eyelet punching machine 15000

1 Paper creasing machine 10000

1 Hard press 10000

5 Glue making & appling tools 1000 5000

12 Furniture (chairs and tables) 50000

Fixtures 10000

Total 120000

pg. 16

LOCATION & FACILITY

The production unit will be located in Thivim industrial estate because of the proximity to the

railway station. According to the rules the land will be taken on 30 year lease and then extended

to 95 years. The total area that we will be required 500 mt2. For this we have to deposit Rs.

5000 which will be refunded if we stop the unit. The lease amount has to be paid in 7

installments. The building will be 3 storeys where the ground floor will be used as a storage

area. The first floor the machinery will be setup and production will be held. On the third floor

is where the administration department will be functioning. The production area will be split

into two for the paper and cloth section. The construction will occupy 4/5 of the area taken.

The full construction will cost around Rs. 20, 00,000. The lease amount since it’s a 3 flour

building will cost us approximately 700 per sq. mt. the total amounts to Rs. 350000. The roof

will be slanting. The building will also have other rooms like for the workers spate for men and

women, toilets and place to store water. All this is required to be kept at min area according to

the rules of the Industrial estates.

We will be requiring power and water which will be provided to us by IDC.

Top floor 1st floor ground floor

Administration department

Production department

Paper bags

Cloth bags

Cloth bags

Storage area

Paper bags

Raw material

Finished goods

pg. 17

INVENTORY The major components of inventory will consist of finished goods and Raw materials. There

will be days targets so there won’t be WIP inventory.

The raw material of the paper bags are Paper roll and old newspapers, Gum and Eyelets.

The raw material required for cloth bags are cloth, old cloth and thread.

Most of the production will be based on the request of the client. Hence there will be no effect

of the seasonal demand and out products are non-seasonal and non-perishable.

The amount of inventory will be based on order size plus safety stock and minimum order

quantity of the supplier. The safety stock will be kept in order hedge against price rise or a

strike or natural calamity which can hamper the delivery of the raw materials. Also the

inventory will depend as the minimum order quantity of the supplier if it is more than the order

than there will be inventory.

The inventory of finished goods will be kept batch wise based on client’s orders. After the

order is complete it will be dispatched.

Lead time for supplier’s outstation suppliers is 10 days and in state suppliers is 3 days.

pg. 18

FINANCE Capital requirement Quantity Name of equipment Rate (Rs.) Amount (Rs.)

3 Cutting machines 20000 60000

6 Stitching machine 30000 90000

1 Attachment machine 40000

12 Furniture (chairs and tables) 50000

Fixtures for cloth bage manufacturing zone 10000

2 Paper sheering machines 10000 20000

1 Eyelet punching machine

15000

1 Paper creasing machine 10000

1 Hard press 10000

5 Glue making & appling tools 1000 5000

12 Furniture (chairs and tables) 50000

Fixtures for paper bage manufacturing zone 10000

Firniture and fixture for Admin area 100000

5 Computers 100000

Other loose tools 10000

Fixture & fittings for the storage area 50000

Construction of building 3000000

Total 3630000

Startup expenses and legal 130665

SALES ESTIMATE

Years 2016 2017 2018 2019 2020

Cloth bags 2000000 2100000 2200000 2300000 2400000

Paper bags 1300000 1365000 1430000 1495000 1560000

Funding Investment breakup from various sources

30% form proprietors

50% from government, Bank and EDC

20% unsecured from friends and family

pg. 19

Profit and Loss account for PAC Bag Pvt ltd

Elements of revenues and expenses 2016 2017 2018 2019

Sales:

Cash sales: Paper Bags 4000000 4200000 4400000 4600000

Cloth bags 3900000 4095000 4290000 4485000

Net sales 7900000 8295000 8690000 9085000

Less Cost of sales

Raw material 3000000 3100000 3250000 3300000

Carriage inward 500000 600000 700000 800000 Gross profit 4400000 4595000 4740000 4985000

Less: operating expenses

salaries & other benefits 1500000 1600000 1700000 1750000

Administrative expenses 50000 70000 62000 64000

Telephone & internet 50000 50000 50000 50000

Electricity & water 500000 550000 600000 620000

Insurance premium(Oriental Insurance) 10000 10000 10000 10000

legal & auditing expenses 5000 6000 5000 5000

Marketing expenses 500000 550000 600000 620000

start up fees 130665 - - -

depreciation 381000 340200 301725 269602

Rent (lease payment) 350000 350000 350000 350000

Maintenance 50000 57000 40000 60000

outward 300000 350000 350000 400000

Miscellaneous Expenses 9000 16000 25000 27000

3835665 3949200 4093725 4225602

Operating profit 564335 645800 646275 759398

Net profit before interest and taxes Less: Interest charges 280000 280000 280000 280000

Interest on loans (loan form EDC @14% interest)

Net profit before tax 284335 365800 366275 479398 Less: provision for tax 197246 124372 124533.5 162995.3

Net profit ( After Interest and tax ) 87089 241428 241741.5 316402.68

pg. 20

BALANCE SHEET OF PAC BAG pvt ltd

Particulars 2016 2017 2018 2019

I. Sources of funds

(1) Shareholder’s Funds

(a) Share Capital 1000000 1000000 1000000 1000000

(b) Reserves and Surplus (profit) 87089 241428 241741 316402

(2) Loan Funds

(a) secured Loan

Loan from EDC 2000000 1820000 1656200 1507142

(b) Unsecured loan

400000 368000 338560 311475.2

Total Capital employed 3487089 3429428 3236501 3135019.2

II. Application of Fund

(1) Fixed Assets

+ Building 3000000 2700000 2430000 2187000

+machinery 360000 306000 260100 221085

+firniture & fixtures 270000 243000 197100 177390

+ land

less depriciation

Machinery 54000 45900 39015 33163

Firniture and fixtures 27000 24300 19710 17739

Buliding 300000 270000 243000 218700

Net Block 3249000 2908800 2585475 2315873

(2) Investments Nil Nil Nil Nil

Current assets loans and advances 238089 520628 651026 819146.2

Less: Current Liabilities and provision

TOTAL 3487089 3429428 3236501 3135019.2

pg. 21

BREAK EVEN ANALSYS

Average per unit revenue 2.5

Average perunit profit 0.15

Average Variable cost per unit 1.06

Average Fixed cost permonth 29000

Fixed cost 3481665

Gross profit per unit 1.33

Breakeven units 2617793.2 Monthly units for breakeven 218149.4361

Breakeven sales 3481663.9

pg. 22

HUMAN RESOURCE

ORGANIZATION STRUCTURE

PERSONNEL PLANNING

Total number of employees

General manager – 1

Production manager – 2

Purchase manager – 1

Production supervisor – 4

Purchase incharge – 1

Stores/inventory keeper – 1

Raw material/finished product collectors – 4

Packing incharge – 4

Raddiwalas – 6

Panel of directors

General Manager

Purchase &

Production Departmen

t

Production Manager(2)

Production supervisor

(4)

Employees

RM/finished

product collecto

rs

Packing

incharge

Purchase manager

purchase incharge

store/inventory keeper

Raddiwalas/raw material

collectors

Admnistration Department

Sales/Marketing

Manager

Team Leaders

Actual Team

client services

team

HR Manager

HR executiv

e

Other staff ( cleaners, security, etc...)

Finance Manager

Clerk

pg. 23

Employees

Paper bags manufacturing – 11

Cloth Bag manufacturing – 9

Sales/Marketing Manager – 1

Team Leader – 2

Sales team – 6

Client services team – 6

Human Resource Manager – 1

Human Resource Executive – 1

Finance Manager – 1

Clerk – 2

TOTAL NUMBER OF EMPLOYEES ON PAYROLL: 64

The security and maintenance will be outsourced to reputed agencies that will provide us

with the required number of security personnel as well as the required amount workers

to help maintain basic cleanliness.

Also the training and development department will be outsourced as we require training

only during the initial stage of set up.

Type of workers

We have a mixture of skilled, unskilled as well as professional employees that help make

our organisation a success.

The employees making the handbags are mostly skilled workers got from various self-

help groups.

The raddiwalas, packing incharge and the raw material collectors are mostly unskilled

labour who have the basic knowledge of reading and writing.

All the other workers are professionals that have the required skills and qualificat ions

that make them suitable for the job.

pg. 24

Recruitment process

Recruitment duties will be handled by the HR department who will keep track on any

available vacancies, promotions, and other needs.

The recruitment process will be different at every level of management.

The general manager will be chosen by the panel of directors through referrals, head

hunting, database of consultancies mainly based on the expertise, understanding of the

sector and business as well as ability to handle the business in the most convenient

manner. The HR department will have nothing to do with that whatsoever.

The managers will be chosen by the General Manager with help from the HR department.

The various mediums that will be used for recruiting managers will be referrals,

newspaper advertisement, online job search engines (naukri.com, monster.com, etc…)

and recruitment consultancies sending in candidates that fit the criteria of selection.

At later stages the manager’s post can be filled internally through promotions of the

junior employees.

The other employees other than the SHG employees will be hired solely by the HR

department through walk in interviews, newspaper advertisements, job search engines

(naukri.com, monster.com, etc…), and recruitment consultancies.

The managers of every department will screen the employees and finally select.

The employees will be selected through interviews conducted by the HR executive who

will conduct the initial interview and filter out the suitable candidates who will later be

interviewed by the department manager and the HR manager before the final selection.

At the set up stage the HR department will be outsourced to hire the first batch of employees.

They will also be responsible for forming a permanent HR department for the company the

will handle all the above duties later.

Training required

The employees will be provided all the required training to maintain our quality levels

and aid customer satisfaction.

Every employee from a particular department will be trained according to the needs and

demands of his job description.

The main mode of training will be on the job and simulation training.

pg. 25

The employees that make the handbags will be trained to use the machines without wear

and tear as well as how to maintain the machines.

The sales/marketing team and the client services team will be given additional training

in soft skills as they are the first point of contact with our clients.

Every new employee that joins our company will be under training for 1 month under the

supervisor and the training team so as to minimise any losses due to errors.

The supervisors will be trained to use the machines, clear any queries as well as train

any employee as and when need arises.

The production manager will also be trained how to use the machines as it is very

important that he knows the same.

pg. 26

REFERENCE

BOOKS

1. Aaker, D. A. & McLoughlin, D. (2010), Strategic Market Management: Global

Perspectives, UK: John Wiley & Sons

2. Dahlen, M., Lange, F. & Smith, T. (2010), Marketing Communications: A Brand

Narrative Approach, UK: John Wiley & Sons

3. Fifield, P. (1998), Marketing Strategy, UK: Butterworth-Heinemann

4. Lamb, C., Hair, J. & McDaniel, C. (2011), Essentials of Marketing 11th Edition, USA:

South-Western Cengage Learning

5. Kotler, P. & Keller, K. (2012), Marketing Management 14th Edition, USA: Pearson

Education

6. Beebe, S., Mottet, T., & Roach, K. (2003), Training and Development: Enhancing

Communication and Leadership Skills, Pearson

7. Bell, R. (2012), Coaching, Training & Developing The Retail Manager, CreateSpace

Independent Publisher

8. Bersin, J. (2008), The Training Measurement Book: Best Practices, Proven Methodologies, and

Practical Approaches (Essential Knowledge Resource), Jon Wiley & Sons

WEBSITES

1. www.entrepreneur.com

2. ForEntrepreneurs.com

3. OneVest.com

4. Quora.com

5. Reddit: startups