PAPER AND CLOTH

BAGS (PAC Bags)

BUSINESS PLAN

Shubham Parsekar
PGDM2/1539
DATE : - 26-02-2016
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.
 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 environme nt.

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. 1
 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. 2
 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. 3
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. 4
 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. 5
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. 6
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. 7
 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. 8
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 distributio n
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. 9
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. 10
 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 consistenc y
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. 11
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. 12
Total cost of the department

Nos. Name of machine Quantity Rate Amount

(Rs.) (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. 13
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. 14
 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 Amount

(Rs.) (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. 15
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.

Storage area
Production department

Raw material

Administration Paper Cloth

Paper Cloth
department bags bags
bags bags

Finished goods

Top floor 1st floor ground floor

pg. 16
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. 17
 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. 18
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. 19
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. 20
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. 21
 HUMAN RESOURCE
ORGANIZATION STRUCTURE

Panel of directors

General Manager
Purchase
& Admnistration
Production Department
Departmen
t
Sales/Marke HR Finance
Production Purchase
ting Manager Manager
Manager(2) manager Manager
purchase HR Clerk
Team
Production incharge executiv
Leaders e
supervisor
(4)
store/inven Actual Other staff (
client
tory keeper Team cleaners,
RM/fini Packin services
g team security,
Emplo shed
product inchar etc...)
yees Raddiwal
collecto ge as/raw
rs material
collectors

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

pg. 22
  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 qualificatio ns
that make them suitable for the job.

pg. 23
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 convenie nt
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. 24
  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. 25
 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

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