we can easily understand how to start business of socks

1. 15130078@gift.edu.pk

2. Group members
1. Asif Nawaz
2. Ameer Khan
3. Hafiz Farukh
4. Gulfam
Assignment 3:
Submitted to Miss Umara Yousef
Introduction to Business

3. SMEDA
SMALL MEDIUM ENTREPRENEUR
DEVELOPMENT AUTHORITY

4. DEMONSTRATION OF SMEDA
 SMEDA was inaugurate in October 1998, For developing
of SME in Pakistan
 SMEDA provide imputes of economy of SMEs
 Study prefeasibility of SMEDA to hallmark SME
facilitation by SMEDA
 SMEDA carried access finance, business development,
institution collaboration
 SMEAD is not only SME policy govt of Pakistan but
facilitates other stakeholders in SME developer
 SMEAD prepare successful strategies for industry like
gems and jewelry, fruits and vegetables, leather and
footwear, etc.

5. PROJECT
INTRODUCTION
PROJECT BRIEF
 Socks are classified in two categories: cotton and nylon
 Cotton sports socks also have two types: pouch and reel
 Cotton sports socks manufacturing by 65% pouch and 35% reel and started with 30 mach
 Second hand machines also can use, which is easily avail in market
Opportunity
 Knitted socks are an item use as general
 Sports socks demand increasing in every passing year as USA, European and middle East
 Pakistan 4th largest producer of socks after China, India and USA
 Raw material easily avail local market so confirm opportunity of new socks manufacturing
Market Entry Timing
Many products and services have a specific time to run a business but business of socks can be run any time
during year
Proposed legal status
• It can be proprietorship and partnership
• We can register company by Law

6. Explanation of project Capacity
 Size of project is critical
 It will be based on 30 machines which is minimum size for expert
oriented manufacture for socks
Key Success Factors/Practical Tips for Success
 Wastage ratio of production should be kept at minimum
 Advance orders for sales can ensure the success of the business.
 Strong controls on purchase price of raw material.
 Quality maintenance will play an important role as it is assumed that
 100% production will be exported

7. EXECUTIVE SUMMARY
 Socks production has been tradition since inception of Pakistan
 Socks production also have export potential
 Karachi and Faisalabad cities leading family trade of socks manufacturing and marketing
in Pakistan
 Knitted socks are an item use a general
 Objective of pre-feasibility to facilitate entrepreneurs investment opportunity and
provide overview about socks business
 This document covers various aspects of socks manufacturing concept like start-up,
marketing, finance and management
 Estimated coast of the project RS 87.534 million and can be run by 50% equity and 50%
Bank loans

8. MARKET INFORMATION
Leading Exporting Countries of Cotton Knitted Socks in the World:
• China is the leading exporter of cotton knitted socks in the world and exports majority of the product to
countries like USA, Germany and Italy.
• Countries Value in US $ (000)
• China 3,767,689
• Italy 1,246,669
• Germany 881,179
• USA 507,677

9. EXPORTS OF COTTON SPORTS SOCKS FROM PAKISTAN:
Partner Trade Value in US $(000) %Age Changes
2010 2009 2008 2010 2009
World 276,146 237,886 243,677 16.08% -2.38%
USA 163,322 144,785 150,502 12.80% -3.80%
Netherlands 20,374 17,948 28,424 13.52% -36.86%
Canada 20,365 19,603 18,755 3.89% 4.52%
==============================================================================
=========
Rest of the World 11,105 6,924 $ 9,156 60.38% -24.37%

10. PRODUCTION PROCESS
Yarn Preparation
on Cone Type
Knitting Quality Check Pre-turning
Swing or
Linking
Post turning
(Inspection)
Dyeing/
Bleaching
Boarding and
pressing
Inspection Pairing Clipping Labeling
Packing
Finished
Socks
Dispatch

11. MACHINERY REQUIREMENT
• A total number of 30 “Single Cylinder 4 Feed machines” will be installed, out of which 18 machines will be
used to manufacture pouch socks and 12 machines will be used for manufacturing reel heel socks.
• Second hand machinery is also readily available in the market and the price is approximately half the price of
the new machines.
• Second hand machinery can also be used to manufacture both types of socks.
in Rs
Total Machinery Cost 64,699,664

12. FURNITURE AND FIXTURE
• There are seven items and total cost required is 1255700
• The project will be using a truck for transportation purposes
• The truck cost would be 1100000

13. HUMAN RESOURCES REQUIREMENT
• Both skilled and unskilled labor would be required
for the manufacturing purpose
• Direct labor would be working on three shift basis
and some will be working on one shift basis
• Total cost of hr is 15876000

14. LAND AND BUILDING AND UTILITIES REQUIREMENT
• Total land required is 5 canals
• Per canal price is 2500000
• Total 22381 sq. area is proposed for manufacturing unit
• Total cost required for infrastructure is 9045350
Utilities required are:
• Electricity, water, telephone.

15. PROJECTED INCOME STATEMENT
• Year 1
• Revenue 141891750
• Cost of sales 106447494
• Gross Profit 35444256
• Expenses 17756331
• Net profit 9708763

16. INCOME STATEMENT YEAR 10
• Revenue 379561616
• Cost of sales 223587800
• Gross Profit 155973816
• Expenses 31918372
• Net profit 120259828
as per the above figures it can be seen that the company progressed over the period of 10 years

17. PROJECT ASSUMPTIONS
Projected Life of The Project in Years
10
Debt 50%
Equity 50%
Annual Mark Up Rate (Short Term & Long Term) 16%
Debt Tenure 5

18. TURNOVER ASSUMPTIONS
Raw Material Inventory 30 days
Stores and Spares Inventory 2
months
Fuel inventory 15 days
Accounts Payable 30 days
Accounts Receivable 45 days