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business plan - paper and cloth bags manufacturing (PAC BAGS)


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Paper and cloth bags manufacturing business plan,marketing ,finance, human resource, operation.

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business plan - paper and cloth bags manufacturing (PAC BAGS)

  1. 1. Shubham Parsekar PGDM2/1539 DATE : - 26-02-2016 PAPER AND CLOTH BAGS (PAC Bags) BUSINESS PLAN
  2. 2. Table of Contents EXECUTIVE SUMMARY COMPANYOVERVIEW -------------------------------------------------------1 - Introduction --------------------------------------------------------1 - Mission --------------------------------------------------------1 - Market and product --------------------------------------------------------1 - Companygoalsand objectives --------------------------------------------------------1 PRODUCT DESCRIPTION --------------------------------------------------------2 - Introduction --------------------------------------------------------2 - Productiondescription --------------------------------------------------------2 - Problemsolving --------------------------------------------------------4 - Market comparison --------------------------------------------------------4 INDUSTRY ANDMARKETPLACE ANALYSES --------------------------------------------------5 - Industryanalsys ---------------------------------------------------------5 - Marketplace analsys ---------------------------------------------------------5 - Customeranalysis ---------------------------------------------------------6 - Competitoranalysis ---------------------------------------------------------6 - SWOT Analsys ---------------------------------------------------------7 MARKETING STRATEGY ---------------------------------------------------------8 - Introduction ----------------------------------------------------------8 - Target marketstrategy -----------------------------------------------------------8 - Productstrategy -----------------------------------------------------------9 - Pricingstrategy -----------------------------------------------------------9 - Distributionstrategy -----------------------------------------------------------9 - Advertisingandsalespromotion -----------------------------------------------------10 - Salesstrategy -----------------------------------------------------------10 - Salesforecast -----------------------------------------------------------10 OPERATIONS ------------------------------------------------------------11 - Introduction ------------------------------------------------------------11 - Value chain ------------------------------------------------------------11 - Clothbag manufacturingprocess ---------------------------------------------------12 - Paperbag manufacturingprocess ---------------------------------------------------14 - Productioncapacity ------------------------------------------------------------15 - Location -------------------------------------------------------------16 - Inventory -------------------------------------------------------------17 FINANCE --------------------------------------------------------------18 - Capital requirement -------------------------------------------------------------18 - Salesestimate -------------------------------------------------------------18 - Funding -------------------------------------------------------------18 - Profitandloss -------------------------------------------------------------19 - Balance sheet -------------------------------------------------------------20 - Breakeven -------------------------------------------------------------21
  3. 3. HUMAN RESOURCE ----------------------------------------------------------22 - OrganisationStructure ----------------------------------------------------------22 - Personnel planning ----------------------------------------------------------22 - Recruitmentprocess ----------------------------------------------------------24 - Training ----------------------------------------------------------24 REFERENCE ----------------------------------------------------------26
  4. 4. 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 materials 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.
  5. 5. 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.
  6. 6. 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.
  7. 7. 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.
  8. 8. 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.
  9. 9. 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 eligible 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 minority 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.
  10. 10. 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.
  11. 11. 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.
  12. 12. 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.
  13. 13. 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 according 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.
  14. 14. 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
  15. 15. 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 labour 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
  16. 16. 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.
  17. 17. 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
  18. 18. 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.
  19. 19. 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
  20. 20. 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 Productiondepartment Paper bags Cloth bags Cloth bags Storage area Paper bags Raw material Finishedgoods
  21. 21. 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.
  22. 22. 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
  23. 23. 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
  24. 24. pg. 20 BALANCESHEET OFPAC BAG pvtltd 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
  25. 25. pg. 21 BREAK EVEN ANALSYS Average perunitrevenue 2.5 Average perunitprofit 0.15 Average Variable costperunit 1.06 Average Fixedcostpermonth 29000 Fixedcost 3481665 Gross profitperunit 1.33 Breakevenunits 2617793.2 Monthlyunitsforbreakeven 218149.4361 Breakevensales 3481663.9
  26. 26. pg. 22 HUMAN RESOURCE ORGANIZATION STRUCTURE PERSONNELPLANNING 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) Emplo yees RM/fini shed product collecto rs Packin g inchar ge Purchase manager purchase incharge store/inven tory keeper Raddiwal as/raw material collectors Admnistration Department Sales/Marke ting Manager Team Leaders Actual Team client services team HR Manager HR executiv e Other staff ( cleaners, security, etc...) Finance Manager Clerk
  27. 27. 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 qualifications that make them suitable for the job.
  28. 28. 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 (,, 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 (,, 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.
  29. 29. 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.
  30. 30. 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 CommunicationandLeadershipSkills,Pearson 7. Bell, R. (2012), Coaching, Training & Developing The Retail Manager, CreateSpace IndependentPublisher 8. Bersin,J.(2008),The TrainingMeasurementBook:BestPractices,ProvenMethodologies,and Practical Approaches(EssentialKnowledge Resource),JonWiley&Sons WEBSITES 1. 2. 3. 4. 5. Reddit: startups