BUSINESS PLAN

ON
“MANUFACTURING OF ECO-FRIENDLY BAGS”

DEPARTMENT OF BUSINESS
ADMINISTRATION

SUBMITTED BY: UNDER THE GUIDANCE OF:

AKRITI BARMAN PROF. SANJAY MEDHAVI
MBA 4TH SEMESTER, 2ND YEAR
UNIVERSITY ROLL NO.: 200012135138
SPECIALISATION- FINANCE
ACADEMIC SESSION- 2021-22

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 ACKNOWLEDGEMENT
I want to use this opportunity to convey my heartfelt gratitude, thanks, and
respect to everyone who assisted me in the successful completion of my project,
whether directly or indirectly.
I would like to begin by thanking our honourable HOD Professor
Sanjay Medhavi for creating an environment that encourages entrepreneurship
and for including this business plan in the syllabus, which allows students to
learn how to write a business plan and use it in real life.
I would again like to express my gratitude to my HOD and my mentor
Prof. Sanjay Medhavi for leading me through the entire process and providing
me with advice on how to proceed with the plan.
Last but not least, I would like to express my gratitude to my friends
and family for their time and assistance.

AKRITI BARMAN
Course: MBA
Specialization: FINANCE
University Roll No.- 200012135138

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CONTENTS
1. Executive Summary…………………………………………………………………………………………………………..06
2. An Overview………………………………..……………………………………………………………………………………07
(a.) Introduction…………………………………………………………………………………………………………………07
(b.) Vision………………………………………………………………………………………………………………………….07
(c.) Mission Statement………………………………………………………………………………………………………..07
(d.) Markets and Products………………………………………………………………………………………………….07
3. Company Goals and Objectives……...……………………………………………………………………………………08
(a.) Goals……………………………………………………………………………………………………………………………08
(b.) Objectives……………………………………………………………………………………………………………………08
(c.) Product Description……………………………………………………………………………………………………...08
4. Description of Products………………………………………………………………………………………………………09
(a.) Paper Bags………………………………....................................................................................................................09
(b.) Cloth Bags………………………………………………................................................................................................10
5. Paper and Cloth Bags Manufacturing…………………………………………………………………………………...11
6. SWOT Analysis……………………………………………………………………………………………………………………12
(a.) Strength……………………………………......................................................................................................................12
(b.) Weaknesses………………………………………………………………………………………………………………........12
(c.) Opportunity…………………………………………………………………………………………………………………….12
(d.) Threats……………………………………………………………………………………………………………………………12
7. General Company Description………………………………………………………………………………………………..13
8. Type of Business Organization………………………………………………………………………………………….........13
9. Organizational Structure………………………………………………………………………………………………………..14
10. Management Teams.......................................................................................................................................................15
(a.) Setting the Directions………………………………………………………………………………………………………15
(b.) Planning and Controlling Efficient Production………………………………………………………………….15
(c.) Managing of the Line………………………………………………………………………………………………………..15
(d.) Coordinating Quality and Supplies……………………………………………………………………………………15
11. Personnel Plans………………………................................................................................................................................16
(a.) Total Number of Employees……………………………………………………………………………………….………16
(b.) Total Number of Employees on Payroll…..…………………………………………………………………………..17

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 (c.) Types of Workers………………………………………………………………………………………………………………17
(d.) Training Required……………………………………………………………………………………………………………..17
12. Industry and Market…………………………………………………………………………………………………………….19
(a.) Market Segmentation…..…………………………………………………………………………………………………….19
13. Target Market Segment Strategy................................................................................................................................20
(a.) Our Target Market……………………………………………………………………………………………………………..20
14. Competitive Advantage………………………………………………………………………………………………………...21
15. Market Growth & Trends..…………………………………………………………………………………………………….22
(a.) Market Trends……………………….…………………………………………………………………………………….……22
16. Strategy……………………………………………………………………………………………………………………………….23
17. Business Model…………………………………………………………………………………………………………………….24
18. Marketing Plan…………………………………..…………………………………………………………………………………25
(a.) Marketing Strategy and Sales Strategy………………………………………………………………………………..25
(b.) Pricing Strategy…………………………………………………………………………………………………………………27
(c.) Sales Plan…………………………………………………………………………………………………………………………..27
(d.) Location and Facilities……………………………………………………………………………………………………….28
(e.) Inventory…………………………………………………………………………………………………………………………..28
(f.) Equipments and Tools………………………………………………………………………………………………………..29
19. Technology………………………………………………………………..………………………………………………………...30
(a.) Technology used for Cloth Bags Production………………………………………………………………………..30
(b.) Technology used for Paper Bags Production………………………………………………………………………32
20. Operational Plan…………...………………………………………………………………………………….………………....34
(a.) Value Chain………………………………………………………………………………………………………………………34
(b.) Cloth Bag Manufacturing Process………………………………………………………………………………………35
(c.) Production Capacity of Cloth Carry Bag...……………………………………………………………………………35
(d.) Cost of Machinery………………..……………………………………………………………………………………………36
(e.) Production Capacity of the Paper Carry Bag.………………………………………………………………………36
(f.) Paper Bag Manufacturing Process………………………………………………………………………………………37
(g.) Cost of Machinery………………..……………………………………………………………………………………………38
21. Financial Plan……………….…………………………………………………………………………………………………….39
(a.) Revenue / Sales Forecast………………………………………………………………………………………………….39
22. Projected Profit and Loss Statement………………………………………………………………….………………….42

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23. Projected Balance Sheet………………………………………………………………………………………………………43
24. Break-Even Analysis……………………………………………………………………………………………………………44
25. References…………………………………………………………………………………………………………………………..45

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 Executive summary
We will provide a safe, environmentally friendly product because the raw
materials used to make our products are paper and cloth, and there is no
wastage and it is easy to dispose of because it is biodegradable, whereas the
main competing product (plastic bags) causes all types of pollution when
discarded.
Reusability - One of the primary problems with plastic bags is their
reusability, which many people dislike because they can't always support the
weight of groceries. Paper and cloth bags, on the other hand, will be able to
handle the weight of the groceries.
Alternative form of advertising- When compared to other forms of
advertising, this is a low-cost way to get the word out for both the client and
Green Bags. Basically, there will be a fierce competition because to the large
number of contestants, which include:
- Little-scale vendors who make small paper bags but aren't well-established or
coordinated.
- A housewife makes cloth bags.
- Supplier of plastic bags.
Point of parity – The usage of green bags is similar to that of other plastic bags;
the main purpose of bags is to carry materials and is convenient when shopping.
Point of difference – Our product is distinguished by its environmental
friendliness and the fact that it can be reused and recycled, whereas non-
biodegradable plastic is hazardous to the environment. Another point of
distinction is that we offer customised products with additional features such as
client advertising, such as the ability to place a brand or symbol on the cloth
bags.

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 AN overview
INTRODUCTION
Althea Bags Private Limited will manufacture and sell custom-made cloth and
paper bags. The fundamental role will be to provide consumers with the type of
bag they desire, regardless of shape, size, colour, or print. We will use some old
materials such as newspaper and cloth for added strength and cost savings,
while the outer layer will be of good quality and presentable, resulting in
durable yet presentable bags for our clients. We are working to find a solution
to the pollution problem produced by the improper disposal of plastic bags.

VISION
The company's vision is to become the leading brand in Varanasi cloth bag and
paper bag manufacturing sector.

MISSION STATEMENT
We want to supply all of our customers with personalised, high-quality products
that meet their demands while also reducing pollution and protecting the
environment.

MARKETS AND PRODUCTS

• Target customer – Supermarkets, Pharmacy, General Provisional Stores,
Clothing and Electronic Showrooms, Event Management Companies
• Product – Newspaper Bags and Cloth Bags
• Target Location – Varanasi
• Type of Operation – Business to Business as it can be seen, there has been an
increase in pollution due to plastic, hence Althea Bags Private Limited will supply
an alternative of paper and cloth bags.
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 Company goals and
objectives
GOALS
Within five years of our founding, we want to be the market leaders in offering
high-quality products.
Expand to additional states and diversify our product line to include
more environment-friendly items.

OBJECTIVES
Raising awareness and persuading consumers to buy environmentally friendly
items and limit their use of plastic bags.

PRODUCT DESCRIPTION
Althea Bags Private Limited will initially offer two biodegradable and
environmentally friendly products in a variety of sizes, with the unique feature
of offering personalised label messaging on our products based on customer
requirements in addition to the generic items offered.

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 Description of project
1. PAPER BAGS
General Newspaper Bags

Customized Craft Paper Bags

Bags made of paper and newspaper will be purchased in bulk from a local scrap
dealer and processed to make carry bags. The bags will come in a variety of
sizes. We will also offer a customised paper bag option, in which the size,
quality, form, design choice, texture, handle, and advertisement will be placed
according to the customer's desires; we will source craft instead of common
newspaper for this.

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2. CLOTH BAGS

Cloth bags will be made from leftover cloth from households at first, then high
quality raw material will be obtained as needed for premium orders. The unique
aspect of Althea Bags Private Limited is that we provide our customers the
choice of having their company name or logo printed on the bags.

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 Paper and cloth bags
manufacturing
➢ General size for paper bags- 10*7, 12*9, 3*2
➢ General size for cloth bags- 24*14, 16*12
All of the general-size bags can have bespoke designs or names based on the
clients' preferences. Clients will also be able to determine the quality, size,
thickness, shape, texture, and design of the bags through an advanced custom
option.
The advanced custom option will be determined by the amount of
the order submitted by the client, with each batch having a different print,
graphics, and material option.

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 SWOT ANALYSIS
STRENGTH
➢ It is environment-friendly, re-usable, and readily disposed of.
➢ Bags that are customised to meet the needs of clients.
➢ A marketing tool for both the Green Bags and the clients.
➢ Better and more durable product than other small-scale vendors.

WEAKNESSES
➢ Because Althea Bags Private Limited is a new company, it is not well
known.
➢ We are a new cardboard packing and paper bag manufacturing company,
and we lack the financial capacity to compete with multi-million-dollar
companies in the market when it comes to manufacturing cardboard
packing materials and paper bags at rock bottom pricing. Also, we may not
have enough cash in hand to promote our company as effectively as we
would like.

OPPORTUNITY
➢ Plastic bags have opened the door for a customer-friendly alternative that
is both environmentally benign and capable of supporting the weight of
things.
➢ As a promotional tool for the client, this will also help to promote Althea
Bags sales.

THREATS
➢ Potential market entry with the same product
➢ Existing small-scale producers, such as housewives or tiny artisans.

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 General company
description
Althea Bags Private Limited is a private limited company that manufactures
cloth and paper bags and sells them directly to customers. The production will
be done according to the clients' orders.
The business will be conducted as a sole proprietorship, meaning Ms.
Akriti Barman would be the sole owner and operator. She will initially hire more
individuals, but the HR department will be in charge of future recruiting.

Type of business
organization
Our company is a manufacturing operation. A manufacturing company
purchases things with the purpose of repurposing them as raw materials for a
new product. As a result, the purchased goods undergo change.
In the manufacturing process, raw materials, labour, and factory
overhead are all combined. Customers will subsequently purchase the
manufactured goods.
The bags will be constructed from raw materials (old materials, old
paper, and cloth), which will be turned into completed items based on client
orders. The shape, size, and colour of the bags will be customised to the client's
specifications, including the addition of a logo if desired.

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 Organizational structure
Althea Bags Private Limited does not want to develop a small-scale cloth bag
and paper bag manufacturing company; our goal in starting a cloth bag and
paper bag manufacturing company in Varanasi is to build a standard and one-
stop cloth bag and paper bag manufacturing company.
Although our Cloth bag and paper bag manufacturing firm will not be
as large as other existing paper bag and cloth bag manufacturing companies, we
will ensure that the proper framework is in place to accommodate the type of
growth that we envision when we first started the company.
We will hire people who are qualified, honest, customer-focused,
and willing to work hard to help us establish a successful business that benefits
all stakeholders (the owners, workforce, and customers). In fact, all of our senior
management workers will be eligible for profit-sharing arrangements, which will
be based on their success over a ten-year period or longer.

PANEL OF
DIRECTORS

GENERAL
MAMGER
PRODUCTION
&PURCHASE ADMINISTRATTION
DEPARTMENT
DEPARTMENT

MANAGER PURCHASE MANGER SALES MARKETING FINANCE

PRODUCTION MANAGER HR MANAGER MANAGER
MANAGER (2)
PURCHASE INCHARGE
TEAM CLERK
WORKERS LEADER HR EXECUTIVE
STORE/INVETORY
KEEPER
ACTUAL
FINISHED TEAM OTHER STAFF
EMPLO PRODUCT
PACKAGING RAW MATERIAL CLIENT SERVICE CLEANER,
INCHARGE COLLECTOR
YEES COLLECTOR TEAM SECURITY

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 Management teams
SETTING THE DIRECTIONS
Manufacturing management is overseen by senior executives with titles such as
manufacturing director or production director.

PLANNING AND CONTROLLING EFFICIENT PRODUCTION

According to the Management Study Guide website, managers who plan and
control production play a critical role in ensuring the efficient and productive
use of a company's manufacturing resources.

MANAGING ON THE LINE

Workers on the production line operate the machinery and equipment. They
report to supervisors or team leaders, who coordinate and supervise individual
operators' work in accordance with production schedules.

COORDINATING QUALITY AND SUPPLIES

Procurement, quality, and distribution departments may have close ties to the
manufacturing management structure. Production planners work with
purchasing managers or supply chain managers to ensure that the right amount
of supplies, materials, and components are ordered and delivered on time to
meet production deadlines.

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 PERSONNEL PLAN
TOTAL NUMBER OF EMPLOYEES
• General manager – 1
• Production Manger – 2
• Purchase Manager -1
• Production supervisor – 4
• Purchase in-charge – 1
• Store inventory keeper – 1
• Raw material/ Finished Product collection – 4
• Packing in-charge
• Raw material collector– 6
• Employees
Paper Bags manufacturing – 11
Cloth Bags manufacturing – 9
• Sales/Marketing Manager – 1
• Team Leader – 1
• Human Resource Manager – 1
• Human resource Executive – 1
• Finance Manager – 1
• Clerk – 2

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TOTAL NUMBER OF EMPLOYEES ON PAYROLL
➢ Security and maintenance will be outsourced to reputable agencies who
will provide us with the required number of security personnel as well as
the necessary number of workers to maintain basic cleanliness.
➢ Training and development will also be outsourced because we only require
training during the initial stages of setup.

TYPES OF WORKERS
➢ We have a combination of skilled, unskilled, and professional staff who
contribute to the success of our company.
➢ Employees who make the handbags are mostly skilled individuals recruited
from various self-help organisations.
➢ The scrap collectors, packing in-charges, and raw material collectors are
primarily unskilled labourers with rudimentary reading and writing skills.
➢ Nonetheless, all of the workers are professionals with the necessary skills
and qualifications for the job.

TRAINING REQUIRED
➢ All necessary training will be provided to workers in order to maintain our
high-quality standards and increase client satisfaction.
➢ Each employee in a given department will be trained in accordance with
his or her job satisfaction needs and desires.
➢ On-the-job and simulation training will be the primary modes of
instruction.
➢ Employees who will make the handbags will be taught how to use the
equipment safely and properly, as well as how to maintain them.
➢ Because they are the first point of contact with our clients, the
sales/marketing team and the client services team will receive additional
soft skills training.

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➢ Every new employee who joins our company will receive one month of
training from the supervisor and the training staff in order to reduce any
losses caused by errors.
➢ Supervisors will be instructed on how to use the devices, answer
questions, and teach personnel as needed.
➢ The production manager will also be taught how to operate the machines,
as it is critical that he understands them.

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 Industry & market
MARKET SEGMENTATION

GEOGRAPHIC BEHAVIOURAL PSYCHOGRAPHIC

• Customer • Rate of Usage • Personality

Location • Benefit Sought • Lifestyle
• Customer • Loyalty Status • Attitude
Region • Readiness to • Class
• Urban/Rural Purchase
• Classification

Because Althea Bags Private Limited primarily manufactures and sells paper and
cloth bags, the company will divide the market into three segments:

1. GEOGRAPHICAL- First and foremost, Althea Bags Private Limited will

target and segment the market area based on its location, which is the entire
Varanasi area. The company will make an effort to improve and invite the
surrounding area so that the bags may be made available to them in a timely
manner. We will go after the nearby vegetable vendors, Kirana stores, and other
businesses.

2. BEHAVIOURAL- The next market to be targeted will be based on the

customer's behavioural preferences. We would like to focus on a market
segment that is easily accessible, has a need for paper and cloth bags, and is
willing to buy. We will be going after retail stores and chain retailers here.

3. PSYCHOGRAPHIC- The next step will be to choose a market based on

their class. We would focus on those markets and customers who are highly
classified and have a certain level of status. This divided client might be linked to
jewellery stores, watch stores, gift shops, and so on.
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 TARGET MARKET SEGMENT
STRATEGY
OUR TARGET MARKET
There is a clear market when it comes to drawing out tactics for a business such
as cardboard packing and paper bag production. Almost all pharmacies,
departmental stores, grocery stores, electronics stores, supermarkets, and
boutiques use paper bags or cardboard boxes to package goods purchased from
their establishments.
As a result, we have positioned our cardboard packaging and paper
bag manufacturing business to serve a diverse spectrum of customers around
the city. We have done our market research and feasibility studies, and we have
a good notion of what our target market is looking for.
We in the cardboard packing and paper bag manufacturing industry
supply our products to the following fast-moving consumer goods (FMCG)
businesses:
• Departmental shops
• Groceries stores
• Pharmaceutical stores
• Electronic stores
• Supermarkets
• Boutiques
• Mobile phone and accessory stores

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 competitive ADVANTAGE
• A closer look at the cloth and paper bag manufacturing industries reveals
that the market has got substantially more competitive in the previous
decade. In fact, if one wants to thrive in this sector, one must be extremely
inventive with their ideas and market approach, as well as customer-
centric and proactive.
• We are fully aware of the increased competition and are well equipped to
compete well with other major cardboard packing and paper bag
manufacturers.
• Moon Bags Ltd. is launching a standard cloth bag and paper bag
manufacturing company in Uttar Pradesh that will undoubtedly become
the preferred choice for enterprises in the fast-moving consumer goods
(FMCG) sector.
• Our cloth bag and paper bag manufacturing company is housed in a
fantastic building that is suited for the type of business we wish to run. We
have enough parking places to accommodate over 30 cars/trucks at any
given moment.
• One thing is certain: we will always strive to provide high-quality, long-
lasting cloth and paper bag products in our sector. One of our business
objectives is to make Althea Bags Private Limited Company a one-stop
shop for cloth and paper bags. Our exceptional customer service culture, a
wide range of payment choices, and a highly secure facility will provide us
a competitive edge.
• Finally, our employees will be well cared for, and their benefits will be
among the best in our industry (start-ups cardboard packing and paper bag
manufacturing companies), implying that they will be more than willing to
work with us to grow the business and help us achieve all of our goals and
objectives. We will also provide decent working conditions and
commissions to freelancing sales agents who we would hire on a case-by-
case basis.

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 Market growth & trends
The paper bag packaging business is rapidly expanding. Paper packaging
market's disposable nature and quicker availability make the process easier and
more flexible. Because of increased public awareness, it is projected that the
ALTHEA BAGS PRIVATE LIMITED will grow at a faster rate than in past years.
However, the market's present difficulty is the paper bags' sturdiness, and such
bags cannot be utilised for large things.

MARKET TRENDS
The industry of Cloth Bags and Paper Bag Manufacturing has been relatively
unpredictable in recent years. Because the majority of the products produced in
the industry are marketed for downstream usage in the fast-moving consumer
goods (FMCG) sector, the industry's revenue is highly driven by national
consumer demand.
One major trend in the cardboard packing and paper bag
manufacturing industry is that most players are capitalising on the fact that
states in the United States, as well as countries around the world, are passing
legislation restricting the use of materials like nylon bags and polythene bags
due to environmental concerns, so paper bags and cardboard packing materials
have become a viable alternative.
Finally, as part of their marketing tactics, cloth bag and paper bag
manufacturers increasingly make customised paper bags and cardboard packing
materials for larger organisations in the fast-moving consumer goods (FMCG)
industry.
Althea Bags Private Limited will use advertising and sales promotion
to manage its growth and market trends.
Because the company is new to the market, it will take some time for
it to become fashionable, and in the meantime, we will strive to adapt to the
needs, tastes, and preferences of our customers.

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 We will encourage market expansion through advertisements and
sale promotions.

• Advertising-At first, we'll rely on print media such as newspapers, B

magazines, posters, websites, and emails.

• Personnel selling- The sales staff will be responsible for promoting

the product and the value it provides, as well as obtaining orders.

• Public relations- We plan to publish a write-up about the company,

its philosophy, and the benefits to clients and society.

• Direct mail- This will include an interactive consumer website,

catalogue delivery, and promotional items.

Strategy
The organisation will primarily focus on the following strategies:

➢ Strong Market Connections- Business success does not come from

raw industrial prowess alone. It needs to begin with the client. Whatever
we produce must be something that buyers are eager to purchase. It must
be properly designed. We're putting a lot of effort into staying in touch
with our customers.
➢ Keep innovating-We must cultivate a culture that encourages
continuous innovation and if we don't innovate, we run the risk of being
overtaken.
➢ Customers should be listened to- Consumers are the primary
issue for manufacturers, or any firm for that matter. It's not enough to
attempt to stay up; we need to be ahead of the curve when it comes to
how customers think, feel, and act.
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 ➢ Enhance Current Procedures: Our current practices may hold the
key to our future expansion. Process improvement covers a wide range of
tools, techniques, and strategies, including waste reduction through lean
manufacturing.
➢ Waste Reduction- Manufacturers can reduce waste while increasing
efficiency by building cost-effective and sustainable procedures.

Business model
• PARTNERS- Vendors, Raw Materials, and Local Partners.

• SKILLS- Globalization, Marketing, and Manufacturing.

• CUSTOMER RELATIONSHIP- One-on-One Help, Repairs.

• TARGET CUSTOMERS- Retailers, Kirana stores, Chain stores, Jewellery

Stores, Gift Shops, Medical Stores, and Local Vegetable Vendors.

• DISTRIBUTION CHANNELS- Limited number of retailers, Client-direct

distribution.

• PREPOSITION OF VALUE- Timeless and high-quality goods, Status

symbol, and Custom orders.

• EXPENSE STRUCTURE – The Cost of Production.

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 Marketing plan
MARKETING STRATEGY AND SALES STRATEGY
We do a complete market survey and feasibility studies before deciding on a
location for Althea Bags Private Limited in order to be able to reach the
accessible market and become one of the preferred choices for businesses not
only in Varanasi, but also in other states. We have precise data and information
that we can use to arrange our business so that we can attract the quantity of
clients we want at any given time.
We must continue to manufacture and sell the cloth and paper bags
that we create in order to stay in business and develop, which is why we will go
to great lengths to empower our sales and marketing teams to deliver. To
summarise, Althea Bags Private Limited will pursue customers using the
following sales and marketing strategies:
• Host a big opening celebration for our cloth bag and paper bag manufacturing
company.
• Send introductory letters and our brochure to manufacturing companies,
stores, and key stakeholders in Varanasi and other parts of Uttar Pradesh to
introduce our cloth bag and paper bag manufacturing company.
• Ascertain that we produce a diverse assortment of paper and cloth bags.
• Use eye-catching handbills to raise awareness and provide direction to our
factory.
• Place our advertising and flexi banners in strategic locations across Varanasi.
• Place our greeters in strategic locations to welcome and direct potential
customers.
• Create a loyalty programme that allows us to reward our loyal consumers.
• Place advertising in the yellow pages for our company and products (local
directories).
• Use the internet to spread the word about our products.

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• Use direct marketing and sales techniques.
• Promote the usage of word-of-mouth advertising (referrals).
Despite the fact that our cloth bag and paper bag manufacturing
company is in a good situation, we will continue to promote the company. To
advertise our cloth bag and paper bag manufacturing company, we will use all
available resources.
Althea Bags Private Limited has a long-term goal to construct
factories in strategic areas in Varanasi and other cities in Uttar Pradesh, which is
why we will work hard to ensure that our brand is well-known.
In fact, our public relations and advertising strategy is designed to
successfully express our brand, not just to gain customers. The platforms we
plan to use to promote and advertise Althea Bags Private Limited are listed
below.
• Place ads in local newspapers, radio stations, and television stations.
• Encourage our valued clients to spread the information through word of
mouth.
• Ensure that our banners and billboards are strategically placed throughout
Varanasi.
• Distribute our fliers and handbills in and around our neighbourhood’s target
regions.
• Calling corporate organisations and retailers to inform them of our company
and the products we create and sell is a good way to start.
• Promote our cloth bag and paper bag manufacturing company on our official
website and use marketing tactics to drive visitors to the site.

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PRICING STRATEGY
Aside from quality, one of the important aspects that offers Cloth bag and paper
bag manufacturing companies leverage is pricing. It is natural for consumers to
seek for locations where they can buy Cloth bag and paper bags at a lower price,
which is why the other manufacturing business is a big participant.
We recognise that we lack the capacity to compete with long-
standing manufacturing bag companies, but we will ensure that the costs and
quality of all of our cloth and paper bag goods are comparable to what is
available at competitor levels within our level.

SALES PLAN
• Every customer purchase will contain care instructions.
• Our goal is to sell as many bags as possible in an efficient and effective
manner. The salesperson will explain product care throughout the fitting
process, and each sales receipt will include care instructions and a return policy.
• Using the Retail Pro system, we will be able to keep track of a customer's
contact information and purchases, allowing us to build a contact list for
promotions, special events, and new product arrivals.
• We feel it is critical to be an active member of the local business community,
supporting our downtown area, participating in local promotions, and
participating in organisations that have an impact on the lives of our consumers.
• Our knowledgeable sales personnel will provide the best possible service to
our customers. This level of service provided during an intimate fitting
experience fosters a strong bond between the customer and her fitter, resulting
in a loyal customer.

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LOCATION AND FACILITIES
When it comes to beginning a business, location is crucial. Before launching any
firm, it is necessary to decide on the location of the industry. The location
should be chosen such that all amenities are available.
• Availability of market.
• Availability of transportation.
• Availability of water and power are some of the factors that must be taken
into account.
Varanasi will house the production facility. Land will be taken on a 30-year lease
and then extended as needed, according to the rule. A total of 500 m2 of space
will be required. For this, we must deposit Rs. 5,000, which will be repaid if the
unit is terminated. The rent must be paid in seven instalments. The structure
will be three storeyed tall, with the ground floor serving as a storage facility. The
machinery will be set up and the production will take place on the first floor.
The administration department will be located on the third floor of the building.
The paper and textile sections of the production facility will be separated. The
building will take up to 4/5th of the available space. The entire cost of the
construction is estimated to be around Rs. 3,50,000 per sq. mt. The roof will
have a tilt to it. Other rooms in the structure will include locker rooms for men
and women, restrooms, and a water storage area. According to the rules of the
industrial estate, all of this must be kept in the main area.

INVENTORY
Finished goods and raw materials will make up the majority of inventory. There
will be no WIP industry because there will be a day objective.
• The paper bags' raw materials are paper rolls and used newspapers, Eyelets
and Gums.
• Cloth, old cloth, and thread are the basic materials for making cloth bags.

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The majority of the output will be done on demand at the client's request. As a
result, seasonal demand will have no effect, and cut products are non-
seasonable and non-perishable.
The amount of inventory will be determined by the order size plus safety stock
and the supplier's minimum order quantity. The safety will be retained in order
to protect against price increases, strikes, or natural disasters that could disrupt
the delivery of raw supplies. Also, inventory will be determined by the supplier's
minimum quantity; if it is greater than the order, inventory will be created.
On the basis of customer orders, finished product inventory will be
held batch by batch. The order will be dispatched after it has been completed.
Outstation suppliers have a 10-day lead time, whereas in-state
suppliers have a 3-day lead time.

EQUIPMENTS AND TOOLS

The technology used to make the bags is cutting-edge. Different bag-making
machines, such as go-cutting, stitching, pasting, and sewing bags, will be
employed.

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 Technology
A. TECHNOLOGY USED FOR CLOTH BAGS PRODUCTION
1. Cutting machines- The cloth will first be cut into pieces, shapes, and
sizes according to the requirements. Three machines, each costing Rs. 20,000,
will be required for the all-rounder.
Workers will operate this equipment in order to provide the correct
form and size for the bags that clients require.
The cutting machine can assist one in cutting quickly and easily.

2. Sewing machine- Following the cutting of the bags, the pieces will be
put together using a sewing machine to give them an appropriate form. Each
machine will set you back Rs. 30,000. There will be a total of six machines
required. The workmen will destroy the entire machine. Workers will also be
trained in order to do their jobs properly.

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3. Attachment machine- To connect and deliver the final product, an
attachment machine will be used. The machine's total cost will be Rs. 40,000.

4. Furniture and Fixtures- The total cost of the furniture will be Rs.
60,000. For the personnel, the furniture will include chairs and tables. It would
also assist staff function efficiently and successfully without being exhausted by
maintaining the decorum of the atmosphere.

5. Other Tools- • Scissors

• Gums/ Fevicol to stick bags
• Pencil/pen
• Stationery product
• Threads

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B. TECHNOLOGY USED FOR PAPER BAGS PRODUCTION
The technology will be centred on generating bags machines that the worker
will operate. In order to manufacture, four different types of machines will be
necessary.

1. Paper Sheering machines- The papers are layered and trimmed to the
product and pattern size requested by the customer.

2. Eyelit Punching machines- The semi-finished product will be

perforated with holes and an eyelet will be added. The machine will cost Rs.
15,000 and will only be one of a kind.

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3. Paper Ceasing machines- This machine will assist in the layering of
papers and will be turned off in a timely manner. The machine will be one in
number and will cost Rs. 10,000 per piece.

4. Glue and Other Tools- Other tools, such as glue, will be used to
complete the object. These tools will set one back Rs. 5,000 in total.

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 OPERATIONAL PLAN
The manufacturing process will not be entirely labour and capital-intensive.
Depending on the quality requirements, the method will vary from client to
client. Our company deals in two different items, so the process for each is
different. The procedure will be broken down into sections. This strategy
assumes that the machinery is running at 85% capacity and that the workers are
well-trained.
Special bags will be produced in batches, whereas conventional sizes
will be produced on a continuous basis or if no custom bags are to be produced.
We will only have one shift per day, and the company will only work overtime if
there are orders to be fulfilled. The quality and uniformity will be overseen by
the supervisors on site, with every ten bags being rechecked for flaws. The
amount of labour and machinery used in this plant is determined by the
production objective and the amount of time each process takes.

VALUE CHAIN
STEP 1- Receive customer order, including logos for printing.
STEP 2- Place material order.
STEP 3- Material print if required.
STEP 4- The manufacturing process begins.
STEP 5- Once all of the steps have been completed, the bags are sent out.

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CLOTH BAG MANUFACTURING PROCESS
1. The appropriate fabric will be taken from the store based on the client's
texture, colour, and graphics requests. If necessary, the material will be pre-
printed. This procedure will also obtain the appropriate old cloth for the
product.

2. CUTTING- In this step, the fabrics are layered and cut to the product and
pattern dimensions requested by the buyer. Cut fabrics are labelled with
product codes and passed on to the next department. Here, three employees
will be required.

3. Sewing and Finishing- In a stitching machine, all of the bag's body parts,
such as the front, back, gusset, and handle, are stitched together. At this point,
it will be done based on the customer's request. This will necessitate the hiring
of six people. At this point, the handles will be made as well.

4. Checking and Packaging- Once the bags are completed, they are
swiftly inspected for any problems. If an error is discovered, it is repaired and
corrected. The bags are tied with a fabric zip tie and placed in a large cloth bag
with the name of the customer for whom the purchase was placed. This will
necessitate the hiring of two people.

PRODUCTION CAPACITY OF CLOTH CARRY BAG

In a day's operation, an average of 200 metres of cloth can be produced, with an
average of 500 bags being made every day. In a month, a total of 15,000 bags
can be manufactured.

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COST OF MACHINERY

Rate Amount
No. Name of Machine Quantity
(Rs.) (Rs.)

3 Cutting Machines 20,000 60,000

6 Stitching Machines 30,000 1,80,000

1 Attachment Machine 40,000

12 Furnitures (Chairs and Tables) 50,000

Fixtures 10,000

TOTAL 2,50,000

PRODUCTION CAPACITY OF PAPER CARRY BAGS

In a single day's operation, an average of 500 meters2 of paper can be
generated, with an average of 400 carry bags created every day. In a month, a
total of 12,000 bags can be produced.

36 | P a g e
PAPER BAG MANUFACTURING PROCESS
1. The required paper will be obtained from the store based on the texture,
colour, and graphics requested by the client. If necessary, the material will be
pre-printed. This method will also obtain the acquired old paper, which will be
used to strengthen the product.

2. Paper Sheering- During this procedure, consumers arrange paper in

layers and cut it according to the product code before passing it on to the next
department. Sheered paper pieces are labelled with product codes and sent to
the next department. This will necessitate the hiring of two people.

3. Eyelet Punching Process- At this step, depending on the client's

requirement, paper bags will include a handle or a hole to make them easier to
carry. The semi-finished product will be perforated with holes and an eyelet will
be added. There will be one employee present.

4. Paper Creasing- At this stage, the cut-out paper bags will be layered and
produced to make the folding and sticking procedure go more smoothly. It will
be necessary to hire two people.

5. Hard Press- This stage is dependent on the client's requirement; if the bag
is thick and of good quality, the paper will be put through this process. For
durability and quality, glue will be put to the layers and the paper will be
thickened.

6. Folding, Sticking, and Finishing- All of a bag's body parts, such as the
front, back, and handles, are folded and attached together in the proper
manner. At this point, handles will be made and attached to the bags. This will
necessitate the hiring of five people.

7. Quality Control and Packaging- Finished bags are inspected for any
faults. If an error is discovered, it is repaired and corrected. The bags are
secured with a fabric zip tie and placed in a bag that has the name of the client
for whom the order was placed. This will necessitate the hiring of two people.

37 | P a g e
COST OF MACHINERY

Rate Amount
No. Name of Machine Quantity
(Rs.) (Rs.)

2 Paper Sheering Machines 10,000 20,000

1 Eyelet Punching Machine 15,000

1 Paper Creasing Machine 10,000

1 Hard Press 10,000

5 Glue Making and Applying Tools 1,000 5,000

12 Furniture (Chairs and Tables) 50,000

Fixtures 10,000

TOTAL 1,20,000

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 financial PLAN
REVENUE / SALES FORECAST
BEST GUESS

YEARS YEAR 1 YEAR 2 YEAR 3 YEAR 4 YEAR 5

CLOTH
20,00,000 21,00,000 22,00,000 23,00,000 24,00,000
BAGS

PAPER
13,00,000 13,65,000 14,30,000 14,95,000 15,6000
BAGS
This best-case scenario assumes that the company's product sales, which
include both cloth and paper bags, have increased. The sale projection for the
first year is Rs. 20,00,000, and in five years it has climbed to Rs. 24,00,000 for
cotton bags. According to the paper bag sales prediction, the first year's income
will be Rs. 13,00,000, and the second year's revenue will be Rs. 15,60,000.

WORST CASE

YEARS YEAR 1 YEAR 2 YEAR 3 YEAR 4 YEAR 5

CLOTH
20,00,000 21,00,000 22,00,000 23,00,000 24,00,000
BAGS

PAPER
13,00,000 13,65,000 14,30,000 14,95,000 15,60,000
BAGS

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This is the worst-case scenario, in which the company anticipates that it is not
making enough revenue in comparison to the capital invested. The income for
the first year is Rs. 12,00,000, and it rises to Rs. 13,90,000, indicating that our
company is not making much money from the production and sale of cloth bags,
and the same is true for paper bags. Year one's revenue for paper bags is Rs.
9,00,000, while year two's revenue is Rs. 10,35,000. Thus, it appears that the
company has gained by Rs. 45,000 in only 5 years.

SALES ESTIMATE

YEARS 2019 2020 2021 2022 2023

Cloth Bag 20,00,000 21,00,000 22,00,000 23,00,000 24,00,000

Paper Bag 13,00,000 13,65,000 14,30,000 14,95,000 15,60,000

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EXPENSES

Rate Amount
Quantity Name of Equipment
(Rs.) (Rs.)

3 Cutting Machine 20,000 60,000

6 Stitching Machine 30,000 90,000
1 Attachment Machine 40,000
12 Furniture (Tables and Chairs) 50,000
Fixtures for cloth bag 10,000
manufacturing zone
2 Paper Sheering Machine 10,000 20,000
1 Eyelet Punching Machine 15,000
1 Paper Ceasing Machine 10,000
1 Hard Press 10,000
5 Glue making and applying tools 1,000 5,000
12 Furniture (Chairs and Tables) 50,000
Fixtures for paper bag 50,000
manufacturing zone
Furniture and Fixtures for Admin 10,000
area
5 Computers 1,00,000
Other Tools 10,000
Furnitures and Fixtures for the 50,000
Storage area
Construction of Building 30,00,000

TOTAL 36,30,000
Start-up expenses and legal 1,30,665

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 Projected profit and loss
statement
Particulars Year 1 Year 2 Year 3 Year 4 Year 5

Sales:
Cash Sales: Paper Bags 40,00,000 42,00,000 44,00,000 46,00,000 48,00,000
Cloth Bags 39,00,000 40,95,000 42,90,000 44,85,000 46,60,000
Net Sales 79,00,000 82,95,000 86,90,000 90,85,000 94,60,000
Less Cost of Assets
Raw Material 30,00,000 31,00,000 32,50,000 33,00,000 34,00,000
Carriage Inward 5,00,000 6,00,000 7,00,000 8,00,000 9,00,000
Gross Profits 44,00,000 45,95,000 47,40,000 49,85,000 51,60,000

Less: Operating Expenses 15,00,000 16,00,000 17,00,000 17,50,000 18,00,000

Salaries and Other Benefits 50,000 70,000 62,000 50,000 55,000
Administration Expenses 50,000 70,000 62,000 64,000 63,000
Electricity and Water 5,00,000 5,50,000 6,00,000 6,20,000 6,25,000
Insurance Premium 10,000 10,000 10,000 10,000 10,000
Legal and Auditing Expense 5,000 5,000 5,000 5,000 5,000
Marketing Expenses 5,00,000 5,50,000 6,00,000 6,20,000 6,25,000
Start-up Fees 1,30,665 0 0 0 0
Depreciation 3,81,000 3,40,200 3,01,725 2,69,602 2,30,625
Rent (Lease Payment) 3,50,000 3,50,000 3,50,000 3,50,000 3,50,000
Maintenance 50,000 57,000 40,000 60,000 55,000
Outward 3,00,000 3,50,000 3,50,000 4,00,000 4,50,000
Miscellaneous Expenses 9,000 16,000 25,000 27, 000 28,000
Operating Profit 38,35,665 39,49,200 40,93,725 42,25,602 39,81,625
Net Profit before Interest and 5,64,335 6,45,800 6,46,275 7,59,398 11,78,375
Taxes
Less: Interest Charges
Interest on Loan @ 14% 2,80,000 2,80,000 2,80,000 2,80,000 2,80,000
Net Profit After Tax 2,84,335 3,65,800 3,66,275 4,79,398 8,98,375
Less: Provision for Tax 1,97,546 1,24,372 1,24,533.5 1,62,995 2,32,595
NET PROFIT 87,089 2,41,428 2,41,741.5 3,16,402 6,65,780
42 | P a g e
 Projected balance sheet
Particulars Year 1 Year 2 Year 3 Year 4 Year 5

I. Sources of Funds
(1) Shareholder’s Fund
(a) Share Capital 10,00,000 10,00,000 10,00,000 10,00,000 10,00,000
(b) Reserves and Surplus 87,089 2,41,428 2,41,741 3,16,402 6,65,780
(Profit)
(2) Loan Funds
(a) Secured Loan 20,00,000 18,20,000 16,56,200 15,07,142 14,25,410
(b) Unsecured Loan 4,00,000 3,68,000 3,38,560 3,11,475 2,90,500
Total Capital Employed 34,87,089 34,29,428 32,36,501 31,35,019 33,81,690

II. Application of Funds

(1) Fixed Assets
+ Building 30,00,000 27,00,000 24,30,000 21,87,000 19,80,000
+ Machinery 3,60,000 3,06,000 2,60,100 2,21,085 1,65,800
+ Furnitures and Fixtures 2,70,000 2,43,000 1,97,100 1,77,390 1,56,200
Less: Depreciation
Machinery 54,000 45,900 39,015 33,163 24,870
Furnitures and Fixtures 27,000 24,300 19,710 17,739 15,620
Building 3,00,000 2,70,000 2,43,000 2,18,700 1,98,000
Net Balance 32,49,000 29,08,800 25,85,475 23,15,873 20,62,510
(2) Investment Nil Nil Nil Nil Nil
Current Assets Loans and
Advances
Less: Current Liabilities and 2,38,089 5,20,628 6,51,026 8,19,146 9,08,568
Provisions
TOTAL 34,87,089 34,29,428 32,36,501 31,35,019 33,81,690

43 | P a g e
 Break- even analysis
Average per unit revenue- 2.5
Average per unit profit- 0.15
Average Variable Cost per unit- 1.06
Average Fixed Cost per unit- 29,000
Fixed Assets- 34,81,665
Gross Profit per unit- 1.33

Breakeven Units 2617793.2

Monthly units for Breakeven

Breakeven Sales 34,81,663

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 References
➢ www.google.com

➢ www.quora.com

➢ www.entrepreneur.com

➢ www.LinkedIn.com

➢ How to Write the Best Business Plan — 2021 Complete Guide (bplans.com)

➢ Write your business plan (sba.gov)

➢ How to start paper bag making business (startuptalky.com)

➢ Paper Bag Making Business Plan – Start Profitable Small Scale

Manufacturing Business In India (expert-market.com)

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