New Garments Business Plan Essay

Though agriculture has always been the one of the or so anticipated sectors in budgets, discussions, lectures and books but in true spirit garments industry in Bangladesh is the most essential sector in terms of employment of comparatively less educated people.Employing almost 4.2 zillion people of whom 80% argon women and thus contributing to empowerment of rural women.Let alone employment even if we consider foreign currency inflow this has been one of the most potential source. RMG c everyplaces around 80% of the total foreign exchange earnings of Bangladesh. According to a survey it contributes around 8 billion dollars which is around 13% of GDP. Starting in 1970s earning from it has increased by 8 durations which is around 16.5% per annum.SWOT analysisWeakness1. Limited financial investment,2. Insufficient infrastructural facility,3. little educated work-force4. Negative impression on foreign buyers due to both political and excitement within the industry among the labor5. omit of legal enforcement6. Lack of brand awareness7. PovertyThreats1. High level of inflation2. China, Pakistan and India.3. Increasing competition4. Capital investment availability,5. Political instability6. Corruption7. Workplace unrestStrengths1. Labor intensive industry and labor hail is cheaper in Bangladesh compared to most countries2. Plenty of labor available3. Quality products4. Competitive pricingOpportunities1. Becoming a major hub2. Tax reduction/govt. incentives3. Planned Infrastructural development should improve supply chain a lotCompany EleganceOur caller-up go forth be a garment federation. Estimations are done ground on square textile ltd and a small company named triangle fashion wear in Dhaka.VisionProvide quality clothing for every class of people and become one of the leading names in garments sector in the terra firma and abroad as well.MissionCapture and satisfy the needs of customers through cost leadership and quality assurance and thus expand grad ually.IntroductionOur company in the sign stage go away go for fasten shirts only assuming monthly demand of 4000 shirts. As we leave alone only produce enjoin volume so the simulated demand is also our total production in units.We will take orders from other garments. As we will do the sewing only we wont be having any inventory cost other than the raw materials.Reason behind being the designing and the cutting in these scenarios are normally done by the garment giving the order and we will complete the sewing and the collars. Buttons will be done afterwards elsewhere.For the galvanising arrangements such as getting the business line for industrial purpose and placing meters the cost is assumed as 40000 and for wearing, stabilizers for machines sockets and other expenditure 40000 more is added with the initial cost.We will have 22 machines for which a 1000-1200 square feet space will be require. For hiring the place advance with 1st months rent is assumed as 115000.Loan of 2 00,000(27.54%of initial investment) will be taken at a commit of 15% which is close to 30% of the total investment amount. (Basic bank)(Small scale enterprise The enterprise will be termed as small if in todays market condition the replacement cost of plant, machinery and other components excluding land and building amounts to tk 15 million or less-Policy strategies for small and medium enterprises development in Bangladesh)InventoryThe raw materials should include, needles, pastes used in collars and threads. Ordering volume will be our production so thither will be no additional inventory costMachinesTaking the demand into account we will start with 22 machines of which 18 are single needle plain machines 2 over locks and two three needle machines.Ratios of plain machine to over locks and three needle is 102Single needle is for basic sewing, three needle takes 1/3 time compared to single needle for obvious reasons but are very expensive, and over locks are sewing machines with bl ades that cuts the additional threads after sewing.Changes in demand and consequencesAccording to the owner of the triangle fashion wear in the winter time the demand for shirts shine by 20-25%.duration of this shortage in demand is around 2 months.During this period there are obvious lay-offs so there is decrease in demand, in salaries and ultimately decrease in COGS and sales as well.Sales and COGSSales growth for our company is taken as 17%, based on the average of 5 years growth in sales of square textiles which is close to 20% and of triangle fashion wear which is close to 15%.As for COGS, for our company the growth assumed is 10%.for square text. Average growth in cogs is less than 15.NWC is assumed as 15% of sale for our company for each of five years. For square text. It is close to 18%.Salvage valueFor the over locks and single needle SV is assumed at an average of 5500tk after 5 years for each of the machines and for the 3 needle machine it is 8000 tk eachDepreciation and taxAs for depreciation we deducted salvage value from total machine cost and deducted the amount by 10 which is the total lifetime for the machines. We used straight line depreciation for the other years.Corporate tax rate is assumed as 35% of the EBT amount.Calculating WACCMarket return of 10% is taken from the stock Bangladesh web site on 12th April, US risk free rate is taken for the measurement which is close to 3% and beta of 1.26 is taken from the stock Bangladesh website as well for the textile industries.Calculating CAPEXCapital expenditure is calculated by summing up all the fixed assets for the 1st year which is close to 7% of the total sales for the same year. For the rest of years the growth rate is assumed as same as the sales which is 15%.After that we deducted fixed asset amount of the previous year from the amount of current year.4P analysis fruitAs we said earlier our only product will be shirts.PricingRate for sewing shirts in the market now is close to 90tk per s hirt, we will start with 85tk to capture the market in the first place and then will focus on maintaining the quality.As we will only sew shirts so the calculated cost for each shirt will also be our production cost/unit.it is calculated as 49.5 by dividing COGS by demand. forward motionPromotionWe will do it by ourselves as the owner of the business so we wont be having any additional cost for advertising and there will be experienced supervisors too, to initiate promotion.Place/Location and manner of speakingWe will choose a place close to the companies we are expecting to get orders from.For the delivery of raw products to us and delivery of the sewed shirts to the companies ordering, companies themselves will be responsible.so again there will be no additional transportation cost for our company.