Feasibility Report of Women Boutique free essay sample

Plan for Fashion Boutique 1. 0 EXECUTIVE SUMMARY Overview Fashionista is an upscale womens clothing boutique that will open in October this year. Fashionistas clothing selections and exclusive personal style services include a detailed Style Assessment, which will ensure that our customers are well dressed. It is a woman-owned business, currently organized as a Sole Proprietorship. Clothing for stylish women It will carry Ready-to-Wear (RTW) designer and casual/contemporary apparel amp; accessories for women, and will be the exclusive U. S. ome of the German line, Herr Frau. Mission †¢ To provide women with a boutique that offers a comfortable and approachable environment †¢ To showcase quality, well-constructed fashions from prominent and cutting-edge designers †¢ To offer a variety of beautiful and high-end fashion accessories †¢ To help women learn what clothing and styles go best with their unique personalities †¢ To generate buzz and sales through top-no tch exclusive services Keys to Success 1. Having a good location in a high-shopping area 2. We will write a custom essay sample on Feasibility Report of Women Boutique or any similar topic specifically for you Do Not WasteYour Time HIRE WRITER Only 13.90 / page Quality product and good relationships with vendors . Outstanding customer service Objectives †¢ To turn inventory five times and to maintain profit margins at 15-20% through close attention to expenses and cost of goods sold †¢ To drive awareness and build sales through mentions in both local print and the nations top fashion magazines 2. 0 COMPANY SUMMARY Fashionista is an upscale womens clothing boutique that intends to open at Prahladnagar in Ahmedabad in October. It carries beautiful designer labels for professional women, such as the sophisticated silhouettes of Herr Frau and luxurious handbags. Start-up Summary This business plan will be used for three purposes: †¢ To map out all the necessary components to create a successful and well-run boutique †¢ To provide management with a blueprint to follow †¢ To secure financing through private institutions and investors 3. 0 PRODUCTS amp; SERVICES Fashionista will carry Ready-to-Wear (RTW) designer diffusion lines and casual/contemporary apparel amp; accessories for women. It will also carry designer fashion accessories and various branded items. Apparel Lines †¢ Allen solley †¢ Van heusen †¢ Arrow Louis Philippe †¢ Wills lifestyle †¢ Park avenue †¢ Annabelle Accessories †¢ Local designer jewelry †¢ Handbags †¢ Belts, Scarves, Gloves, Hats 4. 0 MARKET ANALYSIS SUMMARY There are various economic forces that affect apparel retailers. Consumer confidence is the most important; people dont shop when they are not feeling good. Unemployment also has an effect, in that fewer wo men out in the workforce means less disposable income for high-end quality clothing. Thus, the large discounters are now working with top designers to bring designer apparel to the masses. Although they cant compete on quality, their continued development of the trend could have a direct impact on retailers who sell designer clothing during tough economic times. Market Segmentation Market Needs If you were to overhear women talking in a dressing room, you would more than likely hear them comment on something theyve tried on and question how they should wear it or what it will go with in their closet. Research has shown that women are stressed, have little time to shop, and would generally like help in determining the right clothes and styles to wear. Women between the ages of 25-54 are spending more money in apparel each year, there are sure to be some mistakes made in clothing choices. Television shows clearly speak to a womans confusion about what looks best on her. Even women who can afford a professional stylist feel helpless and often jokingly request that their stylist come to their home every morning to help them get dressed. Research indicates that women approach retail shopping uniquely by evaluating purchases based on product and company information derived from both personal and expert sources. The table below shows that out of the ten characteristics consumers find important in deciding where to shop, four were attributed to customer service. Kapra Boutique The Designer Shalwar Kameez Fashion House Search KB Designs Top of Form | | | powered by| | Bottom of Form This Blog | This Blog  Ã‚  Ã‚  |   | Top of Form Bottom of Form Pre-Feasibility Study BOUTIQUE (Women Designer Wear) INTRODUCTION 1. 1 Project Brief The pre-feasibility study focuses on the establishment of women designer wear Kapra Boutique including the operations of apparel designing, manufacturing, selling and marketing. The study has been designed to capture the dynamics of the Kapra Boutique industry, with its many components and possible strategic opportunities. 1. 2 Opportunity Rationale Clothing is a beautiful visual demonstration of the social and emotional needs of people wearing it. It also portrays in a clearly understood visual manner, what people of different cultures and styles want socially. Fashion, through times, has gone through so many rapid changes and bizarre extremes that it has examples of nearly every kind of clothing function. However, in a Kapra boutique business, the specifications and descriptions of the designs and clothes are so general that they can fit more than one costume, which actually are quite different in nature from each other and this is solely dependent on the taste of the people. The range of Pakistani dresses is remarkably wide, according to the vast cultures, geographical differences, purchasing capacities, influence of the western culture, and bewildering diversities of the ethnic groups. One has, therefore, to sift and isolate, and then relate and bring together, the ideas for creating various designs, which can fit in the context of the fashion in vogue and the culture in practice. In reference to Pakistan, the Kapra Boutique business is quite in vogue but has yet to be formalized. The market of this enterprise is quite scattered and unorganized. There are a few major players in Kapra Boutique business and these entrepreneurs have also taken an initiative based on their caprice and experience in the field of fashion design. However, there is a massive potential in this field, if one has the ability to design and market his/her products through introducing innovative designs both in stitching as well as the fabric sector. Furthermore, there is massive export potential in this sector, as the demand of Pakistani dresses, especially in countries like UAE, USA, and UK, is massive due to a high number of Pakistani expatriates who have settled in these countries. The Kapra Boutique business can also be expanded into a more profitable venture by providing stitching facilities to other Kapra boutiques, which do not own a stitching unit or are lacking this facility. . 3 Proposed Capacity The Kapra Boutique business capacity is greatly dependent on the market size and the number of potential clientele one can attract. Furthermore, the women fashion wear Pre-Feasibility Study Kapra Boutique (Women Designer Wear) Garments will be designed through a contracted designer and then stitched through in-house stitching uni t. On average, a designer can supply forty designs per month from which nearly twenty designs are selected on average. Approximately, total capacity of the defined unit with 5 stitching machines (basis on 8-10 hours shift) will be about 5001 dresses. The breakup of the total number of dresses will be as follows: Total designs selected by designer 20 Number of dresses in each design 5 Number of dresses in each size 5 Total Number of dresses 500 This production and sales capacity is estimated to be economically viable and justifies the capital as well as operational costs of the project. 1. 4 Total Project Cost The Kapra Boutique shop needs a total investment of about Rs. 1. 45 million. This includes a capital investment of Rs. 881,920 and a sum of Rs. 569,600 as working capital. CURRENT INDUSTRY STRUCTURE Currently, the Kapra boutique industry is relatively unorganized and is cattered in and around the posh areas of the metropolitan cities of Pakistan i. e. Lahore, Islamabad, Karachi, Peshawar, and Quetta. The Kapra boutiques in Peshawar and Quetta, mostly sell the traditional dresses having indigenous/local designs, whereas the ones in Lahore, Islamabad, and Karachi deal in fashion wear greatly influenced by the west and the loca l trends in vogue. As such, there is no exact detail available of the number of Kapra boutiques, especially in women wear, because there is no association or link between these enterprises. The reason being the business rivalries and the competitive structure of this industry. However, one can name a few major players in the business such as Indifference, Generation, Parahan, Nee Punhal, Bossini, Kapre Waghera, Maria B, Ninas, and some individual designer players like Beegees, Nilofar Shahid, Nadia Mistri, Amir Adnan, Shayan Malik, and Sahar Saigol. MARKETING The marketing of Kapra boutique follows the conventional marketing pattern which is dependent on selection of venue of the outlet/s and the product mix (designs and sizes), as well as the promotional strategy. Furthermore, the Kapra boutique owner has to marketing techniques like: †¢ Usage of print media i. e. rinting of posters and pamphlets as well as displaying it and distributing it at proper places †¢ Advertisement in print media i. e. newspapers and fashion magazines, etc. 1 This production also includes additional suits that will be prepared on orders/outsourcing/CMT (Cutting, Manufacturing and Trimming) per month in order to utilize the maximum capacity of the stitching unit. †¢ Usage of electronic media i. e. projection of the Kapra boutique in fashion programs, advertisement on television, and provision of dresses to various television plays and films. †¢ Event arrangement like fashion shows and photo-shoots. Usage of e-commerce i. e. launching of website and advertising on web. Moreover, in order to keep abreast with the emerging trends and client tastes, surveys regarding customer satisfaction/needs should be a regular feature of this project. As this project of Kapra Boutique deals in designer women wear, therefore the product mix will comprise of different styles of the female dresses in different sizes. Whereas, the styles will be Shalwar Kameez, Q-lots, Pajama Kameez, Frocks, Kurta, Peeshwaz, Party dresses, Casual Dresses and other prevalent dresses based on the market trends. The average sale price per dress is assumed to be Rs. 2,100. Apart from this, there is a vast export potential in this industry, which is evident from the export figures of 1998-99 (available from the data of Federal Bureau of Statistics-FBS). SITC2 Code Product Classification 2000 – 2001 Value (Rs. 000) 8422102 Suit women cotton not knitted 1,415,124 8422103 Suit women synthetic not knitted 501,917 8422104 Suit women (other textile material not knitted) 46,861 8422202 Ensembles women cotton not knitted 2,107 8424002 Dresses women not knitted 463,346 424003 Dresses women man made fiber not knitted 63,438 8424004 Dress women other textile not knitted 17,723 8424006 Shisha embroided dresses of cotton 286 8427006 Baluchi Kameez of Silk 27 Total 2,510,826 Source: Federal Bureau of Statistics Even these figures represent the formal export patterns of women dresses from Pakistan and are not representative of the export of these dresses taking place on informal level. Most of the wom en dresses prepared in Pakistan are exported to USA, UK, Germany, UAE, Saudi Arabia, France, Belgium, Netherlands, and South Africa. The end users of these dresses in foreign countries are mostly Pakistani and Indian women who have immigrated to these countries. RAW MATERIAL 4. 1 Raw Material The raw-material required for such sort of projects, would be as follows: †¢ Fabric: The fabric, which is the basic raw material requirement for a Kapra boutique and a major component of the cost, can be obtained from wholesale markets or from markets specializing in designer cloth at Faisalabad, Karachi, and Lahore. †¢ Accessories: Accessories such as buttons, laces, zippers, elastics, threads, needles, embroidery threads, glasses, etc. ill be procured from the local market at competitive rates. †¢ Labels, tags and packaging: Labels and tags can be obtained on order, as these serve as an identity for the Kapra boutique and are useful for promotion. PRODUCTION PROCESS FLOW 5. 1 Production Process Flow The process for converting fabric in designer wear garments follows the below mentioned sequence: †¢ Desig n: The initial process starts from the designing phase. Various patterns of clothing and the fashions in vogue, which also relate to the tastes of the concerned clientele, are designed. This is done by the contracted designer as he/she will provide the basic designs of which the fabric will be converted into the designer wear garment. On average, a designer is supposed to provide 40 designs per month or 100-120 designs per season i. e. three months. From these designs, approximately 50% of the designs are selected for further development of clothes. †¢ Pattern Making/Cutting: Based on the designs selected, patterns for cutting are developed and based on these patterns, fabric is cut, embroided, block printed, and processed accordingly3. Stitching: The cutting is then followed by stitching, which can either be done by the in-house stitching unit or by outsourcing it4. Labels are also attached to the apparels in this process. †¢ Finishing: The final phase is that of finishing, in which the garment will be checked for quality control and will cleaned (if required) for final presentation at the outlet. The garments will also be tagged for identification of siz es, prices, addresses, handling instructions, etc. 3 After cutting, the fabric is embroided and this is normally outsourced to any locally available commercial embroidery unit. In case of over-lock stitching, it will be done in-house. The stitching of buttonholes as well as elastic embedding will be outsourced. This will cost approximately @Rs. 5 per dress. Pre-Feasibility Study Kapra Boutique (Women Designer Wear) PREF-57/July, 2002/ Rev 01 Presentation/Market: Once the designer wear garment is ready after going through the above-mentioned process, it is presented at the outlet/shop for sale to the clientele. Designing Pattern Making/Cutting Stitching Market/Clientele Presentation Finishing HUMAN RESOURCE REQUIREMENTS The project of Kapra Boutique requires the following Human Resources/Staff: Positions Required Salary per Month Salary per Annum Chief Executive/Owner 1 30,000 360,000 Designer 1 15,000 180,000 Sales Girls 2 5,000 120,000 Production Supervisor/Cutting Master 1 8,000 96,000 Stitchers/Tailors5 5 6,000 360,000 Press/Iron Man/Finishing man 1 3,000 36,000 Office Boy 1 2,000 24,000 Total 12 1,176,000 MACHINERY/EQUIPMENT DETAILS The Kapra boutique will require a small in-house stitching unit. The cost of the stitching machinery will be as follows: Stitching Machinery 6 No. Rs/Unit Rs Single needle lock-stitch machine (Juki China) 4 20,000 80,000 Over-lock stitch machine (Juki China) 1 50,000 50,000 Accessories (Scissors, Cutting Board, Table, stools, carpet, etc. ) 50,000 50,000 Total 180,000 6 Though the prices here are given of the new machines but second hand machines are also widely available which can function properly and can reduce the project cost too. Furthermore, the following will also be required to setup a Kapra Boutique: Other Equipment No. Rs/Unit Rs Air-conditioner 1 30,000 30,000 Stereo System 1 23,000 23,000 Computer and Printer 1 35,000 35,000 Telephone amp; Fax 1 10,000 10,000 Credit Card Machine7 1 Total 98,000 PREMISES FOR SHOP AND STITCHING UNIT 8. 1 Recommended mode for renting a Shop It is recommended that the proposed location for the said enterprise be a posh area, where people have the buying capacity for women fashion wear. The size of the shop should be at least 800 Sq. ft i. e. 20 feet front and 40 feet depth. Furthermore, a small building will be required to establishing the stitching unit. One viable option is to rent a small house for this purpose. The shop will be obtained on rental basis, and the rent estimation for such a shop is Rs 30,000/month. According to the prevailing practice, six months rent as advance and three months rent as security would be required for renting the shop. It is assumed that security is a one-time expenditure, whereas pre-paid rent will only be given at the beginning, while establishing the Kapra boutique. After first six months, rent will be paid on monthly basis. The cost estimates for setting up the Kapra Boutique are as follows: Rs Security for renting shop/outlet (Rent @ Rs. 30,000 per month. 3 months rent as security) 90,000 Interior decoration (installing lighting, mannequins, hanging racks, mirrors, glass panes, cash counter, and ther decor, etc. ) 300,000 Security for renting a house for installing the stitching unit (Rent @ Rs. 6,000 per month) 9,000 Credit card machines are installed free of cost by the Bank on fulfilling the Bank requirements like having a Bank account, copy of registry or lease agreement of shop, etc. However, these requirements may vary from Bank to Bank. 8. 2 Infrastr ucture requirements The project will have the following infrastructure components: Infrastructure Requirements Sq. ft Main shop 600 Try Room 36 Small Store 100 Kitchen 64 Building for Stitching Unit 10 Marla House Pre-Feasibility Study Kapra Boutique (Women Designer Wear) PROJECT ECONOMICS 9. 1 Project Cost Description Cost (Rs. ) Machinery amp; equipment 278,000 Furniture amp; Fixture (Interior Decoration) 300,000 Security Deposits for Premises8 108,000 Pre-operating expenses Salaries9 98,000 Promotional Expenses 97,920 Total Capital Cost 881,920 Working Capital Raw material (Fabric amp; Accessories) 28,800 Accounts Receivable 108,800 Prepaid Rent (Kapra Boutique and Stitching Unit) 432,000 Total Working capital 569,600 Project Cost 1,451,520 9. 2 Project Returns Internal Rate of Return (IRR) 40. 18% Payback Period (Years) 3. 87 Net Present Value (NPV) 2,267,714 . 3 Financing Plan Financing Rs. Equity 50% 725,760 Debt 50% 725,760 8 Security Deposit for Kapra Boutique Rs. 90,000 (@Rs. 30,000 per month for three months), and for Stitching Unit Rs. 18,000 (@Rs. 6,000 per month for three months). 9 One month salary of staff Pre-Feasibility Study Kapra Boutique (Women Designer Wear) KEY SUCCESS FACTORS There are a number of factors, which contribute towar ds the success of a project. In case of the project of   Kapra Boutique, some of the Key Success Factors are as follows: †¢ Proper care while producing dresses should be adopted †¢ Proper Inventory management i. e. eeping minimum inventory as per past sales trends. †¢ The dress designs should be according to the emerging trends and fashions. †¢ Designing of dresses according to the consumer tastes/preferences gathered through consumer surveys. †¢ The location of the outlet should be properly selected and attractively decorated so as to target the clientele effectively. †¢ The customer satisfaction should be given due importance, because it is the customer satisfaction, which can increase the sales. Hence, excellent customer service should be provided. THREATS FOR THE BUSINESS †¢ Competitive Structure of the market The market of the Kapra boutiques is highly competitive, therefore if the entrepreneur is not well responsive to the tastes and response of the clientele as well as the fashions in vogue he/she may not be able to capitalize the opportunity properly. †¢ Pilferage in the designs The designs which a designer produce can be sold by the staff even before that design is launched and that can pose serious threat to the business because in the fashion industry it is the uniqueness of the design which matters. †¢ Selection of the wrong venue Selection of the wrong venue can be a major hurdle in achieving the desired business objectives. Selection of the wrong design If the designs are not selected according to the tastes of the clientele then it can be detrimental for the business, so the clientele taste should be properly tracked. †¢ Tax Improper documentation of the sales receipt record may lead to problems with Tax department. Pre-Feasibility Study Kapra Boutique (Women Desi gner Wear) FINANCIAL ANALYSIS 12. 1 Projected Income Statement Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 Sales 3,264,000 3,698,112 4,189,961 4,747,226 5,378,607 6,093,961 6,904,458 7,822,751 8,863,177 10,041,980 Cost of Goods Sold Raw Material 576,000 639,936 710,969 789,886 877,564 974,973 1,083,195 1,203,430 1,337,011 1,485,419 Payroll P roduction Staff 672,000 719,040 769,373 823,229 880,855 942,515 1,008,491 1,079,085 1,154,621 1,235,445 Machine M aintenance 10,000 10,200 10,404 10,612 10,824 11,041 11,262 11,487 11,717 11,951 Embroidery amp; Accessories costs 300,000 333,300 370,296 411,399 457,064 509,830 564,164 626,787 696,360 773,656 Direct E lectricity 48,000 52,800 58,080 63,888 70,277 77,304 85,035 93,538 102,892 113,181 Total 1,606,000 1,755,276 1,919,122 2,099,015 2,296,584 2,515,663 2,752,147 3,014,327 3,302,601 3,619,652 Gross Profit 1,658,000 1,942,836 2,270,839 2,648,211 3,082,022 3,578,298 4,152,311 4,808,424 5,560,576 6,422,328 Operating Expenses Fixed Electricity 72,000 79,200 87,120 95,832 105,415 115,957 127,552 140,308 154,338 169,772 Payroll Administration 504,000 539,280 577,030 617,422 660,641 706,886 756,368 809,314 865,966 926,583 Shop amp; stiching house rent 432,000 453,600 476,2 80 500,094 525,099 551,354 578,921 607,867 638,261 670,174 Amortization pre Ops. Exp. 9,592 19,592 19,592 19,592 19,592 19,592 19,592 19,592 19,592 19,592 Telephone, Internet Charges 36,000 37,800 39,690 41,675 43,758 45,946 48,243 50,656 53,188 55,848 Promotional Expenses 97,920 55,472 62,849 71,208 80,679 91,409 103,567 117,341 132,948 150,630 Depreciation 57,800 57,800 57,800 57,800 57,800 57,800 57,800 57,800 57,800 57,800 Total 1,219,312 1,242,744 1,320,361 1,403,623 1,492,984 1,588,944 1,692,044 1,802,878 1,922,093 2,050,399 Operating P rofit 438,688 700,092 950,478 1,244,589 1,589,038 1,989,354 2,460,267 3,005,546 3,638,483 4,371,929 Non Operating Expenses Financial Charges 130,637 112,377 90,830 65,404 35,402 Running Finance Total 130,637 112,377 90,830 65,404 35,402 Profit before Tax 308,051 587,716 859,648 1,179,184 1,553,636 1,989,354 2,460,267 3,005,546 3,638,483 4,371,929 Tax 107,818 205,700 300,877 412,714 543,772 696,274 861,093 1,051,941 1,273,469 1,530,175 Profit after Tax 200,233 382,015 558,771 766,470 1,009,863 1,293,080 1,599,174 1,953,605 2,365,014 2,841,754 Opening R etained earnings 200,233 582,248 1,141,020 1,907,490 2,917,353 4,210,433 5,809,606 7,763,211 10,128,226 Retained earning beginning of year 200,233 582,248 1,141,020 1,907,490 2,917,353 4,210,433 5,809,606 7,763,211 10,128,226 12,969,979 PROJECTED INCOME STATEMENT Pre-Feasibility Study Kapra Boutique (Women Designer Wear) 12. 2 Projected Cash Flow Statement PROJECTED CASH FLOW STATEMENT Year 0 Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 Operating Activities Net Profit 2 00,233 382,015 558,771 766,470 1,009,863 1,293,080 1,599,174 1,953,605 2,365,014 2,841,754 Amortization of preoperational expenses 1 9,592 19,592 19,592 19,592 19,592 19,592 19,592 19,592 19,592 19,592 Security Deposit (108,000) Building Rent Expense 4 32,000 453,600 476,280 500,094 525,099 551,354 578,921 607,867 638,261 670,174 Building Rent Repayment (432,000) (453,600) (476,280) (500,094) (525,099) (551,354) (578,921) (607,867) (638,261) (670,174) Depreciation 5 7,800 57,800 57,800 57,800 57,800 57,800 57,800 57,800 57,800 57,800 Stock and inventory (28,800) (3,197) (3,552) (3,946) (4,384) (4,870) (5,411) (6,012) (6,679) (7,420) 74,271 Account Receivable (108,800) (14,470) (16,395) (18,575) (21,046) (23,845) (27,017) (30,610) (34,681) (39,293) 334,733 Account Payable 1 9,200 2,131 2,368 2,631 2,923 3,247 3,607 4,008 4,453 4,947 Cash provided by operations (677,600) 2 57,558 418,912 592,196 796,058 1,035,207 1,313,724 1,614,605 1,963,252 2,368,232 4,003,270 Financing Activities Share capital 7 25,760 Addition to Long Term Debt 7 25,760 Long Term Loan Repayment (101,445) (119,705) (141,252) (166,678) (196,680) Short Term Loan Repayment Cash Provided/Used for Financing Activities 1 ,451,520 (101,445) (119,705) (141,252) (166,678) (196,680) Investing Activities Capital Expenditure (773,920) Cash Used Provided by Investing Activities (773,920) Net Cash inflow/(outflow) 1 56,113 299,206 450,943 629,380 838,528 1,313,724 1,614,605 1,963,252 2,368,232 4,003,270 Cash Balance Brought forward 156,113 455,319 906,263 1,535,643 2,374,170 3,687,894 5,302,500 7,265,751 9,633,983 Cash Balance 1 56,113 455,319 906,263 1,535,643 2,374,170 3,687,894 5,302,500 7,265,751 9,633,983 13,637,253 Running Finance Cash Carried Forward 1 56,113 455,319 906,263 1,535,643 2,374,170 3,687,894 5,302,500 7,265,751 9,633,983 13,637,253 Pre-Feasibility Study Kapra Boutique (Women Designer Wear) PREF-57/July, 2002/ Rev 01 12. 3 Projected Balance Sheet PROJECTED BALANCE SHEET Year 0 Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 Current Assets Cash 1 56,113 4 55,319 9 06,263 1 ,535,643 2 ,374,170 3 ,687,894 5 ,302,500 7 ,265,751 9 ,633,983 13,637,253 Security Deposit 1 08,000 1 08,000 1 08,000 1 08,000 1 08,000 1 08,000 1 08,000 1 08,000 1 08,000 1 08,000 108,000 Stocks and Inventory 2 8,800 3 1,997 3 5,548 3 9,494 4 3,878 4 8,749 5 4,160 6 0,172 6 6,851 7 4,271 Prepaid Rent 4 32,000 4 53,600 4 76,280 5 00,094 5 25,099 5 51,354 5 78,921 6 07,867 6 38,261 6 70,174 Accounts Receivables 1 08,800 1 23,270 1 39,665 1 58,241 1 79,287 2 03,132 2 30,149 2 60,758 2 95,439 3 34,733 Total 6 77,600 8 72,980 1 ,214,813 1 ,712,092 2 ,391,907 3 ,285,405 4 ,659,124 6 ,339,297 8 ,374,302 10,821,161 1 3,745,253 Gross Fixed Assets Machinery amp; Equipment 5 78,000 5 78,000 5 78,000 5 78,000 5 78,000 5 78,000 5 78,000 5 78,000 5 78,000 5 78,000 578,000 Less: Accumalated Depriciation 5 7,800 1 15,600 1 73,400 2 31,200 2 89,000 3 46,800 4 04,600 4 62,400 5 20,200 578,000 Net Fixed Assets 5 78,000 5 20,200 4 62,400 4 04,600 3 46,800 2 89,000 2 31,200 1 73,400 1 15,600 5 7,800 Intangible Assets Pre-operational Expenses 1 95,920 1 76,328 1 56,736 1 37,144 1 17,552 9 7,960 7 8,368 5 8,776 3 9,184 1 9,592 Total 1 95,920 1 76,328 1 56,736 1 37,144 1 17,552 9 7,960 7 8,368 5 8,776 3 9,184 1 9,592 Total Assets 1 ,451,520 1 ,569,508 1 ,833,949 2 ,253,836 2 ,856,259 3 ,672,365 4 ,968,692 6 ,571,473 8 ,529,086 10,898,553 1 3,745,253 Liabilities Long Term Debt 7 25,760 6 24,315 5 04,610 3 63,357 1 96,680 (0) Short Term Debt Accounts Payable 1 9,200 2 1,331 2 3,699 2 6,330 2 9,252 3 2,499 3 6,107 4 0,114 4 4,567 49,514 Total 7 25,760 6 43,515 5 25,941 3 87,056 2 23,009 2 9,252 3 2,499 3 6,107 4 0,114 4 4,567 49,514 Equity Paid -up Capital 7 25,760 7 25,760 7 25,760 7 25,760 7 25,760 7 25,760 7 25,760 7 25,760 7 25,760 7 25,760 725,760 Retained Earnings 2 00,233 5 82,248 1 ,141,020 1 ,907,490 2 ,917,353 4 ,210,433 5 ,809,606 7 ,763,211 10,128,226 1 2,969,979 Total 7 25,760 9 25,993 1 ,308,008 1 ,866,780 2 ,633,250 3 ,643,113 4 ,936,193 6 ,535,366 8 ,488,971 10,853,986 1 3,695,739 Total Liabilities And Equity 1 ,451,520 1 ,569,508 1 ,833,949 2 ,253,836 2 ,856,259 3 ,672,365 4 ,968,692 6 ,571,473 8 ,529,086 10,898,553 1 3,745,253 Pre-Feasibility Study Kapra Boutique (Women Designer Wear) PREF-57/July, 2002/ Rev 01 KEY ASSUMPTIONS 13. 1 Production Assumptions Number of Stitching Machines 5 Production Capacity (No. of dresses per month) 500 Capacity Utilization for the first year (No. of dresses per month) 200 Self Production (% of total production) 60% Dresses manufactured on CMT basis (% of total production) 40% Monthly self production (Year 1) 120 Monthly Dresses manufactured on CMT basis (Year 1) 80 13. 2 Cost Assumptions Initial (Year 1) Average cost per dress (Rs. ) Material amp; Fabrics 400 Accessories 25 Embroidery Cost 100 Direct Labor Cost 280 Direct Electricity Cost 20 Machine Maintenance Cost 4 Admin amp; Rent expenses amp; promotional expenses 446 Fixed electricity 30 Average unit cost per dress (Rs. ) 1,305 13. 3 Sales Assumptions No. of dresses sold per month(Year 1) 120 Average unit price per dress (Rs. ) 2,100 Average Monthly Sales through retail outlet (Rs. ) 252,000 No. of dresses sold on CMT basis per month(Year 1) 80 Average unit price per dress on CMT basis (Rs. ) 250 Average Monthly Sales through outsourcing(Rs. ) 20,000 Total Average Monthly Sales (Year 1) (Rs. ) 272,000 Sale growth rate (Units) 10% Sale growth rate (price) 3% Pre-Feasibility Study Kapra Boutique (Women Designer Wear) PREF-57/July, 2002/ Rev 01 13. 4 Operating Assumptions Hours operational per day 8 Days operational per month (Production) 25 Days operational per month (Boutique) 25 13. 5 Cash flow Assumptions Account Payable Cycle (Days) 10 Account Receivable Cycle (Days) 10 Raw Material Inventory (Days) 15 13. 6 Expense Assumptions Initial Promotional Expenses (Year 1) (%age of expected sales) 3% Promotion Expenses after Year 1 (% of expected sales) 1. 5% Machine Maintenance per annum Rs. 10,000 Direct Electricity per month (Year 1) 4,000 Fixed Electricity per month (Year 1) 6,000 Telephone and Internet charges (Year 1) 3,000 Raw Material Price Growth rate 1% Payroll growth rate 7% Machine Maintenance growth rate 2% Direct electricity growth rate 10% Fixed electricity growth rate 10% Rent growth rate 5% Telephone and Internet charges growth rate 5% Depreciation Method Straight Line 13. 7 Financial Assumptions Project Life 10 Years Debt: Equity 50:50 Interest Rate on Long Term Debt 18% Interest Rate on Short Term Debt 18% Debt Tenure 5 Years Debt Payment per year 1 Discount Rate 18% Small and Medium Enterprise Development Authority Government of Pakistan www. smeda. org. pk HEAD OFFICE Waheed Trade Complex, 1st Floor , 36-Commercial Zone, Phase III, Sector XX, Khayaban-e-Iqbal, DHA Lahore Tel: (042) 111-111-456, Fax: (042) 5896619, 5899756 [emailprotected] org. pk REGIONAL OFFICE PUNJAB REGIONAL OFFICE SINDH REGIONAL OFFICE NWFP REGIONAL OFFICE BALOCHISTAN Waheed Trade Complex, 1st Floor, 36-Commercial Zone, Phase III, Sector XX, Khayaban-e-Iqbal, DHA Lahore. Tel: (042) 111-111-456 Fax: (042) 5896619, 5899756 [emailprotected] org. pk 5TH Floor, Bahria Complex II, M. T. Khan Road, Karachi. Tel: (021) 111-111-456 Fax: (021) 5610572 [emailprotected] org. pk Ground Floor State Life Building The Mall, Peshawar. Tel: (091) 9213046-47 Fax: (091) 286908 [emailprotected] org. pk Bungalow No. 15-A Chaman Housing Scheme Airport Road, Quetta. Tel: (081) 831623, 831702 Fax: (081) 831922 [emailprotected] org. pk Pre-Feasibility Study Kapra Boutique (Women Designer Wear) DISCL AIMER The purpose and scope of this information memorandum is to introduce the subject matter and provide a general idea and information on the said area. All the material included in this document is based on data/information gathered from various sources and is based on certain assumptions. Although, ue care and diligence has been taken to compile this document, the contained information may vary due to any change in any of the concerned factors, and the actual results may differ substantially from the presented information. SMEDA does not assume any liability for any financial or other loss resulting from this memorandum in consequence of undertaking this activity. Therefore, the content of this memorandum should not be relied upon for making any decision, investment or otherwise. The prospective user of this memorandum is encouraged to carry out his/her own due diligence and gather any information he/she considers necessary for making an informed decision. The content of the informatio n memorandum does not bind SMEDA in any legal or other form. DOCUMENT CONTROL Document No. PREF-57