CONTENTS

Section 1 Introduction

Section 2 Promoter

Section 3 Marketing status

Section 4 Infrastructure faculty

Section 5 Market Potentiality

Section 5 Basic Assumption

Section 6 Implementation Schedule

Section 7 Technical Aspect

Section 8 Quality Control and Standard

Section 9 Production Capacity

Section 10 Pollution Control

Section 11 Energy Conservation

Section 12 Financial Aspect

Section 13 Process Flow Chart

Section 14 Loan Funding

Section 15 GST

Section 13 Conclusion
 Introduction –
Khadi empowers the country because it brings a lot of man power to manufacture so it
provides employments many people like spinners, weavers, farmers etc. This business has
potential to grow fast and sustain long time so my project is to establish a clothing brand in
next 5 year.

Business model is based as a limited investment you applied in your business in certain time
and you will get ROI in certain time. It will give motivation automatically to run business. It
helps to run business in starting days and also not to allow increase expenses.

Manufacturing of Shirts and Trousers are under the category of readymade Garment
industry. Readymade garment industry has occupied a unique place in the industrial scenario
of our country by generating e-commerce earnings and creating lot of employment. Its
contribution to industrial production, employment and e-commerce earnings are very
significant. This industry provides one of the basic necessities of life. The employment
provided by it is a source of livelihood for millions of people. It also provides maximum
employment with minimum capital investment. Since this industry is highly labour-intensive,
it is ideally suited to Indian condition. This project report is prepared for the manufacture of
Khadi Garments as they find wide acceptance in local and international markets. Any person
having the knowledge of cutting and stitching operations can easily set up such
establishments.

Promoter-

Name-
Education –

Plant Address –
My name is .............. is serving in KVIC department. I am familiar a fabric that is
Khadi/khaddar since childhood. I discuss a lot with my father about this fabric and taken great
knowledge about khadi.

I am a kind of person who likes to be close to the nature and love to do

creative things. I personally like clothing stuff and experiments with the designs. I took the
admission in a fashion designing course in Skill development centre, MSME Delhi where I
learnt the procedure to do designs and stitching basics. That’s how all started.
Industry - Clothing
Constitution - Proprietorship
Location - Lucknow, Utter Pradesh
My Clothing brand name is MY KHADI CLOTHES. Clothes are the basic need of every
human. A research says that we have 5 times more clothes compare to our grandparent’s
generation and this will be double till 2025. I have selected Khadi fabric for my designs
because Khadi has a great history and it has extra ordinary qualities like eco friendly fabric,
cool in summer and warm in winter and comfort ability.

Marketing status –
Clothes are the basic need of the human. This industry is
one of the most growing and never end industry. We can run goggle ads campaign to get
traffic in our website. In ecommerce website the challenge is to rank in 1st page. For this we
can do SEO and rank in 1st page in goggle.

We can also list our dresses in some market place like Government e marketplace (GEM),
Amazon, and flip kart etc. Khadi fabric has a lot of qualities that separates different from
others. The people are being aware about natural fibres and hygienic things so Khadi can be
strong option to all communities around the world.

The online market size is so big because people like to do shopping clothes
online due it’s easy to purchase and return also .The growth of the industry is so much.
Thousands of businesses are running in this industry and more required because billions of
people need to this industry.

I would create an e commerce website of my clothing brand named

www.mykhadiclothes.in and list my all designs in only Khadi fabric and list also in other
market place like Amazon, flip kart etc. And will open a retail outlet also. This is not only a
fashion ecommerce website it is my vision to provide a good customer experience.

Firstly I will make an ecommerce website and list all the designs in website and then create
online presence in social media platform like YouTube, Instagram etc. where I can create a
sales funnel. After educating people and get traffic then bring them in our ecommerce website.

Infrastructure faculty -

I have a retail shop in Bhadua choraha Ganga ganj, Lucknow and behind shop lot of
space is ready to build. I need to maintain this place for my plant. Here I would open a
clothing retail also. This is the highway (Luck now to Sultanpur highway) front space so
people can notice a clothing retail store easily and easy for the transportation also.

MARKET POTENTIAL:

Readymade garments are the choice of urban people. It is also gaining wider
acceptance in semi-urban and rural areas. The huge charges made by tailors and delay in
delivery has made people to switch over to readymade garments. In domestic market and
export market, it has made spectacular progress in the last decade. This industry is becoming
very vibrant and lot of foreign investment pouring in this industry because of low risk and
high earning nature of this industry. As these products are fashion oriented, entrepreneurs
should always keep in mind the changing fashion styles. Considering its advantageous
position, it is assumed that there will be no constraint in marketing of Khadi’s readymade
garments.

BASIS & PRESUMPTIONS:

1. This project is based on single shift basis and 300 working days in a year.

2. Since this industry is labor-intensive, the working efficiency is considered at 75%.

3. Costs of machinery and equipment/ material indicated refer to a particular make and
approximately to those prevailing at the time of preparation of this project.

4. Installation and electrification cost are taken @ 10% of cost of machinery and equipment.

5. Non-refundable deposits, project report cost, trial production, security deposits with
Electricity Board are taken under pre-operative expenses.

6. Depreciation has been considered:

(a) On Building @ 5%
(b) On plant and machinery @ 10%
(c) On furniture and fixtures @ 15%
(d) On other fixed assets @ 15%.

7. Interest on capital investment has been taken @ 16% per annum.

8. Minimum 25% of total investment is required as margin money.

IMPLEMENTATION SCHEDULE

Implementation period in months for executing this project in stage-wise is

given below:

Sl. No. Activity Period

1. Selection of site/working shed 1 week
2. Formation of Firm (ownership/proprietorship) 1 week
3. Preparation of feasibility report 1 week
4. Registration with GST 2 week
5. Arrangement of finance (Term loan and working capital) 1 month
6. Procurement of machinery and equipment 1 week
7. Plant erection and electrification 2 week
8. Arrangement of raw material including packaging 2 week
material etc.
 9. Recruitment of manpower 1 week
10. Selection of market channel 1 week
11. Miscellaneous works like power/water connection etc. 2 week

12. Note: Considering that some of the above activities may be

overlapping, the project implementation will take a total period of four months
approximately for starting the production.

TECHNICAL ASPECTS

Process of Manufacture: The manufacturing process involves the following

steps:

Procurement of Fabric: Khadi fabrics as per demand are to be procured from the
open market. The fabric will be inspected by laying on the inspection table against
light before cutting so that unevenness in colour/shade or any other fault, if any
visible in the fabric are eliminated.

Cutting and Stitching: The inspected fabric is placed on the cutting table in
layers and then the different parts of the respective garments are demarked by a
chalk as per different sizes. Cutting is carried out by the cutting machine. Stitching
is carried out for individual portion of the garments by skilled workers with the
help of over-lock, lock stitch machines etc.

Checking, Pressing and Packing: Final checking is done before pressing and
packing on the checking table so that any fault in the piece may be removed and
protruding threads eliminated. The individual pieces are pressed by steam presses
to remove any wrinkle marks and packed in the carton boxes.

QUALITY CONTROL & STANDARD:

The quality of garments mainly depends on quality of fabric used. Therefore, care
must be taken while purchasing fabrics to ensure good colourfastness properties,
uniformity in shade etc. Generally garments are made as per customer's
specification in respect of size, design and fashion.

PRODUCTION CAPACITY (Per Month):

Products Quantity (Pcs.) Value (Rs.)

Gents Shirts 120 1,30,266/-

Gents Trousers 60 72,370/-

POLLUTION CONTROL:

The process of manufacture does not generate pollution. However, entrepreneurs are to
contact State Pollution Control Board for necessary guidance.

ENERGY CONSERVATION:

Maximum care should be taken while selecting the machinery and other electrical
equipments so as to ensure minimum power consumption.

FINANCIAL ASPECTS:

(A) Fixed Capital

(i) Land & Building:

Land : 840 sq. mtr. (Owned)

Building Area

Factory Shed : Rs. 30,000.00 800 sq. mtr.

Store (Raw : Rs. 6,000.00 50 sq. mtr.

Material)
Store (Finished : Rs. 6,000.00 50 sq. mtr.
Goods)
Total Cost Rs. 42,000.00

(ii) Machinery & Equipments

Sl. Machinery Description Qty Rate Value

No Nos. (Rs.) (In Rs.)
1. Single Needle Lock Stitch Machine 2 23,650/- 47,300.00
Manual.
2. Double Needle Lock Stitch Machine 2 45,000/- 90,000.00
Manual
3. Press 2 3,000/- 6,000.00
4. Other Utilities 5,000.00
Total 1,48,300.00
(iii) Other Fixed Assets

i. Erection and Installation 15,000/-

ii. Office Furniture 10,000/-
iii. Pre-operative expenses 5,000/-
Total: 30,000/-
Total Fixed Capital: 2,20,300/-

(B) Working Capital (per month)

(iv) Staff & Labour (Per Month):

Sl. Personnel No. Rate(Rs.) Amount ( In Rs.)

No.
1. Sales Representative 1 10,000.00 10,000/-

2. Store manager 2 7,000.00 7,000/-

3. Cutting Master, Stitching and 2 10,000.00 20,000/-

Pressing
4. Delivery Man 1 7,000.00 7,000/-

Total: 44,000/-

Perquisites @ 20% on the total salary 8,800/-

Grand Total 52,800/-

(v) Raw Material ( Per month):

Sl. Item description Qty. Rate (Rs.) Value

No Unit (In Rs.)
1. Khadi Fabric (Mtrs.) 200 Mtr 300/- 60,000/-
2. Khadi Denim Fabric for 100 Mtr 550/- 55,000/-
Trousers(Mtrs.).
4. Sewing Thread LS 1,000/-
6. Packing Material (Nos.) 150 Pcs 4 600/-
Total: 1,16,600/-

(vi) Utilities: (Per Month)

 1. Electricity Rs. 10,000/-
2. Water charges Rs. 2,000/-

Total: - Rs. 12,000/-

(vii) Other Contingent Expense (Per Month):

1. Advertisement & Publicity Rs. 3,000/-

2. Postage & Stationery Rs. 1,000/-

3. Repair and maintenance Rs. 2,000/-

4. Transport /Traveling charges Rs. 5,000/-

5. Telephone Bills Rs. 500/-

6. Miscellaneous Expenses Rs. 2,000/-

Total: Rs. 13,500/-

(viii) Total Recurring expenses (per month):

i. Staff & Labour Rs. 52,800/-

ii. Raw Material Rs. 1,16,600/-

iii. Utilities Rs. 12,000/-

iv. Other contingent expenses Rs. 13,500/-

Total: Rs. 1,94,900/-

(ix) Total Working Capital for 3 months: 1,94,900 X 3 = Rs. 5,84,700/-

TOTAL CAPITAL INVESTMENT:

1. Machinery & Equipment Rs. 2,20,300/-

2. Working Capital for 3 months Rs. 5,84,700/-

Total: Rs. 8,05,000/-

MACHINERY UTILIZATIONS:

Capacity utilization of plant and machinery is considered as 75% of installed capacity.

However, this can be improved to 80% during 3rd year of production.
FINANCIAL ASPECTS:

(1) Cost of Production (Per Annum)

1. Recurring Expenses Rs. 23,38,800/-

2. Depreciation on Machinery @ 10% Rs. 14,830/-

3. Depreciation on Office Furniture & other Rs. 6,000/-

fixed assets @ 20%
4. Interest on Total Investment @ 12% Rs. 72,000/-

Total: Rs. 24,31,630/-

(2) Turn Over (per year) by Sales

Products Quantity Rate/Pc. (Rs.) Value (Rs.)

(Nos.)

Gents Shirts 1,344 1,500/- 20,16000/-

Gents Trousers 672 2,000/- 13,44,000/-

Total 33,60,000/-

(3) Net Profit (per year)

(Before Income Tax)

Sales Value (-) Cost of Production

33,60,000/- (-) 24,31,630/- Rs. 9,28,370/-

(4) Net Profit Ratio:

Net profit X 100 9,28,370X 100 27.63%

Turn Over/Annum 33,60,000

(5) Rate of Return on Investment:

(Net Profit/Total Capital Investment)
Annual Profit X 100 9,28,370X 100
Total Capital 8,05,000 = 115.32%
Investment
(6) Break Even Point/Analysis:

Fixed Cost (Per Annum):

1. Depreciation Rs. 20,830/-

2. Interest on Capital Investment Rs. 72,000/-

3. Wages of Staff & Labour Rs. 1,94,900/-

4. Other contingent expenses Rs. 10,000/-

Total Fixed Cost: Rs. 2,97,730/-

Break Even Point:

Fixed Cost X 100 2,97,730/- X 100

Fixed Cost + Annual 12,26,100/- = 24.28%
Profit
Process flow chart –

Fabric + Buttons + lasses

Check fabric quality

Cut fabric

Stitch in the machine

Packing

Deliver to customer

Loan and funding –

Loan and funding is the major part of any business. For my start up I am to purchase
stitching machines and fabric and have to buy stitching machine. Marketing is the major work
that every business has to do that takes money a lot and courier cost, lasses and buttons and
packing there are many thing that takes money.
I need only 6 lacks amount of money through loan. It would be term loan for Rs.3,
60,000 (60% of total loan) and Rs. 2,40,000(40% of total loan) to operate business for a
limited investment and generate revenue. My business is eligible for 25% subsidy of the net
amount of loan.

GST Criteria –
Knitted apparel and clothing fall under chapter 61 of the HSN code. Apparel
and clothing not knitted falls under chapter 62 of the HSN code. Under both categories any
piece of apparel or clothing would be taxed at 5 % GST if the taxable value of the goods
does not exceed Rs. 1000 per piece. All types of apparel and clothing of sale value exceeding
Rs. 1000 per piece would be taxed at 12% GST.
Conclusion –
After Corona virus effect people avoid to go outside for shopping. This is the best time
for e commerce start ups. Khadi is the great fabric .It is eco friendly and handmade fabric.
Clothes are the basic need of every human and in this digital era we can provide an effective
option of all fashion shoppers online and we can recreate the glory of Khadi fabric.
Khadi is not only a fabric but it is an emotion that brings whole country together. We have all
the things like marketing strategies, a business mind, Management skills and confidence to
understand consumer behaviour and provide a good customer experience.

THANKING YOU...