Name and Contact details of client:
Thabo B. Direko 3 T. Ndanda St, Joeslovo Mossel Bay 6500
Cell: 073 162 5943
Description of the business Edit
What exactly is it that is going to be sold or done?
Make of swat and pegs bags, bottle bags, napkin bags and handbags. Have experience in sewing for a production line to make swab bags (bag to pack swab's in and hang in and around your house and can also be used to put pegs in.
What skills are needed to do this? Where is this taught and how much will it cost?
Experience in sewing and dressmaking designs. The idea is to make the above bags on h home "production line" and establish a sales force to sell all the items on a commission basis, this using the sales force to move the items for the "factory."
What tools or equipment are needed? Where can they be bought, and how much will they cost?
I have my own sewing machine and equipment but I would need: Printed material: R6, 00 per meter @ lekka Lap Mossel Bay I will also get some scissors, needless etc. at above mention shop. I need: stock of R400.00 (material, cotton, extras) [R300 + R100] Marketing expenses R200.00.Extra cost for transport to buy and sell my goods R200.00.
How much space is needed to work from?
Enough working space is needed.
Where will the space be found, and how much will it cost to rent?
I will work from my house, no rent will be paid. Electricity R100 Telephone R50
What sort of people will buy the product? Who are they and where do they live?
Most people in the community and shop owners Tourist and other I will look for shops in town that can keep my items in their shops and sell it on my behalf, they will receive a percentage of the sale.
How much and how often will they buy? Will they come to the shop or will it be necessary to deliver?
Throughout the year, they could come to the shop and I will also go the clients and businesses to market my products
Upstream Businesses Edit
A list of businesses and ideas that provide the services and products that this business needs.
- Lekka Lap Mossel Bay
- Brenners taxi's
Downstream Businesses Edit
A list of businesses and ideas that this business could provide products for.
- Private persons
- Tourist and other
What major competitors will attract clients' spending away from the business products?
In my area I would be the only marketer for my product so there isn't any direct competitors at this moment in time but however there are people who do sewing and who could become my competition in the future.
What prices and products do these companies have?
What makes them popular / unpopular?
What do they do to attract customers? Specials? Interesting marketing / advertising?
Which of the competitors stand out as being particularly good at what they do?
What can be done to stand out against them? What can be done that is more exciting / more interesting?
I will make sure my quality is excellent and the prices are good, good value for their money.
Marketing the business to clients Edit
What sort of people will buy the products and how important is product consistency to them (e.g. must every loaf of bread be identical)?
I make creative and practical bags; everyone of the community could use my product for either private or functions.
How seasonal or fashion-dependent are their buying habits (do they buy only in summer, only over Christmas, etc.)?
Throughout the year
Do the clients want the products to be the cheapest or the best (low price / low quality or high price / high quality)?
They want good quality products with fairly reasonable prices
How do the clients decide where to buy the products? What sorts of advertising / promotions attract their interest?
Advertising must be done, it is important to keep your business in the spot light. I will print pamphlets and leave them at clients homes also I will go from door-to-door using door-to-door salesman. I will go to shops and leave my item there for their clients to buy.
Do the clients want the same things sold in the same way, or do they want things to change all the time?
In my particular business change will be good because it has to stay in fashion. But the quality should be of very much importance.
What can be done to attract the first clients (the most important and most difficult to get)? How much will it cost?
Specials and competisions to win free bags, good quality and beautiful bags would attract clients. They will cost R35.00 (special offer). I will try to get orders before making to many items. Go from door-to-door with a few examples.
The business inputs and outputs Edit
List all of the inputs (products that are required to produce the products):
Material, cotton, sponge, needles, sewing machine etc.
List all the suppliers for the inputs and their addresses telephone numbers, and sales terms (cash, 30 days, etc.):
Bernina, Lekka Lap Mossel Bay, Game etc.
List all of your outputs (products created by your business):
Swap bags, pag bags, bottle bags, handbags etc.
What sort of prices can be charged and how much profit will can be made on each item (a rough estimate)?
Cost of making: R11, 99 Selling Price: R35, 00 Profit: R23, 00 per bag The average cost to make one bag is R12.00. I will sell it for R35.00 to other sales people i.e. this is the factory price. If they take 10 or more bags the price is only R30.00. They can sell it for between R45.00 and R55.00 each. A plus/minus 30% profit for them.
Do the outputs have a shelf life? Must they be sold within a specified time limit before they go off / can't be sold? Which ones?
No, all finished products would be placed on shelves and sold
Setting up the business Edit
List everything that needs to be done to prepare the business to be ready (list everything needed to have as well, both equipment and stock):
I need to get the correct equipment for example: Work table, ironing board and iron, patterns, material, scissors etc. Do my final designs. Buy raw material, make products and get sales people to sell my products.
How long will it take to get all of these things and how much will they cost to get?
Ten days, I've already got the equipment, the material will cost me R300 plus R100(other)
List all the fixed costs to be paid every month even if nothing is sold (things like rent, electricity, telephone, staff wages):'
Telephone: R50 Electricity: R100 Transport: R100
Total amount for fixed costs: R250
How many staff will be needed and how much will each of them be paid (wages must be included in the fixed costs above)?
None at the initial stage, but later I would need about two helpers, they would be paid R10 per bag finished. I will find door-to-door or "street" sales-people who can sell my items on commission. I will motivate them and see what I can do to make them sell more.
What training will they need, how long will it take and how much will it cost?
I will teach them some sewing skills and give them a contract to work for me. Selling skills will be a great advantage.
The manufacturing or production process Edit
What possible problems may happen during each step of the manufacturing process?
Stress, uncomfortable working conditions, damaged equipment
Step-by-step instructions on the manufacturing process:
Arrange all equipment ready. Have all the material thats needed. Have the correct pattern/designs. Pin the material with the pattern. Cut the materail according to the pattern. Sew the material together. Apply safety precautions. Iron when sewing is done. Pack it neatly. Get to sales people. Sell and collect cash.
Allocate each of the manufacturing steps to a process and a process to a staff member:
Arrange safe work conditions for the staff (if any) See if he/she has right measurements. Monitor his sewing skill. Guide him for better quality.
What possible problems may happen during each step of the manufacturing process?
Mess up the material by cutting without patterns,ect. Bad working conditions. Damaged equipment. Bad quality.
What solutions can be identified for these problems? How much will they cost and how long will they take to fix?
Report all damages in time. Get all problems known and attend to them Do proper quality control.
What is the maintenance program for all the equipment?
Take all the machinery to qualified technicians and service all equipment regularly.
What safety requirements are important for production?
Follow safety standards
How will quality control and client feedback be handled?
Quality machinery, material and work would ensure no bad feedback but if accured it would be dealt with accordingly. I will deal with this personally by speaking to clients and sales people.
Costing and bookkeeping Edit
How many of each of the stock items can reasonably be sold each day (and month)?
200 bags a month = R4 000.00 p/month profit for my factory. 10 bags a day can be sold at R20 per bag profit = R200 p/d. 2 sales people who sell 5 bags each per day will receive plus/minut R75 p/day or R375 p/week at R15 markup per bag.
Will sales volumes be a similar number of each item each month, or is there seasonal variation (cold months, hot, or festivals)?'
Yes, I need to increase my sales force all the time and replace slow sales people with new sales people. I need to keep them motivated all the time.
What sort of pricing strategy will be chosen (cheapest or best)?
The best, good quality and great value. Example: R12.00 cost, R35.00 factory price, R45.00 public pay, R10.00 Commissions earned. Cost x 3 (factory price)
What profit margin will be chosen for the products?
Fair profit margin cost x 3 R35.00
Write down the cost prices plus the margin for each stock item you will sell, and the selling price
An average cost = R12.00 Factory sells for = R30.00 - R25.00 Sell to public for = R45.00 - R55.00 Sales people or shop received 30 plus % commissions.
Is this competitive? Will customers pay this much? Do the margins need to be adjusted? By how much?
Yes, Good markup and great value.
Now, set a target. How many items for each product need to be sold on a daily (and monthly) basis to be profitable?
First month target 5 per day (20 days per month) 2nd month target 10 per day (20 days per month) 3rd month target 15 per day. Look for a sales-force of 3-5 people.
Set out the products, costs, margins and selling prices:
Cost price - Peg bags: R11, 99 Selling Price: R35, 00 Cost price - Swat bags: R17, 00 Selling Price: R35, 00
Total per Month
= R4 000
What trends are included in the projections?
Start with low target of R2 500.00 P/M Spent money one recruiting a good sales force (R500 p/m) Own salary only from 3rd month. Made provision to replace equipment or service equipment Under "other" cost of R300 is also equipment maintanace costs. Raw material expences increase as production/sales increase. Target is to make recruiting of sales force an ongoing practise as the sales force is the core of the business.
Running the business Edit
What is the process for running the business on a typical day? Who will be responsible for each step? Link this back to the production process.
Buy raw material, make the bags and get them to the sales force. Recruit new sales people every month and do quality control.
Who will act as backup should the person responsible not be there? What do they need to act as backup?
I will do everyting myself in the beginning until help is needed.
What weekly processes need to be performed? Who is responsible, who is backup and what tools are required?
Same as above.
What monthly processes need to be performed? Who is responsible, who is backup and what tools are required?
See page 23 also. Check sales against target. Motivate sales force Try to open new markets. Bigger area i.e. George, Knysna, ect. Market resistance, is there any?
What is the schedule for training and motivating staff?
Weekly "Power Hour's" for sales-force to keep them motivated and help them to become better sales people. I will look for someone who can help me with good motivation.
What processes are required for maintenance and new product creation? Who is responsible and what tools do they need?
Listen to your clients and sales-force. What do our clients want? Ask them and ask the sales-force.
Before beginning Edit
What major laws concern the business, and which government departments should be called to keep up to date (list phone numbers)?
Related articles Edit
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