Here are many factories that operate as a clothing manufacturer whether they provide women, men or children clothes. However, most of these factories operate based on traditional methods that need to be developed in order to attract traders. Hence, we have come up with an innovative idea of readymade clothes factory based on the most up-to-date techniques and scientific methods to satisfy all traders and help market their products effectively. In addition, highly experienced labours are needed to implement such modern techniques. We will show you how to conduct a feasibility study for a readymade clothes factory.
Any project’s feasibility study consists of 3 stages:
- Market Study
- Technical Study
- Financial Study
1- A market study is essentially about identifying the demand on the project’s future products, it includes:
A – Studying the products’ demand and supply factors.
B – Acknowledging the market’s structure, size, characteristics and procedures.
C – Analyzing the previous and current supply, whether it is imported or a local product, in addition to its sales volume.
D – Acknowledging the extent of prices stability and competitors’ marketing policies.
E – Defining the future marketing policies of your project.
2- Moving on to the technical study of your project, it consists of the following steps:
A – Studying the production process and the needed land space of such a process.
B – Identifying the project’s requirements of machines and equipment.
C – Identifying the project’s requirements of materials.
D – Defining the project’s requirements of energy.
E – Defining the project’s requirements of furniture and transportation.
F – Defining the project’s requirements of labours, supervisors, managers and the way they should be organised.
G – Defining the labours’ organisational structure.
H – Studying the environmental requirements.
I – Studying the licensing procedures.
3-A financial study of a project means setting up financial statements to be able to identify the amount of cash that a project needs. A financial study of a project includes:
A – Expected operation costs of a year.
B – A capital statement (Financial resources).
C – How would you pay loans and capital loans back?
D – Profits and losses.
E – The project’s cash flow.
A financial evaluation of a project is to identify the project’s capability of providing direct revenues that are compatible with its financial resources. The following are several objective criteria used in financial and economic evaluations of a project which could be helpful when conducting a feasibility study:
– Break-Even Analysis (BEA) is a method to identify the relation between revenues and costs to know the minimum production size that is required to meet costs (No profits or losses). This is an initial indicator to identify the extent of project profitability.
– Payback period is among the essential methods that concern investors to know when he can regain his money.
– Medium revenue average is based on calculating the percentage of the average annual net accounting profits after deducting consumption and taxes to the required investment size of the project.
– Net present value (NPV) of an investment refers to the difference between present value of the project’s internal cash flows and the present value of the project’s external cash flows.
– Profits analysis is the result of dividing internal cash flows’ present value on external cash flows’ present value. If the result turns to be more than 1, the project will be profitable and vice versa.
– Internal rate of revenue is among the most important parameters in the financial evaluation. It is represented in the average of having a project’s equal internal cash flows’ present value and external cash flows’ present value. In other words, an internal rate of revenue is the deduction rate in which net present value of a project equals zero.
There is a persistent need of establishing an up-to-date readymade clothes factory as it serves all the society’s level. Giving to the current fast technological advancement, we had to make use of such technology in an effective way that could benefit society. This factory would manufacture women, men and children clothes and would benefit the whole community.
Equipment and required materials:
– Work place: rent a flat and equip it with sewing machines, overlock sewing machine, buttons and buttonholes.
-Chairs and tables (finishing and packaging) light equipment (scissors and irons).
– Workers (tailors, labours and fitters).
– Manufacturing materials (clothes and threads).
– Marketing and advertising the project.
Work place:
A rented flat
Space= 100m
Price= $58 x 12 months
Total= $700
Wires, lamps and equipment cables= $56
Grand Total= $750
Machines:
Sewing machines
Quantity= 4
Price= $150
Total= $600
Overlock sewing machine
Quantity=1
Price= $300
Total= $300
Buttonholes machine
Quantity=1
Price= $350
Total= $350
Buttons machine
Quantity=1
Price= $350
Total= $350
Steam Iron
Quantity=1
Price= $170
Total= $170
Electric scissors
Quantity=1
Price= $170
Total= $170
Grand Total= $1940
Chairs and tables
Finishing and sorting tables
Quantity = 2
Price = $15
Total = $25
Cloth cutting table
Quantity = 1
Price = $60
Total = $60
Chairs
Quantity = 12
Price = $6
Total = $72
Grand total = $157
Light equipment:
Scissors
Scissors “7-inch
Quantity= 5
Price = $5
Total = $25
Scissors “12 inches
Quantity = 5
Price = $10
Total = $50
Finishing scissors
Quantity = 10
Price = $0.50
Total = $5
Electric Iron
Quantity = 2
Price = $20
Total = $40
Grand Total = $120
Grand total of equipment and manufacturing requirements= $1940 +$157 +$120 = $2217
Human resources:
Administration
Job Title: Fitter
Number: 1
Monthly salary: $225
Total: $225
Sewing
Job Title: Tailor
Number: 4 tailors
Monthly Salary: $135
Total: $540
Finishing
Job Title: Finishing personnel
Number: 4
Monthly Salary: $45
Total: $180
Labours
Job Title: Presser
Issue: 1
Monthly Salary: $70
Total: $70
Grand total of salaries
= $1015 per month
Advertising and licensing
Costs of advertising and marketing = $120
Cost of licensing = $230
Grand total= $350
per month
Total cost of the factory
Work place = $750
Costs of equipment
= $2115
Labours = $1015 x 12 = $12180 a year
Advertising and licensing = $350
Total cost = $750 + $2115 +$12180 +$350 = $15395
Manufacturing materials (1500 shirt)
Fabrics (1 shirt = 1.25 m)
Quantity = 1875m
Price = $2
Total = $3750
Collar fillers
Quantity = 150m
Price = $1
Total = $150
Marketing & advertising the project as per budget and marketing plan set & cooperating with local government export promotion centres.
