PROJECT REPORT

Of

BOUTIQUE

(Women Designer Wear)

PURPOSE OF THE DOCUMENT

This particular pre-feasibility is regarding Boutique(Women Designer Wear)

The objective of the pre-feasibility report is primarily to facilitate potential entrepreneurs in

project identification for investment and in order to serve his objective; the document covers various
aspects of the project concept development, start-up, marketing, finance and management.

[We can modify the project capacity and project cost as per your requirement. We can also
prepare project report on any subject as per your requirement.]

Lucknow Office: Sidhivinayak Building ,

27/1/B, Gokhlley Marg, Lucknow-226001

Delhi Office : Multi Disciplinary Training

Centre, Gandhi Darshan Rajghat,
New Delhi 110002

Email : [email protected]
Contact : +91 7526000333, 444, 555
 PROJECT REPORT

BOUTIQUE

(WOMEN DESIGNER WEAR)

INTRODUCTION
This pre‐feasibility study provides information on key facets of starting a Boutique
business for Women Designer Wear. Growing number of boutiques have become an
emblem of successful clothes business in India. Most people especially women prefer
them over ordinary garment brands. There has been a mushroom growth in women
designer wear boutiques since the last decade as they offer versatility and sophistication.
This trend is not confined to metropolis alone but has also spread to small cities and
towns. The rise is attributed to a growing middle class, exposure to media, entertainment,
movies, internet and also to a fleet of qualified fashion designers graduating from fashion
schools every year. Aspiring fashion graduates or potential entrepreneurs may find this
growing sector a good prospect to capitalize on their potential, talent and market
opportunity. In order to facilitate the potential investors, this document provides the basic
information regarding business operations of apparel designing, manufacturing,
marketing and selling of women wear in India.

20
Production Process Flow

The process of converting fabric into designer wear garments mainly follows the below
mentioned sequence:

Purchasing
Design Pattern Making
Raw Material

Stitching Cutting Embroidery

Presentation / Market /
Finishing
Display Clientele

Installed & Operational Capacities

The boutique business’s installed capacity will largely depend on the market size it will
operate in and the potential clientele. On average, a designer can draw / design 300
designs per annum from which around 280 designs are selected on average
The pre‐feasibility study is based on six (6) machines (single needle), two (2) over‐lock
machines, one (1) embroidery machine, with an operational capacity of manufacturing
6000 dresses per annum. However, capacity utilization during first year of operation is
assumed at 60%, Capacity utilization growth rate of 10% is considered for subsequently
years. This production and sales capacity is estimated to be economically viable and
justifies the capital as well as operational costs of the project.
Breakup of the total number of dresses will be as follows:

Total designs selected by Designer 280

No of size in each design 4
No of dresses in each size 4
Total readymade dresses 4,480
Made to measure dresses 1,520
Total Dresses 6,000

20
CRITICAL FACTORS

Following are the factors critical for the success of this business venture;

 Selection of a good location for the outlet.

 Ability to produce / acquire unique designs and safe guarding such design from
piracy.
 Selection of affordable and quality raw materials i.e. fabric, accessories, etc.
 Emphasis on quality i.e. stitching and finishing, appropriate labelling, display
and packaging.
 Marketing and promotion through various channels i.e. catalogues / pamphlets,
outdoor advertisement, hoardings / flex signs, TV & cable ads, fashion shows,
participation in exhibitions, promotion through social media (Facebook etc.).
 Right product mix, proper inventory management, emphasis on customer
services.
 Employing and retaining skilled labour.

 Higher return on investment and a steady growth of business is expected with

the entrepreneur having some prior experience in the related field of business.

GEOGRAPHICAL POTENTIAL FOR INVESTMENT

The recommended location for setting up a boutique business will be a posh or semi‐
posh area of a metropolitan city across India that can offer easy access of customers
to the outlet. It is further recommended that the proposed location should be taken on
rent.
POTENTIAL TARGET MARKETS

The potential target market for the Designer’s Dresses would be females of age group,
14 years and above, belonging to middle and upper middle-income family groups who
generally prefer to buy the dresses with unique designs. The middle and upper-middle
family income groups dominate the overall urban population in India. This phenomenon
provides an ample opportunity for the investment in this sector. In addition to the
domestic market there is a good potential for exports of Indian dresses as there is a
large population of India expatriates in USA,UAE,UK,Canada etc

PROJECT COST SUMMARY

A detailed financial model has been developed to analyse the commercial viability of
Boutique (Women Designer Wear). Various costs and revenues related assumptions
along with results of the analysis are outlined in this section.
The projected Income Statement, Cash Flow Statement and Balance Sheet are also
attached as annexure.

20
 PROJECT AT A GLANCE

1 Name of the Entreprenuer XXXXXXX

2 Constitution (legal Status) X

: XXXXXX

3 Father's/Spouce's Name XXXXXXXX

4 Unit Address : XXXXXXXX

Taluk/Block:
District : XXXXX
Pin: XXXXX State: XXXXX
E-Mail : XXXXX
Mobile XXXXX

5 Product and By Product : Boutique(Women's Designer wear)

6 Name of the project / business activity proposed B

: outique(Women's Designer wear)

7 Cost of Project : Rs25.00 lac

8 Means of Finance
Term Loan Rs.11.57 Lacs
KVIC Margin Money - As per Project Eligibility
Own Capital Rs.1.99 Lacs
Working Capital Rs.6.37 Lacs

9 Debt Service Coverage Ratio : 7.60

10 Pay Back Period : 5 Years

11 Project Implementation Period : 6 Months

12 Break Even Point : 32%

13 Employment : 13 Persons

14 Power Requirement : 8.00 HP

15 Major Raw materials : Cloth material and accessories

16 Estimated Annual Sales Turnover : 126.58 Lacs

16 Detailed Cost of Project & Means of Finance

COST OF PROJECT (Rs. In Lacs)

Particulars Amount
Land Rented/Owned
Building & Civil Work (2500 Sq ft) 4.00
Plant & Machinery 6.68
Furniture & Fixtures 1.50
Pre-operative Expenses 0.68
Working Capital Requirement 7.08
Total 19.94

MEANS OF FINANCE
Particulars Amount

Own Contribution @10% 1.99

Term Loan 11.57

Workign Capital Finance 6.37

Total 19.94

General Special
Beneficiary's Margin Monery 10% 5%
(% of Project Cost)
PLANT & MACHINERY

Single Needle Lock Stitching Machine 6 60,000 360,000

Over Lock Machine 2 45,000 90,000
Embroidery Machine 1 75,000 75,000
Generator for Workshop 6 KW 1 75,000 75,000
Generator for Outlet (2.5 KVA) 1 40,000 40,000
Scissors 12 1000 12,000
Embroidery Frame Set (4 to 5 Pieces) 1 10,000 10,000
Chalks (Pack) 5 150 750
Cutting Scales and Measuring Scales LS 5250
Total 668,000
PROJECTED BALANCE SHEET

PARTICULARS IST YEAR IIND YEAR IIIRD YEAR IVTH YEAR VTH YEAR

SOURCES OF FUND

Capital Account 1.99 1.99 1.99 1.99 1.99

Retained Profit 12.56 26.27 41.54 59.75 80.70

Term Loan 11.57 8.68 5.79 2.89 1.45

Cash Credit 6.35 6.35 6.35 6.35 6.35
Sundry Creditors 6.30 7.35 8.40 9.45 10.50
Provisions & Other Liab 0.36 0.40 0.44 0.48 0.53

TOTAL : 39.14 51.04 64.51 80.91 101.52

APPLICATION OF FUND

Fixed Assets ( Gross) 12.18 12.18 12.18 12.18 12.18

Gross Dep. 1.48 2.83 4.01 5.03 5.92
Net Fixed Assets 10.70 9.35 8.17 7.15 6.26

Current Assets
Sundry Debtors 8.86 10.55 12.06 13.57 15.08
Stock in Hand 4.52 8.07 9.23 10.38 11.53

Cash and Bank 12.56 20.32 32.03 46.49 64.98

Deposits & Advances 2.50 2.75 3.03 3.33 3.66

TOTAL : 39.14 51.04 64.51 80.91 101.52

- - - - -
PROJECTED PROFITABILITY STATEMENT

PARTICULARS IST YEAR IIND YEAR IIIRD YEAR IVTH YEAR VTH YEAR

A) SALES
Gross Sale 126.58 150.70 172.30 193.90 215.50

Total (A) 126.58 150.70 172.30 193.90 215.50

B) COST OF SALES

Raw Mateiral Consumed 90.00 105.00 120.00 135.00 150.00

Elecricity Expenses 2.84 3.31 3.79 4.26 4.73
Repair & Maintenance - 1.51 1.72 1.94 2.15
Labour & Wages 13.20 14.52 15.97 17.57 19.33
Depriciation 1.48 1.35 1.18 1.02 0.89
Consumables and Other Expenses 2.53 3.01 3.45 3.88 4.31
Cost of Production 110.05 128.71 146.10 163.67 181.41

Add: Opening Stock /WIP - 2.42 2.82 3.23 3.63

Less: Closing Stock /WIP 2.42 2.82 3.23 3.63 4.03

Cost of Sales (B) 107.63 128.31 145.70 163.27 181.01

C) GROSS PROFIT (A-B) 18.95 22.39 26.60 30.63 34.48

15% 15% 15% 16% 16%
D) Bank Interest (Term Loan ) 0.98 1.04 0.71 0.37 0.06
Bank Interest ( C.C. Limit ) 0.64 0.64 0.64 0.64 0.64

E) Salary to Staff 2.24 2.47 2.72 2.99 3.29

F) Selling & Adm Expenses Exp. 2.53 3.01 3.45 3.88 4.31

TOTAL (D+E) 6.39 7.16 7.50 7.87 8.29

H) NET PROFIT 12.56 15.23 19.09 22.76 26.19

I) Taxation - 1.52 3.82 4.55 5.24

J) PROFIT (After Tax) 12.56 13.71 15.27 18.20 20.95

PROJECTED CASH FLOW STATEMENT

PARTICULARS IST YEAR IIND YEAR IIIRD YEARIVTH YEAR VTH YEAR

SOURCES OF FUND

Share Capital 1.99 -

Reserve & Surplus 12.56 15.23 19.09 22.76 26.19
Depriciation & Exp. W/off 1.48 1.35 1.18 1.02 0.89
Increase in Cash Credit 6.35 - - - -
Increase In Term Loan 11.57 - - - -
Increase in Creditors 6.30 1.05 1.05 1.05 1.05
Increase in Provisions 0.36 0.04 0.04 0.04 0.05

TOTAL : 40.61 17.67 21.36 24.87 28.18

APPLICATION OF FUND

Increase in Fixed Assets 12.18 - - - -

Increase in Stock 4.52 3.55 1.15 1.15 1.15
Increase in Debtors 8.86 1.69 1.51 1.51 1.51
Increase in Deposits & Adv 2.50 0.25 0.28 0.30 0.33
Repayment of Term Loan - 2.89 2.89 2.89 1.45
Taxation - 1.52 3.82 4.55 5.24

TOTAL : 28.06 9.91 9.65 10.41 9.68

Opening Cash & Bank Balance - 12.56 20.32 32.03 46.49

Add : Surplus 12.56 7.76 11.71 14.46 18.50

Closing Cash & Bank Balance 12.56 20.32 32.03 46.49 64.98
COMPUTATION OF MANUFACTURING OF Women Designer Wear

Items to be Manufactured Women Designer Wear

Manufacturing Capacity per day - 20 Dresses

No. of Working Hour 8
No of Shift per day 1
No of Working Days per month 25
No. of Working Day per annum 300
Total Production per Annum 6,000.00 Dresses

Year Capacity
Utilisation
Dresses
IST YEAR 60% 3,600
IIND YEAR 70% 4,200
IIIRD YEAR 80% 4,800
IVTH YEAR 90% 5,400
VTH YEAR 100% 6,000

COMPUTATION OF RAW MATERIAL

Item Name Quantity of Recovery Unit Rate of Total Cost

Raw Material of RM Per Annum (100%)

Cloth material other accessoroes and

packaging 100% 6,000.00 100% 2,500.00 150.00

Total (Rounded off in lacs) 150.00

Annual Consumption cost ( In Lacs) 150.00

Raw Material Consumed Capacity Amount (Rs.)

Utilisation

IST YEAR 60% 90.00

IIND YEAR 70% 105.00
IIIRD YEAR 80% 120.00
IVTH YEAR 90% 135.00
VTH YEAR 100% 150.00
COMPUTATION OF CLOSING STOCK & WORKING CAPITAL

PARTICULARS IST YEAR IIND YEAR IIIRD YEAR IVTH YEAR VTH YEAR

Finished Goods
(15 Days requirement) 2.42 2.82 3.23 3.63 4.03
Raw Material
(15 Days requirement) 2.10 5.25 6.00 6.75 7.50

Closing Stock 4.52 8.07 9.23 10.38 11.53

COMPUTATION OF WORKING CAPITAL REQUIREMENT

Particulars Total
Amount
Stock in Hand 4.52

Sundry Debtors 8.86

Total 13.38
Sundry Creditors 6.30

Working Capital Requirement 7.08

Margin 0.73

Working Capital Finance 6.35

BREAK UP OF LABOUR

Particulars Wages No of Total

Per Month Employees Salary

Master Tailor 12,500.00 2 25,000.00

Stitching Master/tailor 10,000.00 6 60,000.00
Design Asstt and purchaser 15,000.00 1 15,000.00

100,000.00
Add: 10% Fringe Benefit 10,000.00
Total Labour Cost Per Month - 110,000.00
Total Labour Cost for the year ( In Rs. Lakhs) 9.00 13.20

BREAK UP OF SALARY

Particulars Salary No of Total

Per Month Employees Salary
Supervisor 10,000.00 1 10,000.00
Sales Man 7,000.00 1 7,000.00
Accountant 8,000.00 1 8,000.00
Misc staff 15,000.00 1 15,000.00
Total Salary Per Month 17,000.00

Add: 10% Fringe Benefit 1,700.00

Total Salary for the month 18,700.00

Total Salary for the year ( In Rs. Lakhs) 4.00 2.24

COMPUTATION OF DEPRECIATION

Description Land Building/shed Plant & Furniture TOTAL

Machinery

Rate of Depreciation 10.00% 15.00% 10.00%

Opening Balance Leased - - - -
Addition - 4.00 6.68 1.50 12.18
- 4.00 6.68 1.50 12.18
Less : Depreciation - 0.40 1.00 0.08 1.48
WDV at end of Ist year - 3.60 5.68 1.43 10.70
Additions During The Year - - - - -
- 3.60 5.68 1.43 10.70
Less : Depreciation - 0.36 0.85 0.14 1.35
WDV at end of IInd Year - 3.24 4.83 1.28 9.35
Additions During The Year - - - - -
- 3.24 4.83 1.28 9.35
Less : Depreciation - 0.32 0.72 0.13 1.18
WDV at end of IIIrd year - 2.92 4.10 1.15 8.17
Additions During The Year - - - - -
- 2.92 4.10 1.15 8.17
Less : Depreciation - 0.29 0.62 0.12 1.02
WDV at end of IV year - 2.62 3.49 1.04 7.15
Additions During The Year - - - - -
- 2.62 3.49 1.04 7.15
Less : Depreciation - 0.26 0.52 0.10 0.89
WDV at end of Vth year - 2.36 2.96 0.93 6.26
REPAYMENT SCHEDULE OF TERM LOAN 11.5%

Year Particulars Amount Addition Total Interest Repayment Cl Balance

IST YEAR Opening Balance
Ist Quarter - 11.57 11.57 - - 11.57
Iind Quarter 11.57 - 11.57 0.33 - 11.57
IIIrd Quarter 11.57 - 11.57 0.33 0.72 10.85
Ivth Quarter 10.85 - 10.85 0.31 0.72 10.13
0.98 1.45
IIND YEAR Opening Balance
Ist Quarter 10.13 - 10.13 0.29 0.72 9.40
Iind Quarter 9.40 - 9.40 0.27 0.72 8.68
IIIrd Quarter 8.68 - 8.68 0.25 0.72 7.96
Ivth Quarter 7.96 7.96 0.23 0.72 7.23
1.04 2.89
IIIRD YEAR Opening Balance
Ist Quarter 7.23 - 7.23 0.21 0.72 6.51
Iind Quarter 6.51 - 6.51 0.19 0.72 5.79
IIIrd Quarter 5.79 - 5.79 0.17 0.72 5.06
Ivth Quarter 5.06 5.06 0.15 0.72 4.34
0.71 2.89
IVTH YEAR Opening Balance
Ist Quarter 4.34 - 4.34 0.12 0.72 3.62
Iind Quarter 3.62 - 3.62 0.10 0.72 2.89
IIIrd Quarter 2.89 - 2.89 0.08 0.72 2.17
Ivth Quarter 2.17 2.17 0.06 0.72 1.45
0.37 2.89
VTH YEAR Opening Balance
Ist Quarter 1.45 - 1.45 0.04 0.72 0.72

Iind Quarter 0.72 - 0.72 0.02 0.72 - 0.00

IIIrd Quarter - 0.00 - - 0.00 - 0.00 - - 0.00
Ivth Quarter - 0.00 - 0.00 - 0.00 - - 0.00
0.06 1.45
CALCULATION OF D.S.C.R

PARTICULARS IST YEAR IIND YEAR IIIRD YEAR IVTH YEAR VTH YEAR

CASH ACCRUALS 14.04 15.06 16.45 19.23 21.84

Interest on Term Loan 0.98 1.04 0.71 0.37 0.06

Total 15.01 16.10 17.16 19.60 21.91

REPAYMENT
Instalment of Term Loan 2.89 2.89 2.89 1.45 1.45
Interest on Term Loan 0.98 1.04 0.71 0.37 0.06

Total 3.87 3.93 3.60 1.82 1.51

DEBT SERVICE COVERAGE RATIO 3.88 4.09 4.76 10.76 14.52

AVERAGE D.S.C.R. 7.60

COMPUTATION OF SALE
Particulars IST YEAR IIND YEAR IIIRD YEAR IVTH YEAR VTH YEAR
Op Stock - 84 98 112 126
Production 3,600 4,200 4,800 5,400 6,000
3,600 4,284 4,898 5,512 6,126
Less : Closing Stock 84 98 112 126 140
Net Sale 3,516 4,186 4,786 5,386 5,986
Sale Price per dress 3,600.00 3,600.00 3,600.00 3,600.00 3,600.00
Sale (in Lacs) 126.58 150.70 172.30 193.90 215.50
COMPUTATION OF ELECTRICITY
(A) POWER CONNECTION

Total Working Hour per day Hours 8

Electric Load Required 8
Load Factor 0.7460
Electricity Charges per unit 8.00
Total Working Days 300
Electricity Charges ( 8 Hrs Per day ) 114,585.60

Add : Minimim Charges (@ 10%)

(B) D.G. SET

No. of Working Days 300 days
No of Working Hours 2 Hour per day
Total no of Hour 600
Diesel Consumption per Hour 8
Total Consumption of Diesel 4,800
Cost of Diesel 65.00 Rs. /Ltr
Total cost of Diesel 3.12
Add : Lube Cost @15% 0.47
Total 3.59

Total cost of Power & Fuel at 100% 4.73

Year Capacity Amount

(in Lacs)

IST YEAR 60% 2.84

IIND YEAR 70% 3.31
IIIRD YEAR 80% 3.79
IVTH YEAR 90% 4.26
VTH YEAR 100% 4.73
BREAK EVEN POINT ANALYSIS

Year I II III IV V

Net Sales & Other Income 126.58 150.70 172.30 193.90 215.50
Less : Op. WIP Goods - 2.42 2.82 3.23 3.63
Add : Cl. WIP Goods 2.42 2.82 3.23 3.63 4.03

Total Sales 129.00 151.10 172.70 194.30 215.90

Variable & Semi Variable Exp.

Raw Material & Tax 90.00 105.00 120.00 135.00 150.00

Electricity Exp/Coal Consumption at 85% 2.41 2.82 3.22 3.62 4.02
Manufacturing Expenses 80% 2.03 3.62 4.14 4.65 5.17
Wages & Salary at 60% 9.27 10.19 11.21 12.33 13.57
Selling & adminstrative Expenses 80% 2.03 2.41 2.76 3.10 3.45
Intt. On Working Capital Loan 0.64 0.64 0.64 0.64 0.64
Total Variable & Semi Variable Exp 106.37 124.67 141.96 159.35 176.85

Contribution 22.63 26.43 30.74 34.95 39.05

Fixed & Semi Fixed Expenses

Manufacturing Expenses 20% 0.51 0.90 1.03 1.16 1.29

Electricity Exp/Coal Consumption at 15% 0.43 0.50 0.57 0.64 0.71
Wages & Salary at 40% 6.18 6.80 7.47 8.22 9.04
Interest on Term Loan 0.98 1.04 0.71 0.37 0.06
Depreciation 1.48 1.35 1.18 1.02 0.89
Selling & adminstrative Expenses 20% 0.51 0.60 0.69 0.78 0.86
Total Fixed Expenses 10.07 11.19 11.65 12.20 12.86

Capacity Utilization 75% 80% 85% 90% 95%

OPERATING PROFIT 12.56 15.23 19.09 22.76 26.19
BREAK EVEN POINT 33% 34% 32% 31% 31%
BREAK EVEN SALES 57.41 64.00 65.44 67.80 71.10
 DISCLAIMER

The views expressed in this Project Report are advisory in nature. SAMADHAN assume no
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contained in Project report is for educational purpose and reflect the views of the industry
which are drawn from various research material sources from internet, experts, suppliers and
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to case basis considering specific requirement of the project, capacity and type of plant and
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