BUSINESS IDEA FOR MAKING SCHOOL BAGS IN UGANDA

By: wmutenza0 comments

Introduction

The idea is premised on production and marketing of 20,800 bags per month which translates into 249,600 bags per year. The revenue potential is estimated at USD 41,600 per month which translates into USD 499,200 per year. The business has a good market demand throughout the year especially at the beginning of term. This kind of investment can cost about US 122,116 in the first trading year.

Production Process

The manufacturing process calls for skill in cutting the raw material, followed by stitching and fixing accessories before it is packed for dispatch. An internal lining is fixed to prevent easy tearing from the inside.

Capital Investment required in US$

Item Unit Qty @ Total
Industrial Sewing machine No. 2 2,650 5,300
Pair of scissors No. 5 6 30
Measuring tape No. 1 3 3
Delivery van No. 1 5,000 5,000
TC of Machinery       10,333

Production and Operating Costs in US$ Direct Materials, Supplies and Costs

Cost Item Units @/ day Qty/ day Prod. cost/ day Prod. Cost/ month Prod. Cost/ year
Tarpaulin Mtrs 1.3 100 125 3,250 39,000
Zips No. 0.3 800 200 5,200 62,400
Threads Bundles 1.5 3 5 130 1,560
Sub-total         9,737 116,844

General costs (Overheads)

Utilities (power) 150 1,800
(Utilities (water) 20 240
Packaging 50 600
Salaries 150 1,800
Renting 150 1,800
Depreciation (Assets write off) Expenses 215.27 2,583
Sub-total 735.27 8,823
Total Operating costs 9,315 125,667
  1. Production costs assumed are for 312 days per year with a daily capacity of 800 School bags.
  2. Depreciation (fixed assets write off) assumes 4 years life of assets write off at 25% per year for all assets.
  3. Direct costs include: materials, supplies and other costs that directly go into
  4. production of the product.

Product Costs and Price structure in US$

Item Qty/ day Qty /yr @ Prod. Cost / yr UPx TR
School bags 800 249,600 0.50 125,667 2 499,200

Profitability Analysis in US$

Profitability item per day per month per year
Revenue      
School bags 1,600 41,600 499,200
Less Prod & Operating Costs 402.77965 10,472 125,667
Profit 1,197 31,128 373,533

Market Analysis

With the growing numbers of school-and-college-going children, the demand for these bags is on the rise. Hence, there is a ready market for neatly stitched bags. The plant may also incorporate in other bags like transport bags. These are all easily marketable in Uganda.

Government Incentives Available

Government has reduced taxes on scholastic materials to boost the Education sector. In a bid to eradicate poverty, government is encouraging small scale businesses through PROSPERITY FOR ALL programme.

Suppliers of Plant and machinery

SENGA Sew Co Ltd, Plot 7 Luwum Street. P.O. Box 24901 Kampala Uganda.

Tel: 256-414-235832, +256-772-863857

Shoprite Lugogo Kampala

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