Introduction
Buckets are a household item in many homes mainly used to draw and store water and to wash clothes. They are however, used to carry other items as well. They are popular because of their durability and multipurpose use. They are quite common in rural areas, although urban dwellers use them too. The project idea has been developed to tap into the existing market for metallic buckets. The project estimates fixed capital of US$ 3,049, operating costs of US$ 226,410, generating revenue of 247,104 US$ in the first year of operation. The project’s profit margin is estimated at 8%.
Production Process
Buckets are manufactured out of galvanized iron sheets. It is cut into required sizes within conical shapes. These are then assembled and swaging as a main production process is done. A handle is made out of cut to size steel rod and fitted on to the body. Utmost precision is focused on the fixing of the bottom to the body to ensure it does not leak.
Capital Investment Requirements in US$
| Capital Investment Item | Units | Qty | @ | total |
|---|---|---|---|---|
| Shearing machine | No | 1 | 820 | 820 |
| Bending Machine | No | 1 | 522 | 522 |
| Hand operated circle cutting machine | No | 1 | 600 | 600 |
| Press Hand operated | No | 1 | 457 | 457 |
| Office furniture Fittings | No | – | – | 150 |
| Tool Kit & other tools | No | – | – | 500 |
| Total | 3,049 |
Production and Operating Costs Direct Materials, Supplies and Costs
| Cost Item | Units | @ | Qty/ day | Pdn Cost/ day | Pdn Cost/ month | Pdn Cost/ year |
|---|---|---|---|---|---|---|
| Direct Costs | ||||||
| Galvanized Iron sheet | Pcs | 55 | 12 | 660 | 17,160 | 205,920 |
| Steel Rods | Pcs | 52 | 0.5 | 26 | 676 | 8,112 |
| Rivets | Pcs | 0.3 | 22 | 5.5 | 143 | 1,716 |
| Sub-total | 692 | 17979 | 215748 | |||
General Costs (Overheads)
| Rent | 200 | 2,400 |
|---|---|---|
| Labour | 300 | 3,600 |
| Utilities | 175 | 2,100 |
| Cleaning and Toiletries | 50 | 600 |
| Miscellaneous | 100 | 1,200 |
| Depreciation | 64 | 762 |
| Sub-total | 889 | 10,662 |
| Total Operating Costs | 18,868 | 226,410 |
- Production costs assumed 312 days per year with daily capacity of producing 36 buckets.
- Depreciation (fixed asset write off) assumes 4-years life of assets written off at 25% per year for all assets.
- Direct costs include: materials, supplies and other costs that directly go into production of the product.
- Total monthly days assumed are 26-days.
- The valuation currency used is United States Dollars.
Market Analysis
Buckets and drums are common in schools and training institutions and places of communal gatherings like community centers.
Project Product Costs and Price Structure
| Item | Qty/day | Qty/yr | @ | Pdn Cost/ yr | UPx | Total Revenu |
|---|---|---|---|---|---|---|
| Buckets | 36 | 11,232 | 20 | 226,410 | 22 | 247,104 |
Profitability Analysis Table
| Profitability Item | Per day | Per Month | Per year |
|---|---|---|---|
| Revenue | 792 | 20,592 | 247,104 |
| Less: Production and Operating Costs | 726 | 18,868 | 226,410 |
| Profit | 66 | 1,724 | 20,694 |
Government Facilities and Incentives
The government has come out clean on the liberalization of the economy. There are a lot of incentives for those entrepreneurs who venture into manufacturing. They enjoy VAT deferment facilities and other tax benefits. Through organizations like Private Sector Foundation Uganda there are plenty of opportunities that accrue to the users of these available facilities including financial Subsidies.
Business Risk
This is associated with some risks like incurring losses thus need for employing better marketing strategies like Price, product, and people among others.
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