Boutique & factory proposal

1. DESIGNER’S BOTIQUE

2. DESIGNER’S BOTIQUE
TABLE OF CONTENTS
 Letter of Transmittal
 Acknowledgement
 Project Brief
 Key Assumptions
 Depreciation and Amortization Schedule
 IncomeStatement
 Balance Sheet
 Cash Flow
 Reference

3. DESIGNER’S BOTIQUE
PROJECT BRIEF
Clothing is a beautiful visual demonstration of the social and
emotional needs of people wearing it. It also portrays in a clearly understood
visual manner, what people of different cultures and styles want socially.
Fashion, through times, has gone through so many rapid changes and bizarre
extremes that it has examples of nearly every kind of clothing function. However,
in a boutique business, the specifications and descriptions of the designs and
clothes are so general that they can fit more than one costume, which actually
are quite different in nature from each other and this is solely dependent on the
taste of the people. The range of Indian dresses is remarkably wide, according to
the vast cultures, geographical differences, purchasing capacities, influence of
the western culture, and bewildering diversities of the ethnic groups. One has,
therefore, to sift and isolate, and then relate and bring together, the ideas for
creating various designs, which can fit in the context of the fashion in vogue and
the culture in practice.
In reference to India, the Boutique business is quite in vogue but has yet
to be formalized. The market of this enterprise is quite scattered and
unorganized. There are a few major players in Boutique business and these
entrepreneurs have also taken an initiative based on their caprice and
experience in the field of fashion design. However, there is a massive potential in
this field, if one has the ability to design and market his/her products through
introducing innovative designs both in stitching as well as the fabric sector.
Furthermore, there is massive export potential in this sector, as the demand of
Indian dresses, especially in countries like UAE, USA, and UK, is massive due to
a high number of Indian expatriates who have settled in these countries. The
Boutique business can also be expanded into a more profitable venture by
providing stitching facilities to other boutiques, which do not own a stitching unit
or are lacking this facility.
PROPOSED CAPACITY
The Boutique business capacity is greatly dependent on the
market size and the number of potential clientele one can attract. Furthermore,
the women fashion wear garments will be designed through a contracted
designer and then stitched through in-house stitching unit. On average, a
designer can supply forty designs per month from which nearly twenty designs
are selected on average. Approximately, total capacity of the defined unit with 5
stitching machines (basis on 8-10 hours shift) will be about 500 dresses. The
breakup of the total number of dresses will be as follows:

4. DESIGNER’S BOTIQUE
Total designs selected by designer 20
Number of dresses in each design 5
Number of dresses in each size 5
Total Number of dresses 500
This production and sales capacity is estimated to be economically viable and
justifies the capital as well as operational costs of the project.
MARKETING
The marketing of boutique follows the conventional marketing pattern,
which is dependent on selection of venue of the outlet/s and the product mix
(designs and sizes), as well as the promotional strategy. Furthermore, the
boutique owner has to marketing techniques like:
 Usage of print media i.e. printing of posters and pamphlets as well as
displaying it and distributing it at proper places
 Advertisement in print media i.e. newspapers and fashion magazines,
etc.
 Usage of electronic media i.e. projection of the boutique in fashion
programs,
 advertisement on television, and provision of dresses to various television
plays
 and films.
 Event arrangement like fashion shows and photo-shoots.
 Usage of e-commerce i.e. launching of website and advertising on web.
Moreover, in order to keep abreast with the emerging trends and client tastes,
surveys regarding customer satisfaction/needs should be a regular feature of this
project. As this project of Boutique deals in designer women wear, therefore the
product mix will comprise of different styles of the female dresses in different
sizes. Whereas, the styles will be Salwar Kameez, Q-lots, Pajama Kameez,
Sarees, Party dresses, Casual Dresses and other prevalent dresses based on
the market trends. The average sale price per dress is assumed to be Rs.2100.
RAW MATERIAL
The raw material required for such sort of projects, would be as follows:
 Fabric: The fabric, which is the basic raw material requirement for a
boutique and a major component of the cost, can be obtained from
wholesale markets or from markets specializing in designer cloth at
Faisalabad, Karachi, and Lahore.
 Accessories: Accessories such as buttons, laces, zippers, elastics,
threads, needles, embroidery threads, glasses, etc. will be procured from
the local market at competitive rates.

5. DESIGNER’S BOTIQUE
 Labels, tags and packaging: Labels and tags can be obtained on order,
as these serve as an identity for the boutique and are useful for promotion.
PRODUCTION PROCESS FLOW:
The process for converting fabric in designer wear garments follows the
below mentioned sequence:
Design: The initial process starts from the designing phase. Various patterns of
clothing and the fashions in vogue, which also relate to the tastes of the
concerned clientele, are designed. The contracted designer as does this
he/she will provide the basic designs of which the fabric will be converted into
the designer wear garment. On average, a designer is supposed to provide 40
designs per month or 100-120 designs per season i.e. three months. From these
designs, approximately 50% of the designs are selected for further development
of clothes.
 Pattern Making/Cutting: Based on the designs selected, patterns for
cutting are developed and based on these patterns, fabric is cut,
embroidered, block printed, and processed accordingly 3 .
 Stitching: The cutting is then followed by stitching, which can either be
done by the in-house stitching unit or by outsourcing it 4 . Labels are also
attached to the apparels in this process.
 Finishing: The final phase is that of finishing, in which the garment will be
checked for quality control and will cleaned (if required) for final
presentation at the outlet. The garments will also be tagged for
identification of sizes, prices, addresses, handling instructions, etc.
 Presentation/Market: Once the designer wears garment is ready after
going through the above-mentioned process, it is presented at the
outlet/shop for sale to the clientele.
PREMISES FO R SHOP AND STITCHING UNIT
Recommended mode for renting a Shop
It is recommended that the proposed location for the said enterprise be a
posh area, where people have the buying capacity for women fashion wear. The
size of the shop should be at least 800 Sq.ft i.e. 20 feet front and 40 feet depth.
Furthermore, a small building will be required to establishing the stitching unit.
One viable option is to rent a small house for this purpose.
Designing Pattern making
/ cutting
Stitching
FinishingPresentationMarket / Clientele

6. DESIGNER’S BOTIQUE
The shop will be obtained on rental basis, and the rent estimation for such a shop
is Rs 30,000/month. According to the prevailing practice, six months rent as
advance and three months rent, as security would be required for renting the
shop. It is assumed that security is a one-time expenditure, whereas pre-paid
rent will only be given at the beginning, while establishing the boutique. After first
six months, rent will be paid on monthly basis.
The cost estimates for setting up the Boutique are as follows:
Security for renting shop/outlet (Rent @ Rs.30, 000per month. 3
months rent as security)
90000
Interior decoration (installing lighting, mannequins, hanging racks,
mirrors, glass panes, cash counter, and other furnitures, etc.)
300000
INFRASTRUCTURE REQUIREMENTS
The project will have the following infrastructure components:
INFRASTRUCTURE REQUIREMENTS Sq .fts
Main shop 600
Try room 36
Small store 100
Building for stitching unit 11 Village Palla
MACHINERY AND EQUIPMENTS
Single needle lock-stitch machine 4 20,000 80,000
Over-lock stitch machine 1 50,000 50,000
Accessories (Scissors, Cutting Board, Table, stools,
carpet, etc.)
50,000 50,000
Air-conditioner 1 30000 30000
Stereo System 1 23000 23000
Computer and Printer 1 35000 35000
Telephone & Fax 1 10000 10000
KEY SUCCESS FACTORS:
There are a number of factors, which contribute towards the success of a
project. In case of the project of Boutique, some of the Key Success Factors are
as follows:
 Proper care while producing dresses should be adopted.
 ent i.e. keeping minimum inventory as per
past sales trends.
 The dress designs should be according to the emerging trends and
fashions.
 Designing of dresses according to the consumer tastes/preferences
gathered through consumer surveys.

7. DESIGNER’S BOTIQUE
 e outlet should be properly selected and attractively
decorated so as to target the clientele effectively.

the customer satisfaction, which can increase the sales. Hence, excellent
customer service should be provided.
THREATS FOR THE BUSINESS
 Competitive Structure of the market- The market of the boutiques is
highly competitive, therefore if the entrepreneur is not well responsive to
the tastes and response of the clientele as well as the fashions in vogue
he/she may not be able to capitalize the opportunity properly.
 Pilferage in the designs-The designs, which a designer produce can be
sold by the staff even before that design is launched and that can pose
serious threat to the business because in the fashion industry it is the
uniqueness of the design which matters.
 Selection of the wrong venue- Selection of the wrong venue can be a
major hurdle in achieving the desired business objectives.
 Selection of the wrong design- If the designs are not selected according
to the tastes of the clientele then it can be detrimental for the business, so
the clientele taste should be properly tracked.
 Tax - Improper documentation of the sales receipt record may lead to
problems with Tax department.

8. DESIGNER’S BOTIQUE
KEY ASSUMPTIONS
PRODUCTION ASSUMPTIONS
Number of Stitching Machines 5
Production Capacity (No. of dresses per month) 500
Capacity Utilization for the first year (No. of dresses per month) 200
Self Production (% of total production) 60%
Dresses manufactured on CMT basis (% of total production) 40%
Monthly self production (Year 1) 120
Monthly Dresses manufactured on CMT basis (Year 1) 80
COST ASSUMPTIONS
Material & Fabrics 400
Accessories 25
Embroidery Cost 100
Direct Labor Cost 280
Direct Electricity Cost 20
Machine Maintenance Cost 4
Admin & Rent expenses & promotional expenses 446
Fixed electricity 30
Average unit cost per dress (Rs.) 1305
SALES ASSUMPTIONS:
No. of dresses sold per month (Year 1) 120
Average unit price per dress (Rs.) 2100
Average Monthly Sales through retail outlet (Rs.) 252000
No. Of dresses sold on CMT basis per month (Year). CMT
manufacturers are garments manufacturer, they are like the outsource
for the company, In boutiques such garments are also available.
80
Average unit price per dress on CMT basis (Rs.) 250
Average Monthly Sales through outsourcing (Rs.) 20000
Total Average Monthly Sales (Year 1) (Rs.) 272000
Sale growth rate (Units) 10%
Sale growth rate (price) 13.33%

9. DESIGNER’S BOTIQUE
OPERATING ASSUMPTIONS
Hours operational per day 8
Days operational per month (Production) 25
Days operational per month (Boutique) 25
CASH FLOW ASSUMPTIONS
Account Payable Cycle (Days) 10
Account Receivable Cycle (Days) 10
Raw Material Inventory (Days) 15
EXPENSE ASSUMPTIONS
Initial Promotional Expenses (Year 1) (%age of expected sales) 3%
Promotion Expenses after Year 1 (% of expected sales) 1.5%
Machine Maintenance per annum 10000
Direct Electricity per month (Year 1) 4000
Fixed Electricity per month (Year 1) 6000
Telephone and Internet charges (Year 1) 3000
Raw Material Price Growth rate 11%
Payroll growth rate 7%
Machine Maintenance growth rate 2%
Direct electricity growth rate 10%
Fixed electricity growth rate 10%
Rent growth rate 5%
Telephone and Internet charges growth rate 5%
Depreciation Method STRAIGHT
LINE

10. DESIGNER’S BOTIQUE
PROJECT COST
DECRIPTION COST (RS)
Machinery & equipment 378000
Furniture & Fixture (Interior Decoration) 300000
Security Deposits for Premises 90000
Pre-operating expenses
Salaries 98000
Promotional Expenses 97920
Total Capital Cost 881920
Working Capital
Raw material (Fabric & Accessories) 178800
Accounts Receivable 138800
Prepaid Rent (Boutique and Stitching Unit) 492000
Total Working capital 809600
Project Cost 1773520