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PROJECT APPRAISAL Project appraisal means the assessment of a project in terms of its economic, social and financial liability. This makes it necessary to recognize the interrelationship of various aspects of a project. This exercise is critical as it calls for a multidimensional analysis of the project. Financial institutions carry out project appraisal to assess its creditworthiness before giving finance to a project. Methods of project appraisal Project is appraisal under the following contexts: •

Economic analysis

Financial analysis

Technical feasibility

Managerial competence and

Market analysis.

On the basis of these factors I am going for the project appraisal of my Business plan of ‘Rented Bridal Wear’.

ECONOMIC ANALYSIS I have analyzed the various factors such as Sales Forecast, monthly and yearly Profits which goes with the promising Business. Sales forecast Particulars

1st year

2nd year

3rd year

4th year

5th year

Gross receipt

144

216

312

420

600

Cost of sales

120

180

260

350

500

Gross profit

24

36

52

70

100

3

3

5

7

10

Expenses Salaries and wages


Utilities

0.6

0.7

1

1.4

2

Rent/lease

3.6

3.6

4.5

4.5

6

Office supplies

0.2

0.4

0.8

1.2

2

Telephone

0.4

0.6

1

1.4

2.5

Printing/photocopy 0.2

0.3

0.7

1

2

Misc. exp.

0.2

0.4

0.9

1.3

2

Advertising

3

4

6

9

13

Insurance

1.2

1.8

2.6

3.5

5

Transportation

1

2

3

4

6

Packaging

0.6

1

2

3

5

Bank charges

0.1

0.2

0.5

0.8

1.5

Interest on loan

3

3

3

3

3

Decoration

1

1.5

3

4

6

Total expenses

16.1

22.8

34

43.1

66

Net profit

5.9

13.2

18

26.9

34

As mention above sales and the profit return as per the plan support my Business Plan.

As my Business Plan is Garment related so procurement of the raw materials is not a tough task. Apparel segment is vast.

We targeted our sales volume in such that comparing with it the profit return it will be achievable.

Today the customer are more aware of the product which is more customized.

As our store will be located in the Mumbai so it acquire huge market. Awareness diminished the risk to operate this business.


OPERATIONS

LOCATION

:

NAVI MUMBAI

MANUFACTURERS AND SUPPLIERS: S R Brothers Product Category :

Advertising And Promotional Products, Documentation File, Folders, Sportswear, Sportswear And Access...

Products :

Accessories, Travel Pouches, Travel Wallets, Conference Folders, Brief...

Address :

204 / 205, Balarama Bandra - Kurla Complex, Bandra (e), Mumbai 400051. Maharashtra India Tel. No. : 91-22-26590267

Spice Islands Apparels Ltd. Product Category :

Apparels And Clothing, Sportswear, Sportswear And Accessories

Products :

Mens Shirts, Ladies Blouses And Tops, Childrenswear, Pyjamas, Boxer Sh...

Address :

125 - A Wing, Mittal Towers, Nariman Point,, Mumbai - 400021. Maharashtra


India Tel. No. : 91-22-2823128

Welspun India Ltd. Product Category :

Bedspreads & Coverlets, Dyes And Pigment, Fabrics, Fabrics, Woven, Sportswear, Sportswear And Acces...

Products :

Home Textiles - Terry Towels, Bed Sheets

Address :

B/9 Trade World Premises Kamala Mills Compound, Lower Parel, Mumbai - 400013. Maharashtra India Tel. No. : 91-22-66136000

Regalia Apparels Pvt. Ltd. Product Category :

Sportswear, Sportswear And Accessories

Address :

Gala No. 2, Hitex Industrial Estate S. V. Road, Dahisar (e), Mumbai 400068. Maharashtra India Tel. No. : 91-22-28954880

Samit International Inc. Product Category :

Apparels And Clothing, Knitwear, Leather Goods, Sportswear, Sportswear And Accessories, Yarns

Address :

112, Amir Industrial Estate Sun Mill Compound, Lower Parel, Mumbai - 400013. Maharashtra India Tel. No. : 91-22-24949060


Budget and finance Capital required

50 lacs

SecurityDeposit for office space

10 lacs

Rent in advance

3.6 lacs (Rs.30,000x12 months)

Furniture n fittings

5 lacs

Purchase of inventory

30 lacs

Misc exp.

1.4 lacs

Total capital required

50 lacs

Source of finance Owners capital

12.5 lacs

Bank loan

37.5 lacs

Total

50 lacs

Above mention are the basic financial details which will be going for the investment.

All the Assets, Capital working capitals has been planned to operate the business smoothly.

Adequate amount is allocated in different departments to start and proper execution of the Business plan.

Analyzing the above details it is concluded that it is fruitful to the business as faras Benefits are concern.


TECHNICAL FEASIBILITY •

For the proper execution of this business we require a list of items that I mention above. That is minimum requirement in Financial analysis.

From the computers to the software, websites etc.

All this facilities are easily available in hands.

We have selected the location for the store in Mumbai where customer can easily access there.

The product is a fashion symbol and lots of advanced Technology has been used for the up gradation.

MANAGERIAL COMPETENCE •

As I am holding the degree of the Master in Fashion Management so I am capable of manage the things. All the managerial skills I have developed through the courses offered by my institution.

The working staff and the employed that I am going to employed should have the minimum criteria to understand and work in the place.

Plan for the time to time training will has been executed.

A proper action plan is followed and executed with the concern of respective team members.

Best use of human resource we are going to utilized.

Employment is based on stage for selection so that we can get the best employee to work with.

MARKET ANALYSIS Target Market: Middle to Upper Middle class customers The business is supposed to operate in the selected part of the Mumbai in the beginning. As Mumbai is a Metropolitan city as well as economic capital and Fashion city of India, the interest and knowledge of the people about the brands and trends is very high. The disposable income of the people is also good which is a good sign and opportunity for starting new stores in that


locality. A result of market research done by me shows that the average customer of the target segment spends 25-30 thousand rupees annually on kids apparel and accessories. And also the frequency of visiting the stores is 6 times annually which is comparatively higher. The market of Mumbai is very attractive that’s why every companies are entering into this city. Age group

:

5-16 years old kids

Gender

:

Unisex

Store format preference

EOB'S (stand alone) 17% Dept. Stores 12% Malls 71%

EOB'S (stand alone) Dept. Stores Malls


Frequency of visiting stores

6 month or more 3 month 3% 24%

Every month 31%

Every month 2 month 3 month 6 month or more

2 month 42%

Medium of brand awareness Internet 3% television 1%

In store display In store display 11% Word of mouth 13%

Print Media 44% Attractive shop window display 28%

Word of mouth Attractive shop window display Print Media television Internet


Attributes preference while purchasing

Fabric/quality 17%

Design/Pattern 26%

Fabric/quality Fit/size Price

Brand 5% Convenience 6% Colors 15%

Colors

Fit/size 24%

Convenience Brand

Price 7%

Design/Pattern

No. of respondants

Monthly Income 45 40 35 30 25 20 15 10 5 0

39

36

Series1 11

12 2 <15000

15-30000

30-50000 Income(in Rs.)

50-100000

100000>


Annual spending on Kids wear

%age of response

30 24

25 20 15

20

19 15

Series1

11

10

6

5

35-40

40>

5 0 <15

15-20

20-25

25-30

30-35

Value in Rs.'000

Projected Cash Flow Our projected cash flow is outlined in the following chart and table. The table lists sales tax collected and paid out, as well as repayment of the loan we are seeking.


Important Assumptions I assume that the economic conditions will improve in the next two to three years. Therefore, business will be good in year one, but years two and years three. One, Two, Step! will be very successful. The table below outlines the projected balance sheet. While, as a retail store, we have no plans for long-term assets, we will have a healthy cash balance, growing over the next five years. We plan to pay off our loan within six years.

PROJECT APPRAISAL