A Project Report on

“READYMADE GARMENT SHOP”

[Special Reference to Ladies Garment Shop]

A Project report submitted to the Sant Gadge Baba Amravati University, Amravati.
In Partial Fulfillment of the requirement for the Degree of “Master of Commerce”
Submitted By
Ku. Swapna Rambhau Gokhe

Prof. Dr. M. C. Dabre Prof. L. R. Sharma

(Project Guide) (Head of the Project Committee)

Dr. S. G. Chapke
(Principal)

The Berar General Education Society’s

Smt L. R. T. College of Commerce, Akola.
Recognized by Government of Maharashtra & Affiliated to Sant Gadge Baba Amravati
University, Amravati.
(Accredited With “B+” Grade by NAAC, Banglore)
2008 – 2009
 Smt. L. R. T. College of Commerce, Akola.

Certificate

This is to certify that, Ku. Swapna Rambhau Gokhe is a bonafide student of

M.Com. [Semester IV] of Smt. L. R. T. College of Commerce, Akola.

1. That the candidate has satisfactorily conducted the project work for not less
than one academic year and
2. That the project is result of the candidates own research work and is of
sufficiently high standard to warrant its presentation for examination.

Prof. Dr. M. C. Dabre Prof. L. R. Sharma

(Project Guide) (Head of the Project Committee)

Dr. S. G. Chapke
(Principal)
Place: Akola.
Date:

Smt. L. R. T. College of Commerce, Akola.

 Candidate’s Declaration

I hereby declare that the project repost entitled Readymade Garment Shop is the
result of my own research work for the degree of master of commerce and it has not
been submitted earlier by me to this or any other university.

Ku. Swapna Rambhau Gokhe

M. Com. Semester IV
Smt. L. R. T. College of Commerce, Akola.

Place: Akola.
Date:

Letter of Transmission
 This is certified that Ku. Swapna Rambhau Gokhe student of Smt. L. R. T.
College of Commerce, Akola, Studying in M. Com. [Semester IV], she has visited to
our Shreeji Kapad Kendra, Akola for getting all relevant information relating to her
project.

Shreeji Kapad Kendra Akola

Place: Akola
Date:
 Acknowledgement

Writing a project of this kind is very difficult job. But it could be completed
because of the help and support from many corners. It is my desire to mention my
fillings about support sources here.
Every research, in any field, needs proper guidance of experts and
knowledgeable person. I feel immense pleasure in expressing whole hearted thanks
towards my project guide Prof. Dr. M. C. Dabre for his outstanding guidance,
enthusiastic suggestions immensely valuable encouragement throughout the course of
the study. Without the pillars of his support and co-operation I could not have even
taken a single step towards completion of this project.
I would like to express my deepest sense of gratitude toward Principal, Dr. S.
G. Chapke and Prof. L. R. Sharma for their sincere help and constant encouragement.
And I am also thankful to Dr. S R. Baheti sir to provide me for library books and
magazines information.
I shall be failing in my duty if I don’t acknowledge enormous support and
assistance received from my family members throughout this endeavors. Their kind
blessings lead me to see these days of achievement and satisfaction.
I am also thankful to all my dear friends who motivated me in accomplishing
this project work.
Last but the foremost important I would like to thank God for sending so many
people in my life to help me.

Ku. Swapna Rambhau Gokhe

M. Com. Semester
IV Smt. L. R. T. College of
Commerce, Akola.
Place: Akola.
Date:
 INDEX

SR.
PARTICUL PAGE
NO.
AR NO.
CHAPTER 1 : INTRODUCTION
1.1 Introduction
1. 1.2 Selection of the Project 07 TO 15
1.3 Profile of the Subject
1.4 Importance of the Subject
CHAPTER 2 : PROJECT METHODOLOGY
2.1 Meaning of the Project
2.2 Methodology of the Project
2. 16 TO 19
2.3 Data Collection
2.4 Objectives of the Study
2.5 Limitations of the Study
CHAPTER 3 : PROJECT COST
3.1 Meaning of the Project Cost
3.2 Analysis of the Finance
3.3 Analysis of the Project
3. Cost [Essentials / 20 TO 32
Estimated]
3.4 Essentials for the Business Establishment
3.5 Capital Structure and Profit
3.6 Ratio Analysis
3.7 List of Suppliers

4. CONCLUSIONS AND SUGGESTIONS 33 TO 34

APPENDIX
A. Questionnaire
5. 35TO 37
B. Bibliography
C. Application Forms
 CHAPTER -I
INTRODUCTION
1.1 INTRODUCTION

As the technology advances each and every sector has been rapidly developed like a
Government Sector, Engineering Sector, etc. then how can the “READYMADE
GARMENT SHOP” become backward. Each and every person wants to look like a
hero and heroine. As the fashion takes place, they want to wear more fashionable
cloths.

In movies actor and actresses are wearing different types of dresses and sarries.
Every person wants to look like them. With the increase in fashion every person
want to wear that type of cloths. Some people purchase cloth material and visit at
the tailor shop for stitching the dresses they like. But it takes too much time.
Fashion is growing up day to day. Readymade Garment Shops are opened. People
are satisfied from Readymade Garment Shop and people also save their valuable
time. Readymade Garment Shop provides better design dresses to customers.

With the change in the trend in fashion market Readymade Garment have become
very popular. Most of the people used to wear Readymade Garment Shop have
become very popular. Most of the people used to wear Readymade Garment in case
of time saving activity. Especially ladies have taken very much interest in new
designs and fashionable garments.

New fashion designers made new trend designs to attract customers and mostly to
female customers. They like to wear new fashion cloths or new look of garment.
There are various types of dresses which are very reasonable to general or ordinary
people.

Readymade Garment Company like as Nain See Private Ltd., Saujnya Dresses,
Ashika Sarries and Dresses, Garden Dresses, Damini Sarries and Salwar Suit, etc.
makes garment very attractive and it gives it special effect to that garment or
dresses to be very attractive. There work of various types of stitches like “Kashmiri
Buta, Kunadan Work or Jardari Work is become very famous in new trend. There
are various other companies are also work to give better quality product.
In recent years many people are interested in wearing readymade cloths and
especially ladies have most interest in that type of cloths so when the researcher is
a lady it takes too
Much interest for the topic. So that researcher selected the subject Readymade
Garment Shop [Ladies Garment Shop] as the study of the project.

1.2 SELECTION OF THE PROJECT

The best topic for the research is one which arises from the researchers own
curiosity. He can handle a topic in which he is really interested well than the one
suggested by someone else. The researcher who is prompted by scientific curiosity
may be interested in some general subject matter about which little is known. And
when there is a lady researcher for the topic like ladies cloths, the topic becomes
very interesting and gives best results.

It is said that ‘select a project which will bring out improvement in the present
status of an activity’. Moreover such improvement should be quantifiable. It means
that it should be able to point out how much time, money and other resources can be
saved or how much enhancement in sales, production, efficiency and productivity
can be achieved through the implementation and suggestions and solutions.

The subject matter of the project should be such that it has underlying management
principles and theoretical framework on the basis of what data can be collected,
analyzed and arguments can be developed. The project idea should be such that it
should be applicable in other similar situations like the development of the idea,
proving or disapproving of hypothesis and methodology. The project should not be
so exclusive that its principals have no other application. The project work should
be based on personnel hunch.

The selection of the topic is very important job for the researcher. In today’s
competitive world employment is emerging great problem. There are various causes
responsible for increasing unemployment. Some of them are even increasing
population computerization and automation. Thus in today’s world self employment
is one of the best opportunity. Readymade Garment Shop offers you this great
opportunity of self employment.
From the researchers point of view it is very important that he will study all points
related to his topic. So his reason for doing this project to know how logistics helps
in material management. Logistics include the flow and storage of items from raw
material to customer delivery and other very important reason for selection of the
particular topic is to know about –
 1) Material planning and control.
2) Purchase of goods.
3) Selling of goods.
4) Financial statement for the shop
5) Profit earnings etc.

1.3 PROFILE OF THE SUBJECT

There are various factors which plays very important part of any Readymade
Garment Shop. Followings are some of them-

A. Fashion:-

For some women, fashion is a way of life. It reflects their personality, their attitude,
their approach towards life, and their lifestyle. A closer look tells us that it refers to
a particular style of clothing which is worn by people on a national/ international
level. Fashion is not restricted to clothing alone. Anything with a touch of class, and
a hint of the extraordinary, something that catches the eye instantly, and is visually
appealing, is fashionable. Thus, fashion is a phenomenon that continues to change
women's lives all over the world. Today women have access to a wider range of
fashionable clothes.

Over the years, women have embraced fashion to project themselves the way they
want to. Whatever women wear or use today, is a matter of great speculation and
scrutiny. Fashion has entered all arenas of women's lives, right from veiled hats to
high-heeled shoes. Their fashion consciousness and the need for fresh, new
concepts and ideas from time to time have given the fashion industry a major boost.

B. Fashion industry:-

The fashion industry is a huge platform which provides access to a wide range of
fashionable goods. This industry is a creative industry which involves continuous
change, innovativeness, and state-of-the-art technology.
Women's fashion industry comprises:
a. Designers
b. Manufacturers
 c. Sellers/Marketers
d. Buyers
e. Others (Colorist, Forecaster, Illustrator, Models Etc.)

C. Market:-

The word market is derived from the Latin word “Mercantile” which means a place
where a business is conducted. In common parlance a market refers to a place
where buyers and sellers actually meet to effect purchase and sales. In other words,
a market is a particular place where goods are bought and sold.

In a broader sense, a market does not necessarily mean a place. The term ‘market’
and ‘sellers’ in person, by mail, telephone, telegraph, cable fax as any other means
of communication so that their mind may meet of effect purchases and sales.

Philip Kolter says that,

“Market is the set of actual and potential buyers of product”.

D. Marketing:-

The term marketing refers to the sum of activities involved in finding out the needs
of the potential buyers developing the products and services to satisfy those needs
and making them available to those who need them at the slight time at the right
places, in the required quantities, at the right prices.

Marketing consist of all those activities which are included in the process of flow of
goods from the production centers to the consumers. The whole process involves
the creation as time, place and possession utility.

Druker defines that

“Marketing is a process which converts resources, distinct knowledge into a

contribution of economic value in the market.”
E. Business
 Business in an economic activity which is conducted with the aim as motive of
earning profits, business refers to all those activities which are concerned with
production and distribution of goods and services. The term business has two wings
or two aspects or two branches. One aspect of business is commerce.

Keith Devis says that,

“Business may be defined as the organized efforts of individuals to produce goods

and services to sell these goods and services in a market place and to reap some
rewards for this effort.”

F. Advertising

The word advertising has been derived from the Latin word “Adverter” which
means ‘turn to’ as turning the attention towards the products. Advertisement means
to make the product know to the word with the help of attractive advertisement
policy. Customer may be demand more for those particular products but the main
function or work of advertising is create a place in minds of people to purchase the
product because the main objective of advertising is to increase the sale.

Definition given by Prof. Albert Fray

“Advertising as the preparation or visual or oral messages and their dissemination

through paid media for the purpose of making people aware of and favorably
inclined towards a product, brand, service, institution, idea or point of view”.

G. Services

In modern time services are extend become a valuable things for all the business in
situations services which are closely relating with the customer or user is the
necessity of every business with the help of services the seller provides number of
services to the customer or earning a profit or the other side consumer get
satisfaction of their need by paying same amount for the services. Another
important thing is that the people who want to share a thought, pleasure or pains
which are closely related with services.

H. Discount
Discount is a deduction given by seller to buyer on sale price of the goods so as
increase sale or for immediate payment of sale price in case of cash sale. It is
always offered by buyer at percentage (%) of sale price. Discount scheme will be
generally adopted in case of off season period. So as to attract the customer or
buyer will be ready to purchase bulk quantities of goods.

“Discount is percentage reduction on sale price i.e. each cash discount which
reduces the invoice value of goods which reduces the invoice value of goods e.g.
25% discount on cloths.”

I. Replacement guarantee

Replacement guarantee means the security to the customer about whole product. It
is the whole product may be change or replaced by another one. The customers
have to fallow the guarantee period for claim.

J. Gifts

Customers are very much attracted toward the gifts specially while giving one dress
free for purchasing two dresses.

For that shopkeeper prepares big banner with wording as_

“BUY TWO GET ONE FREE”

K. Window display

In this method actual good are displayed in showcases to attract the attention of the
prospective buyers. As the goods are displayed in showcases outside the shop,
people are allowed to watch and inspect the goods. This provokes the prospective
buyers to buy the goods.

L. Showroom

In this method of advertising spacious area is provided for display of goods hence
they are arranged very systematically in an attractive way. The visitors to such
showroom,
who are prospective buyers, are allowed to handle and inspect the goods presented in
showroom.

M. Customer service

Customer service is the overall activity of identifying and satisfying customer

needs. . As an overall description of the desired relationship between a supplier and
a customer. 'Service' in this sense is based on the premise that every commercial
transaction is a service. Customer service is one of the most important ingredients
of the marketing mix for products and services. High quality customer service helps
to create customer loyalty. Customers today are not only interested in the product
they are being offered but all the additional elements of service that they receive
from the greeting they receive when they enter a retail outlet, to the refund and help
that they receive when they have a complaint about a faulty product that they have
paid for.

N. Customer expectation

Customers are people who buy products and services from other people. What
customers thin it is the job of marketers to understand the needs of their customers.
In doing so they can develop goods or services which meet their needs more
precisely than their competitors. The problem is that the process of buying a
product is more complex than it might at first appear. Customers do not usually
make purchases without thinking carefully about their requirements. Wherever
there is choice, decisions are involved, and these may be influenced by constantly
changing motives and feel about a company and/or its products is a key aspect of
business success.

O. Customer requirements

The supermarket industry provides a good example of the way in which different
groups of customers will have different expectations. Some customers just want to
buy standard products at the lowest possible prices. They will therefore shop from
supermarkets that offer the lowest prices and provide a reasonable range of goods.
In contrast, some supermarket shoppers are seeking such aspects as variety and
quality. They will therefore choose to buy from an up-market supermarket.
Additionally some customers will have special tastes such as wanting to buy
FAIRTRADE products or organic fruit and vegetables. It
is clear therefore that to be successful a business has to have a clear understanding of
their target customers and the expectations of this group.

1.4 IMPORTANCE OF THE SUBJECT

In modern business every business should be given greater importance whether it

has be in the nature of large, middle, small scale industry. The various important
things are in Readymade Garment Shop.

In today’s large competition it is essential to know ones market position. A

successful organization has to know its strength and weakness and in the market
along with Readymade Garment. Market study stimulates need by taking
appropriate steps for remaining defects in its marketing effect.

Project of Readymade Garment serves as instrument for development of certain

important skills in commerce and management student to make earning more
effective these skills are as follows _
a) Analytical Skill
b) Communication Skill
c) Research Skill
d) Decision making Skill

Importance Of The Study Of Readymade Garment Shop Is As Follows:

I. Readymade Garment Shop business is that type which has little investment
and more profit.
II. It is a business where in short production period, business can earn a lot.
III. This business provides greater availability of market.
IV. In that kind of business we can provides various job opportunities to all kinds
of people like men and women.
V. This project provides us information about various Government policies,
production policies, sale and profits, etc.
VI. Readymade Garment Shop provides all types of knowledge for business,
market as well as employment.
*****
 CHAPTER NO 2

PROJECT METHODOLOGY

2.1 MEANING OF THE PROJECT:

A project is a scientific and systematic study of a real problem faced by and

organization with an object to resolve it with the application of management
concepts and skills. The study can deal with a small or a big problem faced by the
enterprise in a discipline of management like finance, marketing, production,
personnel. The essential requirement of a project is that it should entail scientific
collection, analysis and interpretation of data leading to valid conclusion. Form the
study attempting to diagnose and identify managerial problems and at the same time
providing him an exposure to the real business world. Form the organization point
of view it is a sort of feedback of its policies and plans which may facilitate the
decision making.

A project is a kind of action oriented research aiming at the detection managerial

problem of a business organization and inviting the efforts to solve those. It
provides a scientific basis or managerial decision and actions.

Definition

“A project is scientific and systematic study of real issue or a problem with the
intention of resolving the problem by application of management concept and
skill”.

“A project work is a scientifically evolved work plan devised to achieve a specific

objective within a specified period of time.”

2.2 METHODOLOGY OF THE PROJECT

 A. Project methodology

A project methodology tells you what you have to do, to manage your projects from
start to finish. It describes every step in the project life cycle in depth, so you know
exactly
which tasks to complete, when and how. Whether you're an expert or a novice, it
helps you complete tasks faster than before.

Method refers to the procedure for obtaining knowledge based on empirical

observations and logical reasoning. Methodology refers to the logic of scientific
investigation. It is a procedure of empirical investigation. It is not concerned with
build of knowledge but how knowledge is built, i.e. how facts are collected
classified and analyzed.

B. Methods of
research

Following are the main types or method of research which are generally used by
any researcher

a) Case study method

b) Historical method
c) Experimental method
d) Survey method.
a) Case study method

Case study is a recent development in research. Case study is a method of exploring

and analyzing the life of a social unit, a person, a family, institution, cultural group
or even an entire community.

b) Historical method
This method investigates the past events and phenomena on the basis of historical
documents and evidences. It seeks to find explanation of questions of current
interest by an intensive study of past.
c) Experimental method

In this method the researcher studies the effect of independent variable on

dependent variable by artificially controlling the effect of rest of the variables. It is
conducted in fundamental sciences like physics, chemistry, biology, nuclear
science, etc. through laboratory experiments.

d) Survey method
The survey is a method of analysis in scientific and orderly form for defined
purpose of social situation of problem or population.

Above explained are the basis methods used for most of the researcher. In the
project like readymade garment shop researcher is interested to use the survey
method because the survey method is a technique of investigation by a direct
observation of a phenomena or by systematic gathering of data from population. It
involves a systematic and comprehensive study of a particular group, community,
or organization, etc. with a view to analyzed a social problem and presentation of
recommendation for its solutions.

The first, second and third method both have some special conditions so the
researcher cannot apply it to each and every research. So it is better to use survey
method for deep study of our subject.

In survey method a techniques of investigation by direct observation is used. But

we can also use various publications, reference books, magazines, articles, etc. to
collect data. So we select the survey method for our research study.

2.3 DATA COLLECTION

A project work is totally depends on collection of data, or collecting all relevant

information which are necessary for project work. The collection of data means a
purposive gathering of information relevant to the subject matter of investigation
from the units of population under investigation. Collection of data makes the most
important step of any research enquiry or statistical enquiry. If data collected is not
correct, reliable, relevant, and appropriate, one can not obtain valid and useful
results from the enquiry.

Collection of data requires common sense, experience, and knowledge. One should
be alert, tactful, cautious and sensitive while collecting data for any statistical
enquiry. In the preparation of this project report the data is collected form above
sources.
A. Primary sources
a. Observation
b. Interview
c. Questionnaire
B. Secondary sources
 d. Magazines
e. Books
f. Library
g. Internet

2.4 OBJECTIVES OF THE STUDY

Followings are the main objects of the study

I. To study the scope of financial approach concerning to the cloth business.

II. To find out the potential benefits and opportunities lie in this business.
III. To study the information about various suppliers of the product.
IV. To study the management policy or formulation of production policy,
marketing, storing, etc.
V. To make the study of marketing skills.
VI. To evaluate profitability
VII. To study the management of capital and other sources.
VIII. To acquire useful guidelines to venture in cloth market.

2.5 LIMITATIONS OF THE STUDY

I. This project report mainly focused on ladies dress or other cloths trading,
which is just a part of cloth trading. Other different kinds of trades under
clothing sector are not considered.
II. A new firm may find it difficult to enter in cloth trading as the already
established firms may give them a tough competition.
III. The scope of study is limited to marketing profile of Readymade Garments.
IV. The firm needs to maintain varieties of stock, which ultimately demanded for
huge investment.

*****
 CHAPTER NO 3

PROJECT COST

3.1 MEANING OF PROJECT COST

Project cost is a statement which presents detailed information relating to the

various stages of cost, and it also shows the total cost of product manufactured
during particular period of time. Thus the project cost is prepared for particular
period of time, via-monthly, quarterly or yearly, etc.

It has already been explained earlier that manufacturing accounts deals with cost
relating to cost of goods manufactured i.e. only prime cost & factory cost. Its
offices and administration expenses are added to the costs, we get the cost of
production. Similarly, if selling and distribution expenses are added to the cost of
production we get cost of goods sold or total cost.
Object of preparing project cost
I. The total cost and cost per unit of production can be ascertained.
II. After proper comparison the management may take the corrective measures.
III. It helps the management while formulating suitable production policy.
IV. It is very helpful to submit the price quotation for tenders.
V. It also helps the management by supplying suitable information for
management control.

3.2 ANALYSIS OF FINANCE

Finance is the life blood of any industrial or commercial undertaking. It is needed

for starting the business. Some capital is required, without the money business are
not run in good manner. Because every need of the shop management fulfillment
made by the money. When starts the business, available money could a capital.
Capital is playing very important role in the business transactions. Finance is not
important in large scale and small scale.
Every enterprise needs the finance these fulfillment made by the following medium
A. Bank
B. Government policies
 C. Private financial groups
D. Money lender
E. Finance from relatives

A. Bank

The business starts needs the finance. The businessman involves the all money for
the business function is growing fast. But all the business may not fully capable in
the finance department so they need the money. Various financial institutions are
ready to provide the facility of credit money. But most popular word in the financial
sector called a Bank. Banks play the important role in the industry because the
finance is the readymade product which made the shop to run the business. Banks
provide the credit facility to the business. The capacity of credit means loan depend
upon the nature because the loan provide with the following rules and conditions of
Banks. In all view the finance taken from Bank economical truthful, secure, etc. so
that large amount loans are demanded from Bank.

The Bank provides the finance in low rate of interest. The comparison between the
rate of interest and services of both sides the Bank get the appreciated. Bank also
provides the special policies and schemes to the business. The transaction should be
held in accordance to the law. The investment made by self is only 20% to 30% of
total capital. Balance 70% to 80% amount is provided by the Banks. The payment
of loan in adjusting premium or installment all are overview of the financial
conditions.

B. Government policies

The business start for that needs the finance. The need of finance fulfillment is
made by Banks. The project passed by Government which provides the Bank loan
and the project allots the subsidies to the business. The Government provides the
infrastructure facility to the business. The Government also provides 20% to 30%
subsidies on the business cost. With adopting the strategy the industrial
development increases.

The unemployment problem solves by Government by providing financial

assistance to the business. The different schemes and policies attract to
unemployment person to start the employment and self employment. The
Government wants to increase standard of living of society for that income of every
person increases.
 C. Private financial companies

The private financial companies provide the finance to the business. The need of the
business satisfies by money which provides by the private financial companies. In
current times the private companies are get part in the finance. So they provide
finance to the backward and economic backward class, needy persons, businessman
etc.

D. Money lenders

For the every business need the finance. At that time the Banks and other sources of
finance are not capable or avoid provide the finance in certain limit. The
businessman goes to the money lender. Money lender provides the finance in large
manner with less paperwork. The less paper is the advantage in the businessman’s
side so that he takes loan form money lender on a high rate of interest.

The comparison between Bank and other sources of finance the difference in the
rate of interest. The money lender provide loan without security of wealth. They
provide on one sign on paper. The earliest get the finance in simple manner so that
the businessman attract towards the money lenders for the finance.

E. Finance from Relatives

The business gets the finance from the various source of finance. One of that is
finance from Relatives. In the business need of finance is the important thing.
Suddenly the emergency finance availability gets only the relatives of the
businessman.

The finance gets without any security. Get money without any interest and pay only
principal amount. When person needs the finance firstly goes to the relatives for the
help.

3.3 ANALYSIS OF THE PROJECT COST

Cost analysis means that the drafting of all the procedure which relates the
production i.e. calculation of the project cost of Readymade Garment Shop.
In the pre-historic Stone Age when man killed an animal with the forces of his
hand, without the use of weapon. The cost activity was “Labor”. When that man
converted animals hide into his clothes the cost of his activity was material + Labor
and when articles began to be manufactured in his factories as in the present age the
cost of the output began to count as_

Material + Labor + Expenses.

PROJECT COST
[ESTIMATED]
A] Land and Building TABLE 3.1

I. Land 400 Sq. Feet @ 800 Sq. Feet 320000

Construction Area 300 Sq. Feet 200000

520000
II. Other Fixed Asset
Furniture and Fixture 200000
Electrification 6000
License 6000

732000
B] Working capital [per annum]
I. Salary and Wages 62400
II. Purchase of Garments 200000

262400
C] Other contingency
I. Printed carry bags 6000
II. Telephone 10800
III. Stationary 5000
IV. Carriage 5500
V. Postage 3000
VI. Other Exp. 2000
VII. Advertising Exp. 800
 33100
294400
Total Working Capital
994400
Total Capital Investment [A + B] F] Man Power Requirement
04 Person.
02 Labor 02 Workers

3.4 ESSENTIALS FOR THE BUSINESS ESTABLISHMENT

TABLE 3.2
Area In Market Place.
Plot 400 Sq. Feet. 220w.
Electricity Supply Water Facility
Water Labors
Purifier (Drinking Water) Total 04 People
Skilled Worker 02 Labor / Helper 02 Urban / Ruler Government Private Financer Shop Act License N
M.S.E.B.

Market Financers

License

Name and Address of Offices

Shop Act License Under Maharashtra Shop Act 1948. Near
Greenland Cottage Hotel, Vidya Nagar,
Murtizapur Road, Akola
No Objection Certificate Municipal Corporation, Gandhi Road, Akola
Electricity Supply
Rural Area Concern Engineer, Sub Divisional Office,
Electricity Board.
Urban Area Electricity Board, M.S.E.B. Main Office,
Necklace Road, Durga Chowk, Akola
Finances
Government S.B.I., Janta Bank, Nationalized And Co-Operative Banks
Private Sector H.D.F.C., I.C.I.C.I., Etc.
3.5 CAPITAL STUCTURE AND PROFIT
TABLE 3.3
Fixed Asset

Sr. Particula Amount

No r
Land
1. 400 sq. feet @ 800 sq. feet 320000
Building
2. Construction area 300 sq. feet 200000
Other Fixed Asset
3. Furniture and Fixture 200000
Electrification 6000
License 6000
Total 732000

TABLE 3.4
Working Capital (Variable Expenses)

Sr. Particula Amount

No r
1. Salary and Wages to Worker 62400
2. Purchase of Garment for Sale 200000
3. Other Contingency 32000
Total 294400

TABLE 3.5
Other Expenses

Sr. Particula Amount

No r
1. Printed carry bags 6000
2. Telephone 10800
3. Stationary 5000
4. Carriage 5500
5. Postage 3000
6. Other Exp. 2000
7. Advertising Exp. 800
Total 33100

TABLE 3.6
Total Sale

Sr. Particula Amount

No r
1. Sale of Garments 250000
2. Selling Expenses 3000
Total 253000

TABLE 3.7
Total Capital Invested

Sr. Particula Amount

No r
Fixed Asset
1. Land and Building 520000
Other Fixed Asset
2. Furniture, Fixture, Electricity, license, etc. 212000
Variable Expenses
3. Salary, Stock, etc. 262400
4. Other Expenses 33100
Total 1027500

TABLE 3.8
Means of Finance

Sr. Particula Amount

No r
1. Loan form Bank 750000
2. Loan form Relative 200000
3. Self Contribution 77500
Total 102750
0
 TABLE 3.9
Man Power Requirement

Sr. Salary Salary

Particula
No r Per Month Per Year
1. 2 Skilled Worker
1400 Rs. Per Worker 2800 33600
2. 2 Labor / Helper
1200 Rs. Per Labor 2400 28800
Total 5200 62400

TABLE 3.10
Total Profit

Sr. Particular Amount

No
1. Total Sales 250000
- Cost of Goods Sold 200000
2. Gross
Profit 50000
3. 3000
- Selling Expenses
33100
- Other Expenses / Operating Expenses
Net Profit 13900

3.6 RATIO ANALYSIS

Ratio analysis is an important technique of financial analysis which calculated

the financial stability and financial soundness of the concern. The simple ratios that
are inherent for assessing a firm position are as under_
1.Gross Profit Ratio
Gross Profit Ratio = Gross Profit
_ × 100
Sales

50000
= _ × 100
250000

= 20 %

2.Net Profit
Ratio
= Net Profit
Net Profit Ratio
_ × 100
Sales

13900
= _ × 100
250000

= 5.56 %

3.Operating Rati
Expenses o
Operating Exp. = Operating Expenses
Ratio ×
100
Sales

33100
= _×
100 250000

= 13.24 %

4. Selling Expenses Ratio

Selling Expenses = Selling / Distribution Sales

Exp. Ratio
300
 0
= _× × 100
100 250000

= 1.2 %
 5. Stock Turnover Ratio

Stock Turnover = Cost of Good Sold.

Ratio × Times

Average Stock

200000
= _×
Times
55000

= 3.64 Times

Average Stock = Opening Stock +Closing

Stock

= 110000

= 55000

6. Operating Ratio = Cost Of Good Sold +

Operating Exp.
× 100
Sale

= 200000 +
33100 × 100

250000

= 93.24 %

Depreciation:
Generally, ‘depreciation’ means gradual decrease in the value of an asset which
arises due to normal wear and tear, obsolescence etc, in short, depreciation means
the gradual diminution, loss or shrinkage in utility value of an assets due to wear
and tear in use, efflux ion of time or obsolescence. It practically, the payment which
is made against the purchase of fixed asset is an advance payment for an expenses.
Purchases of fixed asset represent claims to service which will gradually expire and
turn into expenses in the course of rendering services over a number of years.
Hence, the portion of fixed assets consumed during a particular accounting period
as result of its use is known depreciation.
 Definition:

“Depreciation accounting is a system of accounting which claims to distribute the

estimated useful life of the unit in a systematic and national manner. It is a process
of allocation, not of valuation. Depreciation for the year is the portion of the year.
Although allocation may be properly take into account occurrences during the year.
It is not intended to be the measurement of the effect of all such occurrences.”

Depreciation chart
TABLE 3.11

Building Furniture
Year Particula Total
r (10%) (15%)
Actual Cost 520000 200000
1st Year
- Less : Depreciation 52000 30000 82000
468000 170000
2nd
Year - Less : Depreciation 46800 25500 72500
421200 144500
3rd Year
- Less : Depreciation 42120 21675 63795
379080 122825
4th Year
- Less : Depreciation 37908 18424 56332
5th 341172 104401

Yea - Less : Depreciation 34112 15660 18452

r
Total 307060 88741

3.7 NAME AND ADDRESSES OF STOCK SUPPLIERS

1. Akola : Deepak Garment, New Cloth Market, Akola.

2. Amravati : Shreeram Hogiary, Tahsil Road Amravati.

3. Mumbai : 37-41, Ansar Manzil, 2nd Floor, Room No-36, Mumbai

4. Delhi : 4525, Gali Jatan, Puhari Dhiraj, Sardar Bazaar, New

Delhi.

5. Chennai : 765-B Anna Nagar, West Exth, 4th Avenue, Chennai.

*****
 CONCLUSIONS AND SUGGESTIONS
A. CONCLUSIONS

1. Clothing and textile sector forms a part for heritage of India and exemplifies
the richness and diversity of our country.
2. Akola town itself is the biggest cloth market throughout the vidarbha region.
3. Cloth trading is having an important place in Akola market. This project
throws light on clothing sector and business opportunities it has.
4. New entrepreneurs may venture into this sector to acquire the potentials and
benefits lie in this field.
5. Through this project, one can develop and understandings of the nature,
scope and financial aspect of cloth business especially trading of dress
material.
6. As the Indian fashion industry is growing every day, Indian dress designer’s
touch, creating garment which are truly outstanding. Designers are always
experimenting with the new design, style every season. For this purpose, they
require dress material.
7. One can show their creativity and innovative thinking over cloth material as
they cannot experiment with readymade outfits.
8. People today are more fashion conscious. They prefer to wear fashionable
and designer outfit. So this business is more profitable.
9. Women want to be more stylish and descent. So they like to buy dress from
more reliable and stylish shop as per their requirement.
10. They want the dress which are more designed and stitched with latest
fashion. So the readymade garment shop gets the indeed significant place in
market.
11. This business requires huge investment and it also involves some risk factors.
12. Its scope is wider as Akola is rapidly growing and developing market place.
 B. SUGGESTIONS

Followings are the few suggestions which I would like to suggest for this type
of business.

1. To open a cloth shop it is recommended to invest a fairly huge sum of money

2. Variety of stock is to be maintained as the fashion of cloth changes too
rapidly, moreover huge color rang is to be maintain to satisfy the needs of
customers.
3. Owing to cut throat competition the shop owner needs to keep latest and
fashionable stock to attract to large number of customers.
4. Location plays the key role for this business. For a shop in a prime locality
would definitely be a plus point for the business.
5. Take care of customers by providing them various services to be still stand in
the market for long time.
6. They should have to know customer value
7. They have to develop their communication skill.
8. They should always aware about their social responsibility.
9. Develop self confidence and sufficient product knowledge.
10. They should adopt pleasant and likable disposition
11. Sense of humor necessary to cool down an angry customer and reduce
tension in the atmosphere.
12. Tactfulness to do the correct things at the right moment to win customers.
13. Co-operation and helpfulness to build an effective sales team and to develop
good customer relationship.
 Appendix 1

QUESTIONNAIRE

This is the most popular method of extracting information from people. They
are usually conducted by post, telephone or in person. Questionnaires are easy to
administer and easy for respondents to deal with. They simplify the analysis of
results, and can provide surprisingly detailed information. A useful way of
delivering a questionnaire is on-line. . However, questionnaires are easy to 'cheat'
on and a market research agency will ensure that 'control questions' has been built
in to check that the questionnaire has been filed in a suitable fashion.

1. Name of Proprietor
2. Address of the Shop
3. Education of the Proprietor
4. Year of Establishment
5. Nature of Business Wholesale / Retailer
6. If Rental, Amount of Rent Monthly / Yearly
7. Area of Shop
8. How much space require for opening a cloth shop
9. Reason for Accepting Business
10. Any Other Additional Business Yes/No
11. Which of One
12. What are the legal formalities to be fulfilled for starting a new business?
13. Total Capital of Business
14. How You Established This? Self / Relative /
Friend Circle/Loan
from Bank
15. How Your Family Member Help You in
 This Business Directly / Indirectly
16. If There Is Partner in Shop Yes / No
17. If Yes Then How Many Partners Are There?
18. If You Supply Good To the Customer on Order
19. Do You Get Advance Payment While Ordering?
20. If There Is Other Godown for the Stock of Goods
21. What Varieties Of Material Do You Keep In Your Shop?
22. Do You Keep Annual Statement?
23. What Is Your Annual Expenditure?
24. What Is Your Annual Income?
25. If There Are Any Employees in Your Shop
26. How Many Are They
27. What Is The Salary of Employee?
28. Did You Fill Business/Income Tax? Yes / No
29. If Yes How Much Is It
30. What Are The Risks of The Shop?
31. Which Problem Did You Face While Doing This Business.
 Appendix 2
BIBLIOGRAPH
Y
Year of
Sr. Author Name Book Name Publishing Publicati
No House on
A. Books
Nilkanth
Organization of
1. Bhosle R. M. Publishing June 1996
Commerce
House Mumbai
Organization Himalaya
2. Franandes S. of Commerce Publishing 2006-
And House 2007
Management Nagpur
Research
Phadke September
3. Herekar Dr.P.M. Methodology
And Project Prakashan 2004
Work Pune
Himalaya
Research
4. Nakkiram Dr S. Publishing 2001-
Methods In
House Nagpur 2002
Social Sciences
Shivkumar M. Guideline of Himalaya
5. Publishing 2001-
Prakash M. Project Report
House 2002
Nagpur
B. Magazines
Delhi Press
6. Nath Paresh Gruhshobha Bhavan,Rani Oct.2008
Zansi Marg
New
Delhi
Vishwapti
7. Tiwari jitendra Udyamita Laghu Oct.2008.
Udyog
At Indian
8. Varma Pradip Lokprabha Express Oct.2008.
Newspapers
(Bombay)
C. Internet
 I. www.womenfashionwear.com
II. www.time100.co.uk
III. www.readymade-garment.com/india
IV. www.jimyellowpages.com/kokata/8/readymade.garment
V. www.webduniya123.com/city/delhi
VI. www.marketresearch.com
VII. www.answers.com