MAKING COTTON TSHIRTS

Introduction
This business idea is for production and marketing of cotton t-shirts. Cotton t-shirts are particularly for sports and casual wear. A good sweat absorbent wear, these garments are soft, tough and wrinkle free.
The revenue is estimated at US$700 per year, and the project cost is estimated at US$229,424 per year. The production capacity per day is 450 t-shirts per day.

Production Process
As per the desired sizes and designs, the knitted fabric is cut into pieces and labeled as per measurement of the latest designs for the market. Then, the required button stitching is added to the semi-finished fabrics. These products undergo strict quality control measures as knitted shirts and finished garments that are ready for packing and marketing.

Market Analysis
The demand for T-shirts has been increasing as a casual wear especially for sportswear. Apart from domestic demand, the shirts enjoy a lot of demand from the export market. With the current market prospects in the Western countries, this could yet turn out to be a very profitable project. Tri-star and Phoenix have tried to invest in this sector.

Capital Investment Requirements in US$

Capital investment item

Units

Qty

Unit cost

Amount

Over lock machine

no

1

750

750

Cutting machine

no

1

2,500

2,500

Sewing machine

no

5

450

2,250

Industrial flat iron

no

1

250

250

Packing materials

no

100

0.03

3

Cutting set

no

6

10.00

60

Measuring tape

no

2

2.5

5

Zig zag machine

no

1

600

600

Van

no

1

6,000

6,000

Total cost on machinery

12,418




 

Production and Operating Costs

Cost Item

Unit

Unit
cost/
day

Qty/
day

Prod cost/
day

Prod
cost/
month

Prod
cost/ yr

mtrs

1.5

450

675

17,550

210,600


Sub-total


450

675

17,550

210,600


General costs(overheads)







Utilities(water and power)

150

1,800





Labour

750

9,000





Rent

100

1,200





Miscellaneous costs

50

600





Distribution costs

260

3,120





Depreciation(Asset write off)Expenses)

259

3,104





Sub -total

1,569

18,824





Total Operating Costs

19,119

229,424





Cotton knitted fabric 1 Production costs assumed are for 312 days per year; with a daily capacity
of 450 pieces of T-shirts.

 2 Depreciation (fixed assets write off) assumes 4 years life of assets written off at 25% per year for all assets.
3 Direct costs include: materials, supplies and other items that directly go into production of the product.
Project Product Costs and Price in US$

Item

Qty/day

Qty/yr

Unit Cost

Prod cost/yr

Unit Price

Total Revenue

T-shirts

450

140,400

1.63

229,424

5.0

702,000

 

Profitability Analysis in US$

Profitability Item

Per
day

Per
month

Per
Year

Revenue

2,250

58,500

702,000

Less production and operating Costs

735

19,119

229,424

Profit

1,515

39,381

472,576