INTRODUCTION
There are many types of tailoring units, but the one discussed here is a village-level unit catering to 10-15 villages, situated in the main market in the area. On average, a tailor with basic equipment i.e. one motored tailoring machine, usually earns INR. 6,000 per month, by stitching garments like shirt-pants, Kurtis, salwar-kameez, etc. for men and women. Tailoring business requires a lot of research on the trends and fashion that are in the market to remain profitable. The entrepreneur also has to keep a check on the retail and wholesale prices of the raw materials and finished products so that she/he has a competitive advantage.
MARKET POTENTIAL
Factors leading to the growth of the sewing market are high demand by end-use industries such as apparel and garments. The rising population is also driving the demand for sewing machines and the market is expected to grow significantly. Establishing tailoring units will help the local people to meet their demands. The Sewing Machines Market is growing at a CAGR of >3% over the next 5 years. The Asia-Pacific region is growing at the highest CAGR over 2021-2026. The domestic apparel and textile industry in India contributes 5% to the country’s GDP, 7% of industry output in value terms, and 12% of the country’s export earnings. India is the 6th largest exporter of textiles and apparel in the world. It is the 2nd largest employer in the country providing direct employment to 45 million people and 100 million people in allied industries.
FUNDING SOURCE
Under the Work 4 Progress programme of the Development Alternatives Group, such enterprises have been financed by Sankalp Swashakti Mahila Mandal (a Cluster Level Federation), SKS, and Sanghamithra Rural Financial Services (Micro Finance Institutions) and have also availed government support through NLRM, with an average loan size of INR 45,000.
BUSINESS ECONOMICS
FIXED CAPITAL (One Time Expenditure)
| MACHINERY & EQUIPMENT | AMOUNT (in INR) |
| Tailoring Machine (2 @ INR 3,500/unit) | 7,000 |
| Overlock Machine | 4,500 |
| Sewing Tool Kit | 1,000 |
| Iron | 2,000 |
| Chairs (3 @ INR 500/unit) | 1,500 |
| Thread Box | 500 |
| Table (4 @ INR 4,000/unit) | 16,000 |
| Scissors (3 @ INR 300/unit) | 900 |
| Measuring Scale | 250 |
| Transportation | 5,000 |
| Installation and Training Charges | 10,000 |
| TOTAL | 48,650 |
WORKING CAPITAL (for a 2-month cycle)
| RAW MATERIAL | AMOUNT (in INR) |
| Thread (150 units @ INR 7/unit) | 1,050 |
| Buttons (one pack contains 200) (2 packs @ INR 500/unit) | 1,000 |
| Needles (one pack includes 25 needles) (4 packs @ INR 180/unit) | 720 |
| Zipper Chains with Hooks (100 units @ INR 5/unit) | 500 |
| STAFF AND LABOUR | AMOUNT (in INR) |
| Entrepreneur’s Salary (@ INR 10,000/month) | 20,000 |
| 2 Full-time Workers (@ INR 6,000/month) | 24,000 |
| UTILITIES & OTHER EXPENSES | AMOUNT (in INR) |
| Electricity | 1,000 |
| Telephone/mobile | 1,600 |
| Rent @ 300 sq.ft (@ INR 5,000/month) | 10,0000 |
| Transportation | 3,000 |
| Packaging | 2,000 |
| Stationeries | 1,000 |
| TOTAL | 65,870 |
FINANCIAL SUMMARY (Annual)
| FINANCIALS | AMOUNT (in INR) |
| Fixed Cost | 48,650 |
| Working Capital (for each cycle of 2 months duration) | 65,870 |
| Total Enterprise Set-Up Cost | 1,14,520 |
| Revenue (per annum) | 4,23,000 |
| Total Expenditure (annual working capital) | 3,95,220 |
| Enterprise Profit (per annum) | 27,780 |
| Payback Period (in months) | 22 |
BASIC ASSUMPTIONS
- The number of operational days in a month is 26.
- A 300 sq. ft. area is rented for the unit
- The tailor stitches garments for both –men and women
- Breakup of sales in one cycle as follows
| Particulars | Quantity | Selling Price/Item (in INR) | Amount (in INR) |
| Sewing | 750 | 70 | 52,500 |
| Stitching Buttons | 400 | 30 | 12,000 |
| Repairing Zipper | 100 | 60 | 6,000 |
Note: All figures mentioned are indicative and for reference purpose only. Development Alternatives Group bears no liability for accuracy. For any further information, please contact Development Alternatives on +91-11-2654-4100 or +91-11-2654-4200.
Star Entrepreneur
Against familial pressure Prabha set up her tailoring unit in Bhojla, Jhansi to supplement her husband’s income.
Having invested INR 50,000, her monthly income at present is INR 15,000 and her trendy new designs have captured the market of not only her village but nearby villages as well.