Business plan for the production of paper bags with calculations

2024 Author: Howard Calhoun | [email protected]. Last modified: 2023-12-17 10:16

Environmentally friendly products are a popular business line. The plan for the production of paper bags from recycled materials is a promising activity. Profitability with well-established sales markets reaches 50%. At the same time, an entrepreneur can independently organize the purchase of raw materials from the population and reduce dependence on suppliers.

Scope of application

Paper packaging is used in various industries. These include:

• chain retail;
• storage of household products;
• gift industry;
• dry building mixes.

When drawing up a business plan for the production of paper bags, certain nuances must be taken into account. Only an integrated approach will allow us to achieve steady growth and cover all costs.

Choice of legal form

Before starting your own business, you need to register with the tax authorities. There are two forms of existence suitable for small businesses:

1. Individual entrepreneurship.
2. Limited liability company.

Each way of doing business has its own advantages and disadvantages. For example, it is easier for individuals to keep tax records, and fewer documents are required for registration. There are also disadvantages. A limited liability company in the event of lawsuits loses only the authorized capital. An individual entrepreneur risks movable and immovable property. This aspect must be taken into account when drawing up a business plan for the production of paper bags.

A legal entity is also organized if several merchants begin to work together. In such a situation, the income of each founder depends solely on the degree of his participation in the formation of the authorized capital. This includes not only bank accounts, but also the cost of the equipment used. At the same time, businessmen turn to a third-party appraisal to determine the real value of such aggregates.

Starting activities

One of the main cost criteria in the business plan for the production of paper bags is the purchase of equipment. Production lines are divided into two classes:

1. Automated.
2. With the involvement of manual labor.

The first variations of the technique are more expensive. Their use helps a businessman save a certain amount in the future. Such designs are characterized by increased performance characteristics, they do not require the involvement of a large staff. Therefore, it will be possible to reduce the monthly costs of doing business, whichwill positively affect profitability.

Selection of premises

The second item of expenditure is the rent of the shop. It is better to place the factory on the outskirts of the city, since the rates there are minimal. Before concluding a contract and starting the installation of a line for the production of paper bags, it is necessary to clarify all issues related to the allocation of electrical capacities, summing up other necessary communications. Checking in the regulatory authorities (fire inspection) falls on the owner of the premises. Sometimes there are exceptions to this rule. This moment is negotiated in advance and taken into account when concluding a contract.

With the growth of income, it is desirable to acquire your own premises. When searching for the right site, attention is focused on the social and environmental component of the business. This will help to negotiate with the municipality on favorable terms for the provision of land for development.

Recruitment

Cadres decide everything. The phrase is hackneyed, but relevant to this day. Maintenance of equipment for the production of paper bags does not require special training. Staff training takes a minimum of time, so there is no expense for the remuneration of qualified employees. Sales are more difficult. You need to find a professional sales manager. The motivation in this case is the percentage of the concluded deals. It is impossible to save on such an employee. The owner is the owner himself. Often this type of activity is organized as a family contract.

Search for raw materials

Purchasing is a significant part of the cost only at the initial stage. In the future, this money is included in the working capital of the enterprise. There are several ways to purchase used paper:

1. Purchasing from the public.
2. Purchase from third parties.
3. Search for a major supplier.

The first method is the cheapest and least effective. The population delivers waste paper all the time, but no one will specially go to the processing shop. Therefore, this method of forming the resource base is considered unstable. Buying paper from resellers is more expensive. This negatively affects the cost of the paper bag. As a result, you can lose the lion's share of income. The ideal option is to find a large supplier. They can be large shops, shopping centers, supermarkets. It is difficult to conclude a cooperation agreement with them because of the great competition, but if it works out, you can count on constant stable supplies of waste paper at the lowest cost. A simple technique will help to increase the likelihood of a positive outcome of negotiations. An entrepreneur needs to focus on the social responsibility of his business, the fight for the environment.

To reduce the risks of production line downtime, a businessman is advised to establish all three channels for the search for raw materials. In some cases, this approach will increase the workload up to 100%. Surplus paper can simply be resold to other companies or additional lines can be supplied, for example, for the production of egg packaging. Diversification will lead to revenue growthmerchant, the sustainability of the entire business model.

Distribution options

The problem of selling finished products worries many. It generally determines the success or failure of entrepreneurial activity. This also applies to the paper bag business. You need to look for wholesale buyers constantly! It is impossible to stop at any major counterparty and work only with him. There is a risk of monopsony, that is, a situation where there is only one buyer in the market. At first, such cooperation can promise high profits, but soon the situation will become much worse. There is a risk of lower purchase prices and falling profitability.

Network stores are the main buyers of paper bags. Here the entrepreneur faces another problem - competition. Buyers in supermarkets buy ordinary plastic bags and do not pay any attention to paper. The reason for this behavior is the high price difference. Paper bags are 10 times more expensive than plastic bags! Therefore, you need to choose the right positioning of the goods. It is advisable to sell bags not in the form of ordinary packaging, but as an environmentally friendly product that is used for its intended purpose for a long time in a row. This approach will give motivation to buy a large category of citizens.

It is necessary to establish contacts with other firms. The production of paper bags with a logo will help increase the profitability of the enterprise. The move is non-standard, but effective. Here the businessman decides sever altasks:

1. Realizes the product itself.
2. Increases added value by applying advertising on the package.
3. Expands sales areas.

At the same time, this idea will be popular with various business representatives. You can also use your own data for promotion purposes. Often, paper bags with a logo are ordered by creative workshops, gift shops. This service is in demand in both large and small cities.

Production of paper bags for products is not the only direction in development. Entrepreneurs additionally produce packaging for dry building mixtures. It is especially profitable to debug work in cities where manufacturers of gypsum or cement compositions are located.

Accents

Success in business depends on a number of important factors. Paper recycling is no exception. In this case, first of all, the capacity of the equipment used for the production of paper bags is taken into account. Modern automatic lines have high efficiency. The recommendation for an entrepreneur is simple: it is better to immediately invest in a quality line than to suffer losses in the future due to downtime due to a breakdown.

The policy of purchasing raw materials is also being carefully analyzed. There are two options here:

1. Setting the average price for the region.
2. Increase in purchase price relative to competitors.

Both methods have advantages and disadvantages. In the first case, costs are reduced and profitability is increased,but it's harder to compete in a busy niche. In the second, you will have to inflate the budget and raise more funds at the start of the business. But such a model will immediately join the competition. As a result, the entrepreneur will only benefit from this.

Raising funds

This type of business is costly. A significant expense item is determined by equipment for the production of paper bags. A reasonable question arises as to where to get the money. There will be two options for action:

• own funds;
• attracting loans and investors.

To start cooperation with banks and third-party investors, it is recommended to draw up a detailed business plan. It takes into account different stages of work, probable scenarios for the development of the enterprise.

A little about calculations

Where to start the production of paper bags? With calculations and drawing up a business plan. The simplest calculations are presented in the following form:

Calculation table

Expense item	Costs (thousand rubles)
1. Procurement of equipment.	450
2. Room rental (with a margin of 2 months).	60
3. Payroll (with a margin of 2 months).	120
4. Purchase of raw materials (with a margin of 2 months).	100
5. Repair	150
Total	880

It is also necessary to take into account that at the start during the first two monthsThe firm will not pay any dividends. Therefore, be patient.