Conceiving an idea is always the easy part of any business. Making the idea of starting a handbag line practical is the hurdle you have to ponder about. In this industry, many brands have come up only to last a few months in the business. Distinguishing the dos and don’t in a handbag line is what separates successful businesses from failing ones.
When starting a handbag line you should brace yourself for a competitive market and posses a brave spirit. Every facet of its growth has to work in unity in order to produce perfection.
The structure of your business will determine the amount of cash you are to invest when starting a handbag line. You may invest a few thousand dollars or go big and invest six figures in your business.
Kicking off as a home based business and making your own bags is the most affordable option. You can also hire help with producing single bags at a time as this is moderately affordable too.
Manufacturing handbags is the most costly way to go when starting a handbag line. This is a decision that requires critical thinking before choosing this path.
When starting this business labor and material is significantly expensive. Below are some of the expenses you will incur when venturing in the handbag business both as home-based entrepreneur and also as a manufacturer.
This the standard amount you will have to spent on mortgage/ rent for the first six months. This include the working space as well as the office area. The amount may vary according to locality of your company and also the quality of the structure. It’s advisable to select a facility that’s easily accessible, that is close to the road for easy transportation of materials as well as products. Urban centers are more favorable as compared to rural ones.
Leasehold Improvements ( $10 - $15 / square foot;750 square feet) $7500
Leasing a piece of property for your company is necessary. Do a thorough research before making this move. This will enable you determine the availability of both manual and skilled labor in the area. Many people do not favor working miles from home. You might also incur some added costs acquiring labor from far. It’s also cautious to consider the surrounding of the property, is it suitable for an industry? Are the conditions conducive for working?
Office Apparatus, Furniture, Supplies $7,102
An office, being the center of in information, should be up to standards and fully equipped. This is where your planning ,organisation, directing, staffing and also controlling of your business takes place. The setting should provide a working environment that invokes professionalism. This basically means everything needed in a standard office should be available and conveniently placed.
Reserves, Cut and Sew Equipment, Textiles and Packaging $1,200
Producing multiple bags at time will require more tools as well as materials due to a larger workforce. It’s also advisable to pile stocks for a continuous flow of the production process. Your packaging should be appealing to the target customers.
Factory Sewing Machine $1000
To achieve the industrial rate of production, you will need an industrial sewing machine. This will facilitate the production of multiple products at a time.
Since the production rate is high,overcasting will require a serger to prevent fraying. This will also reduce the amount of labor needed.
Production Expenses ( 1st 6 months ) $24,000
This is the total cost needed for manufacturing in the first six months. This costs will include the expenses of immediate labor, direct material as well as the costs of production overhead. Notice all costs are consistent for the first six months because then is when you can rate the progress of your business.
Business Licenses (approximated) $100
This will vary according to the locality of your premises. Conducting research on the area of choice will get you a precise figure. Seeking advice from local authorities is the best option.
Line Installation Fee ( phone ) $150
In order to figure out the best phone line Installation for your company, your first step should be to examine your company’s needs. The needs of your clientele will determine the features required to leverage the services you offer. A multi-line landline is suitable in this case as it allows clients to get through to another line if the one being called is unavailable at the moment.
P.O. Box ( 1st 6 months ) $54
This is necessary to protect your precise location. You wouldn’t want clients showing up unannounced.
Employee Salaries, Duties and Benefits ( 1st 6 months ) $9,025
The salary you pay shouldn’t be more than the job's worth. A salary just like any business cost is an investment with expected returns. When planning how to pay salaries, start by deciding the highest amount you’ll be willing to pay. The salary per person should be relevant to their value in the company. The lowest amount of salary should be in accordance with the market rate as this is what sets employees' expectations. Budgeting for taxes should also be your priority.
Start-up Marketing ( 1st 6 months ) $1,440
It’s important to note that having a great team of professionals and a great product does not necessarily mean your product will be known. The scaling of your company will depend on a constructive and well-planned marketing strategy. Your marketing budget should be founded on the hopes of your achievement. Your specific short, as well as long term goals, dictate your advertising costs. Having a plan is the safest route to take in order to examine your results when checking the performance of each marketing activity. Select different channels and test them to determine what produces paying users and qualified leads. Test these channels with a small portion of your marketing budget.
Legal Services $900
Legal services are of course very crucial when setting up your company. Through legal services, you will be able to make out legal boundaries and the risks related to crossing them. Counsel have a professional duty to identify possible problems and handle them effectively. Therefore, it’s cautious to budget for this fee to be on the safe side.
Accounting Services $500
Management of all your financial information is a crucial part of your business. The income statements, balance sheet, and financial statements are the major financial statements that need recording. These services are crucial to the smooth working of the company. Accounting services should be a compulsory part of your budget.
Sales Call Transportation Expenses ( 1st 6 months ) $1,200
This is basically the cost of the delivery of the ordered products. The locations will definitely vary. Delivery services when outsourced can be quite costly. Using a company vehicle is the best option.
Travel Costs ( 1st 6 months) $ 1,500
As a company, you should definitely anticipate business trips. These expenses include airline costs, hotel accommodation fees, and other expenses like renting a car for easy movement. Business trips are part of a company’s operations thus a necessary budget.
Insurance ( yearly cost) $500
Insurance is vital for the protection of your assets in case of a catastrophe. Insurance also provides protection when customers are harmed at the company’s disposal. Insurance cover should also be compulsory in your budget.
Market Research Cost $500
Through market research, you will be able to determine the feasibility of your business. This basically means you will be able to know the demand of your product whether as a leather bag manufacturer or custom bag manufacturer. You will also be able to monitor industry trends when venturing into your handbag business and know how to fit in. Understanding your market will enable your company to determine optimal product placement, that is, time,place and manner of product distribution. Research is also important for monitoring your competitors.
Membership Fees $510
The benefits of your business being a member of an organization are important in the successful operations of your company. The company's concerns about certain policies are voiced by organizations and can eventually lead to reforms. For example, leather bag manufacturers face certain tough policies that might inhibit their productivity to some extent. The organization advocates for a more economic environment. Membership will also show the professionalism of your company as a bag manufacturer. Organizations sponsor industry awards, therefore, providing an avenue for your handbag line to gain recognition.
Publications and Books $100
Publications and books maintain communication both internally and externally in a company. Publications are also important for boosting the public relations of your company. Books and publications are an important motivational tool for employees. They help improve the performance of the workforce of your handbag line by keeping employees informed on the company’s policies, social events, activities, and also services.
Online Services ( broadband)$99
Fast internet will definitely boost the productivity of your handbag line. There is no frustration of buffering thus boosting staff morale. Data storage and backup will be improved therefore leading to a reduction of computer hardware. Interaction with customers is more efficient as well as an increase in capacity due to the use of broadband services. This will also enable your company to save costs by cutting down energy use brought about by servers at every office.
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Website Design $2,000
Your website influences the perception of your audience towards your brand. The impression created will either invoke interest or make people leave your page and favor a competitor. Good web design will boost your search engine optimization strategy. This is because web design elements affect content publishing on your website. Your web design will also manifest an impression of your customer service. Your website represents your customer service thus a good web design will give customers confidence in your services. Web design is necessary in order to be competitive in the handbag manufacturing business as your competitors have invested in it.
Web Hosting ( 1st year ) $100
Web hosting will ensure an increase in website load time thus facilitating better user experience which is critical for your handbag line. Good web hosting also improves the security of your website and prevents website downtime which might result in the loss of customers as well as revenue. Select a highly reliable and uptime web host. This will ensure that your website is always available online unless there is server maintenance. The bandwidth of a web host should also be considered for the amount of traffic your website can manage monthly. Solid customer support is important for efficient communication when your website has technical issues.
Considering all the costs, the total you will require to be an established manufacturer in the handbag business is $ 69,680
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COSTS OF A HOME-BASED HANDBAG LINE
The costs of starting a home-based handbag line are significantly cheaper as compared to manufacturers whether the custom bag manufacturer or leather bag manufacturer. Below are some of the expenses incurred when setting up this business.
Office Tools and Furniture $ 2, 895
You will need a small up to the standard office with suitable equipment. This where your planning, organization, as well as communication, will take place. Recording and analyzing of information will also be done here. Basically all paperwork will be done in the office and also handling of clients. This means the setting should create a good working condition.
Cut and Sew Equipment, Textile, Stock, and Packaging $600
You will need tools for crafting your handbags. Tools available should be proportional to your workforce. Keeping stocks is important so that you don’t run out of materials when in the middle of work.
Business Licenses $100 ( approximate)
Registering your handbag business with local authorities is compulsory. This is necessary for taxation purposes. A business without a permit is an illegal business. The fee will vary according to the local city government.
Line Installation Fee $ 40
The phone system cost will differ according to the business needs. In this case, a single analogue landline will be perfect for your handbag line as you will not be accustomed to many calls and faxes. This type of phone line installation is cost-effective and ideal for broadband as well. Acquiring a single analogue landline will also prevent you from wasting money on extra features that are unnecessary for your small business. When selecting your business phone installation, it’s also cautious to consider the maintenance services of the phone line provider. Good customer service will ensure the smooth running of your handbag business. The phone model should not be ignored as well. Costs of different models differ depending on whether you choose a generic phone, medium-range brand model, or a top of the line brand model. Some of the models, depending on the quality, may have additional features like 3- way calling, automatic call-back, call waiting, call forwarding.
P O Box ( 1st 6 months ) $ 54
You home-based handbag line will definitely need P O Box address for several unavoidable reasons.
A post office box address will ensure privacy as well as professionalism for your business. Your actual location is hidden from the public, therefore, preventing uninvited visitors from turning up to your home.
Start-up Marketing ( 3% projected revenue 1st 6 months) $200
This should be mandatory in your budget. Through start-up advertising, your brand establishes its individual identity which is quite significant to the development of the handbag line. Through marketing, your company’s fundamental values as well as business techniques are expressed. Your brand will also be differentiated from the competition therefore establish a unique selling point and attracting customers who seek your specified product. Marketing gives a promise of longevity to customers by coming up with an identity tally's with its goals, values, and beliefs.
Sales Calls Transportation Costs ( 1st 6 months ) $1,200
Budgeting for the transportation of deliveries is very important. Sales calls are usually prearranged otherwise it’s a cold call. This basically means the delivery will be made to homes which can be very expensive. A vehicle would be conducive for this task
Insurance ( yearly ) $500
Having business insurance is crucial for the protection of your assets. Incidents such as fires are nonpredictable and your assets could be wiped out. Insurance also protects your customers in case of any harm at the disposal of your company. Insurance is a government requirement that should not miss in your budget to make your business legal.
Market Research $250
Through market research, you will be able to know your customers better. The research will enable you to figure out your ideals customer’s full profile. This will enable you to determine the market size and what moves the customers to make purchases. By doing a market research you are able to examine the market and identify your competitors. Additionally, you will be able to market test your product before full exposure to your target customer base.
Publications offer a regular and credible resource for learning about industry trends as well as events planned for the year. It’s an efficient way to connect your business with the public. Most people trust the information from a magazine rather than social media.
High-speed internet increases productivity. It also boosts efficiency by reducing the necessity of traveling through video conferencing and also remote office access. It’s definitely worth investing in.
Web Design $1,000
Web design is all about first impressions. An attractive website will invoke a positive impression of your business. This will create a great perception of your product to your customers.
Web Hosting ( 1st year ) $100
Web hosting influences the success of your website. Through web hosting, your website will always be accessible on the web.
It’s crucial to consider the bandwidth and storage of a web host, customer support and also clear pricing terms.