The business idea is for making and marketing of leather sandals. It is premised on production of 300 Leather Sandals per month
which translates into 3120 Sandals per year. The revenue potential is estimated at NGN 1,500,000 per month which translates into NGN
15,600,000. This project cost is NGN 3,488,000 .
After the tannery process, different layers of skins and hides are put together to make shoe soles, another piece is cut that will make the strings of the shoe. The two pieces are then inter-joined by use of either glue or sewing machine. The two are finally taken for smoothening more especially at the edges.
Capital Investment Requirements (CBN exchange rate -$1 to 417.07 NGN) as of 11 feb 2022.
|Capital investment item||Units||Qty||Cost in
|Cost in USD|
|Total cost of machinery||80,000||191.842|
Production and operating costs
|Pdn cost/ month in NGN||Pdn cost/ year
|Pdn cost/ year
|Skins and hides||kg||1000||3||90,000||1,080,000||2,589.866|
General costs (overheads)
| Cost Per Month
|Cost Per Year
|Cost Per Year
|Utilities(water and power)||2000||24,000||57.553|
|Total Operating Costs||284,000||3,408,000||8,172.466|
- Production costs assumed 312 days per year with a daily capacity of 10 Leather Sandals.
- Depreciation (fixed assets write off) assumes 4 years life of assets write off of 25% per year for all assets.
- Direct costs include materials, supplies and other costs that directly go into production of the product.
Project product costs and Price structure
|Item||Qty /day||Qty/yr||@||Pdn cost /yr
|Pdn cost /yr
|Profitability Item||Per day||Per month||Per Year
|Less production and operating Costs||10,000||284,000||3,408,000||8,172.466|
There is an ever-increasing demand for leather products processed from skins and hides.
Availability of Raw Materials and Equipment
Raw Materials (skins and hides) can be got from local markets , and equipment can be obtained from the local market too.
This business associated with risks of stiff competition from other manufacturers thus need for employing better mixing strategies like Price, place among others.