While thinking of innovative and sustainable business ideas there is one business that is definitely in demand right now and is an environmentally friendly venture too, and this is the business of making paper bags. With the current ban on plastic bags and items made from plastic in Pune and some cities of Maharashtra (and hopefully being implemented in several cities nationwide), the paper bag making business is definitely a profitable venture to enter into with a high demand for paper bags over the plastic alternatives. Additionally, since this business is beneficial to the environment, it has the backing of the Government as well. Several businesses and consumers too are choosing environmentally sustainable options, thereby increasing the demand for paper bags further.
Another feature that makes this business a preferred choice is that it requires a minimum set up and can be started with limited funds as well.
Step 1- Plan Thoroughly
As with any business idea, the first step before diving in is to have a business plan in place, where the entire business idea, the specifics, the logistics, the funding and other details proposed for the business is mentioned.
Having a business plan checklist handy can make this process easier and it usually includes-
- Summary- this includes a description of the proposed idea and vision
- Detailed business plan- this includes a detailed description of the business idea along with the information regarding the premises for the manufacturing business, machinery and equipment needed, employees required, etc.
- Funding details- this includes the plan to procure funding, from which source and also details regarding how much funding is required
- Marketing Plan- this includes a description of the demographic study, identifying the target audience and the tentative plan to market the product
Step 2 – Helpful Pointers To Keep In Mind
There are a few things you need to keep in mind while making the business plan for the paper bag business-
Choose Your Niche Product
There are a number of varieties and types of paper bags that can be manufactured, such as different shapes, different sizes, different colours, different designs and prints on the bags and many such variations. For your business to succeed you need to specialise in a specific product type and make it your unique, niche product that becomes your USP. Some of the type of bags that can be manufactured include-
- Paper bags for groceries and food items
- Paper bags for shopping
- Paper bags for medicines and medical use
- Paper bags for packaging of jewellery and delicate accessories
- Paper bags for industrial use such as packing of semi-finished goods
- Paper bags for parties and as party favours
Location Of The Business
The location of the manufacturing unit is also important since an ideal location is convenient and helps save on resources and funds. A unit with sufficient water supply and cheaper electricity along with certain ‘economic zone’ benefits can help with the uninterrupted operation of the machines and equipment and ensures smooth-flowing production.
Additionally, the rent or purchase value of the premises for the production unit must not weigh down on the profits earned. Also, the location must preferably be close to the clients, thus helping save on transportation costs.
Training And Equipment Required
It is vital to have the requisite knowledge for starting a paper bag making business, not just about planning the business but the detailed technical know-how about the exact manufacturing process. A brief description of the steps involved in the manufacturing process include-
- Deciding the size of the bag, measuring it accurately and getting the shape cut on the cutting machine.
- Printing the print or logo or information on to the cut-out
- Folding, pasting and shearing the paper- this can be done manually or automatically through machines
- Fitting the lace and eyelet to obtain the finished product
Having appropriate knowledge about the equipment required for the manufacturing process is equally necessary. Some of the equipment that is required for the process includes-
- Bag cutting machine
- Punching machines
- Stereo press and stereo grinder
- Testing scale machine
- Creasing machine
- Printing machines
- Roll slitter motorized machines
- Eyelet fitting machines
- Lace fitting machines
As with every manufacturing business, the raw material is necessary to get the business started and if the raw material can be procured easily it can save time spent in the manufacturing process. The raw materials should be in sufficient quantity to avoid stalling of the manufacturing process owing to it. Also while choosing a vendor for obtaining the raw material check for the paper quality, cost, and the delivery process.
The raw materials required for paper bag making business include-
- Paper roll colours and white
- Paper sheets
- Printing chemicals, ink, etc
- Laces and tags
- Polyester stereo
The paper bag making business is not very labour intensive and a small scale unit can work smoothly with around 10 employees. The employee count can be increased while scaling up the business. The labour need not be professionals as they can be provided with training for the bag making process on the job. Apart from labour for the actual manufacturing process, the business will even require a graphic designer to help with the printing process on the bags.
Investment And Procurement Of Funding
The business requires an initial capital investment for the purchase of raw material as well as equipment, along with purchasing or renting of the space. The cost of a fully automatic paper bag making machine is approximately between Rs 5 to 8 lakhs while a semi-automatic machine can cost up to Rs 3 lakh approximately while a completely manual manufacturing unit can cost much less, approximately Rs 50,000. The production quality and quantity will vary depending on the type of manufacturing unit.
The funding for the manufacturing unit can be obtained either from bank loans or from private (non-banking) financial institutes or from self-funding or with financial help from friends and family.
Registrations For The Business
As with any business, it is necessary to apply for and adhere to legal compliances and obtain necessary licences to run the manufacturing business. A paper bag manufacturing business needs a trade licence which can be obtained from the local municipal authorities. The business can also apply for and register for a Udyog Aadhaar which can be advantageous to the business owing to the benefits for businesses registered under Udyog Aadhaar. Registering for a GST number is also vital for the business and further certification from the Bureau of Indian Standards (BIS) can also be obtained for the paper bag manufacturing business.
Step 3- Assistance With Setting Up The Business
There are a number of things to remember and follow-up on while setting up a paper bag manufacturing business. In case you feel overwhelmed or need assistance with the planning process, or experience trouble with the registrations or any aspect while setting up the business, you can contact deAsra for their guidance.