"He had called it Teascuits and it was meant to combine the taste of milk, sugar and tea with biscuits. "If you just had the biscuits you would not need the tea, felt the eager `inventor'," laughs the official. The proposal was thrown out, because apart from being a fairly bizarre idea it was a one-line idea unaccompanied by either homework or a project report.

A project report convinces the FI, that at the very least, you have done some spadework. If you are looking for a cue as to what constitutes one, take a look at one from the Small Industries Service Institute. The institute annually prepares and updates project profiles on potential business opportunities. Enterprise brings an edited text of the profile on leather purses and hand bags whichwas updated recently.

Product: Leather purses and hand bags

Product code: nine digit code is 293201005

Quality standards: Product quality depends upon the raw material used for fabrication of the products. The design and stitching play a vital role as well. Indian standards for raw material: a) Chrome upper leather IS: 478-1971 b) Lining leather: IS 3840-1966

Month and year of production: November 1977

Prepared by Leather Division, SISI, Mumbai

Introduction: A major point of favour of this industry is the indigeneous availability of raw material and skilled labour. It is labour-oriented and can be set up anywhere including in villages. The cheaper product can also be produced by using foam leather (rexine).

Market Potential: Attraction designs and good materials chosen make them popular, they are utility items but are not yet part of a dress code for either sex. It has a wide scope in domestic and foreign markets.

Basis and presumptions: Thisscheme is worked out on a single shift basis. Target is to produce 30,000 pieces each of hand and shoulder bags per month in 25 working days.

Production per annum:
Handbags Rs 3,60,000
Purses Rs 1,27,500
Total Rs 4,37,500

Technical aspect: Production details and process of manufacture. Implementation schedule: Production may start six months from the date of conception of the project, after registration, procuring rented premises, machinery, recruitment of workers and trial production.

Financial Aspects:1. Land 600 sq mts and building 400 sq mts = Rs 5,000 rent p.m
2. Machinery and equipment, including, office furniture and work tables = Rs 5,05,000
3.Total fixed capital: Rs 5,05,000
4. Working capital per month: a)Staff, labour, skilled workers and perks @20% of salary = Rs 71,400
b) Raw materials = Rs 42,500
c) Utilities = Rs 10,000
d) Other expenses (rent, postage, stationery, advertising, telephone, etc) = Rs 11,500
e) Working capital for threemonths = Rs 15,54,000 approx
f) Total capital investment (3+ e) = Rs 20,59,000

Financial Analysis

Cost of production p.a. (Total recurring cost per annum, depreciation on machinery, tools and and office equipment, and interest on total investment) = Rs 65,97,500
Total sales p.a.
Wallets (Rs 50 per piece) and shoulder bags (Rs 200 each) = Rs 75,00,000
Profit before tax = Rs 9,02,500
Break-even analysis

Fixed cost + Rs 3,24,220
(Depreciation Rs 63,000 Interests Rs 3,18,500 40% of wages.salaries of Rs 71,400 x 12 = Rs 8,56,800)
BER point = Fixed cost x 100/Fixed cost + profit
= 7,24, 220 x100/ 7,24,220 + 9,02,500
= 7,24,220 x 100/ 16,26,720 = 45%

For the actual report you can contact the SISI . You can also seek further information on suppliers of machinery and raw material, financial assistance as well as guidance on retail outlets.