paper bags startup business plan

Paper Bag Manufacturing Business Plan [Sample Template]

By: Author Tony Martins Ajaero

Home » Business Plans » Manufacturing Sector

Are you about starting a paper bag manufacturing company? If YES, here is a complete sample paper bag manufacturing business plan template & feasibility report you can use for FREE .

Okay, so we have considered all the requirements for starting a paper bag manufacturing company. We also took it further by analyzing and drafting a sample paper bag manufacturing company marketing plan template backed up by actionable guerrilla marketing ideas for paper bag manufacturing companies. So let’s proceed to the business planning section .

Starting a business of your own is one sure way of becoming financially stable. Business ideas are all around us but one of the challenges that aspiring entrepreneurs are confronted with is how to know a business that can become profitable and successful.

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The rule of thumb in choosing a business to launch is to look out for a business whose products or services are needed in our everyday life; a business whose products can be purchased by the rich as well as the poor and a business that is less competitive in your location.

One of such businesses is the paper bag manufacturing business. It is a fact that paper bags are used by the rich as well as the poor. A paper bag manufacturing business is indeed a profitable business that an aspiring entrepreneur with the required startup capital can successfully launch and grow from scratch to profitability.

If you are interested in starting a paper bag manufacturing company, then you would find this sample paper bag manufacturing company business plan template highly useful.

A Sample Paper Bag Manufacturing Business Plan Template

1. industry overview.

Paper bag is one commodity that is used mostly in the retailing industry for packaging goods that are bought from departmental stores, supermarkets, and in the open market; although nylon bags cum polythene bags are also used, but most people prefer paper bags.

This goes to show that there is indeed a very large market for paper bags in our world; hence loads of investors cum aspiring entrepreneur are pitching their tent in the paper bag manufacturing industry.

Businesses in the Cardboard Packaging and Paper Bag manufacturing industry manufacture various sizes and designs of paper bags for the purpose of hauling goods or groceries. Aside from the manufacturing of paper bags, companies in this line of business also manufacture cardboard packaging and sacks.

Cardboard packaging includes corrugated and solid cardboard boxes, folding cartons and customized cardboard containers. In recent time, the conditions in the Cardboard Packaging and Paper Bag Manufacturing industry have been relatively volatile.

The revenue generated in the industry is heavily influenced by national demand for consumer goods, as the majority of the products that are produced in the industry are sold for downstream use in the fast-moving consumer goods (FMCG) sector.

The Cardboard Packaging and Paper Bag Manufacturing industry is indeed a major sector of the economy of most countries in the world.

Statistics has it that in the united kingdom alone, the Cardboard Packaging and Paper Bag Manufacturing industry generates well over $4 billion annually from more than 483 registered and licensed big scale cardboard packaging and paper bag manufacturing companies scattered all around the United Kingdom.

The industry is responsible for the employment of over 26,885 people. Experts project the industry to grow at a 1.5 percent annual rate. The establishment in this industry that has a dominant market share in the United Kingdom are; DS Smith Packaging Ltd, SAICA Pack UK Limited and Smurfit Kappa UK Ltd.

Over and above, the Cardboard Packaging and Paper Bag Manufacturing industry is a profitable industry and it is open for any aspiring entrepreneur to come in and establish his or her business; you can choose to start on a small scale or you can choose to start on a large scale with standard manufacturing factories both in the united states of America and in countries in Asia where you can get cheaper labor and raw materials.

2. Executive Summary

Red Ribbon® Paper Bag Manufacturing Co is a US registered paper bag and cardboard manufacturing company that will be located in Trenton – New Jersey; in an ideal location that is highly suitable for the kind of business we want to establish.

We have been able to lease a facility that is big enough (a 25 thousand square foot facility) to fit into the design of the kind of standard paper bag and cardboard manufacturing company that we intend establishing.

Red Ribbon® Paper Bag Manufacturing Co will be involved in the manufacturing of a wide range of paper bags and cardboard packing cum casing for both corporate and individual clients. We are set to service a wide range of clientele not just in the United States of America, but also all parts of the world.

We are aware that there are several large and small paper bag manufacturing companies all around the United States of America, which is why we spent time and resources to conduct a thorough feasibility studies and market survey so as to be well positioned to favorably compete with all our competitors.

Red Ribbon® Paper Bag Manufacturing Co will ensure that all the paper bags that leave our factory are of the highest quality and highly durable and affordable.

We want to build a business with a wide range of client base that cut across businesses in the fast-moving consumer goods (FMCG) sector. We have a CRM software that will enable us manage a one on one relationship with our customers no matter how large our customer base may grow to.

Red Ribbon® Paper Bag Manufacturing Co will at all times demonstrate her commitment to sustainability, both individually and as a firm, by actively participating in our communities and integrating sustainable business practices wherever possible.

We will ensure that we hold ourselves accountable to the highest standards by meeting our customers’ needs precisely and completely whenever they patronize our products. Red Ribbon® Paper Bag Manufacturing Co is a family business that is owned by Douglas Emerson and his immediate family members.

Douglas Emerson has a Diploma in paper bag cum cardboard making and a B.Sc. in Business Administration, with over 12 years of experience in the cardboard and paper bag manufacturing industry. He will be bringing in his vast experience to build Red Ribbon® Paper Bag Manufacturing Co to become a top brand.

3. Our Products and Services

Red Ribbon® Paper Bag Manufacturing Co is in the paper bag manufacturing industry to manufacture a wide range of paper bags and cardboard casing for both corporate and individual clients.

We are set to service a wide range of clientele not just in the United States of America, but also all parts of the world and of course to make profits, which is why we will ensure we go all the way to give our clients options. Our product offerings are listed below;

• Customized paper bags for events
• Paper bags for food storage
• Paper bags for grocery
• Paper bags for trash
• Paper bags for packaging
• Corrugated cardboard boxes, cartons and cases
• Non-corrugated cardboard boxes, cartons and cases
• Corrugated cardboard in rolls or sheets

4. Our Mission and Vision Statement

• Our vision is to become the leading brand in the cardboard packaging and paper bag manufacturing industry in New Jersey and to establish a one stop cardboard packaging and paper bag manufacturing company.
• Our mission is to establish a world – class paper bag manufacturing company whose products will not only be used by both small and big corporations in the FMCG sector in the United States of America, but also be exported to other countries of the world.

Our Business Structure

Red Ribbon® Paper Bag Manufacturing Co do not intend to start our paper bag manufacturing business in a small scale; our intention of starting the company is to build a standard and one stop paper bag manufacturing company in Trenton – New Jersey.

Although our cardboard packing and paper bag manufacturing company might not be as big as DS Smith Packaging Ltd, SAICA Pack UK Limited and Smurfit Kappa UK Ltd et al, but we will ensure that we put the right structures in place that will support the kind of growth that we have in mind while setting up the business.

We will make sure that we employ people that are qualified, honest, customer centric and are ready to work to help us build a prosperous business that will benefit all our stakeholders.

As a matter of fact, profit-sharing arrangement will be made available to all our senior management staff and it will be based on their performance for a period of ten years or more. In view of that, we have decided to hire qualified and competent hands to occupy the following positions;

• Chief Executive Officer (Owner)
• Factory Manager
• Human Resources and Amin Manager

Merchandize Manager

Sales and Marketing Manager

• Paper Bags Designers and Making Experts
• Accountants/Cashiers
• Customer Services Executive

5. Job Roles and Responsibilities

Chief Executive Officer – CEO:

• Increases management’s effectiveness by recruiting, selecting, orienting, training, coaching, counseling, and disciplining managers; communicating values, strategies, and objectives; assigning accountabilities; planning, monitoring, and appraising job results; developing incentives; developing a climate for offering information and opinions; providing educational opportunities.
• Accountable for fixing prices and signing business deals
• In control of providing direction for the business
• Creating, communicating, and implementing the organization’s vision, mission, and overall direction – i.e. leading the development and implementation of the overall organization’s strategy.
• Responsible for signing checks and documents on behalf of the company
• Appraises the success of the organization

Administrative and HR Manager

• Responsible for overseeing the smooth running of HR and administrative tasks for the organization
• Maintains office supplies by checking stocks; placing and expediting orders; evaluating new products.
• Ensures operation of equipment by completing preventive maintenance requirements; calling for repairs.
• Defining job positions for recruitment and managing interviewing process.
• Carrying out staff induction for new team members.
• Responsible for training, evaluation and assessment of employees.
• Responsible for arranging travel, meetings and appointments.
• Oversee the smooth running of the daily office activities.

Factory Manager:

• Responsible for managing the daily activities in the paper bag manufacturing factory
• Ensures that proper records of cardboard packing materials and paper bags are kept and warehouse does not run out of finished products
• Ensure that the factory is in tip top shape
• Interfaces with third – party suppliers (vendors) of raw materials
• Control cardboard packaging and paper bag distribution and supply inventory
• Supervise the workforce in the cardboard packing and paper bag manufacturing factory
• Manages vendor relations, market visits, and the ongoing education and development of the organizations’ buying teams
• Helps to ensure consistent quality of cardboard packing and paper bag making raw materials are purchased and used
• Responsible for the purchase of cardboard packing and paper bag raw material for the organizations
• Responsible for planning sales, monitoring inventory, selecting the merchandise, and writing and pricing orders to vendors
• Manages external research and coordinate all the internal sources of information to retain the organizations’ best customers and attract new ones
• Models demographic information and analyze the volumes of transactional data generated by customer purchases
• Recognizes, arranges, and spreads out to new partners, and business opportunities et al
• Identifies development opportunities; follows up on development leads and contacts; participates in the structuring and financing of projects; assures the completion of development projects.
• Responsible for supervising implementation, advocate for the customer’s needs, and communicate with clients
• Develops, executes and evaluates new plans for expanding sales
• Documents all customer contact and information
• Represents the company in strategic meetings
• Helps to increase sales and growth for the company

Cardboard Packing and Paper Designers and Making Experts

• Responsible for designing and manufacturing customized paper
• Responsible for designing and manufacturing paper bags for food storage
• Responsible for designing and manufacturing paper bags for grocery
• Responsible for designing and manufacturing paper bags for merchandise
• Responsible for designing and manufacturing paper bags for trash
• Responsible for designing and manufacturing paper bags for packaging
• Responsible for designing and manufacturing corrugated cardboard boxes, cartons and cases
• Responsible for designing and manufacturing non-corrugated cardboard boxes, cartons and cases
• Responsible for designing and manufacturing corrugated cardboard in rolls or sheets

Accountant/Cashier:

• Responsible for preparing financial reports, budgets, and financial statements for the organization.
• Provides managements with financial analyses, development budgets, and accounting reports; analyzes financial feasibility for the most complex proposed projects; conducts market research to forecast trends and business conditions.
• Responsible for financial forecasting and risks analysis.
• Performs cash management, general ledger accounting, and financial reporting.
• Responsible for developing and managing financial systems and policies.
• Responsible for administering payrolls.
• Ensures compliance with taxation legislation.
• Handles all financial transactions for the organization.
• Serves as internal auditor for the organization.

Client Service Executive

• Ensures that all contacts with clients (e-mail, walk-In center, SMS or phone) provides the client with a personalized customer service experience of the highest level
• Through interaction with customers on the phone, uses every opportunity to build client’s interest in the company’s products and services
• Manages administrative duties assigned by the human resources and admin manager in an effective and timely manner
• Consistently stays abreast of any new information on the organizations’ products, promotional campaigns etc. to ensure accurate and helpful information is supplied to customers when they make enquiries

6. SWOT Analysis

Red Ribbon® Paper Bag Manufacturing Co is in business to become one of the leading paper bag manufacturing companies in the United States of America and we are fully aware that it will take the right business concept, management and organizational – structure to achieve our goal.

We know that there are several paper bag manufacturing companies all over the United States of America and even in the same location where we intend locating ours, which is why we are following the due process of establishing a business.

We know that if a proper SWOT analysis is conducted for our business, we will be able to position our business to maximize our strength, leverage on the opportunities that will be available to us, mitigate our risks and be well equipped to confront our threats.

Red Ribbon® Paper Bag Manufacturing Co employed the services of an expert HR and Business Analyst with bias in the manufacturing industry to help us conduct a thorough SWOT analysis and to help us create a Business model that will help us achieve our business goals and objectives. This is the summary of the SWOT analysis that was conducted for Red Ribbon® Paper Bag Manufacturing Co;

Our main strength lies in the high quality of our finished cardboard packing materials and paper bags, the power of our team and our state-of-the-art paper bag manufacturing factory.

We have a team of highly trained and experienced paper bag designers and makers and support staff members that can go all the way to produce top notch cardboard and paper bags. We are well positioned in the heart of Trento – New Jersey and we know we will attract loads of clients from the first day we open our factory.

A major weakness that may count against us is the fact that we are a new cardboard and paper bag manufacturing company and we don’t have the financial capacity to compete with multi – million dollars companies in the industry when it comes to selling our products at rock bottom prices. So also, we may not have enough cash reserve to promote our business the way we would want to do.

• Opportunities:

The fact that we are going to be operating our cardboard and paper bag manufacturing company in Trento – New Jersey provides us with unlimited opportunities to sell our products to a large number businesses. We have been able to conduct thorough feasibility studies and market survey and we know what our potential clients will be expecting from us.

Just like any other business, one of the major threats that we are likely going to face is economic downturn. It is a fact that economic downturn affects purchasing/spending power.

Another threat that may likely confront us is the arrival of a new cardboard and paper bag manufacturing company in same location where ours is located. So also, unfavorable government policies may also pose a threat for businesses such as ours.

7. MARKET ANALYSIS

• Market Trends

The condition in the Cardboard and Paper Bag Manufacturing industry have been relatively volatile. The revenue generated in the industry is heavily influenced by national demand for consumer goods, as the majority of the products that are produced in the industry are sold for downstream use in the fast-moving consumer goods (FMCG) sector.

One major trend in the cardboard and paper bag manufacturing industry is that most players are leveraging on the fact that states in the US and even countries of the world are passing a legislation that will limit the use of nylon and polythene bags because of environmental hazard hence paper bags have become a good substitute.

Lastly, as part of marketing strategies, paper bag manufacturing companies now ensure that they go beyond mass production of paper bags and cardboard to producing customized paper bags for bigger corporations who are in the fast-moving consumer goods (FMCG) sector.

8. Our Target Market

There is hardly any pharmaceutical store, departmental store, groceries store, electronic stores supermarkets or boutique that do not make use of paper bags or cardboard boxes for packaging goods bought from their stores.

In view of that, we have positioned our paper bags manufacturing company to service a wide range of clientele in the United States of America and other parts of the world. We have conducted our market research and feasibility studies and we have ideas of what our target market would be expecting from us.

We in the paper bag manufacturing industry will supply our products to the following fast-moving consumer goods organizations;

• Departmental Stores
• Groceries Stores
• Pharmaceutical Stores
• Electronic Stores
• Supermarkets
• Shoe manufacturing companies
• Fast food restaurants
• Mobile phones and accessories stores

Our Competitive Advantage

A close examination of the paper bag manufacturing industry reveals that the market has become much more intensely competitive over the last decade. As a matter of fact, you have to be highly creative with your designs and market approach if you must survive in this industry.

We are aware of the stiff competition and we are well prepared to compete favorably with other leading paper bag manufacturing companies in the United States and the globe.

Red Ribbon® Paper Bag Manufacturing Co is launching a standard paper bag manufacturing company that will indeed become the preferred choice for businesses in the fast-moving consumer goods sector both in the United States of America and other countries of the world.

Our paper bag manufacturing company is located in an ideal property highly suitable for the kind of manufacturing company that we want to run.

One thing is certain, we will ensure that we manufacture high quality and durable cardboard and paper bags in our factory at all times. Our excellent customer service culture, various payment options and highly secured facility will serve as a competitive advantage for us.

Lastly, our employees will be well taken care of, and their welfare package will be among the best within our category in the industry meaning that they will be more than willing to build the business with us and help deliver our set goals and achieve all our aims and objectives.

We will also give good working conditions and commissions to freelance sales agents that we will recruit from time to time.

9. SALES AND MARKETING STRATEGY

• Sources of Income

Red Ribbon® Paper Bag Manufacturing Co is in business to manufacture and supply cardboard and paper bags in the United States of America and other parts of the world.

We are in the cardboard and paper bag manufacturing industry to maximize profits and we are going to go all the way out to ensure that we achieve our goals. Red Ribbon® Paper Bag Manufacturing Co will generate income by selling the following products;

• Customized paper bags
• Paper bags for merchandise

10. Sales Forecast

The paper bag manufacturing industry has a wide range of customers that cut across various manufacturing industries. We are well positioned to take on the available market in the United States of America and of course the rest of the world and we are quite optimistic that we will meet our set target of generating enough profits from the first six months of operation and grow the business and our clientele base.

We have been able to critically examine the cardboard and paper bag manufacturing industry, we have analyzed our chances in the industry and we have been able to come up with the following sales forecast. The sales projection is based on information gathered on the field and some assumptions that are peculiar to startups in Trenton – New Jersey.

• First Fiscal Year: $250,000
• Second Fiscal Year: $650,000
• Third Fiscal Year: $1.2 million

N.B : This projection was done based on what is obtainable in the industry and with the assumption that there won’t be any major economic meltdown and there won’t be any major competitor manufacturing or retailing same products as we do within the same location. Please note that the above projection might be lower and at the same time it might be higher.

• Marketing Strategy and Sales Strategy

Before choosing a location for Red Ribbon® Paper Bag Manufacturing Co, we conducted a thorough market survey and feasibility studies in order for us to penetrate the available market and become one of the preferred choice for businesses in Trenton – New Jersey.

We have detailed information and data that we were able to utilize to structure our business to attract the number of customers we want to attract per time.

We hired experts who have good understanding of the cardboard and paper bag manufacturing industry to help us develop marketing strategies that will help us achieve our business goal of winning a larger percentage of the available market in the United States of America.

In other to continue to be in business and grow, we must continue to manufacture and sell the cardboard and paper bags that we produce which is why we will go all out to empower or sales and marketing team to deliver. In summary, Red Ribbon® Paper Bag Manufacturing Co will adopt the following sales and marketing approach to win customers over;

• Open our paper bag manufacturing company in a grand style with a party for all
• Introduce our paper bag manufacturing company by sending introductory letters alongside our brochure to manufacturing organizations, stores and key stakeholders in Trenton – New Jersey and other parts of the United States
• Ensure that we manufacture a wide range of paper bags and cardboard
• Make use of attractive hand bills to create awareness and also to give direction to our factory
• Position our signage/flexi banners at strategic places around Trenton – New Jersey
• Create a loyalty plan that will enable us reward our regular customers
• Engage in roadshows within our neighborhood to create awareness for our products
• List our business and products on yellow pages ads (local directories)
• Leverage on the internet to promote our products
• Engage in direct marketing and sales
• Encourage the use of Word of mouth marketing (referrals)

11. Publicity and Advertising Strategy

Even though our paper bag manufacturing company is well positioned, we will still go ahead to intensify publicity for the business. We are going to explore all available means to promote our cardboard and paper bag manufacturing company.

Red Ribbon® Paper Bag Manufacturing Co has a long – term plan of opening our factories in key locations in Asia, South America and Africa which is why we will deliberately build our brand to be well accepted in the United States of America before venturing out. Here are the platforms we intend leveraging on to promote and advertise Red Ribbon® Paper Bag Manufacturing Co;

• Place adverts on community based newspapers, radio and TV stations
• Encourage the use of word of mouth publicity from our loyal customers
• Leverage on the internet and social media platforms to promote our business
• Ensure that our we position our banners and billboards in strategic positions all around Trenton – New Jersey
• Distribute our fliers and handbills in target areas in and around our neighborhood
• Contact corporate organizations and stores by calling them up and informing them of Red Ribbon® Paper Bag Manufacturing Co and the products we manufacture
• Advertise our paper bag manufacturing company in our official website and employ strategies that will help us pull traffic to the site
• Brand all our official cars and trucks and ensure that all our staff members and management staff wear our branded shirt or cap at regular intervals

12. Our Pricing Strategy

Aside from quality, pricing is one of the key factors that gives leverage to cardboard and paper bag manufacturing companies, it is normal for consumers to go to places where they can get paper bags at cheaper prices which is why big players in the cardboard and paper bags manufacturing industry like DS Smith Packaging Ltd, SAICA Pack UK Limited and Smurfit Kappa UK Ltd et al will always attract loads of clients.

We know we don’t have the capacity to compete with these companies, but we will ensure that the prices and quality of all our cardboard and paper bags are competitive with what is obtainable amongst cardboard and paper bags manufacturing companies within our level.

• Payment Options

The payment policy adopted by Red Ribbon® Paper Bag Manufacturing Co is all inclusive because we are aware that different customers prefer different payment options as it suits them but at the same time, we will ensure that we abide by the financial rules and regulation of the United States of America.

Here are the payment options that Red Ribbon® Paper Bag Manufacturing Co will make available to her clients;

• Payment via bank transfer
• Payment with cash
• Payment via Point of Sale Machine (POS)
• Payment via online bank transfer
• Payment via check
• Payment via bank draft

In view of the above, we have chosen banking platforms that will enable our client make payment for the purchase of our paper bags and cardboard without any stress on their part. Our bank account numbers will be made available on our website and promotional materials.

13. Startup Expenditure (Budget)

In setting up any business, the amount or cost will depend on the approach and scale you want to undertake. If you intend to go big by renting / leasing a big facility, then you would need a good amount of capital as you would need to ensure that your employees are well taken care of, and that your facility is conducive enough for workers to be creative and productive.

This means that the startup can either be low or high depending on your goals, vision and aspirations for your business. The tools and equipment that will be used are nearly the same cost everywhere, and any difference in prices would be minimal and can be overlooked.

As for the detailed cost analysis for starting a cardboard and paper bag manufacturing business; it might differ in other countries due to the value of their money. These are the key areas where we will spend our startup capital on;

• The total fee for registering the Business in the United States of America – $750
• Legal expenses for obtaining licenses and permits as well as the accounting services (software, P.O.S machines and other software) – $3,300
• Marketing promotion expenses for the grand opening of Red Ribbon® Paper Bag Manufacturing Co in the amount of $3,500 and as well as flyer printing (2,000 flyers at $0.04 per copy) for the total amount of $3,580
• The total cost for hiring Business Consultant – $2,500
• The total cost for payment of insurance policy covers (general liability, workers’ compensation and property casualty) coverage at a total premium – $9,400
• The total cost for long – term leasing of a standard warehouse / factory – $250,000
• The total cost for remodeling the warehouse / factory – $20,000
• Other start-up expenses including stationery ( $500 ) and phone and utility deposits – ( $2,500 ).
• Operational cost for the first 3 months (salaries of employees, payments of bills et al) – $100,000
• The total cost for start-up inventory (purchase of tools and equipment and the purchase of raw materials inclusive) – $150,000
• The total cost for counter area equipment – $9,500
• The total cost for store equipment (cash register, security, ventilation, signage) – $13,750
• The total cost for the purchase and installation of CCTVs: $10,000
• The cost for the purchase of office furniture and gadgets (Computers, Printers, Telephone, TVs, Sound System, tables and chairs et al): $4,000.
• The total cost of launching a Website: $600
• The total cost for our opening party: $7,000
• Miscellaneous: $10,000

We would need an estimate of $750,000 to successfully set up our paper bag manufacturing company in Trenton – New Jersey. .

Generating Startup Capital for Red Ribbon® Paper Bag Manufacturing Co

Red Ribbon® Paper Bag Manufacturing Co is a family business that is solely owned and financed by James Whitney and his immediate family members. They do not intend to welcome any external business partners which is why he has decided to restrict the sourcing of the startup capital to 3 major sources.

These are the areas we intend generating our startup capital;

• Generate part of the startup capital from personal savings
• Source for soft loans from family members and friends
• Apply for loan from my Bank

N.B: We have been able to generate about $250,000 ( Personal savings $200,000 and soft loan from family members $50,000 ) and we are at the final stages of obtaining a loan facility of $500,000 from our bank. All the papers and documents have been signed and submitted, the loan has been approved and any moment from now our account will be credited with the amount.

14. Sustainability and Expansion Strategy

The future of a business lies in the number of loyal customers they have, the capacity and competence of the employees, their investment strategy and the business structure. If all of these factors are missing from a business, then it won’t be too long before the business closes shop.

One of our major goals of starting Red Ribbon® Paper Bag Manufacturing Co is to build a business that will survive off its own cash flow without the need for injecting finance from external sources once the business is officially running.

We know that one of the ways of gaining approval and winning customers over is to manufacture durable and quality paper bags and to retail them a little bit cheaper than what is obtainable in the market and we are well prepared to survive on lower profit margin for a while.

Red Ribbon® Paper Bag Manufacturing Co will make sure that the right foundation, structures and processes are put in place to ensure that our staff welfare are well taken of. Our company’s corporate culture is designed to drive our business to greater heights and training and retraining of our workforce is at the top burner.

As a matter of fact, profit-sharing arrangement will be made available to all our management staff and it will be based on their performance for a period of six years or more. We know that if that is put in place, we will be able to successfully hire and retain the best hands we can get in the industry; they will be more committed to help us build the business of our dreams.

Check List/Milestone

• Business Name Availability Check: Completed
• Business Registration: Completed
• Opening of Corporate Bank Accounts: Completed
• Securing Point of Sales (POS) Machines: Completed
• Opening Mobile Money Accounts: Completed
• Opening Online Payment Platforms: Completed
• Application and Obtaining Tax Payer’s ID: In Progress
• Application for business license and permit: Completed
• Purchase of Insurance for the Business: Completed
• Leasing of facility and remodeling the facility: In Progress
• Conducting Feasibility Studies: Completed
• Generating capital from family members: Completed
• Applications for Loan from the bank: In Progress
• Writing of Business Plan: Completed
• Drafting of Employee’s Handbook: Completed
• Drafting of Contract Documents and other relevant Legal Documents: In Progress
• Design of The Company’s Logo: Completed
• Graphic Designs and Printing of Packaging and Promotional Materials: In Progress
• Recruitment of employees: In Progress
• Purchase of machines and equipment: Completed
• Purchase of the Needed furniture, racks, shelves, computers, electronic appliances, office appliances and CCTV: In progress
• Creating Official Website for the Company: In Progress
• Creating Awareness for the business both online and around the community: In Progress
• Health and Safety and Fire Safety Arrangement (License): Secured
• Opening party/launching party planning: In Progress
• Compilation of the list of products we will be manufacturing: Completed
• Establishing business relationship with vendors and supplier of raw materials: In Progress.

A Comprehensive Guide to Paper Bags and How to Start a Paper Bag Making Business!

Rishita Jain , Akash Kushwaha

With the rising toxicity and pollution levels in the environment, eco-friendly products have become the need of the hour. Governments and various companies across the world are finally discouraging the use of plastics, which causes disastrous environmental issues. This has paved way for the paper bag-making businesses. Paper bags are in great demand nowadays for their recyclable and sustainable features in nearly every commences activity.

The Emergence and Evolution of Paper Bags! Advantages of Using Paper Bags Common Uses of the Paper Bags Types of Paper Bags The Paper Bag Industry, its Market Potential, and Opportunities 10 Easy Steps to Start Paper Bags Making Business Some Steps to be Kept in Mind to Make Paper Bags Branding and Promotion of the Product Profits Expected from Paper Bag Making Business

The Emergence and Evolution of Paper Bags!

Paper bags, as the name implies, are bags made out of paper. These papers are usually created with the chemical pulp that is manufactured with the help of the kraft pulping process.

Paper bags are not a new thing that we witness today. The paper bag-making industry is pretty old in India and is still found in a majority of Indian shops, mainly in tier 2, and tier 3 cities, and beyond. However, most of these are envelope-styled bags, which lack handles. The flat-bottomed bags with handles are pretty new to the Indian market though, which is generally known for its eco-friendly bags made out of jute.

Francis Wolle first invented the machine to mass-produce paper bags back in 1852. His brother and Wolle patented the machine and established the Union Paper Bag Company. It was James Baldwin, who first received a patent for the apparatus for making square-bottomed paper bags in 1853. He was a papermaker of Birmingham and Kings Norton in England. Baldwin then began to use the image of a flat-bottomed bag as his business logo.

The concept of flat-bottomed paper bags got a boost in 1871 when inventor Margaret E. Knight ideated a machine that would be able to create flat-bottomed paper bags. These bags were detected fit to carry more than the previous envelope-style design. Eventually, Charles Stilwell patented a machine that is capable of creating square-bottom paper bags that had pleated sides in 1883. These bags emerged as a better alternative that is easier to fold and store. The Stilwell bags also came to be known as S.O.S or Self-Opening Sack.

The latest modification of the paper bags that come with handles was actually implemented by Walter Deubener in 1912. A grocer from Saint Paul, Minnesota, Deubener used cords with paper bags to reinforce them and also added carrying handles. Named after Walter Deubener, the "Deubener Shopping Bags" were able to carry nearly 75 pounds then, which was why it soon rose in popularity. It recorded a sale of 1+ mn bags a year by 1915.

After this, paper bags with handles became the standard for department stores and others, especially for their ease of use and durability. However, paper bags were trumped by plastic bags, which were introduced in the 1970s. These bags were lightweight and affordable, which propelled them to be the regular choice of both shoppers and merchants. However, plastic bags were eventually found to be really harmful to the environment, which is the reason for the growing demand for paper bags and other eco-friendly options.

Advantages of Using Paper Bags

Paper bags are largely embraced today by shoppers and shopkeepers because of the list of advantages they bring to us. Here's to list of some of them:

• They are biodegradable and recyclable
• They don't cause harm to the environment
• Paper bags pose less risk of suffocation
• These bags don't harm the marine life
• The paper bags are easy to dispose of
• They are sustainable options
• They save energy
• The making of paper bags is easy and efficient
• They are cost effective
• Paper bags are efficient marketing tools
• They can also serve as excellent gifts for corporates and others

Common Uses of the Paper Bags

Following are some of the major areas where paper bags are used:

• Gift packaging
• Food packaging
• Paper cover making at home
• Medical use
• Jewellery packaging
• General purposes
• Advertising

Types of Paper Bags

Paper bags can be classified into numerous categories. However, when looking at these bags, there are 2 prominent varieties of them that one can usually find:

• White paper bags - The white paper bags or the white kraft paper bags are chemically treated variants of paper bags. These bags are bleached and treated with other chemicals, which help whiten them and purify the natural kraft pulp.
• Brown paper bags - The brown paper bags or the brown kraft paper bags are made of unbleached kraft pulp.

The Paper Bag Industry, its Market Potential, and Opportunities

The global market for paper bags is estimated to grow at a steady CAGR of 4.1% between 2022-2030 and is to reach $7.3 bn during this period. The global market size of paper bags was $5.2 bn in 2022. The collective paper bag manufacturers' market share or value share of the top 5 companies in 2022E is estimated at 11%.

The Indian paper bag industry last stood at $5.95 bn when reported in 2018. the country today, exports paper products worth Rs 400 crore per annum.  

Paper has no real competing product. Plastic bags, once regarded as a substitute for paper bags have lost their market over time. Moreover, the establishment of consumer stores and shopping malls has further increased the demand for paper bags. Hence, the paper bag-making business is a booming opportunity for new and aspiring entrepreneurs.

10 Easy Steps to Start Paper Bags Making Business

Paper bag making is rising in demand and more and more companies and entrepreneurs are joining in to make the best of the paper bag-making business. Now, if you are also looking forward to building a paper bag-making business, then here are some easy and effective steps that you can keep in handy:

Perform a thorough market research

Thorough market research is essential regardless of whatever the business is that you want to build. Proper market research would help you:

• Know more about the industry
• Build your strategies
• Market your products effectively
• Analyze your competitors
• Perform a SWOT analysis
• Thrive in the long run  

Build a robust business and revenue model

Business models are of various kinds , one type of business model may not suit all of the industries and products/services around which the businesses revolve. So, spend time generously building a business model that is cost-effective and efficient for the customers, which would thrive in the future. It is also equally important to chalk out all the ways through which you would be able to earn, embracing the business model that you have zeroed in.  

Estimate the Paper Bag Making Business Costs

As paper bag making is generally a small-scale business , it will require minimal investment. The main areas of investment will be the cost of machinery, labor, and land.   Maintenance, transportation, and marketing will contribute to variable investments.

The price of one fully automatic paper bag-making machine is around 5 – 8 Lakhs INR. The price is dependent on the production capacity of the machine. One fully automatic machine can produce 15000 pieces/hour. Researching and proper planning as to where to spend and the choice of suppliers will also reduce your cost to a significant extent.

Register your Company

You will need to register your business and obtain a trade license from a local municipal authority.

• Here, you can proceed either with a sole proprietor or an LLP registration of Company registration.
• Then you will have to get your UDYOG AADHAR MSME registration or SSI registration completed. It is for businesses running under the name of small-scale industries.
• After that, you need to make your company GST-compliant, by opting for GST registration.
• Lastly, you need to procure the BIS certification for your company, which is offered by the Bureau of Indian Standards

Focus on the Legal Compliance of your Business

Registering your paper bag-making business is a significant part of making your business legally compliant, which contains other factors too. These legal factors need to be checked first by seeking the help of local government representatives. Looking for and proceeding with efficient business insurance would further make your paper bag manufacturing business future-proof.

After all these things are taken care of, you can start your business professionally, but the naming of the business plays an important part, then.

Name your Business wisely

The naming of your business will play a huge role in the future growth and success of your business. Hence, you need to name your paper manufacturing business wisely. To choose a perfect name for your paper-making business, you need to ensure:

• The name is unique
• It is simple
• It is easily pronounced and written
• The name should be marketable
• It should be memorable
• The name should be relevant to the industry

Select a Proper Location for your Paper Bag Manufacturing Unit

Choosing an appropriate location according to your business size is very important. Moreover, the rented land cost must not outweigh your profits. To make transportation costs minimum, try to fix the location near the market and reduce the distribution channel. A semi-urban area is the best choice to establish paper bag-making businesses . It reduces costs in taxes, rents, manpower, and other important obligations.

Make Provisions for Procuring the Raw Materials Required for Paper Bag Making

The quality of your products and eventually the profits depend on the raw materials used. Paper bags with outstanding quality and fine texture can boost your competitive advantages and steal the focus of the market and the customers. Therefore, the appropriate quality, as well as quantity of raw materials, should be ensured.

These are some basic raw materials required for paper-making:

• Paper rolls
• Printing chemicals, ink, etc
• Polymeter Stereo
• Flexo Color

You do not need to overstock them as it may cause unnecessary storage costs.

Install Proper Paper Bag Manufacturing Machinery

Now, after the procurement of the raw materials for paper bag-making activities, you need to determine the type of paper bag your business will focus on manufacturing , and then select suitable machinery. Here, you would also need to check whether you will buy eco-friendly carry bag-making machines, wholesale biodegradable bag manufacturing machines, cotton bag-making machines, or something else.

The durability, reliability, and productivity of the machines should be checked thoroughly before purchasing. Depending on these factors, machinery costs from 5 lakhs to 10 lakhs.

Some of the basic features you can get when you buy a paper bag-making machine are listed below.

• Stereo design roller
• Flat forming dye
• 3 horsepower motor for the main drive
• Double-color or four-color flexo printing unit attachment

We recommend you visit a paper bag manufacturing firm in order to know more about the working of machines. This will also give you an idea of the machine you need to buy for manufacturing paper bags.

Engage the Labor Required

Labor size depends on the size of the business but skilled manpower is a must. A healthy interactive training program can help them learn the manufacturing process and meet the requirements of the employer.

Some Steps to be Kept in Mind to Make Paper Bags

• The very first step is to decide on the size of the product. It should meet the client's needs.
• The next step is to print the logo. The print quality should not be compromised.
• Then, the paper should be left for folding, pasting, and shearing which can be done through machines.
• The last two steps are eyelet fitting and lace fitting, which needs to be properly done.

Branding and Promotion of the Product

Presentation is every bit as important as manufacturing. Without the right promotion, no business can survive long-term. There must be a uniqueness in your product description to attract your client's attention. A logo represents the image of your company and is good for promotion. You can hire freelancers to design your company's logo as you want. Also, you can use mediums like local magazines and newspapers for advertising your paper bags.

Social media provides a great platform for promoting your product and reaching the consumer crowd quickly. Establish an online website that not only gains orders but also creates an impactful image of your product to viewers. Research and conduct small surveys of the local and online markets.

Profits Expected from Paper Bag Making Business

The paper bag-making machine is capable of making 60 bags in a minute. You can make a profit of 10 paise per bag. So, you can get a profit of Rs 6 for every minute you invest in bag-making. With production and marketing going smoothly, you can expect to earn near about Rs 2800 on a daily basis. This sums up to Rs 70000 per month. Although these profits vary depending on various other factors in your business.

Paper bag making can be really profitable if executed properly, taking care of all the above measures. This business is full of interesting opportunities, and the output, which is paper bags, is the need of the hour and this need will only escalate in the future. Anyone can start a paper bag-making business because it doesn't require large investments or vast land space or even complex machinery. In fact, you can initiate your business at home too if you have sufficient space for proper planning and researching. So go forth, invest time and energy, and set up your own paper bag-making business .

What are paper bags?

Paper bags are an environmental-friendly choice of bags. Being made out of paper, these bags are rising in demand while more and more people are rejecting plastic bags.

What is the paper packaging bag manufacturers' market?

The global paper packaging bag manufacturers market is valued at $5.2 bn in 2022 and will grow by 4.1% CAGR between 2022-2030, and is expected to reach $7.3 bn during this period.

From where is the paper bag procurement done?

Paper bag procurement can be done by visiting physical local stores, factories, and wholesalers, or by placing orders for the same online.

What is Paper bag limited Kenya?

Paper bags Ltd. is a Kenyan packaging company that manufactures quality paper packaging materials - brown and white paper bags, sacks, and more.

What are some popular paper bag manufacturers in India?

Paper bags is one of the industries that are flourishing today in India and has great potential for future growth too. Here's mentioning some of the prominent paper bag manufacturers in India:

• Yes Sir Bags
• Eco Bags India
• Vachi Paper products
• A. R. Enterprise

How are paper bags made in industry?

The paper bag manufacturing industry is huge today. However, if you are wondering how paper bags are made in the industry now, then here are some important steps that are carried out by the best paper bag manufacturing companies in their paper bag production factories:

• First, they select the raw material needed and gather them
• Then, they proceed with paper steering, where the cutting or sizing of paper is done.
• The handles of the paper bags are done now.
• After that, the sheered and eyelet-punched paper is creased.
• Hard pressing is then done, where sheets of paper are stuck together to make the paper bags stronger and thicker.

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How to Start a Profitable Paper Bag Making Manufacturing Business

• February 6, 2023
• by Editorial Team

Do you want to start a paper bag making business from home or on small scale?  If so, this article will provide you with the necessary information for upcoming entrepreneurs who want to start a small paper bag manufacturing business.

The process of making a paper bag is simple. And with a small startup investment, any individual can start this business both full-time or part-time.

Paper carry bags are one of the most common packaging boxes used by sellers nowadays. Generally, textiles and cloth merchants, dry cleaners, bakers, grocers, stationers, and sweet sellers use these bags regularly. There are paper carry bags that can hold up to 20 kgs of weight without getting torn.

Bags that are made of a paper material called sarc-kraft can withstand such weight. Paper carry bags can compete with any kind of plastic bag in terms of all features. Also, it can cater to any kind of conceivably end-use. Simply, paper bags are durable, eco-friendly in nature, and convenient.

Paper Bag Manufacturing Project Plan for Beginners

Here are the important steps to follow to start a profitable paper bag manufacturing company:

1. Understand the Market

According to industry experts, the global paper bag market is increasing to a moderate CAGR of 4.4% every year. Factors like a strong and growing retail sector in developed regions, rising preference for paper bags across regions, and increasing penetration of retail outlets in emerging economies are contributing to the growth of the global paper bags market.

Many governments today are increasingly becoming environment-sensitive and at least project themselves to be so. Big business too wants to be seen as eco-friendly. Due to the ban on polythene carries bags, the demand is growing very fast.

The retail and the food and beverage industry largely contribute to the growth of the global market for paper bags. Both sectors are growing very fast both in developed and developing countries. Hence, this is the perfect time to start a paper bag-making business for new or first-generation entrepreneurs.

However, if you are planning to enter into the paper bag business n a small scale, it is important to collect information about the local market demand and trends. Do detailed market research and find out the gaps that exist in the market you are going to sell your products. It will help you in creating a proper business plan.

2. Create a Paper Bag Making Business Plan

As with any other business, you need to write a business plan document for your paper bag business. A business plan works as a roadmap for the future activities of the business. In addition, this plan is a must-have document for arranging funds from investors.

For small-scale paper bag-making businesses, one does not need a long and lengthy business plan. Some of the major topics that must be addressed are the following:

• Initial startup and recurring costs
• Target customers
• Pricing plan
• Hiring plan
• How and where to sell?

3. Make Your Paper Bag Manufacturing Business Legally Compliant

It is most essential to abide by the legal requirements of the local government to run a hassle-free legally protected business.

Apart from registering your business, there are a few licenses and permits one needs to procure for the paper bag business. It is best to consult with the local government authority and a lawyer and get all the necessary and essential licenses.

Furthermore, buy business insurance to protect your manufacturing unit from any mishap.

4. Name Your Business

Though often ignored by many startups, a proper business name is critical to the long-term success of any business. Take some time off and select a catchy name for your business so that customers can relate to your products.

Learn More:   How to Name Your Business? Step-By-Step Guidelines

5. Find a Proper Factory Location

For any manufacturing business, factory location is one of the key decisions that a business owner needs to take. As per area requirements, find a place that is not far off from the immediate local market. The less the transport cost for delivery of goods, the more will be your profitability.

6. Buy the Necessary Machine and Raw Materials

Before buying machines, it is advised to talk to machine sellers and if possible visit a local paper bag manufacturing unit. This will make you far more equipped to make a better decision in buying the right machines.

Broadly, you will find two types of paper bag-making machines. One is a semi-automatic and the other is a fully-automatic machine. Select the one as per your budget and capacity of production.

In addition, you need a regular supply of raw materials to make paper carry bags. Talk to local reputed suppliers and ensure a consistent supply of good quality required supplies. Some of the basic materials you need to manufacture paper bags are the following:

• Paper rolls and sheets
• Printing chemicals
• Polyester stereos

7. Paper Bag Manufacturing Process

The paper bag-making process depends on the volume and weight of the Products to be carried.  Accordingly, you need to use various kinds of papers with different GSM and Bursting Strengths.

The basic steps that are followed are mentioned below:

• Cutting paper into proper size by cutting machine.
• Printing the paper as per need.
• Making bags by automatic bag-making machine by folding, pasting, & shearing.
• Eyelet fitting
• Lace fitting.

You can go by either a Semi-automatic or a Fully-automatic process according to your required production output and budget. In addition, you can operate the manufacturing business with 4 to 5 skilled and experienced manpower.

8. Calculate the Cost of Starting a Paper Bag Manufacturing Business

In starting a paper bag-making business, machinery plays an important role in overall success. You must select the machine according to the production output requirement and the types of bags that you want to produce.

Almost all sectors use different types of bags. The paper bags that textile stores use are different from the paper bags that medicine shops use.

Hence, selecting the machinery depends on the industry sectors that you want to cater to. Also, you may consider procuring a printing machine. Because most of the companies will ask you to print the logo, company name, and address on the outer side of the bags.

If you are from India, you can establish a fully-automatic paper bag manufacturing machine at a cost of Rs. 7 Lac per unit with a production capacity of 5000-10000 pieces/ hour.

Broadly, there are two types of units you can establish for producing paper bags. These are semi-automatic or fully automatic. Some of the most important machines are

• Single Slit Slitting unit to size the paper from a big width to a small width to produce small bags
• Paper cutting machine.
• Double Color Flexo printing unit with attachment
• Flat-type size plates and Sachet type size plates
• Eye letting Machine
• Bag cutting machine
• Stereo rollers

Generally, a fully automatic paper bag manufacturing machine comes with all these machines assembled with a complete unit.

Other than the machinery cost, your other major investment will be factory rent, raw material costs, manpower costs, legal costs, and promotional expenses. In India, the approximate cost to start a small-scale paper bag manufacturing business with an automatic machine will be around Rs 15 Lacs to 20 Lacs.

We hope the above-mentioned information will help you in starting a profitable paper bag manufacturing business on a small scale.

Editorial Team at 99BusinessIdeas is a team of experts led by Rupak Chakrabarty with over 25 years of experience in starting and running small businesses. Started in 2010, 99BusinessIdeas is now one of the largest free small business resources in the industry.