Paper plate and cup making business

Paper plate and cup making business, a detailed analysis

Plastic ban all over the world has generated huge requirement for biodegradable products. Paper made plates and cups fall under this category of products that are widely used by businesses as well as common man. The beauty of paper plate and cup making business is that it does not require much technical skills or knowledge and provides high return on investment.

Basic requirements for starting a paper plate and cup making business include land, shed, machines, raw materials, power supply, water supply and laborers. You can start this business from your home depending on land and infrastructure availability. As a startup, this will reduce monthly expenses and increase profit margin. Ensure uninterrupted power and water supply and transportation facilities to the production unit. A three phase power supply might be required based on machine capacity.

Machinery: You should visit similar production units before purchasing machines. Machines made in India, China and Korea is available in market. Paper plate and paper cup machines are manufactured by various engineering companies throughout India. If you Google the keyword “paper plate and cup making machines in India” you will be enlisted with hundreds of makers and suppliers in India. You should compare price, production capacity, service availability and maintenance expenses before taking decision.

Fraudulent Guarantees: More recently, business analysts have found fraudulent offers from several machine manufacturers, giving a buyback guarantee to their customers. These makers or suppliers guarantee that they will buy back the plates and cups produced from their machines for a particular period of time. People who bought their machines under this scheme say that this is 100% fraudulent. These suppliers vanish or never respond after the machine sales. So be vigilant about such miscreants.

Machine Cost: For making paper plate and paper cup, you need two different machines. Paper plate making machine costs 1 to 1.5 lakhs and paper cup making machine costs 6 to 7.5 lakhs. So if you are short of cash, you can start with paper plate making first. This is a low risk method, but usually retailers and other customers prefer paper plate and cup together. If you can convince them to buy paper plates alone, then it’s fine.

Raw materials: A two month supply of raw materials should be stocked before starting production. This will cost approximately 6 lakhs if you are planning for full fledged operation. You should research in the internet to find dealers who deliver quality raw materials at competitive rates at your doorstep.

Labor Requirements: This is not a labor-intensive business, as most of the work is done by machines. Hence you would not need any highly skilled employees and preferably, you can handle the manufacturing process initially. This will help save lot of money in terms of wages on a day to day basis. As anybody can handle the tasks, you can easily find or replace employees according to business requirements.

Capital Requirement: An initial investment of Rs. 10 lakhs and a working capital of Rs. 6 lakhs would be required for setting up a paper plate and cup making business unit.

Know-how: Industrial visits, online research and entrepreneurship training sessions are the sources of know-how for a paper plate and cup making business. You should visit similar business units, both large scale and small scale, before starting your venture. Try to learn and understand the basics of this business from them. You can study in detail through online resources. Search engines and video platforms provide enough content for your learning process.

Many entrepreneurship promotion bodies (both public and private) offer training sessions on business ideas like paper plate and cup making. You should contact the State Industries Development Corporation for more details regarding the same. You can also consult renowned business consultants in your area for more details.

Potential Customers: Paper cups and plates have lots of customers, both businesses and households. Businesses related to food and beverages require paper cups and plates in bulk quantities. Common people purchase paper plates and cups for household events and celebrations. They include weddings, parties, religious ceremonies, festivals and other special occasions. Institutions purchase paper cups and plates for their day-to-day consumption as well as special occasions.

Customer base for paper cups include IT companies, government offices, financial institutions, healthcare centers, educational institutions, hotels, canteens, restaurants, coffee/tea shops, super markets, clubs, movie theaters, event management companies, catering firms, etc. Paper plates are purchased by event management companies, caterers, canteens, restaurants, cafeterias, snack shops, etc. You can also sell paper cups and plates in bulk quantities to retail shops and supermarkets.

Market Study: You should consult a business analyst or consultant for a thorough market research and study before stepping into this business. They will give you accurate analysis on various aspects of paper plate and cup making business. Apart from that, you should collect information regarding widely sold out cup and plate dimensions and coating materials. Pricing of products from various manufacturers should also be compared. You should also know their retail and wholesale rates before fixing your MRP and profit margin.

You should study and calculate total marketing expenses for expenditure estimation before fixing MRP. The average monthly sales in your preferred locations should also be analyzed to streamline your production process. Common online and offline marketing practices and techniques used by your competitors should also be observed to survive in the segment.

Competition: To be frank, this is a very competitive business with many small, medium and large players already dominating the segment. But an effective marketer can penetrate the market as there is huge requirement for biodegradable products. In the beginning stages, you may have to compromise a little bit on profit margins and give more offers and incentives to attract retailers as well as direct customers.

Financial Assistance: Financial institutions provide loans for paper plate and cup making business under various schemes. You will have to submit a detailed project report, six-month bank statement, educational qualification certificates, ID proofs, etc to avail loans. The loan tenure, amount, interest rate, subsidy and other loan terms and conditions depend upon the loan type and institution. A financial consultant should be consulted before choosing any offer. Collateral free loan schemes like Pradhan Mantri Mudra Yojana provides loan upto Rs. 10 lakhs for entrepreneurs.

Profit Margin: Profit margin of paper plate and cup making business is upto 35%. But as it is with any other business, profit margin varies according to your operating expenses. As a startup, you should reduce expenditure on wages, transportation and other operating expenses. Since you don’t need skilled laborers, try to handle the production process yourself or employ freshers. Try to market your products in nearby shops and eateries, so that you can save on transportation costs.

Marketing: Offline marketing techniques include distributing brochures or flyers to potential customers and advertising through newspapers, magazines and local TV channels. Targeted marketing can be done by visiting bulk buyers and offering them higher profit margins and other sales incentives. You can sponsor paper plates and cups for public events to gain public attention and awareness. Regularly visit institutions and give them free sample packs. You can also display your products in industrial expos conducted by various organizations and govt. bodies.

Design a professional business website for promoting your business among online communities. Learn and utilize powerful digital marketing techniques like social media marketing, e-mail marketing, search engine marketing and advertisement campaigns to generate brand awareness and customer base.

Disposition: Good business idea to start from your home with an initial investment of 10-15 lakhs. Highly competitive but there is still room for budding entrepreneurs in the segment. Business consultation and research needed before starting the business to analyze business performance in your area. Business growth prospects are average, but can add new biodegradable products to your product list for scaling up.

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