TATTOO PARLOR

TECHNO ECONOMIC FEASIBILITY REPORT

2008-01-30T14:28:00.000-08:00

TECHNO ECONOMIC FEASIBILITY REPORT

OF

INK inc. TATTOO DEN

PREPARED BY:

ENTREPRENEUR GROUP

Sagar Wadhwani - 483
Hubert Francis - 489
Wafa Haji - 517
Sumit Prithyani - 517
Sanket Kapatkar - 457
Hardik Jain - 515

SUBMITTED TO:

BANK OF MAHARASHTRA
KOREGAON PARK BRANCH
PUNE

DEC. 2007

1 EXECUTIVE SUMMARY

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EXECUTIVE SUMMARY

Name of Business:
INK Inc. Tattoo Den.

Nature of business:
Service (Tattoo making).

Place of sale:
Kalyani Nagar.

Capital Investment:
4, 26,800

Promoter’s Contribution:
Rs.2, 13,400

Loan Capital required:
Rs.2, 13,400.

Bank Rate of Interest:
12 %.

Debit Equity Ratio:
1:1.

Technology:
Creative.

Number of Promoters:
6 (Promoters).

Market:
Local (Kalyani Nagar) Koregaon Park.

2 INTRODUCTION

2008-01-30T14:15:00.000-08:00

Tattoo History:

Tattoos are a very old form of body art and have been practiced from a very long time in civilized human history. The history of tattoos is very ancient and seems to be of thousands of years old and even before the birth of Christ. The recorded indication of tattoos comes from the ancient Egypt where wall paintings as old as 2000 BC have been suggesting the use of tattoos in the ancient Egyptian society.

The etymology of word tattoo provides few very different and interesting answers to the current day practicing of making permanent colored marks on human body or tattooing. The word “tattoo” can have many origins as words in many different languages have the same meaning and similar pronunciation. Different civilizations have been recorded to use the word tattoo or at least practicing of coloring their body parts for different reasons have been recorded.

Tattooing has been a Eurasian practice at least since Neolithic times. Ötzi the Iceman, dating from the fourth millennium BCE, was found in the Ötz valley in the Alps and had approximately 57 carbon tattoos consisting of simple dots and lines on his lower spine, behind his left knee, and on his right ankle. Other mummies bearing tattoos and dating from the end of the second millennium BCE have been discovered at Pazyryk on the Ukok Plateau. Tattooing in Japan is thought to go back to the Paleolithic era, some ten thousand years ago. Various other cultures have had their own tattoo traditions, ranging from rubbing cuts and other wounds with ashes, to hand-pricking the skin to insert dyes, etc.

The word tattoo is said to has two major derivations- from the polynesian word ‘ta’ which means striking something and the tahitian word ‘tatau’ which means ‘to mark something’.

The history of tattoo began over 5000 years ago and is as diverse as the people who wear them.

Tattoos are created by inserting colored materials beneath the skins surface. The first tattoos probably were created by accident. Someone had a small wound, and rubbed it with a hand that was dirty with soot and ashes from the fire. Once the wound had healed, they saw that a mark stayed permanently.

Despite the social sciences' growing fascination with tattooing, and the immense popularity of tattoos themselves, the practice has not left much of a historical record.

Definition:

A tattoo, or dermal pigmentation, is a mark made by inserting pigment into the skin for decorative or other reasons. Tattoos on humans are a type of decorative body modification, while tattoos on animals are most commonly used for identification or branding.

Tattooing has been practiced worldwide. The Ainu, the indigenous people of Japan, wore facial tattoos, as do some Maori of New Zealand to this day. Tattooing was widespread among Polynesian peoples, and among certain tribal groups in the Philippines, Borneo, Mentawai Islands, Africa, North America, South America, Mesoamerica, Europe, Japan, Cambodia, New Zealand and China. Despite some taboos surrounding tattooing, the art continues to be popular all over the world.

Procedure:

Some tribal cultures traditionally created tattoos by cutting designs into the skin and rubbing the resulting wound with ink, ashes or other agents; some cultures continue this practice, which may be an adjunct to scarification. Some cultures create tattooed marks by hand-tapping the ink into the skin using sharpened sticks or animal bones or, in modern times, needles. Traditional Japanese tattoos (irezumi) are still "hand-poked," that is, the ink is inserted beneath the skin using non-electrical, hand-made and hand held tools with needles of sharpened bamboo or steel.

The most common method of tattooing in modern times is the electric tattoo machine, which inserts ink into the skin via a group of needles that are soldered onto a bar, which is attached to an oscillating unit. The unit rapidly and repeatedly drives the needles in and out of the skin, usually 80 to 150 times a second. This modern procedure is ordinarily sanitary. The needles are single-use needles that come packaged individually. The tattoo artist must wash not only his or her hands, but they must also wash the area that will be tattooed. Gloves must be worn at all times and the wound must be wiped frequently with a wet disposable towel of some kind.

Prices for this service vary widely globally and locally, depending on the complexity of the tattoo, the skill and expertise of the artist, the attitude of the customer, the costs of running a business, the economics of supply and demand, etc. The time it takes to get a tattoo is in proportion with its size and complexity. A small one of simple design might take fifteen minutes, whereas an elaborate sleeve tattoo or back piece requires multiple sessions of several hours each.

The modern electric tattoo machine is far removed from the machine invented by Samuel O'Reilly in 1891. O'Reilly's machine was based on the rotary technology of the electric engraving device invented by Thomas Edison. Modern tattoo machines use electromagnetic coils. The first coil machine was patented by Thomas Riley in London, 1891 using a single coil. The first twin coil machine, the predecessor of the modern configuration, was invented by another Englishman, Alfred Charles South of London, in 1899.

3 MISSION AND VISION STATEMENT

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MISSION AND VISION STATEMENT

Mission Statement:

Taking art to the next level…

Vision:

We would certainly expect our tattoo studio to flourish and make good business as the location chosen for the business (Kalyani Nagar), is favorable.

There would be people also coming from Osho Ashram which is quite near to the tattoo studio and also the college going crowd would add to it.

Five years down the line we intend to set up some branches at Deccan and also at Paud road.

We also intend to hire some more tattoo artists who would be professionals from the foreign countries, like U.S.A.

We would also start up our own website so that people all over the world, who are keen about tattoos, especially tourists would know about our tattoo studio and would like to have themselves tattooed.

4 INFORMATION OF THE PROMOTERS

2008-01-30T13:41:00.000-08:00

INFORMATION OF THE PROMOTERS

Name:
Sagar Wadhwani
Age:
21
Address:
F – 1101,
Rohan Garima 2,
Model Colony,
Pune – 411 006
Phone Number:
9975522998
E- Mail:
Sagar@tattooden.com
Qualification:
T.Y.B.COM
Work Experience:
NIL

Name:
Hubert Francis
Age:
21
Address:
Survey no. 247/3,
Kalwad coloney,
A.F.Stn.road,
Lohegaon,
Pune - 411032
Phone Number:
9975787725
E- Mail:
Hubert@tattooden.com
Qualification:
T.Y.B.COM
Work Experience:
Worked in BPO for 1 year

Name:
Wafa Haji
Age:
21
Address:
D-403,
Park

Valencia

,
Mundhwa Rd,
Koregaon Park Annex,
Pune - 411036
Phone Number:
9923400057
E- Mail:
Wafa@tattooden.com
Qualification:
T.Y.B.COM
Work Experience:
Worked in Matrix Cellular For 6 months

Name:
Sanket Kapatkar
Age:
21
Address:
B – 804,
Fortaleza,
Kalyani Nagar,
Pune – 411 007
Phone Number:
94235575857
E- Mail:
Sanket@tattooden.com
Qualification:
T.Y.B.COM
Work Experience:
NIL

Name:
Sumit Prithyani
Age:
21
Address:
17,
Veer Bharati Society,
Bhavani Peth,
Pune 411003
Phone Number:
9420222251
E- Mail:
Sumit@tattooden.com
Qualification:
T.Y.B.COM
Work Experience:
Doing Articleship

Name:
Hardik Jain
Age:
21
Address:
D-405,
Park

Valencia

,
Mundhwa Rd,
Koregaon Park Annex,
Pune - 411036
Phone Number:
9822075753
E- Mail:
Hardik@tattooden.com
Qualification:
T.Y.B.COM
Work Experience:
NIL

5 GENERAL INTRODUCTION OF THE BUSINESS

2008-01-30T13:25:00.000-08:00

GENERAL INTRODUCTION OF THE BUSINESS

Name of Business:
INK Inc. Tattoo Den.

Nature of business:
Service Unit (Tattoo making).

Place of sale:
Kalayni Nagar.

Telephone:
020 26687949.

Nature of products:
Tattoos.

Utility:
Trend, Styling.

Nature of Organization:
Partnership Organization.
Profit sharing Ratio:
Even and equal distribution of profit and loss.

Advantages:
Safe, less painful, economical and hygienic.

Website:
www.tattoo-parlor.blogspot.com

NAME OF THE BUSINESS:

INK Inc. Tattoo Den is the name of the tattoo studio we intend to start.The business plan seeks to give a business edge to what is basically a creative venture.

CORE COMPETENCY:

Application of trendsetting temporary tattoos along with emphasis on permanent tattoos since these will be a larger source of income.

PURPOSE:

INK Inc. will provide customers a wide variety of designs in both permanent as well as temporary tattoo categories while ensuring maximum safety and hygiene.

WORKING OF THE BUSINESS:

INK Inc will be open from 3 p.m. to 9 p.m. on weekdays and 11 a.m. to 9 p.m. on weekends. This is because, since most of our business will come from college students, this is an ideal time.

TARGET MARKET:

Our main target market is college-going students between the ages of 17-25 yrs. We expect a higher proportion of temporary tattoo sales coming from this target segment. Also, foreigners in the city will form a sizeable portion of our target market.

LOCATION:

We have selected Kalyani Nagar, Pune as the area for our first tattoo studio. This is because Kalyani Nagar is very popular amongst our target market. Close proximity to Koregaon Park and especially the OSHO Ashram is a boon.

LAYOUT:

The tattoo studio shall consist of:

The reception
The waiting lounge
The temporary tattoo booth
The permanent tattoo booth
A washroom

(click on the layout above to view larger image)

6 TECHNICAL ASPECT

2008-01-30T13:20:00.000-08:00

TECHNICAL ASPECT

Skills:

The tattoo artists are very talented and are trained by experts and have cleared the certification to go ahead and practice tattoo making as a profession.
The tattoo artists are not only trained but also have worked with professionals and have learned a lot.
Tattoo making is not just an art but it is a skill.

Machines:

The tattoo machines that we would be using, will be purchased form Goa itself.The tattoo machine would cost Rs.25, 000. The manufacture of those tattoomachines is ‘Pioneers’; they make tattoo machines of export quality.This is a one time investment so initially; we would purchase 3 tattoo machines (2 Temporary machines & 1 permanent tattoo machine).

7 MARKET ANALYSIS

2008-01-30T13:04:00.000-08:00

MARKET ANALYSIS

TREND SETTERS IN PUNE:
After SABBY’S TATTOO STUDIO in Koregaon Park, we are the only tattoo makers in the neighboring area (like Koregaon Park and Kalyani Nagar).

LOCAL DEMAND:
According to the survey we made, we found out that people consider it a trend and not taboo, we also came to know that people consider it a trend and not taboo. And there is lot of craze among the youngsters.

NAME OF THE COMPETITIVE COMPANIES THEIR ADDRESS AND RATES:
We have two competitors in the surrounding area – SABBYS TATTOO STUDIO in Lane – 4 Koregaon Park. The prices charged by them are as follows: - Temporary Tattoo for Rs.150/- to Rs.300/-, Permanent Tattoo for Rs.3000/- to Rs.5000/- and AKS STUDIO East Street next to ADDIDAS Showroom. The prices charged by them are as follows: - Temporary Tattoo for Rs.100/- to Rs.350/- and Permanent Tattoo for Rs.3000/- to Rs.4500.

GAP BETWEEN DEMAND AND SUPPLY:
As there is only one Tattoo studio in the entire city, demand is more as compared to the supply, so there is monopoly in the market. So to enhance the supply we can grab a huge amount of crowd.

COMPAIRISON OF PRICES AMONG COMPETITORS:

(click on th table to viw larger image)

Market Survey Conclusion:

We questioned 20 people about what they think of having themselves tattooed.We found out that 18 out of 20 people would certainly like to have their bodies tattooed.We also came to know that people consider it a trend and not taboo.We also came to know that there is a lot of craze for tattoos among the youngsters especially among the college going crowd.So we would be having customers mainly from age group between 18 to 30 years.

8 MARKETING STRATEGY

2008-01-30T12:58:00.000-08:00

MARKETING STRATEGY

Now that we have established that the target market is between the age groups 18 – 30, we will initially set up stalls outside the popular colleges and distribute pamphlets and flyers highlighting the inauguration and opening of our tattoo studio. We will offer to give the first 15 clients free temporary tattoos if they get a permanent tattoo done from us.

Moreover, we will send bulk emails to employees of major IT companies in Kalyani Nagar which will feature invitations to visit our new tattoo studio. Also, within a few weeks we will approach Google and Rediff to display our advertisements on their web site for a nominal fee.

As we know that majority of young people are hooked on to the internet, marketing and advertising through the internet will prove to be the most profitable media line for us.

We also plan to set up stalls within during major college festivals and cultural festivals featuring traditional tattoos and Indian designs.

9 MAN POWER PLANNING

2008-01-30T12:47:00.000-08:00

MAN POWER PLANNING

Initially, we will have one permanent tattoo artist and two temporary tattoo artists. We will also have a receptionist/ cashier. Our permanent tattoo artist, Wafa Haji, has trained under Sabby from Sabby’s Studio and has worked there for six months. Moreover, our temporary tattoo artists have a wide range of experience thanks to their work at various college festivals. As and when business expands, more artists will be hired.

Organizational Chart:

(click on the chart above to view a larger image)

10 FINANCIAL ASPECTS

2008-01-30T11:09:00.000-08:00

FINANCIAL ASPECTS

ECONOMIC ASSESSMENT

Requirements:

1. Studio expenses:
The estimated cost for rental of a single room in Kalyani Nagar and related costs is as follows:

Refundable Deposit: Rs.1.5 lakhs
Monthly Rent: Rs.17000
Electricity Charges: Rs.6500/month

2. Furniture and Fixtures:
The estimated cost for furniture and fixtures are:

1 split air conditioner: Rs.35,000
1 165 liters refrigerator: Rs.8,000
1 5.1 speaker system with DVD changer: Rs.5,000
2 Leather couches & chairs: Rs.60,000
Fixtures & Fittings: Rs.45,000
Mirrors: Rs.5000
Desktop Computer: Rs.35,000
Tattoo Machine: Rs.75000

Total of furniture and fittings: Rs.2, 68000

3. Tools and Equipment:
The estimated cost for tools and equipment is as follows:

(3) Tattoo machines: Rs75,000(one-time investment)
Permanent Tattoo inks/colors:.5000/bottle
Tattoo needle: Rs.500/needle
Temporary tattoo dye: Rs.250/bottle

4. Salaries:
The estimated payment to employees is as follows:

Permanent Tattoo artist: Rs.6,000/month
Temporary Artist: Rs.6,000/month
Cashier/Receptionist: Rs.6000

Total salaries: Rs.36, 000/month

5. Advertising cost:
The estimated advertisement costs are as follows:

Pamphlets/ Flyers/Others: Rs.8,000

Fixed Assets:

(click on the table above to view a larger image)

Working Capital Requirement:

(click on the table above to view a larger image)

Working Capital Requirement:(For 2 months)

125400 * 2= 250800

(click on the table above to view a larger image)

Sources of Finance:

(click on the table above to view a larger image)

Calculation of Sales Revenue:

(click on the table above to view a larger image)

Projected Income statement:

(click on the table above to view a larger image)

Return on Investment:

(click on the table above to view a larger image)

Projected Balance Sheet:

(click on the table above to view a larger image)

Net Profit Division among the Partners:

(click on the table above to view a larger image)

Sources of Finance:

Each partner will contribute Rs.35566 for capital. The additional requirements will be raised from other sources. A loan of Rs.2, 13,400 more will be required.

Break Even Analysis:

1. Variable Cost:

Permanent tattoo ink / colors = Rs.5000 / per bottle * 35 bottles (per year) = 175000
Permanent tattoo needle = Rs.600 / per needle * 70 needles (per year) = 42000

Temporary tattoo ink / colors = Rs.3500 / per bottle * 70 bottles = 245000
Temporary tattoo needle = Rs.350 / per needle * 150 (per year) = 52500
Tattoo Dye = Rs.250 / per bottle * 150 bottles (per year) = 37500

Variable cost = 552000

2. Revenue Generated:

Temporary tattoo – 1440000
Permanent tattoo – 984000
Total Revenue generated = 2424000

3. PROFIT VOLUME RATIO:

Profit Volume Ratio = (Revenue Generated - Variable Cost / Revenue Generated)*100
Profit Volume Ratio = (1872000 / 2424000) * 100
Profit Volume Ratio = 77.22 %

4. FIXED COST:

Salary = 432000
General Exp. = 952800
Yearly Expenses = 1414800

5. INTEREST ON BANK LOAN @ 12 % P.a:
= 25940

6. DEPRECIATION OF ASSETS @ 10 % P.a:

Value of Assets = 33800

7. FIXED COST:

= Yearly Exp. + Yearly Interest + Depreciation
= 1414800 + 25940 + 33800
= 1474540

8. DESIRED SALE TO ACHIEVE BREAKEVEN POINT:

= (Fixed Cost/profit Volume Ratio) * 100
= (1474540/ 77.22 %) * 100
= 190953

9. ACTUAL EXPECTED SALE:

= Revenue Generated P.M X 12
= 202000 * 12
= 2424000

10. BREAKEVEN POINT:

= (Desired Sale / Actual Expected Sale) * 100
= (190953 / 2424000) * 100
= 55.36 %

11. SURPLUS SALE:

= (Actual expected sale – Desired Sale)
= (2424000 –190953)
= 2233047

12. NET PROFIT INCLUDING FIXED COST & VARIABLE COST:

= (Surplus Sale * Profit Volume Ratio)
= (2233047 * 77.22 / 100)
= 1724359

11 SWOT ANALYSIS

2008-01-30T11:03:00.000-08:00

SWOT ANALYSIS

Strengths:

Creativity.
Design Innovation.
Young and Enthusiastic Staff.
Extreme Care given to Hygiene.
Fashion / Style.

Weaknesses:

No prior business experience
Establishing name will take time as it is a client oriented project

Opportunities:

Large Potential Customer Base
Excellent Location
Success of Lifestyle Shows like Miami Inc guarantee interest
Success at tattoo stalls run by us at various college festivals

Threats:

Threat from better known and established studios like Sabby’s Studio in Koregaon Park
Misinformation about unsafe procedures used in tattoo parlors

12 CONCLUSION

2008-01-30T10:55:00.000-08:00

CONCLUSION

The business set-up would, therefore, be a viable option since it would start giving returns only in its second year since inception. This has been made possible mainly due to the locational advantage and pricing strategy of the partners.

Hence we request Bank of Maharashtra Koregaon Park Branch to sanction our Proposal.