Philip Daniel, Tailor and Fabric Shop
October 2011
Name: Philip Daniel
Location: Kulkpene village, northern Ghana
Business Name and Location: Salvation Shop, Kulkpene
Executive Summary
Business Description
Salvation Shop, owned by Philip Daniel, is a tailor and seller of fabric. The shop is located in
Kulkpene, a small village outside of Yendi. Philip tailors shirts and trousers for the men of his
community and other surrounding villages. The shirts and trousers stand out because of their
unique designs and intricate stitching, often drawing attention to the clothes that Philip makes
and act as a form of marketing for his business. The intricate stitching requires the use of a
finishing machine, which he does not have, so Philip currently travels once a week to Yendi to
outsource the service for 0.30 GHS per pair of trousers.
Philip would like to obtain a loan so that he can purchase a finishing machine which will allow
him to save on the cost of paying a third party to stitch his trousers and will allow him to charge
for other tailors to use that stitching. On average, there are about 30 pairs of trousers per week
that Philip anticipates need stitching by the tailors in his community. The purchase of a
finishing machine would also allow Philip to stay in his shop and not travel to Yendi on a weekly
basis, thus, allowing him more days to sell and sew. He could also use the increased profits to
purchase additional fabric and meet the demand of his customers for some specific designs.
Kingdom Impact
The shop is located in Kulkpene along the main road between Yendi and Tamale. Kulkpene is
mostly comprised of Muslims and Traditionalists (idol worshippers). Philip prays every morning
before he opens his shop and oftentimes he has customers waiting for him who ask why he
prays to Jesus. When he is unable to share the Gospel with his customers, he will give them a
Bible Literature Tract.
Investment Required
The total investment needed for this business is 250 GHS, which is equivalent to $167 USD. This
amount would allow Philip to purchase a finishing machine for his shop.
Business Overview
Business Description
Products and Services
Salvation Shop acts as a tailor and fabric seller for Kulkpene and surrounding villages. In
addition to selling fabric for clothing, Philip also tailors men’s shirts and trousers.
The location of his store is ideal as it is right next to the main road between Yendi and Tamale in
the community of Kulkpene. Many people drive by Philip’s store every day and stop by when
they see his fabrics displayed. This allows him to get drive (or bike) thru traffic as well as men
from his village and surrounding communities that have heard of his tailor skill, nice fabrics, and
unique designs. Currently, Philip sells 48 shirts and 48 trousers each month. One reason that
many people buy trousers from Philip is because of the intricate stitching that Philip applies to
each trouser leg. This stitching is high quality and helps the pants last long. It is provided by a
special machine that Philip goes to Yendi to use. Philip travels to Yendi each week with all the
trousers he has sold for the week and leaves them with the seamstress who charges him 0.30
GHS per trouser. He will only travel to Yendi once a week to use this finishing machine to avoid
being away from his work station; however, it still requires a day of his time away from the
store each week. Because of the nice fabric and unique design and stitching on his clothing,
Philip will often sell out of his fabric each month, requiring another trip into Posa, a town in
Togo, to buy more fabric. Before tailoring on his own, Philip was an apprentice under Timothy,
a local tailor. The demand in town is often great enough where Philip and Timothy refer
business to one another.
Purchasing a finishing machine will allow Philip to stay at his shop each day and sell more fabric
and tailor clothing quicker. Additionally, the 0.30GHS that he saves per trouser will go straight
to the bottom line. He could also charge other tailors to put this stitching on their trousers.
Once the business grows through the finishing machine, Philip would also like to increase the
amount of fabric that he buys so that he can meet the current demand of his customers and sell
fabric on his trips to and from the market.
Risks and Opportunities
Risks
The most significant risk to the business is the amount of competition in the local and
surrounding communities. In Kulkpene, there are two other tailors. He apprenticed under one
tailor and with the other. Philip chose to become a tailor because he knew that he had to wear
clothes and he could make them on his own and save money. This demonstrates that there are
few barriers to entry in the tailor business.
Opportunities
Philip has a shop that is located next to the main road from Yendi to Tamale. Also, he would
own the only finishing machine in the area so he can take in finishing work from other
seamstresses or tailors from surrounding villages. The finishing work returns a very high profit
margin for very quick work. This could prove to be not only very profitable but also a big draw
for new customers. Lastly, if Philip were to sell fabric during his trips to and from market, he
could increase his customer base, as well as become more efficient in his time away from his
shop.
Biography of Candidate
Philip is a single man that lives in the village of Kulkpene. He decided that he wanted to be a
tailor after going to purchase clothes of his own. He saw the need that everyone had for
clothing and decided that instead of always paying for clothes he would just make them and
other people would buy from him too. In 2010, Philip became a tailor. Before becoming a
tailor, Philip studied for three years under Timothy (Rita’s husband). This is the typical path
that a tailor will follow.
He has been a Christian for twelve years and will preach on occasion in Kulkpene. Philip said
that he decided to accept Christ when he realized that he was a sinful man and couldn’t pay for
his sin so he decided to trust that God could.
Company Structure
Philip is the sole owner of the tailoring and fabric side of the business. He has one apprentice
whom he is currently training. Many apprentices are required to pay a fee each month to learn
under them; however, Philip is allowing his apprentice to pay a small sum at the very end of
training.
Marketing
Industry and Market Overview
The area surrounding Yendi has a high population of Muslims, animists and pagans. Kulkpene
village is located within the Yendi District.
The standard of living is quite low with most of the people making significantly less than 5GHS
per day. The average family does not have access to electricity or clean water. Many people
walk for several miles to the nearby river to get their water. The predominant industry is
agriculture, with business trends slowing significantly during the farming season which runs
from June to September.
Travel is difficult as very few people have cars or trucks. Most people either walk or ride
bicycles. Only the main road from Tamale (regional capital) to Yendi is paved. Most people
ride bicycles, even for long distances.
The Christian community in Kulkpene and surrounding areas is very friendly and hospitable.
They are very receptive to outsiders coming in and share Christ openly with non-believers.
However, given the number of Muslims in the population, Christians are often ostracized when
they come to know the Lord. When a believer publically acknowledges Christ, they often lose
customers, friends, and sometimes even family.
Local Tailor/Seamstress Market
There are many seamstresses in the region; however, there are none that have a finishing
machine. This is a unique opportunity for Philip to provide a solution for a need that other
tailors may have.
Despite the lower economic level, there are several times in the year when business is difficult
to keep up with because people are scrambling for new clothes. One time is Christmas, but
February and March are also busy periods for the tailor due to weddings and funerals.
Although people are buried immediately, the actual funeral is planned for (due to the cost) and
includes a week-long gathering for family and friends of the deceased, and this often takes
place sometime during January to March. The same is true for weddings. New outfits are quite
often purchased for these events.
Customers
Because Philip’s shop is in the village and next to the roadway, he has many local customers, as
well as many people passing his shop on their way from Tamale or Yendi. His customers often
become repeat customers because of the unique designs and styles that he introduces on his
clothes. These designs and styles often act as branding and marketing for Philip’s clothing.
Philip builds relationships with his customers and treats them well, understanding that
customer service is a big part of his business success. He shares the Lord with non-believers
and often prays with and gives Bible Literature tracts to them.
Philip often markets to other communities as he travels through these communities when going
to and from market. By selling fabric in these communities, he can establish a larger customer
base. His skill as a tailor will allow him to generate additional income sewing their shirts and
trousers and using his finishing machine for each pair of trouser.
Competition
There are two other tailors in the area, Timothy and Joseph. Philip and Joseph both worked
under Timothy, but there is enough demand that they refer business to each other.
Pricing and Distribution
The customers come to his shop to put in an order and get measured, and then come back to
pick up their orders depending on when they want it. He also sews fabric that people bring in
to his shop.
Name of Product or Service
Shirt
Trousers
Shirt Fabric (2yds)
Trouser Fabric (2yds)
Finishing Machine
Unit Price
in cedis
3.00
4.00
7.00
7.00
0.30
Promotion
Philip promotes his business in three ways. First, he has built a shop that sits right next to the
road way. He would like to build a table so that he can better display his product to those that
are passing by his store. Secondly, Philip sews many unique designs into his shirts and trousers.
When people see his designs on other people’s clothes, they will ask where they bought their
clothes. Lastly, he will grow his customer base by selling fabric in other villages as he travels to
and from market.
Financial
Startup Costs
Startup cost to expand the business is entirely for a finishing machine.
Tools and Equipment
Finishing Machine
Unit Price Number
in cedis of Units
250
1
cedis
250
$
$166.67
Investment Required
Investment required is 250 GHS, which is equivalent to $167 USD.
Financial Plan
Assumptions
•
•
•
•
•
•
•
During farming season (June – September) productivity decreases significantly
Local tailors will come to Philip for use of the finishing machine
Assumes six day work week unless farming season
Assumes same number of shirts and trousers are sold each week
Sales and cost numbers were provided by Philip
Significant additional revenue potential in December, and the funeral period of January
through March
The cost associated with tailoring/sewing is primarily the time to make the product, so
profit margin appears high
Projected Income Statement
Salvation Shop
(all amounts are in $)
Year
1
2
3
$450.00
$450.00
$450.00
Incom e
Shirt
Trousers
$600.00
$600.00
$600.00
Shirt Fabric (2yds)
$1,050.00
$1,050.00
$1,050.00
Trouser Fabric (2yds)
$1,050.00
$1,050.00
$1,050.00
$102.00
$102.00
$102.00
$3,252.00
$3,252.00
$3,252.00
$1,500.00
$1,500.00
$1,500.00
$64.00
$64.00
$64.00
Thread (packet)
$6.00
$6.00
$6.00
Needle
$4.00
$4.00
$4.00
Charcoal
$8.00
$8.00
$8.00
Buttons (48 shirts)
$20.00
$20.00
$20.00
Zip (48 trousers)
$20.00
$20.00
$20.00
$576.00
$576.00
$576.00
Rubbers
$4.80
$4.80
$4.80
Finish Machine Stitching
$0.00
$0.00
$0.00
Finishing Machine
Gross Sales
Expenses
Cost of Goods Sold
Wages
Waist (48 trousers)
Loan Payments
$192.00
$0.00
$0.00
$2,394.80
$2,202.80
$2,202.80
Cash Profit
$857.20
$1,049.20
$1,049.20
Loan Proceeds
$166.67
Start-up Costs
$166.67
Cash Flow (Cum ulative)
$857.20
$1,906.40
$2,955.60
Total Expenses
Projected Cash Flow
Financial Investment Required
Loan Amount (Principal)
One-time Service Fee Percentage
Number of Years
Months before First Payment
Monthly Payment Amount
Total of all Payments
Total Service Fee Paid
Cedis
250
$
$166.67
32
$21.33
288
38
$192.00
$25.33
15.00%
0.75
1
Loan to be paid back in 9 monthly installments of 32 GHS, or $21.33 USD, over a 9 month period. First
payment to be due at the end of the 2nd month.
Action Plan
Upon receipt of the loan the following steps should be taken quickly:
•
Purchase finishing machine within 10 days of loan receipt