How to Start Small Scale Paper Bags Making Business

This article includes a sample paper bag making business project report profile with How To guide. The content covers the business plan, market opportunity, raw materials, needed machinery, and production process.

Paper bags are the regular consumable item. You can find several uses of these bags in the retail industry. The manufacturing process is easy. Raw materials are easily available. Also, the business requires very small startup capital. Additionally, it does not require any complex technology. And finally, the market is readily available.

Because of the biologically non-disposable nature of the plastic bags, Govt has banned the plastic carry bags in many cities and urban centers. Here paper bags are fulfilling the gaps in consumer product packaging. Due to these common factors paper bag making has become a very profitable and lucrative manufacturing opportunity for the budding entrepreneurs.

According to the demand and production projection, you can take the initiative as the small-scale manufacturing operation.

10 Steps Guide to Start Paper Bag Making Business

Step 1 Analyze the Paper Bag Market

Paper bags are common packaging material. Generally, bakers and confectioners, grocers, textile and cloth merchants, dry cleaners, sweet-meat dealers etc. use this item widely. Basically, the product has some distinct advantages particularly lower prices over the other conventional packaging medium. Even, the hawkers and vendors on the footpath of packing fruits, vegetable and candies etc. use this product.

Paper carry bags are widely used in all types of trade. Some of the majors are textile shops, bakeries, shoe/chappal shops, grocery shops, fancy shops, bookshops, sweet shops, meat/fish Shops, vegetable Shops, Stationery Shops, hardware Shops, all departmental shops & consumer shops.

The awareness of the hazards of plastic bags to the environment is increasing among the public. Also, the Govt. imposes ban plastic bags throughout India and abroad. Hence, it is fueling the great demand for eco-friendly paper bags. The Eco-friendly Paper bag manufacturing industry is poised for a higher growth with a bright future.

Most popular and high demand paper bags sizes:

Size in Inches Sizes in cms
4.25X 6 11X15
5.25X7.5 13X19
6.75X8.5 17X22
8.25X10 21X25
9.75X12.75 25X34
10.5X16 25X34

Step 2 Prepare the Paper Bag Making Project Report

After deciding the specific type of bags that you will produce, you will need to prepare the project report. A customized project report not only helps in getting bank loans but also helps in establishing the business properly with fewer mistakes.

A project report has two major parts. One is the technical part and the other is the financial aspect. The technical part consists of raw material, production technology etc. On the other hand, the financial aspect consists of the project cost and revenue calculation. Here, we have provided a sample profile to get some idea.

Financial Aspect

Fixed Cost

Plant & Machinery = Rs 1,87,200

Miscellaneous fixed assets = Rs 82,500

Preliminary & Preoperative Expenses = Rs 4,950

Total Fixed Cost = Rs 2,74,650

Working Capital Cost

Salary & Wages = Rs. 27,500

Administrative expenses = Rs. 13,666

Selling expenses = Rs. 3,300

Raw Materials = Rs.2,20,000

Utility = Rs. 3,880

Total Working Capital Cost = Rs.2,68,316

Total Cost of the Project: Rs.5,42,966

Step 3 Obtain Business License & Registration

Initiating this business requires business registration. If you want to operate as a proprietorship company, then a Trade License is sufficient. However, for LLP or Pvt. Ltd. or Ltd company operation, you will need to register the business with ROC.

Apply for Udyog Aadhaar MSME online registration. Apply for GST registration for tax filing. And finally, you will need to apply for BIS certification. Generally, paper bag manufacturers produce the bags according to the specific customer demand. However, you need to maintain the BIS IS 10106: Part 2: Sec 2 in the finished products.

Step 4 Arrange Finance for Paper Bag Making Business

Like any manufacturing business, paper bags making business requires two types of capital investment. The fixed capital investment includes land, building, and machinery. Either you can satisfy all the investment from your own fund or you can apply for the term loan.

The working capital investment includes manpower cost, raw material cost, rent and day to day other operational costs. You can also apply for the working capital loan as overdraft or cash credit facility from your nearby banks or any financial institutions.

Step 5 Select the Location

Now, you need to select a location for the unit operation. If you have space, you can establish the unit at home also. However, it is always advisable to start the business in an industrial zone.

A 500 Sq Ft covered space is sufficient for the unit operation. If you don’t have your own space, then start with a rental arrangement. Ensure, that space has electricity connection, water supply, and easy transportation availability.

Step 6 Establish the Unit

After getting the space, draw a floor plan. You can take help of an interior designer who has the professional experience of designing industrial units. Also, you need to provide the electrical connection to the machines. Determine specific space for raw material storage, machinery installation, and official work. Also, keep some space nearby the main door for loading and unloading purpose.

Step 7 Procure Paper Bags Making Machine

  1. Paper Bags Making Machine. Medium with gazetting facility, Bottom& Centre Pasting, with 3 set o size plates& gear; with 2 HP Electric Motor & Control Panel, complete in all respects.
  2. Stereo Press
  3. Stereo Grinder
  4. Rolls slitter motorized machine
  5. Eye letting Machine
  6. Bag cutting machine
  7. Testing equipment scale etc

First of all, you have to arrange the power and fuel on the basis of consumption norms of the industry. The unit will require a total connected load of 30 KW. Additionally, you will face the water requirement of about 50KL per annum. The requirement of water mainly for washing of film developing etc and drinking purpose.

Step 8 Arrange the Raw Materials

You will need to arrange following raw materials in initiating paper bags making business

  1. Paper sheets 40”x60”, 18000 sheets
  2. Paper in Roll colors & White 500 Reams
  3. Printing Ink, Chemicals etc
  4. Packaging consumable etc.

Step 9 Paper Bags Making Process

The required size of the bag is obtained by fixing the exact size plate for flat or satchel to the size plate holder on the machine. You can obtain the length of the tube by changing the size gear wheel. Each tooth of the wheel represents One Centimeter in length.

The tube, after being cut by the beater into exact size as per the size gear, is carried forward by means of conveyor rollers to the delivery cylinder. The delivery cylinder at the bottom folds the bag. It is pasted and the bag is carried by the folding cylinder to the delivery table. Finally, release the bags and deliver in a vertical stack.

Step 10 Paper Bag Making Business Promotion

Paper bag making is a B2B business. Hence, proper marketing and product promotion is a must. As the other businesses are your customer, you will need to pay attention to providing quality products. You must have a web presence. Also, make your business available on the business classified sites. Even you can think about the paid listing.

Frequently meet your customers. Provide them with creative packaging solutions. It’s not about only bags making. It’s more of providing better packaging solution that is effective and also enhances the brand awareness. It will help you in customer retention.

Finally, have a marketing team. Recruit experienced employees who have previous experience in this field. Use good quality raw materials in paper bag making process.