How to Start a Small Scale Paper Cup Making Business

Are you searching for the paper cup making business project report or sample profile? Find here a Detailed project guide with machinery details, project cost, and profit margin.

Starting a paper cup manufacturing business is easy and profitable too. You can start the business as the small or large-scale both. The project cost or investment depends on the unit size and the production output you want.

Basically, the paper cup is a disposable item. And it has several advantages of use. First of all, it can hold both hot & cold liquid for a longer period of time.  Paper cups are ideal for individual servings at all kinds of parties, functions, picnic occasions, marriages, chat, tea & food joints, etc.

Non-toxic in nature, the shapes and surface designs on these paper cups are attractive and present an inviting look. Also, companies print the company name and logo on the outer side of the cups for promotional purpose.

Therefore, paper cups are getting huge popularity throughout the country. As the domestic population is very, there is always a great demand you can see for this type of the products.

10 Steps Guide to Start a Paper Cup Making Project

Step 1: Analyze the Market

The paper cup is a broad industry. Generally, the prospects of paper cups depend on the value of customers who utilize it. The product has daily consumption both in the rural and urban areas. Paper cup comes in different sizes and thickness. It is available from 20 ml to 200 ml size.

The thickness of the cups depends on the volume of the materials and the nature of the liquid. So, you need to check the demand for the specific type of cup initially. Also, try to understand the overall monthly demand in your area. It will help you in evaluating the demand and supply gap of paper cups.

Step 2: Prepare the Project Report or Business Plan

After deciding the product, you will need to prepare a project report even if you don’t apply for the loan. Apart from helping is getting finance, a project report helps in establishing the unit properly. And it is better to take a professional help in project report preparation.

Generally, the project report has two different segments. One is the technical aspect and another is financial analysis. The two sectors are interconnected and dependant on each other. Here, we put a sample financial analysis for a paper cup making business project.

Paper Cup Making Project Cost

Fixed Cost

Land & Building Rent = Rs 5,000

Machinery & Equipment = Rs 10,60,000

Pre-operative Expenses = Rs 10,000

Total Fixed Cost = Rs 10,75,000

Working Capital Cost

Staff Salary = Rs 37,000 (per month)

Raw Materials = 3,75,000 (per month)

Utilities = Rs 8,000 (per month)

Contingent Expenses = Rs 20,500 (per month)

Total working capital cost = Rs 4,40,500

Working Capital for 3 months = 13,21,500

Total Project Cost = Rs (10,75,000 + 13,21,500) = Rs 23,96,500

The total cost of the project may increase or decrease depending on the unit size and the production output quantity.

Step 3: Arrange Finance

When you get the project cost, the next step is arranging the finance. If you have your own fund, then good. Otherwise, you can apply for a project loan. Check, if there any Government subsidy is available for paper cup making project. Alternatively, you can apply for only machinery finance or only working capital depending on your specific requirement.

Step 4: Secure a Location

Establishing a paper cup making business requires at least a 500 St Ft of covered area with sufficient water and electricity. It is advisable to set up the unit in an industrial area. If you set up the unit nearby residential area, then have a written ‘No Objection’ from your immediate neighbors.

The area requirement of the factory depends on the unit size and the machine operation mode. So, it’s better to talk to the machinery suppliers before finalizing the space.

Step 5: Business Registration & Licensing

Paper cup production business requires business registration. Definitely, you can operate a small-scale unit as a proprietorship firm. For a large-scale operation, you can opt for LLP or Pvt Ltd company registration depending on the investment pattern of the shareholders.

After getting the registration, apply for the business PAN Card 9not applicable for proprietorship firm). And then apply for the Trade License. Obtain GSTIN for tax filing. If you want to produce the paper cups under your company brand name, then apply for Trademark Registration. BIS registration is required for the ISI mark on the products.

Step 6: Procure Paper Cup Making Machine

Simply, you can establish the paper cup making unit in two ways. One is semi-automatic and another is fully-automatic. The fully automatic unit produces more cups per hour than a semi-automatic unit. However, if you are a beginner, then a semi-automatic unit is just perfect for you. You need a paper cup forming machine, molds, dies and other tools and equipment. Also, you need the packaging machine for bulk packaging.

Step 7: Arrange Paper Cup Making Raw Materials

You need raw materials or ingredients for the production of paper cups.  The list follows

  • Printed PE Paper
  • Bottom Reel
  • Packing Material

Step 8: Quality Control

You must maintain the quality control measures in this business. You will need to use food grade paper which is hygienic in nature. Also, you need to follow the BIS regulations if you use ISI mark on your product. In most of the cases, paper cups are produced according to the customer’s specification and the nature of end use.

Step 9: Manufacturing Process

The paper cup making process includes three different steps. In the first step, form the sidewall of the cups and form a shape. Then, form the cup bottom and join it with the previous product.  the third stage mainly includes 45° angle separating, preheating, curling bottom, curling rim and so on mechanisms, which are the important parts in finishing the paper cup.

Step 10: Paper Cup Distribution & Marketing

The paper cup is a B2B industry. You must concentrate on the institutional selling. Paper cups find the potential market in IT companies, Educational Institutions Canteens, Industrial Canteens, Restaurants, Fast Foods, Catering People, Tea Shops, Paper Product Dealers and Super Markets. Also, the roadside tea stalls are the regular buyers of the paper cups. In getting a long-term success in the paper cup making business, you must ensure a healthy monthly sale from the unit.