Tote Bag Business Plan, With a First-Year Projection

A tote bag business plan sets out the bags you'll make and who buys them, what each costs with your time in it, the rules, and the year month by month. For a maker sewing canvas totes, the time is most of the cost, so the plan turns on two things: batch sewing, cutting and sewing in runs to bring the minutes down, and the mix of channels, because a tote sold direct leaves five times what the same tote leaves at a shop's wholesale price. Pouches and aprons from the same canvas fill the table. The label rules are lighter than you'd expect: tote bags aren't on the FTC Textile Act's list of covered products, though aprons, as clothing, carry fiber, origin and care labels. In the example below, a sewn goods maker in Portsmouth, New Hampshire, makes a profit from the first month and ends the year about $25,500 ahead on $64,000 of sales, after paying $20 an hour for the sewing. Below is a description example, each part of the plan, the rules, the year, the startup budget, and a free template.

The short version

• Describe the business in a paragraph: the bags, where you sell, the workspace, the goals.
• Cost each piece with your time in it: canvas, webbing, zipper, label, card fees.
• Sew in batches: time is the biggest cost on a sewn tote.
• Direct sales leave the margin; wholesale at half of retail leaves little on a sewn tote.
• Tote bags and pouches aren't on the Textile Act's covered list; aprons are apparel and need labels.
• Make the canvas count: pouches and aprons from the same cuts.
• TaroStack keeps each canvas lot and each batch's true cost. More below.

Part 1: the business description

Driftwood Canvas Co., the made-up sewn goods maker in Portsmouth, New Hampshire, I use in these examples, writes:

Driftwood Canvas Co. sews canvas tote bags, zipper pouches and aprons in a shared studio, sold at two markets, online, and wholesale to gift shops on the Seacoast. Every piece carries our woven label.

Part 2: what each piece costs

The canvas is $14 a yard, 60 inches wide, priced by area; how that works is in how to calculate cost per inch of fabric. Sewing a dozen totes in a run, instead of one at a time, is what gets the time to 30 minutes.

Part 3: customers and prices

A shop pays half the retail price, which on a sewn tote leaves $6. Wholesale earns its place by filling slow months and putting the bags in front of new buyers, not by its margin. How a sewing price is set is in how to price sewing projects.

Part 4: the label rules

The FTC's Textile Act labels, fiber content, country of origin and the maker's name or RN, apply to the products on its list: wearing apparel, scarves, bedding, towels, tablecloths and more (16 CFR 303.45). Tote bags and zipper pouches aren't on it, so they don't need a fiber label unless you make a fiber claim, in which case the full disclosure applies. An apron is clothing: it carries the fiber, origin and name label, and a care label under the Care Labeling Rule. How the labels read is in T-shirt business license. This is general information, not legal advice.

Part 5: the year, month by month

Fixed costs are $630 a month: studio rent ($300), insurance ($40), market fees ($120), the website and online store ($40), software and card fees ($30), and marketing ($100). Sales start at 35% of full speed:

The year's sales are $64,038 and the profit $25,512, on top of $20 an hour for the sewing, which at full speed is about 90 hours a month.

Part 6: the startup budget

What a broader sewing business looks like is in sewing business plan.

Get the template

Download the tote bag business plan template. Four sheets: products with price, variable cost and units at full speed; the year month by month with a ramp you can change; fixed costs; and the startup budget. It's an ordinary Excel file with no macros, and it works in Google Sheets, LibreOffice and Numbers.

Where this stops working

Canvas comes in bolts that don't divide neatly into totes, pouches and aprons, and the offcuts are worth something. A plan's average cost doesn't know that this month's bolt cost more, or how much canvas is left.

How TaroStack does it

TaroStack keeps each canvas lot and each batch's true cost.

Canvas by the yard. Canvas is bought by the bolt and used by the inch, with units that convert, so each batch of totes takes its canvas off stock at what that bolt cost.

Each run a batch. A run of a dozen totes is a batch with its recipe: canvas, webbing, thread, label and time, so its true cost is on record.

What each channel earns. Margins show by product and by customer, so the shop's totes and the market's totes are compared plainly.

Recipes, batches and true cost are on every plan, from $49 a month. The first 30 days are free, with no credit card. If you'd like a hand setting up, ask, and we'll do it with you.

Questions people also ask

Is a tote bag business profitable?

It can be: in the example, $25,512 on $64,038 of sales in the first year, after paying $20 an hour for the sewing, mostly from direct sales.

Do tote bags need a fiber content label?

Not under the Textile Act: bags aren't on its list of covered products, unless you make a fiber claim, which then needs a full disclosure. Aprons and other clothing do.

How much should I sell a handmade tote bag for?

In the example, $52 direct from a variable cost of $21.49; at a shop's wholesale price of $26, little is left.

How much does it cost to start a tote bag business?

In the example, $4,750, including an industrial sewing machine, cutting tools, first materials, labels, a market setup, a website and $1,500 of working cash.