Two Ideas, Six Weeks: Which Enterprise Should Go Into The Portfolio?
A Leaving Certificate Vocational Programme student in Cork must choose one enterprise idea to develop before the Easter deadline, which leaves six weeks and about eight hours a week alongside revision. Idea A is a phone screen-replacement service: a repair kit and parts cost €400, public liability insurance for a school setting costs €120, and each repair sells for €60 using €25 of parts. Idea B is custom-printed hoodies: a heat press costs €250, design software €60, each hoodie sells for €35 and costs €18 to make. Market research in the school, with 90 students surveyed, found that 22 said they would probably pay €60 for a repair by a student they trust, and 9 said they would buy a hoodie at €35. The student cannot do both and has €500 of savings. The teacher has warned that 'the portfolio marks the process, not the profit', and the student's parent thinks the hoodie idea is safer because 'nobody sues you over a hoodie'.
1. Calculate the break-even point for each idea and interpret the results against the market research. Show your working.
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Idea A - phone repairs
- Fixed costs: €400 kit + €120 insurance = €520
- Contribution per repair: €60 − €25 = €35
- Break-even: €520 ÷ €35 = 14.86 → 15 repairs
- Forecast result at 22 repairs: (22 × €35) − €520 = +€250
- Margin of safety: 22 − 15 = 7 repairs
Idea B - hoodies
- Fixed costs: €250 heat press + €60 software = €310
- Contribution per hoodie: €35 − €18 = €17
- Break-even: €310 ÷ €17 = 18.24 → 19 hoodies
- Forecast result at 9 hoodies: (9 × €17) − €310 = −€157
- The research supports only 9 sales, so the idea loses money at the tested price.
Interpretation - where the marks are:
- Idea B fails the demand test, not the maths test. The arithmetic is fine; there simply are not enough buyers at €35. It could be rescued by a minimum order of 20 hoodies sold in advance, or by raising the price, but neither has been tested.
- Idea A's margin is thinner than it looks. 'Would probably pay' is stated intention, not a purchase. If only 60% of the 22 actually buy (13 repairs), the result is (13 × €35) − €520 = −€65, a loss.
- Sensitivity is the real insight: Idea A breaks even at 15, so it survives a 32% drop in demand; Idea B would need to more than double its researched demand. On these numbers A is clearly the stronger option - but only a deposit or pre-order test proves it.
2. Recommend which idea to take forward and outline the next three steps in the entrepreneurial process, with justification.
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Recommendation: take Idea A forward, subject to a hard demand test in week 1.
The reasons are specific, not general: it clears break-even on researched demand with a margin of seven repairs, the fixed costs are recoverable (a kit and insurance can be used again or partly refunded), and it produces far richer portfolio evidence - a feasibility study, a pricing decision, a risk assessment and a quality-control process. Idea B needs 19 sales from a researched market of 9; taking it forward would mean writing a plan you already know does not add up.
Next three steps:
- Tighten the research (week 1). Stop asking 'would you?'. Take a €10 refundable deposit from ten students for a repair slot. Ten deposits is credible evidence; twenty-two opinions are not. Record the result either way - a failed test is still evidence of the process.
- Test feasibility on real devices (week 1–2). Buy the kit only after deposits exist. Practise on three dead phones, time the job (45 minutes each × 22 repairs ≈ 17 hours across six weeks, which fits inside eight hours a week), check that the insurance covers repairs done on school premises, and confirm parts can be sourced for the models that actually booked.
- Plan and pilot (weeks 2–4), then evaluate (weeks 5–6). Write the risk register and terms (no fix, no fee; pre-existing damage excluded; owner present; no access to personal data), run five repairs as a pilot, compare actual time and cost per repair with the forecast, adjust the price or process, then evaluate actual versus planned in the portfolio.
On the parent's objection: the liability concern is real and is exactly why the insurance line exists in the costing. The answer is to manage the risk in writing, not to choose a loss-making product to avoid it.
3. What is the single biggest risk in the recommended idea, and how should the student manage it?
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Biggest risk: a repair fails and the student is blamed for a phone worth several hundred euro.
This is bigger than the money at stake in the enterprise: the kit costs €400, but the customer's phone may cost €600 to replace, and the reputational damage in a school spreads faster than any advertising.
Why it is the biggest risk rather than just a risk: it is the only one that can end the enterprise in a single afternoon, and it is more likely than it first appears - screens are already cracked when they arrive, and a botched repair can destroy the touch digitiser as well as the glass.
How to manage it:
- Written terms before any work: a signed slip describing the fault, stating that pre-existing or hidden damage is not the student's responsibility, and agreeing a 'no fix, no fee' policy.
- Work only on what can be handled: start with one or two common models, and refuse jobs that need a heat gun or a full teardown until the student has practised on dead devices.
- Confirm the insurance actually covers this activity on school premises, and get that in writing rather than assuming.
- Data protection: ask the owner to back up and lock the phone, never open their apps or photos, and state this in the terms - accessing personal data without consent would breach GDPR.
- Record everything: photograph the device at intake with the owner present, keep a simple job log, and note faults found.
The judgement the examiner wants: the risk cannot be eliminated, so the test is whether it is identified, quantified and reduced to a level the student can carry. If the insurance does not cover it, that changes the recommendation.