Entrepreneurship
This domain covers the entrepreneurial process in apparel, textiles and home furnishing. The exam tests whether you can identify a viable opportunity, estimate costs, set a price and calculate break-even without confusing profit with cash.
Core rules
- Start with a problem and a customer, not only a product. A market survey should check demand, price, competition, seasonality and delivery expectations.
- A prototype or sample lets you test fit, finish, cost and customer response before bulk production.
- Cost includes direct materials, direct labour, variable overheads, fixed overheads and owner’s salary. Price must cover full cost and provide a margin.
- Contribution = selling price − variable cost per unit. Break-even quantity = fixed cost ÷ contribution per unit.
- Working capital funds stock, wages and receivables before payment arrives. Registration such as Udyam, GST where applicable, and schemes such as MUDRA or PMEGP can support a small unit, subject to eligibility.
Worked example
A home-furnishing unit has monthly fixed costs of ₹25,000. A cushion set sells for ₹500; variable cost is ₹300, so contribution = ₹200 per set. Break-even = ₹25,000 ÷ ₹200 = 125 sets per month. At 200 sets, total contribution = 200 × ₹200 = ₹40,000; profit = ₹40,000 − ₹25,000 = ₹15,000. Reasoning: every set contributes ₹200 towards fixed costs; 125 sets cover fixed costs exactly.
Traps that cost marks
Do not count revenue as profit. Do not omit the owner’s salary, rent, electricity or packaging from fixed costs. Do not price only by material cost. Do not ignore working capital and credit terms. Do not claim a government scheme is automatic; eligibility and application apply.
Key idea
A viable textile enterprise controls cost, cash and quality while matching a clearly researched customer need.