Enterprise Planning, Marketing, Finance and Entrepreneurship
This domain tests whether you can prepare a viable dairy plan, estimate costs and returns, choose a market channel and arrange finance.
Core rules
- A bankable project report covers market demand, technical plan, herd and feed plan, capital cost, working capital, cash flow and repayment.
- Classify costs as fixed (shed, equipment, insurance, depreciation) and variable (feed, labour, veterinary care, transport).
- Break-even quantity = fixed cost ÷ contribution per litre, where contribution = selling price − variable cost per litre.
- Marketing mix: product, price, place and promotion. Channels include direct sale, cooperative milk routes, retailers and processors.
- Finance sources include own funds, bank loans, Kisan Credit Card, NABARD-linked schemes, subsidies and livestock insurance.
Worked example
Fixed cost is ₹1,50,000/year; variable cost is ₹28/litre; selling price is ₹40/litre. Contribution is ₹12/litre. Break-even = 1,50,000 ÷ 12 = 12,500 litres/year, or about 34 litres/day. A 10-cow unit yielding 100 litres/day is well above break-even, but only if the milk is actually sold and feed prices hold.
Traps
Do not ignore depreciation, family labour, feed price rises or working capital. Do not overestimate yield or assume a buyer without a written arrangement. Avoid overborrowing.