Entrepreneurship
Entrepreneurship tests opportunity recognition, market research, business planning, legal formalities, finance and the marketing mix for a food-service venture. Expect break-even and feasibility reasoning, not just definitions.
From idea to plan
- Identify a customer problem and a distinct value proposition; test demand through surveys, competitor visits and small trials.
- A business plan covers concept, market, operations, management, marketing, financial projections, risks and exit.
- Legal choices include sole proprietorship, partnership, LLP or company. Register MSME/Udyam where eligible; obtain FSSAI licence or registration, GST registration if turnover crosses the threshold, trade licence and fire/safety clearances.
- Marketing mix: product, price, place and promotion; for services add people, process and physical evidence.
Worked example
A food truck has fixed monthly costs of ₹60,000, variable cost ₹40 per meal and selling price ₹100. Contribution per meal = ₹100−₹40=₹60. Break-even = ₹60,000÷₹60 = 1,000 meals per month. At 800 meals, contribution = ₹48,000, so the venture loses ₹12,000. Reasoning: fixed costs are recovered only after variable costs; break-even units = fixed costs ÷ contribution per unit.
Traps
- Confusing profit with cash in the bank.
- Ignoring working capital for rent, deposits and wages before sales.
- Pricing below full cost and calling the difference marketing.
- Assuming a licence is optional because the outlet is small.
- Forecasting sales without evidence from footfall or pre-bookings.