Entrepreneurship
This domain tests the business side of a laundry and dyeing workshop: market, cost, price, break-even and record keeping.
Core rules
- Start with a market survey: demand, competitors, price range, service mix and location footfall.
- Prepare a business plan covering services, equipment, staff, rent, utilities, licences and working capital.
- Register the business. In India, Udyam registration is common for micro and small units; GST registration applies once turnover crosses the threshold.
- Separate fixed costs from variable costs. Fixed costs include rent, salaries and machine depreciation; variable costs include detergent, water, power per kilogram and packing.
- Contribution per unit equals price minus variable cost. Break-even quantity equals fixed cost divided by contribution.
- Keep daily records of intake, delivery, cash, credit and stock.
Worked example
Fixed costs are INR 20,000 per month. Variable cost is INR 20 per kg and the price is INR 50 per kg. Reasoning: contribution is 50 minus 20, or INR 30 per kg. Break-even is 20,000 divided by 30, or about 667 kg per month, roughly 22 kg per day. Below that volume the shop loses money unless prices rise or variable costs fall.
Traps that cost marks
- Ignoring the owner's own labour and depreciation.
- Pricing below full cost to win customers.
- Keeping no written records of credit or stock.
- Forgetting working capital for the first months.