Entrepreneurship
Entrepreneurship
This domain tests how a vocational power technician turns a trade skill into a viable enterprise: spotting an opportunity, costing, pricing, registering the business and managing cash.
Core rules
- Business plan: product or service, target customer, market survey, competition, operations, manpower, finance and risk.
- Enterprise forms: sole proprietorship, partnership, LLP and private limited company; MSME registration through Udyam gives access to schemes.
- Costs: fixed (rent, salary) versus variable (material, consumables); contribution = price − variable cost per unit.
- Break-even quantity = fixed cost / contribution per unit.
- Working capital covers salaries, stock and receivables; a profitable firm can still fail for lack of cash.
- GST thresholds in India are generally ₹40 lakh for goods and ₹20 lakh for services, lower in special-category states; check scheme and contracting turnover rules before quoting.
- Funding: MUDRA loans, PMEGP, bank term loans, self-financing.
- Quote with material, labour, overhead, contingency and tax shown separately.
Worked example
A small electrical contractor has fixed monthly costs of ₹60 000. Each wiring job sells for ₹25 000 with variable material and labour cost of ₹15 000. Contribution = ₹25 000 − ₹15 000 = ₹10 000 per job. Break-even = 60 000/10 000 = 6 jobs per month. At 9 jobs the profit is 3 × ₹10 000 = ₹30 000 before tax. At 5 jobs the firm loses ₹10 000.
Traps that cost marks
- Confusing turnover with profit, or ignoring the owner's own salary as a cost.
- Inverting the break-even formula or using total cost instead of contribution.
- Quoting a price without GST, transport and contingency.
- Treating a one-off grant as working capital.
- Ignoring competition and customer ability to pay in the market survey.