Field AssignmentEntrepreneurship DevelopmentbyProf.Vishal ThelkarObjective: Back of the Envelope CalculationKey Learning’s: 1. To quickly analyze a business situation 2. Able to understand financials involved in a business 3. Assess need for working capital and its importance 4. Able to justify income and expense (Liquidity/Profitability) Submitted by Division -BTeam No.2Place of Visit: Red rose fashion ,khargone, M.P. Sr. No Roll No Name 1 09 Surbhipatel 2 10 Suyashpatil 3 11 Kishanpawde 4 12 Prashantmishra 5 13 Prateektaleja 6 14 Rachitkalra 7 15 Rahul aswani 8 16 Rahul barfa (Leader) 9 23 Sajalsarkar 10 61 Prashant Upadhyay
Field assignment - EntrepreneurshipThe Teams formed would go to a coffee shop, store, shopping mall, college premise, IT Hubsurrounding in search of a particular business of their Interest. The students should analyze aparticular business chosen of their interest and do a quick assessment of the business(Back ofthe envelope Calculation) on the basis of following guidelines.RED ROSE FASHION GALAXYItems of Expenditure/Cost Amount Lease/rented shop- Rs.5000 per month.Purchase /Lease of Fixed asset : Deposit Rs 100,000/-. Deposit- 100000 Raw material(stock)- Rs 2000,00/-Set up Cost : Furnishing- Rs 100000Initial Investment Total= Rs 400,000/-Cost for running the business on a day to day basis: Cost of raw materials =Rs 60000-70000 per month Maintenance =2500-3000rs/monthAdministration – o Rent = Rs5000 o Electricity= Rs1000 o Telephone= Rs500 o others = Rs 500( Refreshment offered tocustomers, tea etc)Sellingo Advertising = Rs. 2000 /month (Pamplets, Banners.) Rs 72000/-Any other expenses : Interest to be paid on loan. Indigenous loan @ 10% per annum 200000@10%= Rs 20000/- per annum.
Rs 1700/- per month App. Total Rs 472000/- Revenue Sources of revenue Amount From different customer groups =Total revenues:- 100000 100,000/- Total 100,000/- app.Profitability / Liquidity: - Rs. 100000@30% profit= 30000Rs.As per the policy, profit is taken @ 30% of sales.How many units you need to sell to make profits?Total expenses= (Interest-1700 p.m , rent-5000 p.m, electricity and other- 4000) Rs.=10700RS.B.E.P:- To earn 10700Rs, as monthly, we require 35700 Rs. of sales.So, BEP sales are app. 35700/- Rs, no profit no loss point.How much profit can you make?Approximately 30000 Rs. @100000 sales revenues per month.Is it justified when compared with your investment?Yes, because with low initial of 400000 Rs. We are getting our total ROI of 1.2 year.That’s minimumfor this business. (100000@30%)30000 Rs. Per month.How quickly do your customers pay? Vs. How slowly can you pay your suppliers?We have both credit and cash sales and purchases; customer credit period is around 1 month.Supplier’s credit period is also app. 1 month. Healthy terms are established with customers andsuppliers; hence payment of credit goes smoother. Most purchases are made in cash.Investment:- Where will you get the funds to start your venture?
Personal money as well as loan from indigenous bankers.How much of money are you willing to contribute?200000/- Rs in partnership.As the business is in partnership.- How much can you borrow?200,000/- Rs from Indigenous banker @10% interest.