By K S Ahluwalia
So there is a vada pav (popular snack in Maharashtra) stall all across the state. I observed one of them carefully to understand better its business model.
About 5 people seem to work there. They open up their stall at about 4pm and work till 10.30pm.
I observed the output (number of items sold) in 30 minutes.
So he sells apart from Vada pav, other items like – samosa, samosa pav, bhajji pav.
Although the hot selling one is vada pav– which is indeed tasty I must say.
So for ease of calculation let us consider they sell only vada pav so that we get a margin.
One Vada pav costs INR 15. And in those 30 minutes I counted them, roughly selling 6 Vada pavs, a minute.
So considering there is a margin of INR 7 per Vada pav
Working hours 5 hrs 30mins — 330mins. Per min – 6 Vada pavs — total 1980 vada pavs
Margin – 7 INR. Net profit- 7×1980= INR 13,860
And they work every day. Per month- 13,860 x30 = INR 4,15,800
This divided by 5 people gives about 83,160 per person per month!!
Not bad at all!! Lucrative career option you would say.
Edit 1: So I have to consider the ‘hafta’ which they pay the local bodies- so after some research, I have found that it is around 300–400 per day , so roughly 10.5k a month, divided by 5, which is 2.1 k per head.
So 83,160 –2,100 =81,060. Still pretty good.
Edit 2: margin of INR 7 is calculated as- again it’s a rough estimate
Potato per kg in the city is INR 30, so per vada they maybe hardly using 100g, so 3 INR
Pav costs 1.50 INR (wholesale rate)
Other ingredients (all in miniscule amounts as one vada doesn’t contain much) – viz coriander, garlic, chilly, besan, oil, turmeric, salt- 2.5 INR
Total is 7 INR.
Plus garlic chutney and green chutney (both less than half a teaspoon) – 1 INR. Total 8 INR
Cost of vada pav is 15 INR, so a rough estimate of 7 INR per item is profit. 50% net margin
I hope that clears any doubt.
Your call now folks
About the author: K S Ahluwalia
KSA has over 30+ years of business experience across sales, operations, logistic and retail, publishing, consulting and management roles. Experienced in organization development consultant with primary expertise in leadership assessment, skills enhancement and performance management. Has a unique ability to partner with senior leadership, adapt well to change, and collaborate with people throughout an organization allows to build productive relationships and solutions that have had a positive impact on the bottom line for numerous corporations.
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