A thread on Chai-nomics: A business with 47% profit margin!
Chai can be declared as the national beverage of India! India practically runs on it!
after speaking to chai-waallah this is what i found
Chai can be declared as the national beverage of India! India practically runs on it!
after speaking to chai-waallah this is what i found
โ The shop on an average serves ~1200 cups a day
- Chai orders- 700 cups
- Coffee orders- 400 cups
- Horlicks/ Boost- ~100 cups
- Priced between Rs 15-20/ cup
โ On weekends this number goes to 6000cups (Saturday & Sunday included)
๐ On a weekly basis-
- Chai orders- 700 cups
- Coffee orders- 400 cups
- Horlicks/ Boost- ~100 cups
- Priced between Rs 15-20/ cup
โ On weekends this number goes to 6000cups (Saturday & Sunday included)
๐ On a weekly basis-
(1200*5)+ 6000= ~ 12000 cups a week
There are 4 weeks a month + 2 days extra(depends)
๐ cups sold a month- (12000*4) + (1200*2)= 48000+2400= ~50,000 cups a month
Average ticket size is Rs 15-
>> Monthly revenue -
50,000* 15= Rs 7,50,000
There are 4 weeks a month + 2 days extra(depends)
๐ cups sold a month- (12000*4) + (1200*2)= 48000+2400= ~50,000 cups a month
Average ticket size is Rs 15-
>> Monthly revenue -
50,000* 15= Rs 7,50,000
>> Yearly Revenue- 7,50,000*12= Rs90,00,000
Now let's understand the cost incurred-
๐Milk-
Cost of 1litre milk- Rs 40
- 1litre serves ~10 glasses( standard size is 100ml)
>> For 50,000 glasses- 5000litres of milk
>> 5000*40= 2,00,000/month of milk
Now let's understand the cost incurred-
๐Milk-
Cost of 1litre milk- Rs 40
- 1litre serves ~10 glasses( standard size is 100ml)
>> For 50,000 glasses- 5000litres of milk
>> 5000*40= 2,00,000/month of milk
๐Sugar-
โข Cost of 1kg of sugar is roughly- Rs 45/kg
- 1cup requires 3gms of sugar
- 50,000cups=1,50,000gms or 150kg/ month
- Cost of sugar per month- 150*45=6750
~Rs 7000/month
โข Cost of 1kg of sugar is roughly- Rs 45/kg
- 1cup requires 3gms of sugar
- 50,000cups=1,50,000gms or 150kg/ month
- Cost of sugar per month- 150*45=6750
~Rs 7000/month
๐ Labour-
Assuming that bhaiyyas preparing tea are paid Rs 10,000/month
( Average daily wage in India stands at Rs272)
And this shop has around 4
Cost of labour= Rs 40000/month
๐Cylinder-
cost of a cylinder- Rs1100
3 cylinders are required a month= Rs 3300
Assuming that bhaiyyas preparing tea are paid Rs 10,000/month
( Average daily wage in India stands at Rs272)
And this shop has around 4
Cost of labour= Rs 40000/month
๐Cylinder-
cost of a cylinder- Rs1100
3 cylinders are required a month= Rs 3300
๐Tea:
Loose tea costs roughly around 250/kg
Roughly 40kg is needed per month = 40*250=10,000/month
๐Coffee-
A cup of 100ml requires 2gm of Coffee
- 17000 cups= 34000gm/month
- 34 ~35kg of coffee/ month
- Cost of 1kg of coffee- ~400/kg
- 35*400=Rs 14000
~Rs15000
Loose tea costs roughly around 250/kg
Roughly 40kg is needed per month = 40*250=10,000/month
๐Coffee-
A cup of 100ml requires 2gm of Coffee
- 17000 cups= 34000gm/month
- 34 ~35kg of coffee/ month
- Cost of 1kg of coffee- ~400/kg
- 35*400=Rs 14000
~Rs15000
๐Boost/ horlicks at 550/kg
- 1 cup requires 3gm
- 4000cups/month requires 12000gms Or 12kg/month
- 12*550 i.e Rs 6600/month
๐Rent=Rs 1,00,000 a month(roughly)
Assuming water to be free:
- 1 cup requires 3gm
- 4000cups/month requires 12000gms Or 12kg/month
- 12*550 i.e Rs 6600/month
๐Rent=Rs 1,00,000 a month(roughly)
Assuming water to be free:
Total cost โ Milk+ sugar+ coffee+ tea+ boost/horlicks+ cylinder+ labour+ rent
Rs 2 lac (milk) + Rs 7000( sugar)+ Rs15000 (coffee) + Rs10000 (tea leaf)+ Rs 3300 (cylinder)+ Rs 40000( labour)+ Rs6600(boost/horlicks) + 1lac (rent)
= Rs 3,81,900
An approx of Rs 4lacs/ month
Rs 2 lac (milk) + Rs 7000( sugar)+ Rs15000 (coffee) + Rs10000 (tea leaf)+ Rs 3300 (cylinder)+ Rs 40000( labour)+ Rs6600(boost/horlicks) + 1lac (rent)
= Rs 3,81,900
An approx of Rs 4lacs/ month
Profit->
7.5 lacs- 4 lac a month=3.5lac/month
3.5 * 12= Rs 42 lac/year
42 lac a year is to take home profit!
A crazy 47% margin!
7.5 lacs- 4 lac a month=3.5lac/month
3.5 * 12= Rs 42 lac/year
42 lac a year is to take home profit!
A crazy 47% margin!
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