INTRODUCTION
Mobile phones in rural areas have been witnessing an exponential rise with initially only 23% of the population using mobile phones. In villages and smaller cities, phones are commonly used mostly for calling purposes and the service providers are trying to expand their networks so that internet utility can be brought in at a good pace. The rural segment services include selling and procuring information and support for farm commodities, educating the farming community on best practices, delivery of healthcare, and education to remote villages via the mobile broadband network.
MARKET POTENTIAL
With more mobile phones being used by the rural segment population, mobile repairing stores can provide a one-stop solution to any issue that can persist in any phone or accessories at an effective cost as compared to the urban cities. With more service providers taking interest in this segment, more phones would be brought in hence there exists a potential for this segment to be tapped on. As per 2019 industry reports, the smartphone repair industry in India is worth INR 300 million with over 600 million users across the country where everyone needs a repair service.
FUNDING SOURCE
Under the “Work 4 Progress” program of the Development Alternatives Group, such enterprises have been financed by Sankalp Swashakti Mahila Mandal and Sahiyogini Mahila Mandal (Cluster Level Federations), with an average loan size of INR 30,000.
BUSINESS ECONOMICS
FIXED CAPITAL (One Time Expenditure)
| MACHINERY & EQUIPMENT | AMOUNT (in INR) |
| Counter (@ INR 400/unit) | 400 |
| Chair (@ INR 250/unit) | 250 |
| Rack (@ INR 1,500/unit) | 1,500 |
| Electric Fitting (@ INR 750/unit) | 750 |
| Screwdriver (2 units @ INR 50/unit) | 100 |
| Soldering Iron (@ INR 150/unit) | 150 |
| Soldering Station (@ INR 1,500/unit) | 1500 |
| Tweezers (2 units @ INR 25/unit) | 50 |
| TOTAL | 47,000 |
WORKING CAPITAL (for a 2-month cycle)
| RAW MATERIAL & CONSUMABLES | AMOUNT (in INR) |
| Solder Wire (50 g) (2 units @ INR 75/unit) | 12,000 |
| Mobile Charger (25 units @ INR 100/unit) | 1,500 |
| Headphone (25 units @ INR 100/unit) | 2,500 |
| Charging Cable (25 units @ INR 50/unit) | 1,250 |
| STAFF AND LABOUR | AMOUNT (in INR) |
| Entrepreneur’s Salary (@ INR 10,000/month) | 20000 |
| UTILITIES & OTHER EXPENSES | |
| Rent (@ INR 4,000/month) | 8,000 |
| Electricity (150 units @ INR 7/unit) | 1,050 |
| Phone/Internet Bill | 200 |
| Stationery | 100 |
| Repair and Maintenance | 100 |
| TOTAL | 35,800 |
FINANCIAL SUMMARY (Annual)
| FINANCIALS | AMOUNT (in INR) |
| Fixed Cost | 4,700 |
| Working Capital (for each cycle of 2 months duration) | 35,850 |
| Total Enterprise Set-Up Cost | 40,550 |
| Revenue (per annum) | 2,28,000 |
| Total Expenditure (annual working capital) | 2,15,100 |
| Enterprise Profit (per annum) | 12,900 |
| Payback Period (in months) | 4 |
BASIC ASSUMPTIONS
- Working days: 26 days per month (8 hours shift)
- Each cycle consists of 2 months; 6 cycles in a year
- Average revenue: INR 38,000/cycle
- 100% of the goods produced are sold
- Bank loan not taken into account.
| Particulars | Quantity | Selling Price/Item (in INR) | Amount (in INR) |
| Mobile Charger | 25 | 150 | 3,750 |
| Headphone | 25 | 150 | 3,750 |
| Charging Cable | 25 | 100 | 2,500 |
| Mobile Repair | 280 | 100 | 28,000 |
Note: All figures mentioned are indicative and for reference purpose only. Development Alternatives Group bears no liability for accuracy. For any further information, please contact Development Alternatives on +91-11-2654-4100 or +91-11-2654-4200.
Star Entrepreneur
Jitendra, a young entrepreneur, aspired to transform his passion for technology to an income generating opportunity. In 2017, he started his mobile repairing shop by investing his savings of INR 150,000 and additionally availing a loan of INR 20,000 under the NRLM scheme. Through his enterprise, Jitendra has been able to:
- Increase annual household income by more than 50%
- Employ 3 youth from his village