Determining the costing of a business project is the toughest task, it’ s because of the fact that the costing of any project could easily be dogged incorrect once you start doing the business. If the estimated cost of the project comes out to be higher than the practical cost, the situation is quite controllable. But if under any circumstances the estimated cost of the project is lower than the actual price, it gets extremely hard to overcome the situation with a viable solution because of the fact that the estimated costing helps us determine the market price of the product.
Secondly, it is very tough to find reliable sources from where we could arrange the Dealer price of the product and not the retail price. Therefore, we have conducted a survey including 2 prominent businessmen as participants to calculate the actual cost of our products and services. Cost of Raw Materials /Equipment Primarily, we have to keep our service plan in mind, which is ‘ door – to – door’ car wash services, since we will provide car was serviced at the client’ s own convenience at his own home/office, we will have to keep in mind that we do not require bulky or heavy car wash types of equipment such as the ones at a petrol pump or car care centers; rather we would require equipments that could easily fit into our employee’ s van so that it’ s easy to carry.
Thus we have come to the conclusion that we will be using the traditional car wash techniques which include more labor than technology and bulky machines. The next step will be to evaluate the categories of various costs, such as initial costs, fixed costs, and variable costs.
Startup Expenses / Initial Costs Our startup costs will include the cost for purchasing of equipment and raw materials, as well as paying for lease for land/office, and van/truck. Since the customer won’ t come to our office to get his car cleaned, we would not require a big space but space should be sufficient enough to have comfortable sitting arrangements for all our employees and must include a godown to store equipment and raw materials.
Initially, to keep our budget under control we have decided to rent an office space. We have also made a list of equipments to be purchased; this will also be included in our initial costs. Considering a labor force of 3 people equipped with 3 trucks appointed to wash a car, the optimum capacity of the enterprise would be 10 washes per person that would lead to 30 washes per day.
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