Case Study

Vishal started a south Indian restaurant in old Delhi region. He invested 10 lakhs of his own and borrowed ₹15 lakh from SBH Bank @ 10% p.a. The sales revenue for the first year was ₹5 lakhs while the cost of goods sold was ₹7 lakh. Vishal realised that earning rewards is a must for a business to survive for long. In order to increase his sales he focused on customers satisfaction and regularly collected customers feedback. He also advertised about his restaurant in the local daily and offered discount coupons to customers who placed orders above ₹2000. This effort enabled Vishal to increase his sales revenue to ₹15,00,000 with COGS at ₹10,00,000. Today Vishal has expanded his business by opening outlets in other parts of Delhi on his own.

Vishal's vision for the future is that he wants to be in business for himself but not by himself. He aspires to give exclusive rights of his trade marked product to independent retailer in return for their payment of royalties and conformance to standardized operating procedures.

'Vishal realised that earning rewards is a must for a business to survive for long'. Identify the characteristic of business highlighted in the above line.

Profit earning

The correct answer is Option (1) → Profit earning