Introduction.
AC business idea for rural market of India. The idea came about when I was researching rural market business possibilities in India. The goal was to find a business that could earn good profits but with less investment. My survey results show that AC business (Air-conditioner Showroom) has immense potential in the rural market. Today I will detail the AC business idea by explaining problem statements and investments required.
Problem statements.
In the current decade, every part of the planet has experienced moderate to extreme temperature rise because of global warming. And, for the past few years, we in India have been experiencing this oppressive heat. This change in the environment has resulted in high demand for air conditioning solutions, even spread in rural markets.
Opportunity in challenges.
Who loves scorching summer in India? If there held a national competition for essay writing on “Your favorite season” then we are sure not even a single entry will come with a “sweltering summer” topic, everyone hates scorching summer. Generally, in India hot summer stays for 3 months & then followed by moderate temperature for 3 months i.e. July, August, and September but now it is evident that summer is getting prolonged year on year basis.
Human lives became miserable due to rapid industrialization, deforestation, and carbon emission by motor vehicles, and this trend is supposed to continue unless we do something good for nature that too on a large scale. Bringing climate back to 5 decades ago condition can only be a dream now, what is being planned now is to stop further deterioration. We can only hope for the less bad unless we make ourselves conducive to nature.
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With my inquisitiveness to find opportunity in challenges, I embrace the opportunity that our destructive actions have created, that 40/50-degree warming is no longer an urban story but has spread to small towns and suburbs. People are starting to feel the need for air conditioners in their homes and offices, therefore, it is the right time to venture into the retail AC business in this region.
AC Business model.
Opening a small showroom that can display 15/20 numbers of AC will require a maximum of 100 SQQFT areas.
Investment required to start an AC business in rural market.
In a suburban market, that kind of space will not cost high, I am assuming a lakh rupees deposit and 10k rent, the interior will cost one lakh, and the stock will cost five lakhs. A service mechanic and an on-shop demonstrator are enough to run the showroom. With this structure, the Investment is coming to around 7 lakhs. The fixed cost will be around 40k.
Revenue model.
As I said, the store must be at a place like downtown or a semi-urban hub which drives the economy of 10/12 connected tehsils/villages, and the business must be the first entrants. It is expected business will generate sales of 40/50 units in a month which will give 2 lakhs net profit as the margin on AC machines ranges from 30% to 40%, and we can consider the average selling price as Rs 30K.
The fixed cost is around 40K (Salary 25K, Rent 10K, Others 5K) so the break-even point can be estimated at 5 sales in a month.
Along with this if space allows the business may keep other durable products also. Another important aspect one can evaluate is the selling of solar energy gadgets, nowadays AC can run on solar energy. Please remember finance provision and EMI packaging would be a USP on this model.
Furthermore, if you require additional information, you can write to me, I will respond within a week.
