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The new business next door

India
Beauty Salon
A woman and her husband stand next to their electronics shop, Rajasthan, India
Yellow rating
Low risk
$350 / $1,453
24%
$

Savitri married her husband Hira Lal when she was just 17 years old. The family live in Akash cluster, where they moved after their old region was flooded by the Bisalpur dam.

Savitri is determined to provide her two children with a good education and a better upbringing than they have now. Hira Lal works as mechanic and has a small business running an electronics shop. Savitri works as a laborer but dreams of expanding the family businesses and improving their income.

Setting up shop

Savitri wants to take a loan to open and run a cosmetics shop in the space next to her husband's electronics shop, pictured above.They will invest money from the existing business in the new enterprise and take a loan of $1460, which they plan to pay off over two years.

Savitri knows her market and has made very detailed business plans right down to which shampoos and eyeliners the shop will stock. She has calculated everything from transportation to electricity costs for the new business to how much stock she will sell each year and the profit margins she expects to make on each item.

She has estimated a total profit margin of 19% in her first year. Over the first two years she expects to average a profit of $733 a year but once she has paid off the loan this will rise to $1503 in the third year. These are big figures for her family, they'll be able to save more money for the future and be more resilient to unplanned costs.

Savitri has long term plans but with her research, she knows they will be worth her time and energy.

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