SR article

Cost Structure

What are the most important costs in our business?

To order to pay for all this there needs to be an oversight over the costs.

 

The distillation unit has already been bought and installed in the village. Depending on the outcome of the experiments, it has to be adjusted and estimating the costs is thus hard. Amrita pays for any costs made for the project, including the variable costs such as water and electricity. If there is need for manuals to explain the prototype this can also be arranged by Amrita.

The costs of the employees are going to be paid by the profit that the business makes.

 

 

Ecological costs

 

The project is entirely green, which means there isn’t any CO2 emission. The only ecological costs that need to be made are the costs of producing the distillation unit and transporting it to the village. However these advantages weigh out the disadvantages in our opinion, because the costs that are made by producing and transporting the distillation unit is one-off, where the benefits are continuous.

 

 

Social costs

 

According to Bev Meldrum social impact is purely the change we facilitate in the communities we work in [1]. The impact of our project can be a negative impact on the community. To think about what could happen can give insight in how to prevent it. Possible negative social impacts of our project can be:

  • Villagers become competitors. If the lemongrass oil business proves itself to be profitable, it is possible that villagers become competitors. In such a small community this can cause tension and change the dynamic of the village.
  • The lemongrass oil business turns out to be a failure. If for instance the lemongrass oil market collapses it could be that farmers invested in a distillation unit just before the collapse and are stuck with a distillation unit and a debt without a prospect of paying it off.
  • Food production turns into lemongrass production. If the business turns out to be very profitable, it could be possible that more farmers from the village want to get involved in the lemongrass oil business. This can have the effect that farmers that first produced food turn their production towards lemongrass, which can result in a shortage of food.

 

 

References:

[1] EBook - Measuring Your Social Impact

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