Guesstimate: ‘How much would a tea seller earn in a year by selling a tea on the roadside joint in Mumbai’

Question

Accepted Answer

The tea seller in a roadside joint in Mumbai can earn an average annual income of around INR 2,40,000.

The average price of a cup of tea in Mumbai is around INR 10.
Assuming the tea seller sells 100 cups of tea per day, the daily revenue would be INR 1,000.
Considering the tea seller operates 300 days a year, the annual revenue would be INR 3,00,000.
After deducting expenses like rent, ingredients, and wages, the tea seller's net income could be around INR 2,40,000.

Accepted Answer

Explicitly mentioned the assumptions that I was taking initially itself, that I am considering Andheri station area, and I would solve the problem differently for summer, winter and rainy season as demand in each season differs and hence revenue would vary (The panel was extremely impressed by this approach). Then solved the problem from supply side and considered that there will be only 1 labor making the tea, hence we can make approximately 1-2 cups in one minute. Then added multiplication factor to sum up the revenue in 1 hour, followed by 1 day, followed by 1 months. Following the same approach, calculated revenue for all the three seasons.

I was then asked if the tea vendor wants to buy a bigger shop to sell tea, what all factors should be considered? I told them all the factors necessary to check before buying a real estate property. (Panelist was a senior manager and she was leading real estate practice in Deloitte, that’s why I mentioned real estate points to impress her. Such brownie points really help to crack the interview).

Guesstimate: ‘How much would a tea seller earn in a year by selling a tea on the roadside joint in Mumbai’

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