MONEY TODAY dips into the experience of 26 first-generation businessmen it profiled in these pages in the past one year to shortlist five milestones each aspiring entrepreneur has to cross before claiming success.
CONCEPTUALISING BUSINESS IDEA
In the beginning is the idea. It can be original or borrowed. It can strike anyone, anywhere. And those who have their entrepreneurial antennae up tend to catch these ideas first. Like Ranjan Chopra did in the 1980s, when he found that Apple Mac users faced a problem in terms of service support. He set up Team Computers to provide end-toend computer solutions. The company is now worth Rs 135 crore.
Or there’s Rohit Kumar’s idea of providing relocation solutions to foreign nationals moving to India. Kumar started IKAN Relocations, as he found that foreigners were completely at sea when they had to set up home in a strange place. Both ideas are simple, but it took entrepreneurs to give them shape.
Identifying an idea is not enough; determining its feasibility is crucial. Armed with sketches, Pankaj Handa of Blue Rocks made cold calls and door-to-door visits to determine the feasibility of setting up a high-end aquarium business. The timing too has to be right; an idea far ahead of its time need not translate into a profitable business.
ORGANISING CAPITAL
Finance is the fuel that will get your venture up and running. Many avenues lead to capital, from personal savings to loans from banks or funding from venture capitalists (VCs). Some entrepreneurs like Nikhil Nath use their savings. Nath had put away a substantial amount when working with multinational companies. He used this to start his software solutions company, Triton.
Sometimes, personal assets might have to keep the business going. JK Malhotra sold his ancestral home to keep his industrial gas cylinder valves manufacturing unit afloat. This was apart from investing Rs 3 lakh of his savings and a bank loan of Rs 8.75 lakh. The sale of the house gave him time to get the unit back in shape.
As these entrepreneurs found, the key is to control initial investment. VCs enter only when the business is proved viable. For instance, Nath got VC funding only when Triton was three years old.
EXECUTING THE PLAN
Abig idea and sufficient funds are no good unless the idea is executed well. This includes market studies, customer surveys, smart hiring and the like. And this can prove harrowing for first-timers.
Khanindra Burman and Pankaj Bhatia, techies who started a restaurant in their free time, had to do all this after office hours. The duo started a Punjabi eatery, The Village, in Bangalore, and recall that the initial days were “crazy”.
“Our days were spent at work and evenings at the restaurant,” they say. For Shaleen Raizada of Sanshadow, a firm that deals with intellectual property rights, the challenge lay in finding the right people. “I needed people of great expertise. Having associate consultants in various cities proved cost-effective,” she says.
Other entrepreneurs believe that the best way to start is by test marketing the idea, checking out potential customers and tapping on goodwill while still holding on to a job. This approach helps in reducing risks and prepares one to handle the daily challenges that he is likely to face after starting business.
PLANNING BACK-UP
There’s no guarantee that a start-up will succeed. The biggest test for entrepreneurs is in dealing with setbacks. Getting back on track requires gumption, as well as financial support. Often, entrepreneurs might have a back-up plan in place.
Srikant Shastri, for instance, had planned to rejoin the corporate world if his venture failed. When his start-up, Solutions Integrated, ran into rough weather, however, Shastri says he had to jettison his back-up. “What about the employees? I was responsible for their jobs,” he says. His determination to keep the company afloat paid off; Solutions Integrated recorded a turnover of Rs 195 crore in 2005-6.
Kunwar Sachdev took a different path. When his start-up, Su-Kam, faced disaster after the first batch of inverters were faulty, he decided to focus on innovation, instead of giving up. He hired specialists to improve the quality, and Su-Kam was soon a success.
THE TURNING POINT
Entrepreneurs generally dislike resting on their laurels. Which is why they are rarely content with a start-up; they need to consolidate and scale it up. Shedding the startup tag tops their priority after the business stabilises.
Pramod Nagpal’s start-up supplied ethnic wear to multi-brand showrooms. For ten years, Nagpal worked at establishing his enterprise, pumping all profits back into the business. Finally, he was wellestablished, and floated his own retail store, Ethnic World, in Chandigarh in 2004. Today, there are 74 exclusive Ethnic World outlets across northern India.
In some cases, entrepreneurs have had their eyes opened to the possibilities of scaling up by others. S Bhikchandani, who started Info Edge, a company that hosts sites like www.naukri.com and www.jeevansathi.com, was content with the growth of his business.
It was only when Prudential ICICI Technology Fund picked up a 15% stake for Rs 7.3 crore did he realise the potential of his start-up. And soon planned an expansion. His company is worth Rs 100 crore today.
