Kaustuv Ray, 31
"For an entrepreneur risk is unavoidable. But there can be no place for fear"
Education: MA (Economics)
Worked with: Upper division clerk, Kolkata Port Trust
Duration as employee: 4 months
Age at starting business: 22 years
Initial investment: Rs 25,000
Sources of fund: Personal savings
Company: RP Infosystem, manufacturer of PCs
Turnover: Rs 387 crore (projected for 2007-8)
No of employees: 480
A micro beginning: Just four months as an upper division clerk with the Kolkata Port Trust was enough for Kaustuv Ray to realise that a 9-to-5 job was not his cup of tea. The 22-year-old economics post-graduate from Jadavpur University had saved Rs 25,000 from his four months' salary and started scouting for a business opportunity.
"I didn't have major expenses since I was living with my parents," says Ray. "And I wasn't too clear about what I wanted to do except that I wanted to do something on my own." The year was 1998, telephone booths were mushrooming across Kolkata.
Ray realised that the booths needed a regular supply of paper rolls on which the call bills were printed. He spotted his opening there and became a supplier of paper rolls. "I made a profit of Rs 10 on each box. But those were difficult days. Travelling across the city on a bicycle was very tiring. But I had to prove myself," he recalls.
Making a database: In his bid to increase his clientele, Ray did the rounds of offices and companies as well and soon was supplying paper rolls to them. A branch of UCO Bank, which was his client, asked him whether he could supply paper that could be used on a dot matrix printer.
Never one to miss an opportunity, Ray readily agreed. He decided to augment his services by providing single-use carbon paper, which could be used along with the computer paper. From there, it was but natural for him to take another step and begin supplying ink cartridge as well as refilling ink for them. "I was a supplier," he says. "You just had to tell me what you needed and I would supply it."
Rebooting strategy: In 1999, one of his clients, Indian Railway Construction Company (Ircon), asked him if he could supply them with a computer. "I knew nothing about computers. But I wasn't going to refuse a chance to make money," says Ray.
He surveyed the best and most reasonable components he could find, got a computer assembled and then supplied it to Ircon. "I made a profit of Rs 8,000. Till then, I hadn't known there was so much scope in this field. But after that first sale, I knew this was the field I wanted to get into," he says. He soon began taking orders for computers, got them assembled by hiring service engineers and then sold them.
"The only thing in my office at that time was a table and a telephone," Ray says. His childhood friend, Shivaji Panja, also joined him. While one manned the office, the other went out looking for business. It wasn't very easy, especially with hardly any support from home. "I was the first one from my family to venture into business and they weren't too happy with the risk I was taking," he says.
"But for me there was no place for fear," he adds. In 2000, he took a loan of Rs 20 lakh from UCO Bank to start assembling computers. He also became a distributor of computer peripherals. Instead of contracting service engineers, now he employed them. The staff soon grew to 18 people. He also built a network of dealers. And since assembled PCs were much cheaper than branded ones, finding buyers was not difficult.
Tips for starting out
Minimum investment: Willpower and strategic planning. I started my business with Rs 25,000 Skills required: Perseverance
Assembling his ambition: But in 2003, it wasn't enough anymore. "I realised that the margin between assembled computers and branded ones was thinning. If I wanted to continue in this business, I had to manufacture my own brand," says Ray.
But this was easier said than done. For the brand to become successful, it would need a lot of advertising. And that meant a lot of money. "I had to do backward integration," says Ray. "Spending on advertising would just be adding to the cost and I wanted to reduce all unnecessary expenses," he adds.
Ray went about learning the nitty-gritty of advertising. This gave birth to another branch of business, RP Techvision, an advertising agency. In 2005, Ray set up RP Infosystems and began manufacturing computers at an assembling unit in Howrah, under the brand name Chirag.
His marketing strategy was already in place and the dealer network he had established came in handy. He targeted Tier-II and Tier-III cities in the eastern and north-eastern parts of India. Ray focused on his main selling point-price. The price range for his PCs is from Rs 11,500 to Rs 24,000 and he claims to sell nearly 9,000 units a month.
Hedging risks: When Ray first launched Chirag, he wasn't sure how the market would receive the brand. He decided to hedge his risk and diversify. "Like all sensible investors, I didn't want to put all my eggs in one basket," he says. Along with two friends, Ray started two more businesses.
One was RP Foods and Agrochem, The other was RP Ceramics, which produces vitreous china and terra porcelain products. Though Ray isn't involved in the day-to-day running of the projects, he is an active participant in all planning and decision making. "I'm not an expert at everything. I believe in putting the right people in the right place and then trusting them to take the right decisions," says Ray.
In addition, RP Infosystem is now also involved in system integration, software development and turnkey IT projects. Besides advertising, RP Techvision now develops content for various television channels. which cultivates and processes white button mushrooms.
Future domain: Ray's total turnover for 2006-7 was Rs 187 crore but for 2007-8 the projected turnover is more than double at Rs 387 crore. Chirag has a market share of 16% in West Bengal and 2.2% all over India. All this success has further fuelled Ray's ambition.
With three assembly plants already set up, he has plans for more. He hopes to start manufacturing components such as motherboards, keyboards and monitors. "I'm quite positive about the future. The need for computers will only grow," he says confidently.