How To Start A Small Risk Free Business?

It is a challenge and a big deal for starting a new business. There are countless opportunities and many more to explore. Channelising your efforts is necessary for your success. Risk is involved in your path however, with detailed planning and smart decision making you can minimize your risks and grow stronger. After all good decision making combined with positive thinking will definitely help you to be successful.

Many small Businesses fail. You can't believe this as there are many coming up every day and we see them around. For being successful one must read literature, books, do research and try to collect information from people who are successful. Try to get a mentor for yourself to shorten your learning curve. Analyze what they did and how did they make it so big. What were the obstacles that they overcame and how? This will definitely help you to get motivation and encouragement for future.

Get feedback on how to do effective advertising or marketing campaign to promote your small business. What kind of promotions did they make? How did they started promotion in the market about their business? Who all they hired with them and what task or activities they performed. You must sought answers to such questions before beginning.

I understand that each and every business case is different however we can see some key points that every famous entrepreneur can share with us to help us along our way. It is simply more effective that reading a book. This kind of information sharing is way beyond any kind of research.

Don't just consider starting a business means opening a shop and stuffing it with products or services. It isn't just a start but a long term relationship building. Once you're business is running successfully you need to think about the fund management, maintenance of accounts, advertisement, manpower etc. A substantial time and money will be invested in your endeavor. You must need to analyze your future and manage your business accordingly to overcome any obstacles etc.

My success mantra for you is to stay calm, focussed, positive and strong in your endeavor. You must offer your customers high quality products while keeping greater customer satisfaction as your key goal. if you have a good product or service people will definitely realise this and will invest in your business. So don't worry and stay focussed towards your goals.

Next Generation of Air Transport: Capt Gopinath

DREAM BIG, ACT FAST, BE DECISIVE

I am a 25-year-old mechanical engineer based in Lucknow. I have started a business aimed at setting up a network of movie exhibition units in villages, using low-cost projectors. I wish to create a chain of 10,000 movie units across rural India in a span of seven months. After nine months of experimentation, my projector now works fine for a 120-inch display, but I have having a tough time trying to raise the required capital of Rs 1 crore. My parents say they have spent enough on me and friends say they need money for houses, cars and bringing up kids. I tried banks and venture capitalists. Banks ask for income tax returns for three years, while VCs insist on a track record. Is it possible for me to get seed capital or will the money come only after my business begins to bloom? Should I slog for several years before I get basic capital. Please guide.

CAPTAIN GR GOPINATH Executive Chairman, Deccan Aviation

THE creation of a large capital is undoubtedly a critical requirement for entrepreneurs across the board, at every stage of their growth. To get an idea off the ground, however, the critical factor is not money but passion and commitment for your vision, which for the truly committed, is inexhaustible. From Dhirubhai Ambani to Narayana Murthy, the success stories of Indian businesses are rife with first generation entrepreneurs having no prior business education, funding or even experience. Indian entrepreneurs now have the advantage of a dynamic and robust economy acting as a fertile ground for their innovations, experiments and success.

Market Your Dream

People have to buy your idea, if they are to put their money into it. Do make sure you have a vision, a well researched plan in place and stay positive. Ask yourself: What is your vision? What is the relevance of your idea? Are You cut out for the grind? This will help you chart the different stages of development for your business, as you envisage it. Each stage of growth will require different strategy, approach and budget. You will have to don different hats to deal with different challenges and crisis in order to stay afloat and make a success. You want to set up a rural network of movie exhibition units. You can start with the prototype you have already built, make it work and build your product reputation around it. It also helps to build a committed team, and acquire the right know how to market yourself and your product effectively.

Build Your Credibility

If you have to get someone to fund your dream project you have to make them believe that your commitment is 100%. This cannot be simulated, only your sweat, toil and tears can speak for you. You have to be prepared to throw in everything that you have to realise your business concept. An investor will go along with you once he’s convinced that even though the failure of the venture would definitely be a setback for him, for you it will be nothing short of a financial catastrophe. I do not prescribe to any management theory instead I prefer to rely on my gut instinct which is backed by my own research and observation. In the early 1990s I stumbled on a news report about a Vietnamese born French pilot using helicopters to help foreign investors travel all over Vietnam. This made me think about the abysmal lack of helicopter services in India and the potential of the enterprise. The process of economic reforms had begun but commercial aviation was a negligible industry and air travel had remained stagnant in the past decades. Under the circumstances, getting finances for a helicopter looked almost impossible. It took my friends and I four long years to get a single helicopter on lease. By 1996 I had mortgaged everything I owned, borrowed heavily from friends and relatives. I succeeded in getting a few private investors on board and acquired our first helicopter and launched Deccan Aviation. While we earned profits right in the first year of our operation, my vision for Deccan Aviation was not just about securing an annual profit. We wanted Deccan Aviation to become India’s largest, most specialised and customer focused helicopter charter company. This required, further investments, a large fleet of helicopters and more financing. Until four years back, I drew a net salary was Rs30,000, but my company remains well supported by investors.

Early Mover

You must realise that the journey of a thousand miles starts with a single step. And If you want to dream big you must act fast and be decisive. The bottom line is if you have a vision and are willing to put all at stake, you will be able to prove your commitment and get support.

The Big Picture.

You have big ideas and you believe your business model is as good as it gets. But you feel something is wrong. Watch out, it may be that your teammates and employees don’t see the same big picture that you see. Learn to share your vision and values with them.

AT A POPULAR party venue just outside Delhi, about 3,000 had been asked to gather one evening four years ago. They were the employees of Daksh, a business process outsourcing firm, and they were a little perplexed. No speeches, no presentations and none of the usual gobbledygook unleashed in motivation camps. They were just being shown short clips from a range of Hollywood films: Pretty Woman, Titanic, Gone in 60 Seconds and Mighty Joe Young. What the then-CEO, Sanjeev Aggarwal, was trying to do was to communicate with his large team what he wanted from them to build the organisation.

• From Gone in 60 Seconds, he highlighted the need to set a target (steal 50 cars) and accomplish it within the allotted time (three days).

• In Pretty Woman, the clip showed Julia Roberts’ character getting ill-treated by a store keeper, but later treated with respect by the manager of a hotel. By showing this, Daksh wanted its employees to treat everyone properly, irrespective of status.

• A Titanic scene in which the music troupe keeps on playing even as the giant ship is sinking, demonstrated to the employees devotion to customer service comes first.

On that one evening, Aggarwal succeeded in communicating his vision across his company, without having to resort to motivational posters around the office. The unique experience also stayed in the minds of the employees, helping them constantly remember the lessons.

Very often, a startup puts together a team and people are attracted to it because of the excitement of being part of a startup, a bigger paycheck or even a stake. They hear what the target of the company is, but they are not sure what it stands for. While a vision is set for the company, the values need to be put into place as well.

A business leader needs to articulate the corporate vision clearly so that the organisation’s progress towards its goals can be effectively monitored and employees are empowered to take decisions on the move. “Someone once said that leadership is not about leading from the front. It’s like herding cats; you have to herd them from the back. If you are at the back then the ones in front have to know where they are heading. The paradigm where leaders assign tasks is gone. Sharing the vision helps people make decisions on the fly. They can take decisions in the appropriate direction without feeling lost about it,” says Alok Mittal, managing director of Canaan Partners.

Some like Laura Parkin, executive director of National Entrepreneurship Network, believes that a team wouldn’t even be formed without sharing the vision. “The only reason anyone would join a startup is if they see the same vision as the entrepreneur,” she says.

There are entrepreneurs who hesitate to share their vision with the rest of their startup team, worrying they may share too much and lose the idea to someone else. Some may simply be unable to articulate the long-term goals for the company. “Many entrepreneurs are poor communicators. Though they see the light, they are unable to share it,” says

Mr Aggarwal, who is now the managing director of Helion Ventures.For the tongue-tied entrepreneur, help is now available from industrial psychologists, corporate trainers and motivational speakers who can help her/him voice it. One such person is Uma Arora, the founder of Idam Learning. Quoting from her experience, she cited the case of a startup firm that had been growing slow and losing people. “After examining this company closely we realised that they all (team members) hadn’t arrived at a set of values and that their visions were purely in numeric form. They goal was to gain a certain market share, but we didn’t see any vision of what the quality of the company was. There is very often an excessive focus on numbers and not on what kind of company it should be,” she says.

“What I find among today’s entrepreneurs, and there are exceptions of course, is that when we dig deep enough, we see that their vision is simply to raise the valuation and sell it off,” she points out, continuing, “If this is the case then you have to learn to speak two languages. One for your confidantes and core team, and the other for your employees.” For the entrepreneur with the big picture dreams, the vision and values can be etched in stone. For retail chain Subhiksha, it has remained “Be the largest player in the market we operate in and give the consumer the lowest cost.”

Subhiksha is now 920 stores-strong. “Instead of sharing the vision, co-own the vision,” says R Subramanian the founder of Subhiksha. Their vision and values was set back in 1996 when the six member core team set sail.

“If you get the core team into the formulation process, then it becomes our idea and not my idea. Here the team sets the goals, the values and works backwards from there,” says Mr Aggarwal. In 2000, Daksh asked the members of the 25-member core team to make presentations on what it the values of the organisation should be. At the end of the day the funnelled it down and handed it to the human resource department to make it into posters and cards to be distributed.

Sometimes the vision and values change and entrepreneurs must be ready to face it. They can be purists and decide to stay true to their original plan. Or they could evolve with the market for higher gains. “Our initial mission statement was ‘build exceptional customer relationships by leveraging India’s high quality, cost effective intellectual capital.’ In 2000, we thought that India would be the place from where we would deploy our services. We eventually discovered we could deploy our services from Mexico and Philippines as well. So we had to modify our mission statement,” says Mr Aggarwal.

In the case of a large organisation, hitting upon the right vision could be a day-long process that involves numerous people, a clubhouse, a buffet lunch and PowerPoint presentations. For a lone entrepreneur or small team, this could happen at the coffee shop on a paper napkin. “There are a lot of personal styles involved in communicating a vision. But first of all you (the entrepreneur) have to be clear in your head. Clarity and brevity is essential. If the entrepreneur were to write down their vision, if it is longer than even a 150 words, then it is too long,” says Ms Parkin, NEN.

The vision is a mix of numerical targets, values and big picture plan. These automatically set up a monitoring system. ‘’How you do’ and ‘what you do’ is a derivative of ‘where you want to go’,” says Mr Subramanian. Ms Parkin says: “We ask people to envision what their success looks like, and then work towards that.”

Aggarwal and Subramanian had the courage to think out of the box and disseminate their vision innovatively and effectively. As a result, the companies they founded have grown beyond their peers and broke their own targets. Great companies don’t just get the big picture right, but also hang it on the wall for everyone to see.

Article Resource:

Jacob Cherian is the Chief Editor in the The Economic Times, Mumbai and the article appeared in one of their successful columns on Entrepreneurship/Startups.

The Making Of Richard "virgin" Branson

Challenge yourself

Richard's first big challenge came when as a five years old kid he wanted to swim in a beach but could not do so as he did not know how to swim. Inspite of trying his best , suffering cold water and swallowing whole lot of sea water, he lost out the bet with his aunt who offered ten shillings if he could learn swimming by the end of the holiday.

While return he was obviously very unhappy as he hated losing when he saw a river, he decided to give a one last try and pleaded his father to stop the car. The river looked deep and fast, running over rocks but he dared and took the risk. With active encouragement from his parents he stepped into the river , almost got drowned before he relaxed and started floating and then swimming awkwardly and thus won the bet.

Richard "virgin" Branson.

Stand on your own feet

His first lesson on self sufficiency was when he was four years old . While on his way back from somewhere his mother stopped the car at a little distance from the house and told him to get down and find his way home across the field.

Richard loved these challenges and these lessons from his parents became tougher ,once he was asked to bicycle 50 miles to south coast with only a map for guidance when he was 12 years old .These early lessons made him strong and rely on his own self thus making him independent.

When everything seems lost

Richard found out the easy way of making money by selling records domestically which were meant for exports. He started making an enormous profit as tax was not paid on these music records but this was illegal. He was caught and thrown into the prison. He could somehow escape by agreeing to pay penalty which was three times the illegal profit which he has made.

He had no money but slogged without moaning and paid the penalty in installments in three years. He realized that the reputation is everything and his advise to all new business startups is " be fair in all the dealing, do not cheat but aim to win."

Health and care for all.

Health and care for all

THAT India’s primary healthcare is in dire straits is well known. While the affluent sections are being overwhelmed with the choice of superspeciality service, there is a widely held belief that there is no money to be made in providing healthcare to the bottom of the pyramid. Some entrepreneurs are challenging this as a myth and trying to improve the health of healthcare in India.

Ziqitza Health Care Services, the company behind the 1298 emergency ambulance service in Mumbai, has shown the way that it is viable to provide services at a subsidy or for free. Anyone can avail of their dial-in ambulance service, and the company has made it clear that ability to pay will not be a defining factor for using the services.

It was a few years ago that five individuals decided to junk their corporate careers to start the company. Shaffi Mather, Manish Sacheti, Ravi Krishna, Naresh Jain and subsequently Shweta Mangal came together in 2002 to begin Ziqitza.

The first four knew each other from their studies in the US in the mid-90s. Says Mr Sacheti: “We had all decided that we should go back to India and do something in healthcare.” Shaffi Mather and Manish Sacheti met during their MBA at University of Pittsburgh’s Katz School of Business, and quit their respective jobs with Reliance Industries and The Aditya Birla Group. Naresh Jain, who graduated with an MBA from University of Maryland, College Park left GE Plastics and along with Ravi Krishna formed the core team.

The statistics they found were startling. Just 6% of all people in India have access to ambulances with emergency services, which meant that there were several individuals that perhaps lost their lives just en route to hospitals. The point was further driven home when Shaffi Mather’s brother nearly lost his life as a result of poor medical services. Says Mr Sacheti: “Having come from the US and observed the way the health care system works there, we definitely felt that we could do something in India.”

They swung into action by 2003. Shaffi Mather, the CEO of Ziqitza, had worked with the London Ambulance Service as part of a threemonth training at LSE. This proved to be handy as Ziqitza and London Ambulance Service entered into a tie-up in India for paramedic training. Mr Sacheti says: “They even offered us an ambulance, but we refused.”

They then studied the ambulance service in Hong Kong and a subscriptionbased service in South America, but junked the latter because it wouldn’t work in a system where people just couldn’t afford to pay. Finally, they decided to settle down on a ‘sliding scale’ model of payment. In effect, people that could pay would be charged higher, while those that couldn’t were subsidised. But all callers would be able to use the 1298 service regardless. The five-member management team decided to divide the calls into two categories, cardiac calls and basic calls. Says Mr Sacheti, “The cardiac calls require medical intervention. So an ambulance for a cardiac call requires a doctor, a ward boy and medical equipment.” The basic calls won’t require the bells and whistles that a cardiac ambulance requires.

Although their initial studies suggested that the service would be profitable at Rs 5,000 per call, Ziqitza priced its services at Rs 1,500 for a cardiac call and Rs 750 for a basic call for the first 20 km. Mr Sacheti says: “We have discovered that it’s a sustainable business model even at this price.” In a sense, the ambulances break-even, but the company has got four sponsors, Tata AIG, HP, SBI and Playwin that keep the corporate office running. Curiously, it’s been the more affluent bunch that haggles with the ambulance operators when it comes to payment, whereas several lower-income patients from areas like Dharavi have paid up to Rs 1,000 without any hesitation.

The 1298 service was formally launched in 2005 in Mumbai by the Maharashtra chief minister Vilasrao Deshmukh. Ziqitza scaled up their ambulances from one to ten, and established a network of another 10 ambulances and omnis. As Mr Sacheti says: “We needed to have an ambulance for anyone that wanted the service and we can’t refuse calls. So we need to have other ambulances that will take up the load.” But Ziqitza makes it a point not to outsource the cardiac calls. On average, the service gets nearly 40-50 calls a day. But the service suffered some initial pangs. According to Mr Sacheti, “We would let the doctor decide whether the patient should be subsidised or not, but we found that the doctors were actually overcharging the patients and keeping the difference.” Now, all calls are screened. If they’re from the government or BMC hospitals, the fee is immediately waived off or cut.

Recently, Acumen, a not-for-profit equity fund, invested $1.5 million in Ziqitza to aid its expansion from 10 to 70 cardiac ambulances in Mumbai alone. The 1298 service will make its debut in Kerala as well by December. Mr Sacheti says that merely providing the service won’t be enough, it has to be world-class. Hence, the next target — get the patient to the hospital within seven-nine minutes of the call.

That would, perhaps, be the Formula One of emergency healthcare.

Article Resource:
Author: Irshad Daftari is the Chief Editor in the The Economic Times, Mumbai and the article appeared in one of their successful columns on Entrepreneurship/Start-ups called "Starship Enterprise".

Direct Logistics Derives A Sizeable Amount Of Its Revenue From China.

A soldier charges ahead on his own & tames the Dragon

Direct Logistics Derives A Sizeable Amount Of Its Revenue From China

IF CAPTAIN Sunil Devrani of Indian army of the early 1990s had said that one day he would set foot in China, his listeners would have read war in his prediction. Go to China he did, but in a more peaceful way, as an entrepreneur many years later. Direct Logistics, which he started with a capital of Rs 20,000, after quitting the armed forces, is the only Indian logistics firm to derive a sizeable revenue from China.

Mr Devrani says after leaving the army, he had no idea what he was going to do next or whether he would be able to adjust to the “world outside”. The pyramid-like hierarchy of the armed forces bothered him. “Only a few make it to the top and I wasn’t sure about myself, so I decided to quit even if it meant being jobless,” says Mr Devrani.

The ensuing period of idleness, though, didn’t last long. He landed a job as a sales executive with a freight forwarding company. “The transition was tough” but Mr Devrani believed that if he could work his way through an arduous sales career, then the going would be a lot easier later.

Two years on, he quit once again, this time to branch out on his own. “It was a spur of the moment decision,” he says. He had to rely upon capital that was not much more than a month’s salary, the loyalty of two friends and an appetite for risk. “We had a pact. If we didn’t make money in the first month, each of us will put our CVs in the job market and shut shop,” says Mr Devrani. Happily for the trio, November 1997, the first month, turned in a handsome profit. “It was a sign that we were cut out for the job,” says Mr Devrani.

In a decade, Direct Logistics has reached a turnover of nearly Rs 120 crore and is the only freight forwarding & logistics company to have set foot in China. Almost 40% of the company’s revenue, today, originates from its Chinese operations. “China happens to be the largest market for us and the kind of business that we did in India in seven years took us only two years in China,” recalls Mr Devrani. Moreover, in October 2007, Direct Logistics acquired Shenzhen Dida, a Chinese freight forwarding, logistics and international transportation company, with a turnover of Rs 25 crore. This was the first-ever acquisition by an Indian company in the freight forwarding sector in China.

The strategy at Direct Logistics has been simple. To get more business by setting up one branch office in a major port or airport destination every year. “This has been our methodology right from the start,” says Mr Devrani. Today, Direct Logistics has its presence in India, China, Singapore, Hong Kong and Taiwan through its fullyowned offices. An expansion that has kept up pace with robust growth.

Ever since Direct Logistics set shop out of Mumbai in 2002, the topline growth has been almost 100% year-on-year. Says Mr Devrani, “From Rs 9 crore in 2003, we clocked revenues of Rs 19 crore, Rs 40 crore, Rs 65 crore every successive year to Rs 120 crore last year.” Perhaps, one of the reasons why the company has witnessed keen interest from financial institutions.

Early last year, the company received Rs 10 crore as its first round of funding from SIDBI Venture Capital, the venture capital arm of Small Industries Development Bank of India, after diluting a 10% equity stake.

Mr Devrani wants to take the turnover to Rs 1,000 crore by 2012. The key challenge will be talent management. “Ours is a people-sensitive business and managing them will be our biggest challenge,” adds Mr Devrani. However, he believes his core team will take the company there. “If I was in the army, I would like to take them with me to war.”

Article Resource:
Author: Ashish Kumar Mishra is the Chief Editor in the The Economic Times, Mumbai and the article appeared in one of their successful columns on Entrepreneurship/Start-ups called "Starship Enterprise".

Ten Steps to keep Cool after a Big Hit.

Has your product become a hit and are orders pouring in? This 10-step survival guide will help you think fast and react quickly when you wake up one morning to find the world beating a path to your door.

Take a Deep Breath:

While it’s only natural to want to celebrate the good news, remember that a big contract or great press doesn’t mean dollars in your bank account — at least, not today. So hold off on that Ferrari or exotic vacation. Also, remember that the additional sales you ring up will probably require you to lay out more money for people, materials and overhead — and may require you to borrow additional capital as well.

Map out a Strategy:

Make a to-do list, crunch the numbers and marshal your human and production resources. It’s always easier to fight a battle on paper than to shoot first and ask questions later. No matter how much pressure you’re getting from your customers to deliver the goods right now, you need to take the time to sit down and map out a plan of attack.

Get the Money:

Before you go on a hiring binge or start placing orders overseas, it’s important to figure out how much working capital you’re going to need to meet the market demand. Because employees and manufacturers generally won’t wait until you’ve sold the products and collected the money before you pay them, you’ll need a source of capital that you can tap immediately.

Reach out for help: Call on suppliers, personal contacts and use the internet to find extra hands to help you. If you think you can do it alone, think again. No matter how hard you work, there are only 24 hours in a day and you’ve got to sleep during seven or eight of them. That’s why it’s important to reach out to people who can help you. If your company already has employees, ask them to put in extra hours to help you get over the hump. If you’re a one-person show, you can reach out to friends and family members to help you or hire freelancers. But don’t commit anything for the long term.

Forge production partnerships: While there’s no shortage of suppliers listed on the internet, a reliable manufacturer that delivers high-quality goods is not so easy to find. Your best bet may be to contact your industry’s trade association and its leading trade publications for consultants and referrals.

Create a Distribution Network: As news of your product or service spreads, you may start getting orders from consumers and retailers all over the country. If you’re like most businesses, you’re going to need help selling and servicing those accounts. Rather than hiring a national sales manager and opening offices in major cities, a more cost-effective option may be to sell your product through manufacturers’ representatives. These reps (or rep firms) act as independent sales agents for multiple product lines and work on a commission-only basis.

Communicate with your Customers: Communication is the life-blood of any business relationship, but it’s even more important when your product or service suddenly takes off. The biggest mistake a business owner can make is failing to warn customers of shipping or production delays until it’s too late. This is especially critical in the apparel and toy industries where seasonality is important. Manufacturers who fail to communicate with key retail and wholesale customers may find themselves not only with egg on their faces but with unsold inventory in their warehouses as well.

Leverage your success: The hardest thing about achieving over-night success is keeping it going. The last thing you want is to get stuck with a warehouse full of pet rocks. Creating line extensions like the Chicken Soup books or the ‘For Dummies’ series is one way to keep your brand alive. Another is to find new markets for your products and services or new ways to publicise them.

Invest for the future: While it may be tempting to reap the profits from your hit product right away, it’s important to reinvest some of those profits. Whether this means paying down debt, buying new equipment, hiring another employee or opening an-other location, don’t pass up this opportunity to make your money work for you. It’s always cheaper to put your own cash to work in your business than to borrow money from a bank or give up equity to an investor.

Learn from your mistakes: After the excitement of the initial sales rush has died down, take a few hours to sit down with your staff to figure out what went right, what went wrong and what you think you could do better in the future. This will help you put a strategy in place for the next time you come out with a hit product — which could be sooner than you think!

Reference:

Entrepreneur.com