Managing Start Up Enterprises by Suhail Haque - HTML preview

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STEPPING STONE…

What is Entrepreneurship?

Entrepreneurship is as important as innovation for national and global economic growth.

“To believe in yourself, when the world stops believing… to stick it out through thick and thin to see your dream living”… Well, these are just some traits an entrepreneur must have!!!

If uncertainty does not deter you but instead fires you up, entrepreneurship may be your cup of tea!

Entrepreneurship is intangible and is an attitude more often than a profession resting on vision, strong beliefs in one’s ideas, faith, a hunger to make things happen and a strong desire to achieve.

Who deserves to be an Entrepreneur?

Entrepreneurship is for those wanting freedom in the workplace from office pressures… interferences… politics… routines and restricted financial rewards.

It can never be described as the process of creating an innovative and achievable business idea. Or even identifying an existing one and taking risks.

Requisites for being an Entrepreneur

While no formal qualification are required to succeed here, but a good academic background and good grooming always helps.

Starting a new business takes passion, focus, tenacity, ambition, innovative ideas, and willingness to take risks. But, success also requires a solid business knowledge, management expertise, funding and the right people and that’s where B-schools’ can help.

Apart from these, what is more important are;

Personality Traits like;

Creativity
Being aware of one’s strengths and weaknesses
Leadership quality
A thirst and willingness to upgrade skills
Decisiveness and Will – power
Self – discipline and
Knowledge of finances

94% of graduating entrepreneurs in the B-school class of 2012 said that passion was their #1^st motivator for starting a business venture. These aspiring entrepreneurs seeks outlets to exhibit leadership qualities, desire to set direction, take risks, inspire others and engage in high – level innovative thinking.

In addition, the ability to overcome limitations and destructive habits, competitiveness, planning and organizing skills, personal drive and the temperament to work long hours prove helpful here.

The biggest challenge however is to initially spot one’s greatest strength and the work sphere in which one can excel depending on expertise and interest.

The next step is to identify a business idea or opportunity that meets a gap in the market and follow it up by drawing and executing a rational plan of action.

Gaining Skills to Grow and Lead Companies

91% of 2012 graduated entrepreneurs said their management education was important in helping them lead and grow their businesses. It allowed them to;

Develop their business or product ideas in a low – risk environment

Tap into the vast array of innovative research ideas and support

Access early funding opportunities through grants and angel investors

Find team partners and mentors within the school or through the local business community

Network and build relationships with potential business investors and customers

Of the 5% class of 2012 graduating B-school students, 44% actually started their business, while in B-school and 56% planned to launch their companies after graduation. A portion of these graduates were intent on launching

Businesses in products and services sector (37%), consulting (20%) and the high – tech sector (17%)

According to the GMAC 2012 – Global Management Education Graduate Survey-

Entrepreneurs say that B-school prepared them to;

Lead my Company – 91%
Grow my business – 90%
Develop an Idea – 88%
Develop financial projections – 86%
Write a business plan – 81%
Conduct market research – 79%
Contact potential customers – 75%
Create an HR plan – 59%

Pros and Cons of being an Entrepreneur

The fear of failure, high risks, an excessively competitive playing field, tremendous pressures and initial financial sustence are issues that loom large before any entrepreneur.

These are deterrents that prevent many from entering this arena and results in a lot of “potential ideas” that never get executed.

For the fortunate, who among the ones do enter at their own risks and succeed, converting virgin ideas into successful business initiatives is the most fulfilling dimensions of this sphere.

Besides, just relying on good luck, developing conviction, patience, courage, diligence, determination, a zeal to succeed and sincerity enable to taste success in entrepreneurship.

Road to Success…

There is neither any tested formulae nor any shortcut to success in entrepreneurship – because an entrepreneur should be able to feel the pulse of the masses, assess their demands before they arise, see opportunities where others would fail to see any.

All entrepreneurs should realize and accept the fact, that success is very elusive and may be short – lived. Without a strong conviction and faith in oneself and one’s work no entrepreneur can tide over crisis.

They should be creative and be brave enough to take risks in order to undertake unprecedented projects. In short, the entrepreneur would not be successful, if he does not constantly adapt his strategies and review his efforts critically because then stagnancy would settle in and that would be the very end of creative entrepreneurship.

List of Indian entrepreneurs

Name	Founded
Verghese Kurien	Amul
Bhargav Sri Prakash	FriendsLearn
Azim Premji	Wipro
Lakshmi Mittal	ArcelorMittal
Dhirubhai Ambani	Reliance Industries
Anand Mahindra	Mahindra and Mahindra
Shamit Khemka	SynapseIndia
Kunwer Sachdev	Su-kam Power Systems
Saji Chameli	Orell
G. R. Gopinath	Air Deccan
N. R. Narayana Murthy	Infosys
Shiv Nadar	HCL Technologies
V. G. Siddhartha	Café Coffee Day
Kiran Mazumdar-Shaw	Biocon
Achyuta Samanta	KIIT Group of Institutions
Gautam Thapar	Avantha Group
Sunil Mittal	Bharti Enterprises
Venugopal Dhoot	Videocon
Karsanbhai Patel	Nirma
Vishal Gondal	Indiagames
Ardeshir Godrej, Pirojsha Godrej, Adi Godrej	Godrej Group
Kallam Anji Reddy	Dr. Reddy's Laboratories
Jamnalal Bajaj, Rahul Bajaj	Bajaj Group
Sachin Bansal and Binny Bansal	Flipkart
Kishore Biyani	Future Group
Naveen Tewari	InMobi
Laxmanrao Kirloskar	Kirloskar Group
Baba Kalyani	Bharat Forge
Anand Deshpande	Persistent Systems
Byrraju Ramialinga Raju	Mahindra Satyam
Dilip Sanghvi	Sun Pharmaceutical
Ekta Kapoor	Balaji Telefilms
Dr. G. Surender Rao	Yashoda Hospitals
Ramoji Rao	Ramoji Group
Kumar Mangalam Birla	Aditya Birla Group
Varun Agarwal	Alma Mater Store
Arun Mandala	Cinimage Studios Pvt Ltd

Starting a Business: The Idea Phase

Many people believe starting a business is a mysterious process. They know they want to start a business, but they don't know the first steps to take.

But before I start, let's clear up one point - People always wonder if this is a good time to start their business idea. The fact is, there's really never a bad time to launch a business. People have money and are looking for ways to spend it.

It's obvious why it's smart to launch in strong economic times. But launching in tough or uncertain economic times can be just as smart. If you do your homework, presumably there's a need for the business you're starting. Because many people are reluctant to launch in tough times, your new business has a better chance of getting noticed.

Some examples of Start –Up Ideas

Let me narrate you an incident, I have read at the Internet – a business start-up story, a great example.

Entrepreneur magazine is located in Irvine, California, a planned community. Many years ago, there weren't many fast-food restaurants in the business area. Two young men in Irvine found this lunch situation very frustrating. There weren't many affordable choices. Sure, there were some food courts located in strip centres, but the parking lots were really small and the wait was unbearable.

One day, as they were lamenting their lunch problem, one of them said, "Wouldn't it be great if we could get some good food delivered?" The proverbial light bulb went on! Then they did what many people don't do--they did something about their idea. Coincidentally, they purchased one of Entrepreneur's business start-ups guides and started a restaurant delivery business.

Till date, their business has served more than 15 million people! It's neither a complicated business nor an original one. Their competition has gotten stiffer, and yet they're doing phenomenally well.

Inspiration can be anywhere. You can even get an idea in the bus. Here's another classic start-up story: Ever get charged a fee for returning a video late?

Bet you didn't do anything about it. Well, when Reed Hastings got a whopping $40 late charge, instead of getting mad, he got inspired.

Hastings wondered "How come movie rentals don't work like a health club, where, whether you use it a lot or a little, you get charged the same?"

From this thought, Netflix.com, an online DVD rental service, was born.

From its start in 1999, Netflix has grown into a big business with revenues topping $1.3 billion.

Finding the real opportunities

12 Ways to Start a Business

Business ideas are all around you.

You don't need to be a genius or an MBA to spot those ideas and turn them into profits, either. Identifying business opportunities is often as easy as identifying problems many people share and finding a way to solve them.

Even you can turn your passion (hobbies or interests) into profession or business.

Here is a guide to do so;

Do what you love to do
Turn old standbys into new products
Look for mundane money – makers
Turn that hobby into cash
Reach out and teach someone
Sell training seminars to corporate America
Mass produce your advice
Be an industry consultant
Turn a former employer into a valuable source of new business
Modify one of your existing products
Skip the start-up headaches: purchase an existing business
Buy a franchise

Sources of Funding for Start - Up

There are entrepreneurs who tend to fixate on one or two funding sources – often to their detriment. It is better to keep all options on table. You also need a sense of the strings that come with each flavor of capital.

Here, is a prioritized list of sources, with some rules of thumb;

Bootstrapping: Self-funding from your savings.
Friends and family
Small business grants
Loans or lines of credit
Incubators
Angel Investors
Venture Capital
Bartering
Form a partnership
Commit to a major customer

Often the hardest part of starting a business is raising the money to get going. The entrepreneur might have a great and clear idea of how to turn it into a successful business. However, if sufficient finance can’t be raised, it is unlikely that the business will get off the ground.

Raising finances for start-up requires careful planning. The entrepreneur needs to decide;

How much finance is required?
When and how long the finance is needed for?
What security (if any) can be provided?
Whether the entrepreneur is prepared to give up some control (ownership) of the start-up in return for investment?

The finance needs of a start-up should take account of these key areas-

Set-up Costs (the costs that are incurred before the business starts to trade)
Starting investment in capacity (the fixed assets that the business needs before it can begin to trade)
Working Capital (the stocks needed by the business – e.g. raw materials + allowances for mounts that will be owed by customers once sales begin)
Growth Development (extra investment in capacity)
Another way of categorizing the sources of finances for a start-up is to divide them into sources which are from within the business (internal) and from outside providers (external).

A start-up is much more likely to receive investment from a business angel than a venture capitalist.

Financing is needed to start a business and ramp it up profitability. There are several sources to consider when looking for start-up financing.

Putting all your eggs in one basket is never a good business strategy. When you diversify your financing sources, you also have a better chance of getting the appropriate financing that meets your specific needs.

Raising enough money to start a small business can be difficult. The process begins with working out your start-up operating costs for the year, which you can compare against anticipated sales. Even with a reasonably healthy turnover, your business might have to operate at a loss for a while, which means your borrowing requirements will be greater.

Examples of Start-up in India

From trading alone at the age of 17, to the Starting up “Zerodha” – Nitin Kamath

Tathastu - It is a start-up by 4 IITB graduates. The concept of Tathastu revolves around the idea of getting your things done.

Housing.com

Flyrobe - IIT Bombay graduates came up with this great idea. It’s a shared virtual closet for women who need to dress up really good for that perfect occasion.

Dekhbuy – India’s first Social Commerce.

Credithealth Blog – First time healthcare website in India, which guides a patient to make informed medical decisions.

CRAFERA – This started with an initiative of “Make in India” and to sell Indian handicrafts all over the world (www.crafera.com)

Freekall – Concept of freekall is very simple. Started way back in 2014, Yashas C Sekhar, Vijaykumar Umalti and Sandesh E together thought of a plan to help connect Indians to contact among themselves for free.

Careers Unbound – Start-up organization at Pune city offering online recruitment and employee training software

Mera Medicare – Online portal where you can buy medicines online, added to it a guranteed discount of 10% - 25% depending upon the order amount and to that, free home delivery as well.