Busi 30

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business description:

EasY aUTO HarisH BaLasUBraMaNi (L) aNd PadMasrEE HarisH

Prepaid metered auto-rickshaw service

Date of launch:

September 2010 `8 lakh

start-up capital: performance:

150 trips/day broken even in June 2011

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inesses under 10 lakh

BY aNagH PaL

Google search for inspirational quotes for entrepreneurs throws up many lists, but one that finds its way into every compilation is that by a student in entrepreneur Warren G. Tracys class, Entrepreneurship is living a few years of your life like most people wont so you can spend the rest of your life like most people cant. There are perhaps no better words to embody the spirit of an entrepreneur. Entrepreneurship is about freedom, about leading your life the way you want, but, at the same time, it is a lot of hard work. And yes, it requires money. Fortunately, however, it doesnt take a fortune to start a business. With an entrepreneurship ecosystem that is fast developing and availability of low-cost technology, starting a business is more about passion and skills that you bring to the table than having a fat bank balance. In this story we bring you 30 businesses that have been started for an initial investment of less than `10 lakh. The capital ceiling has a
Photo: jagadeesh n.v.

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HOw TO cHEcK sTarT-UP cOsTs

1 Validate the idea first; dont start development till you can do some informal research and talk to a few potential customers.

2 Build a simple version of the product, get

potential customers to try it out and revise it based on their feedback

3 Make a list of expenses. Find out the ones

which are immediate and those of which can be postponed

4 If you need to buy stocks, look for bulk

purchase discounts. Negotiating with your suppliers for deferred payment also helps

5 If possible, work from home. Rent furni-

ture and equipment, or buy used ones. If an expense can be deferred, defer it

6 Use open source software to cut down on

licensing costs for software. When buying computers and peripherals, look for deals

7 Leverage social media marketing to the

hilt. Build a social network. Be on Facebook, Twitter and blog about your product

8 Cut down on utility bills by preventing any

wastage. Reuse and recycle to bring down stationery and printing costs to a minimum

few implications. It has thrown up certain categories of start-ups which require a low investment up-front, with service and technology start-ups forming a majority. We have discussed these in broader detail in the following paragraph. A low start-up capital also implies that, more often than not, the entrepreneur brings certain skills to the table, the intellectual capital, which complements the money that is put into the business. Finally, it means that these entrepreneurs almost always do not depend on any external source of funding and use their savings to get their business off the ground.
How muCH do you nEEd to Start?

This is a question that all entrepreneurs need to answer. Broadly, it consists of these three componentsdevelopment costs (for the developing the product or service), infrastructure costs (the cost for all business infrastructureoffice space, computers and so on) and customer acquisition cost (cost incurred in reaching out to the customers.)

This figure is what you need to get your business started, assuming that you pump revenues back into it. But there should be a contingency fund in case the business takes longer than expected to take off, or does not take off at all. Ideally, this should be six months to a year of operating expenses. When an entrepreneur is not depending on an external source of funding to start off with, or 'bootstrapping' in startup parlance, it becomes important to keep startup costs under control. We take a look at some of the prominent trends we have observed in our list of businesses. Student start-ups. It is not a coincidence that we have a large proportion of student start-ups. Passionate, vibrant and eager, these entrepreneurs have decided to take the plunge even as they are studying. Laura Parkin, co-founder and chief executive officer, National Entrepreneurship Network, a community of entrepreneurs, says that a number of student start-ups have grown rapidly over the last few years among its member institutes. I have got nothing to lose! say students who are not burdened with family responsibilities and EMIs. They are, thus, free to follow their passions. Laksheeta Govil, a fashion student, New Delhi; and Abhinav Mehra, a management graduate, teamed up to launch Fizzy Goblet, which makes designer hand-crafted shoes. Says Mehra, We are experimenting with new material and technology to scale up. Dorai Thodla of The Start-up Center, an early-stage startup accelerator with an initial focus in the mobile, Web and software technology space, says: a student one is not As contaminated by the knowledge of how things are done; so they can explore novel ways of doing things from building products to creating a business model. Technology does not scare students, so they can come up with innovative uses more easily. They learn fast. There are cases in which students have solved a problem in their own campuses and passionate, then scaled up. Ashwin Yogesh R started vibrant and Fluid, a campus milkshake kiosk, when he eagerstudent was a student at Saveetha Engineering start-ups are fast College, Chennai. Having passed out and in rising in India a job, he is working on a business model that will let him take it to shopping malls and other locations. Says Ashish Sinha, founder, start-ups.in, a portal for Indian start-ups, Students need not waste time building a business plan, or running after VC funding. The focus should be on creating a very good product. Successful examples are that of Mark Zuckerberg of Facebook or Michael Dell of his eponymons computer company. They started solving a problem within their campus and figured out a business plan and an expansion model when they had proof of execution. Internet and mobile start-ups. The Internet and mobile as platforms are opening up opportunities for many areas education, gaming, entertainment, media, advertisement, enterprise and personal productivity, commerce, and much more, says Tanvi Shah Rangwala, director, ICT initiatives,

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Up next x Banking: securing your cheque pg 42

craftsvilla.com (L-r) TiraTH KaMdar, BHaviK JHavEri, MONica gUPTa & MaNOJ gUPTa
business description:

Online luxury handicrafts brand dedicated to social upliftment

Date of launch:

January 2011 `10 lakh

startup capital: performance:

3,000 products and over 10,000 customers

sanjit kundu

iAccelerator, a program we designed to equip technology entrepreneurs in the Internet and mobile domains to establish well run and profitable companies in India. Games, mobile applications, Web- and cloud-based applications are also areas of opportunity. Rangawala adds, The scalability of the business model, the sustainable competitive advantage and the agility of development and operation are the most crucial success factors for technology start-ups. Vinayak Joshi, of LearningConcepts.in, a mobile and Webenabled desktop applications developer focused on the education industry, says, The biggest challenge was to convince potential clients that we are as good as the big names. Sinha advises those in the mobile application business. He says, They should come out of the developer mindset and build an application as if they are building a product business with proper marketing, positioning and a business plan. Solving a problem. A certain brand of entrepreneurs is into the businesses of solving customer problems, but in a smarter way than what is currently available. For that they usually leverage a technology platform. How many times have you planned to dine out with a friend but were not sure where to go? Zomato.com aims to solve this problem. Founded by Gurgaon-based Deepinder Goyal and Pankaj Chaddah, it provides a list, based on location and cuisine, of eating out and nightlife options in 10 cities in India. along with scanned menus, directions and reviews. Says Chaddah, There was no one-stop place to get all the information required to decide on a restaurant when we wanted to dine out, order in food or go for a drink. We wanted to bridge this gap in the market in the best way possible. Now they have 800,000 monthly users on their website. Sinha says that such businesses should ideally solve an India related, or local problem, and not copy a global model.

The entrepreneur should have a deep understanding of the consumer mindset and existing solutions to the problems against which he has to compete. The bigger the problem, the more money people would be willing to pay for it. Another set of people leverage their skills to leave their job and start up on their own. People see others making more money and they ask themselves, Why not me?. So, instead of doing a 9-5 job, they decide to go it alone, providing a service in which they have some expertise. Social entrepreneurs. These businesses work on a model that not only makes money, but also creates a sustainable social impact. Molly Alexander, business manager, Acumen Fund, India, a non-profit global venture fund, says: Many of the challenges faced by India have not been solved at scale by government or private sector Games, approaches. We believe the opportunity for mobile, Websocial entrepreneurs is growing in India with Indian innovation leading the way and cloud-based with strong examples globally. apps are areas of Sweetly Designs, creates a sustainable scope for tech livelihood for rural artisans by providing start-ups them access to global markets for handicrafts and empowering them with training, raw materials, knowledge resources and other support. AutomotionAds, a transit advertising company that provides customised solutions on autorickshaws, empowers low-income drivers and their families with benefits such as micropension, insurance, free education and so on. Social entrepreneurs, says Dolly, needs to know their capital needs, measure social and financial returns and look for appropriate partnerships to be successful. Starting on the entrepreneurial journey is a leap of faith. Go right ahead! r
anaghpal@outlookindia.com

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