A beautiful name board with logo on the façade of a store, a restaurant or even an office is the first to catch an eye and make an impression. The décor, the smiling staff comes next. They all go on to imprint a certain image about the business in one’s mind. But another rather undermined communication that does its bit not just in imparting information but in building the image of a quality conscious and customer-centric business is – Notices and Signages.
These are simple boards with directions, instructions and useful information. More often than not, we don’t take much note of these unassuming boards. However, if one were to give it a second thought one would realize that their presence actually makes a lot of things easier and convenient.
Think about the time when we want to find an address in the city. We end up asking the paanwala, rickshawwala, sometimes even the traffic police. Now albeit with the use of internet applications it is much easier to find places, our streets and chowks do not have sufficient direction boards to guide a tourist. But in developed countries every road, highway, airports and public places have prominently placed direction boards with clear symbols and words that makes it delightfully easy for a stranger to find the way!
Similarly, instructions in the business place makes life easy for a consumer/ visitor.
Such communication also takes the form of product manuals, Specials’ Board in restaurants or even the menu card! While designing any of these communications, one must keep in mind that it must be simple, polite and clear to understand by a lay person. A very common but effective example is that of “No Smoking”. We often find such notice – “Thank You For Not Smoking”, which makes it sound much more polite and compelling at the same time. Humour is often an effective way to convey short instructions as humour prevents it from sounding stern.
The handbook or Manual that comes with products, especially electronic or gadgets, is an important communication that helps the customer use and maintain the product effectively. Unfortunately, we usually ignore it and end up without using majority of the features.
Instructional and informational communication answers questions before they even arise in the customer’s mind and thus creates a positive impression in their mind.
It helps the consumer to use the product to its fullest and also take care of it. It also brings in complete transparency which goes on to reflect the integrity of business. All in all, notices, signages, manuals, menu cards and such communication serves a much wider purpose than just passing on information. It speaks a lot about your business and a wise, creative use of it augurs well for its sustained growth.
According to statistics, 9 out of 10 start-ups fall by the wayside. This figure may paint a grim picture, but rather than getting discouraged, budding entrepreneurs should take heart, because 1 start-up out of every 10 does manage to tick all the right boxes, and that start-up can be you. In this article, the business mentors at deAsra have put together a few challenges commonly faced by small-scale food businesses, along with tips to help you sail over these speed bumps smoothly.
But first, what qualifies as a micro/small-scale business?
A mess service, a home-made ladoo business, or even a food packaging and reselling outlet can fall under the category of a small business, as long as the capital investment in machinery does not exceed 5 crores, (for businesses in the manufacturing sector) and is up to 2 crores (for businesses in the service industry) If your investment in machinery is up to 25 lakhs (manufacturing sector) and up to 10 lakhs (service sector), your business will be classified as a micro enterprise. In this case, revenue generated does not bear much weight – For example, a vada-pav vendor could be selling 1000+ vada pavs a day from his cart, yet, his business is still classified as a small business.
Partnership, Proprietorship, or Private Limited? Depends on the need. Another question often raised deals with registrations – what kind of company registration should start-up founders and co-founders opt for? According to deAsra mentors, it depends on the need. For example, when you’re at the cusp of transforming your chakli-making hobby into a full-fledged business, you may start off with a proprietorship registration, and later, as the business scales, convert it into a private limited, in order to run it in more professional way.as well as to take advantage of tax benefits.
Get your licenses right before anything else.
Before you get your business in place, it is essential to get your licenses in order. Miss this step, and fines or penalties could be staring you in the face.
For any business, however small, FSSAI registration and the Shop Act registration are compulsory. Manufacturers, distributors, retail traders and stockists also need to get licenses if their business turnover exceeds 12 lakhs.
A variety of legal formalities too are applicable on the different kinds of company registration. For example, partnership businesses call for partnership deeds and registration thereof, and private limited companies need to get registered at the Registrar of Companies (ROC).
Funding is more accessible than most people think.
Since Pune (and the surrounding region up to a radius of 40 kms) is classified as a developed zone, certain government subsidies do not apply to businesses here. However, to give women entrepreneurs a leg-up, the government has launched many organisations, like the Mahila Arthik Vikas Mahamandal, which offers loans at beneficial interest rates.
The big F word in the start-up scene – funding – is not out of reach anymore – especially if your business is commercially viable, enjoys a continuous stream of revenue and you can raise up to 25% of the margin demand by the bank. And even if that margin is beyond your scope, organisations like deAsra connect you to banks and financial institutions who can give your business some amount of runway.
Research before you figure out your pricing sweet spot.
“How should I price my products/services?” is one of the foremost challenges every entrepreneur faces. Low prices can undercut competition, but can also make your business unviable, while high prices will put you out of the running completely.
To tackle pricing, deAsra mentors help the business owners undertake a thorough audit where they assess the financial viability of a business, and estimate various fixed and variable costs, including raw materials, equipments, electricity, packing material, etc.
They also encourage entrepreneurs to carry out extensive competitor studies, observe the rates in the surrounding localities for the same product/service, and then work on the pricing model.
The USP of your business and its competitive edge can also affect pricing.
A preference for a brand can only be born when there is awareness of that brand’s existence. To get customers beating a path to your shop, deAsra mentors recommend converting your current brand champions into marketers for your business, since referrals, according to them, work the best. Roping in relatives and friends who swear by your delicacies and spreading the news through them is a good way to get one foot in the door.
A few other marketing tactics which can get you off to a good start include distributing food samples and leaflets in your area of operation, distributing products through retail outlets and offering incentives/discounts, especially to referred customers.
Keeping in touch with customers through Whatsapp and email marketing channels; and closely monitoring people’s preferences is also crucial. For example, people are becoming increasingly health-conscious, so incorporating that aspect into your product (think ‘diet chiwda’) could help boost sales.
For a vada pav seller, a simple change in the presentation of his product – and a switch from a wooden cart to a swanky mobile van – did wonders for his business.
Watch out for these hurdles.
As an entrepreneur, it’s ok to make mistakes; in fact mistakes are the stepping stones to success. But learning from those mistakes, and more importantly, learning from other people’s mistakes, can take you a long way ahead in the entrepreneurial journey.
For example, many food businesses end up buying wholesale quantities and building unwanted inventory, which leads to revenue drain. Also, home-grown businesses borrow money from chit funds or micro-finance institutions, which lands them with higher rates of interest. Instead, opt for banks and reputed financial institutions, suggest deAsra mentors. For food businesses, maintaining consistency in quality and taste is also a major problem area. This can be solved by strictly adhering to Standard Operating Procedures (SOPs). Raw materials need to be tested too, which is not widely practised in India. For example, there are more than 20 kinds of potatoes produced in our country, so a vada pav seller has to test all varieties and find out which works best for his vadas.
Keeping tabs on the shelf life of products is equally crucial; maintaining a batch-wise record of products can prove to be helpful in this case. Apart from this, maintaining a proper book of records is essential and comes in handy when you need to recover pending payment dues.
The food business is beset with labour problems – how does one handle that?
According to deAsra mentors, most business owners forget that their labourers too, at the end of the day, are customers, and should be treated with dignity and respect. At deAsra, business owners are introduced to HR management techniques, which help bridge the gap of discord between labourers and owners, while building loyalty and reducing attrition.
Finally, don’t give up too soon, and don’t pass up expert help.
Any food business generally takes a year to pick up pace, and that’s if the quality is top-notch and the right marketing strategies and SOPs are followed to a T. What’s the advice of deAsra mentors to budding entrepreneurs? ‘Don’t give up on your business too soon, but more importantly, don’t hesitate to ask for expert help. Help can move you forward, fast.’
deAsra partners with mentors, business experts and other complementary organisations and financial institutions to help entrepreneurs build a successful food business from the ground-up. Need help with your food business? Give us a call at +91 20 65365300 / 11.
To know how we helped other food businesses take off, read our impact stories here.
Fear of failure has nipped many a start-up in the bud. Small wonder, then, that Silicon Valley’s mantra of ‘fail fast, fail better’ has found wide-spread favour among entrepreneurs; by putting a positive spin on failure. But according to a Forbes article, this adage might well be just lip service. Most entrepreneurs are, in fact, terrified of failing and writing away their investors’ hard earned money (and trust) in the process.
While failure cannot be avoided entirely (and could also prove to be a stepping stone for greater success), wisdom dictates that we learn from the mistakes of our predecessors and avoid making the same ones. Here are 5 commonly made mistakes, culled from the experiences of various entrepreneurs in the travel industry.
1) Failing to create a water-tight business model
Many entrepreneurs get so caught up in the fuzz of ‘inspiration-first’, that they fail to establish a robust monetisation model for their product, believing money will follow inspiration. According to industry veterans, this is a recipe for disaster. Consumers may not beat a path to your door just because your product is inspiring or interesting, especially in the long term. Hammering out your business model and outlining a realistic cost of customer acquisition is crucial before launching a start-up.
2) Not offering anything different, or better
At last count, there were more than 200 start-ups (as estimated by traxcn.com) in the online travel domain, not including the heavy-weight offline players. To make any headway in this crowded industry, your product would have to fulfil an unmet need of consumers, or offer something way better than what is currently available in the market. In his interview with the Economic Times, Michael Lyngdoh, co-founder of Tripoto, has voiced his conviction that this field still has a lot of room for improvement, as no player has managed to close the travel loop fully. The Economic Times article has further highlighted niche segments such as last minute bookings, metasearch, tech providers to hotels, personalised travel packages, alternate stays and budget hotels, as relatively unoccupied areas to focus on.
However, there is a flip side to this. Many entrepreneurs concentrate their energies on a niche, just to avoid the fiercely competed segments. While this strategy may prove lucky, it isn’t the go-to formula for success. If we look closely at the genesis of flourishing start-ups, we can identify a common trend – they’ve all come into place because their founders identified and capitalized on an unsolved problem of consumers.
3) Being under-capitalized
Your start-up is like an airplane. It needs a decent stretch of runway (read money) to take-off smoothly, or it will inevitably nosedive. Statistics cite shortage of funds as the number 2 reason for start-up failure. To get a fair idea of the capital investment needed, make an honest, detailed account of all your expenses, including marketing budgets, and secrete away sufficient cash (around 5%-20% of your entire budget) for a rainy day.
4) Being too invested in your original plan
Every entrepreneur needs to be fired up about their idea; they cannot be entrepreneurs otherwise. However, resting on the other end of the scale, where you are completely consumed by your idea and blind to the inputs of others – is no great shakes either. Start-ups would do better to follow the trail where it leads, and more often than not, it leads to entirely new horizons not previously envisioned.
Take Instagram for example. This immensely popular app was originally Burbn – a multi-faceted, check-in project, similar to FourSquare. Burbn had many complicated features, one of which was a photo-sharing app. But following inputs and behavioural trends of consumers, the founders trimmed down the features to just the popular photo-sharing one, and re-named it as Instagram. Sometimes, listening to others, especially your customers, can make or break your business.
5) Not working with an A-team
Have you heard of the successful one-man company? You couldn’t have, because it doesn’t exist. A successful start-up depends on a team of highly-skilled and deeply-invested people, who put their heads together to make magic happen. Hiring the wrong resources, either from ignorance or due to lack of funds, can prove to be a start-up’s undoing. Your product is only as good as the people working on it, so make sure your key members are the best money can buy.
For some founders, hiring for attitude rather than just skill is a game-changing factor. Elon Musk is said to have told Business Insider that his biggest mistake was, “Weighing too much on someone’s talent and not someone’s personality. I think it matters whether someone has a good heart.”
Jim Collins, the famous American business consultant has summed it up quite succinctly in his quote – “Great vision without great people is irrelevant.”
What mistakes have you made, that you wish you hadn’t, while launching your start-up? Weigh in with your advice in the comment section below.
Established in 2015, deAsra helps individuals become self-employed by offering them end-to-end support across all stages of their business lifecycle, including bank loans, compliance support, supply chain guidance, recruitment advice and more. In the next 5 years, deAsra seeks to enable 25,000 self-employed businesses.
Building a business from ground-up is hard work. While running your own show can give you a high, there are days when it can pull you down so low, that all you want to do is crawl under a blanket and hide. This is when it really helps to have the right circle of friends and supporters, who can help you pick up the pieces and march onward, chin and head up. Jim Rohn, entrepreneur, author and motivational speaker, has said, “You are the average of the five people you spend the most time with.” If this is true, it makes sense to choose our friends wisely, and once we have found them, ‘grapple them to our soul with hoops of steel,’ as Polonius advised Hamlet.
Here are 5 kinds of friends every entrepreneur would be well-advised to have.
As a new entrepreneur, mistakes will be a part and parcel of your life. Which is why every entrepreneur can benefit from a mentor who has been there, done that, and knows enough to tell you not to do that. A good mentor is like a compass – they can point your business north when things are going south. Mentors will also help you skirt around common entrepreneurial stumbling blocks, while offering you sound business advice. To make more ‘mentor friends’, go out and network with as many people as you can. Remember to look first within your own circle of family and friends; you never know who may be a perfect fit. Brooke Stone, Founder and CEO ofBrooke Stone Lifestyle Management, realised that her entrepreneur father was the ideal mentor she had been looking for, when she once happened to call him in a moment of complete overwhelm. Find a good mentor and befriend them early on in your business.
The Business Butterflies
The business butterflies are those blessed individuals who are connected to absolutely everybody in the business world and can introduce you to all the right people in the right places. If you are lucky enough to have friends like these, ask them for help and guidance.
If your influential friend list is currently stuck at 0, you can start out by meeting more people at networking events and building strong relationships with them. Remember to be genuine, and honest in your dealings, and more importantly, since this is a two way street, be open to lending your help too, as much as possible. Like the famous American author and motivational speaker, Zig Ziglar, has said, “You will get all you want in life if you help enough other people get what they want.”
Friends who light up your life with motivating words of encouragement and support are your Sunbeams – and every entrepreneur needs a few of these – or rather, a truckload of them, given the rollercoaster ride entrepreneurship is. When you’re down and out, you need someone to believe in you and remind you of your strengths. Acclaimed author Stephen King, who rose to fame after his first novel ‘Carrie’ was published, had in fact trashed the novel drafts and would’ve never worked on them again, if his wife hadn’t retrieved them from the dustbin and urged him to keep at it. We all need a friend who will show us the bright side when we want to give up on our ‘Carrie’.
Having supportive friends is crucial. But sometimes, you need more than just moral support, you need financial backing too. And for most entrepreneurs, turning to friends and family first is the way to go. Judy Wicks, founder of the wildly popular White Dog Café, (featured in Condé Nast as one of the “50 American restaurants worth the journey”), first started out with a $75000 loan from a friend, which she used to build a kitchen with a grill. Millionaire fashion designer Eileen Fisher, had only $350 in the bank when she launched her namesake company. Eileen borrowed money from her friends and paid them back with an interest of 2% a month as soon as her deliveries cashed in. When you have friends who believe in you to the point of lending you runway capital, you’ve literally hit the jackpot.
Life is not always sunshine and roses. And that’s good. While positive words of encouragement are essential, sometimes, we need people who can give us constructive, intelligent criticism, without holding back or getting personal. According to Elon Musk, getting critical feedback and knowing how to take it is vital in order to run a successful enterprise. “Ask what’s wrong”, advises Musk. “People don’t like to complain or point out faults, but that’s what will make your business stronger.” Friends who can deliver tough news with a soft bow and make us pull up our socks eventually help us grow into better business leaders.
So what kinds of friends have been instrumental in your business success? Share your stories with us in the comment section below.
The goal of deAsra Foundation is to help individuals become self-employed. Our mission is to build a scalable platform to enable 25,000 self-employed businesses over the next 5 years. To this effect we are focusing on urban services businesses. For individuals wanting to do these businesses, we have established a rich eco-system that will be able to provide individuals complete end-to-end support across all stages of the business lifecycle such as bank loans, compliance, supply chain, recruitment etc. We are particularly proud of the work we have done in building out “Business Guides” (http://www.deasra.in/#BusinessInABox)
We have been talking about planning as a prerequisite for sustained efficiency and quality. The systematic planning makes us more agile and we can deliver quality work in minimum time frame. Here is an example of how failure to plan has lead to a big chaos. You may have read a few days ago that Maharashtra Chief Minister’s flight could not take off from the airport because one of the officials accompanying him on the international tour had forgotten to take along his Visa papers! The Chief Minister along with the rest of the passengers had to wait till it was retrieved from his home.
The common sense answer to avoid these lapses is – the checklist. Mere planning is not useful unless it is executed flawlessly. The checklist serves as an effective tool – Plan. Do. Check whether the things are happening as per the plan. If not, Act i.e. make the necessary correction. This is called the PDCA Cycle. This is the foundation of ISO 9000.
We often tell school children that they must keep ten minutes at the end of the exam to go through the answer sheet and to make sure they have attempted all the questions. Another very common example in our daily lives is we check the taste of a recipe before serving it to people to ensure that it is upto the expectation. What we are doing here is simply checking if all the ingredients have been added, and in the right proportion to give the right taste. Once we are sure of it, we are ready to enjoy all the compliments that come our way as guests relish the dish!
If we use this ‘checklist’ in so many activities in our daily lives, why not in our professional lives. A company manufacturing auto spare parts had to dispatch parts in lots of 8, 24 and 72. The client would randomly check the number of parts in the boxes and if any one box had a,shortage, it was presumed that all boxes contained the same quantity and he used to deduct the payment on the entire consignment causing substantial loss to the supplier The company, then, started a system wherein they sent parts in multiples of the lot number to the packing department. So for the lot of 8, they sent 800 parts for packing, no more, no less. This way, as the parts got packed in boxes, in case one or two remained, it meant that some box had been filled with a wrong number of parts and it used to be checked immediately. The loss to the company was averted as with systematic packing of job there was no chance of delivering the wrong quantity. The point is, to accomplish excellence in quality and to maintain the consistency the job/product needs to be checked at various stages. Dr. Atul Gawande’s book ‘ The Checklist Manifesto’ underlines the importance of regular checks on processes to prevent damage or loss. He has related his observations of the American hospitals where lapses in following protocol in examinations led to spread of infections. The book lucidly explains the cause and effect of the problem and how it was overcome by observing a strict protocol and following it.
We often avoid following PDCA Cycle referred above. You will be amazed to know how much difference this little checklist can make while presenting the final, flawless product. It not only gives you the opportunity to rectify errors but also enhance the final effect of the product, service or process and to enhance Customer Satisfaction.
Author: S.R. Joshi
The author is a director at deAsra Foundation. deAsra Foundation is a Section 25 company, a not for profit association formed to contribute to social welfare by enabling entrepreneurship, which will create employment opportunities.
To us, every entrepreneur who joins the deAsra family is special. But, of course, our group of 53 ‘enabled’ entrepreneurs is extra special! These are the entrepreneurs who, to date, deAsra has helped set up business. They are mainly first generation entrepreneurs, and are, by and large, salaried professionals. All the more reason to salute their decision and celebrate their ‘businesspeople’ status.
deAsra Foundation is happy to announce that, in less than 16 months of its launch, we have successfully helped enable 53 entrepreneurs. This is a success worth celebrating, simply because these entrepreneurs are going to be tomorrow’s employers and contribute to the economy of our country.
These 53 enabled entrepreneurs have started businesses in categories ranging from baking and travel to beauty salons, spice making and more. This diversity amply demonstrates deAsra’s preparedness to guide varied kinds of businesses. Guidance in every aspect of the business was provided to entrepreneurs, whether it was finance or marketing or licences. What’s more, deAsra doesn’t just provide planning or executional help, but also the confidence building and morale boosting that every budding entrepreneur needs. Our motivation builds the entrepreneur’s confidence to achieve great heights.
What is creditable on the part of these entrepreneurs is the willingness to take the plunge, go for calculated risks and march ahead to achieve a dream. Today, the deAsra Foundation team is busy and working hard to help more such entrepreneurs to launch, set up, start, run and grow their businesses. We help not only budding entrepreneurs, but also existing business owners who wish to diversify or grow their business. It’s been a great partnership so far – one that has great strategies, plans, understanding, patience, empathy, attitude and a lot of action.
Our Mission is to help enable 25,000 entrepreneurs by Year 2020. We have no doubts that we will achieve our target.
If you have a business idea, do drop us a mail on email@example.com or call us on 020 65365300/11
There are times when all entrepreneurs struggle and need some help getting back up on their feet. These are books written by entrepreneurs for entrepreneurs as a way to give guidance throughout the business journey. The lessons given in these books provide a new insight to business related issues as well as a new way of seeing things in relation to yourself and your business ventures.
1) Dream With Your Eyes Open by Ronnie Screwvala
UTV founder and entrepreneur Ronnie Screwvala chronicles his experiences and myriad of business ventures in his autobiography. He beautifully details the ups and downs of his business success and the formation of his empire.
2) Go Kiss the World by Subroto Bagchi
The Co-founder of Mindtree intertwines his personal life and entrepreneurial journey, and describes the multiple influences and decisions that shaped him and his company today.
3) Bhaag! by Ganesh V
Bhaag! overviews student entrepreneurship in India and illustrates the journeys of 11 student entrepreneurs and the challenges, mistakes, struggles, and successes they faced and overcome on the road to becoming successful. If they can do it, so can you!
4) The Tipping Point by Malcolm Gladwell
Critically acclaimed author Malcolm Gladwell describes a tipping point as “the moment of critical mass, the threshold, the boiling point” and says “ideas and products and messages and behaviours spread like viruses do.” Gladwell encourages you to think deeply and to be empowered to see the world through a different lens.
5) Launch! By Scott Duffy
Written by the prolific founder of Virgin Charter, Launch! serves as a manual for bringing your product to life. Duffy narrates several examples and anecdotes, and provides a guide to follow throughout his multiple years in business.
6) Connect the Dots by Rashmi Bansal
The stories of 20 new entrepreneurs who, without business degrees, started their own companies. With a hard-working ethic and desire to achieve, these individuals prove that passion is all that is necessary to turn dreams into a reality.
7) Losing my Virginity by Richard Branson
The autobiography of business mogul and billionaire investor Richard Branson, founder of Virgin Group, details his life and business ventures, as well as his life experiences and personal life philosophy.
8) Take me Home by Rashmi Bansal
This book focuses on 20 young entrepreneurs who dreamt of making it big. Bansal again provides all the encouragement needed to become a young entrepreneur in India.
9) Thinking Fast and Slow by Daniel Kahnema
Penned by Nobel-Prize winning author and Professor Daniel Kahneman, Thinking Fast and Slow details the decision making process of the brain, as well as the functions, advantages, and disadvantages to this system and how it affects the world of business.
10) The Lean Startup by Eric Ries
Ries provides any entrepreneur the practicality and science behind generating ideas. Ries explains how startups are comparable to science experiments, through the process of testing and analysing everything you do. Through his explanation, entrepreneurs can understand the methodical processes behind creating and running successful businesses.