A representative of ARZ, (an NGO working for the benefit
of trafficked women) asked me my views on their proposed project to start
“Kiosks” for rescued women as a means of rehabilitation and providing a source
of income. Their proposal was not a long term solution. A “Kiosk” at best is a
good photo op for the politician
inaugurating it. For the beneficiary it has an inbuilt drawback and one which
every entrepreneur has to either be wary off or have a plan to address right
from the start.
The draw back in a “kiosk” is the fact that there can be
no growth over the long term. A lady opens a kiosk at a junction. A year down
the line she gets married and starts a family. Do you imagine that her kiosk
will provide increasing revenue to provide for her growing needs. Even if at an
extremely buzy junction, how many chip packets can she sell? Sooner than later
she will be forced to try and expand her kiosk to say set up tables around to
provide meals. The moment this happens she will fall foul of the law, This means the vultures among the
enforcing agencies will approach her for their share or hafta in common
parlance. This will be a permanent feature till one day an upright officer
comes along and demolishes the unauthorized structure; All the investment made
in paying hafta will be wasted.
The representative understood my point, went back to the
drawing board and came up with another idea. A laundry, they surmised that
given the number of industrial units in Goa, they could tap the growing need to
launder uniforms, and they could look at retail outlets too. Now this idea was
much better than the first, in the sense that one could see that the business
could be grown. Hard work would be needed but the potential was there.
Our business rotomoulding, in the US, is a highly
developed process , out of a 100 products manufactured only 1 is a water tank.
In India, when we started, out of 100 products manufactured by this process 99
were water tanks. I believed there was a huge potential in the non water tank
segment. We started with water tanks and today more than 50% of our products
are non water tanks. Once our new
factory in Pune is fully functional, our growing water tank sales will
constitute only 20% of our output.
There are number of examples where a unit is successful
and supplies as an ancillary to a mother unit. Things are hunky dory as the
hassles are limited to one major customer. Till one fine morning the major
customer collapses or goes on strike. At that time running around for a new
customer is not feasible and soon the supplier too closes down. Ideally one can
start with a dominant customer. However it makes good business sense to grow
the business (find new customers) in such way that the major customer has say a
10% share. This way the company is insulated from the problems that may occur
in the dominant customer.
A young man tried
to start a tempo service in the industrial area, I mentioned to him to avoid
driving the tempo himself. That way he would be limited to just one vehicle. I
advised him to mange rather than operate. Today, he has five vehicles operating
and is looking at increasing his fleet, while on the other hand the owner
drivers who waited at the stand are still waiting and still have only one vehicle.
Of course the young man had an advantage he was qualified and therefore easier
for him to speak to customers or
bankers.
Growth has to happen and an entrepreneur has to plan or
look for an opportunity to grow the business right from day one. business to
survive.
Blaise
Suggested reading material: read the stories of successful
business and how they reached where they did or why they failed after getting
to such heights.
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