Small Business - Inspirations & how to manage/operate/grow

[DosaiLvr]

One other topic (other than R2I related dilemma) that gets hashed when close friends meet is how bored they are w/ their job or lack of recognition & opportunities at their workplace etc., which invariably turns to business ideas, and I wanna be my own boss itch.

Most over-the-hill desis' have probably entertained being an entreprenur of some sort - at one time or another.

One thing that I hear all the time, is someone claiming "I'm not a business type, person" or a spouse claiming the same on her husband's behalf - "He's not fit to run a business. He is very nice...." this invariably makes me go - "Hello!:rolleyes: ", in my mind ofcourse.

So, who is a "business type" person? Haven't all kinds of people - good/bad, smart/not so smart, men/women, young/old attained success in business - big and small?

My conclusion is that, only he/she who -

has a passion for business or an idea;

wants to create/build or make something on his/her own;

is not lazy and/or would not shy away from any task related to his/her business;

is not averse to taking risks; (calculated risks!)

is not afraid of failing;

is disciplined and organized; (I rate this very high)

has support of his/her spouse; (or other family members)

is not afraid of dreaming success; (optimist?)

can be a good business person in the long run... others like they say, are not "business type" persons.

[quantumleap]

Hi DL,

Good post, I was thinking on somewhat similar lines yesterday.

What would be interesting to note on this forum is to poll how many have struck on their own since R2I.

It would be useful if they could elaborate on their experiences.

-Qleap

[DosaiLvr]

I see several successful small businesses in India and always wonder why they don't grow into a small corporation or a privately owned chain.

Why do we see franchises and chains of small businesses (everything from hair salons to battery stores to auto mechanics to food industry, to child care etc. etc) in the US, but not so in India?

There seems to be a fundamental difference between how a US small business owner thinks Vs. his counterpart in India...

After some thought, I've compiled a list of reasons why I think successful small businesses in India remain just that - a small business.

I've posted below, in no particular order, a list of pitfalls to growth of a small business- some financial, some operational and some cultural:

Comments and thoughts are welcome.

o A businessperson who is unable to envision the scope for growth

o Owner, who realize the scope for growth but is unable to or is unwilling to scale up

o Maxed out as far as investment goes - Lack of working capital and/or capital investment for expansion

o The middle class who typically start small businesses, have an anathema towards borrowing money, and making interest payment. Hence this businessperson will not make loans to grow the business even in a low risk environment.

o Profit booking in the early stages w/o reinvesting; unfortunately small business owners have bills to pay too.

o Small business owners are usually averse to investing in any activity that does not directly increase the bottom line, hence do not spend or allocate budget for marketing, packaging, and brand-building activities, etc.

o An accidental businessman suffers from a grab and save mentality ? usually arises out of disbelief in her/his success. They attribute it to luck, and plan to make hay while the sun shines. Their priority usually is to recover their investment and hence will not grow the business.

o Lack of professionalism/training - Alienate customers w/ a bad attitude or unprofessional behavior.

o Small business owners tend to play the game close to their vests and usually are control freaks too.
A) They would not partner w/ an outside investor even if one approached them w/ capital readily to invest
B) They would not hire someone capable and yield control to him/her, even if that person is more capable than themselves.
C) They would not hire a business coach or a mentor, as they would not be able to see tangible real-time benefits and results.

o Barrier to entry is usually non-existant or very low. As a result no single businessman would have brand equity or see the benefit for one, which is a required in order to build a chain or a small corporation.

o Empowered, driven and or young folks w/ a vision do not typically found small businesses (in India), and hence we don't see business chains. (This could be a reason why several established small businesses grow in the second generation - when the young enter the family business)

[DosaiLvr]

Following threads may be of interest to those who may want to pursue entrpreneurial interests in India.

Social Security 40 points question -
Question on 40 SS credits -

There are posts here which inquire/explain the SS taxes related obligations of a self-employed USC in India.
_________________________________________

Business ideas in India -

Discusses business ideas to pursue (within a predefined constraint)

_________________________________________

For the franchise options available in India today, look at http://www.franchiseindia.com. You will get an approximate idea of the spectrum available and costs to start a business. (this info courtsey of #127 in the 'business idea' thread in the MSN platform)

[DosaiLvr]

I recently watched a show about Fastfood joints on the Food Channel. The show traced the success and history of McDonalds. The show talked about how Kroc wanted to partner w/ the reluctant McDonald brothers to expand the business. Since they were not keen about expanding, he offered to buy them out. The brothers quoted 2 mil after expense,thinking that nobody - Kroc or anyone else, would pay that much. But, Kroc did and the rest is history.

Ray Kroc is listed in 'Times 100 greatest persons of the century'. This article is about Ray Kroc, the guy who made McDonald's what it is today. He was past 50 and sort of unwell when he took McDonald's to the next level and beyond. He pursued other unsuccessful ideas too...

After seeing the Food Channel's TV show, my mind delved more on why the McDonald brothers did not grow the business themselves? Did they lack the vision? Did not trust their success? Or did they simply "lack the need", aka drive?

http://www.time.com/time/time100/builder/profile/kroc.html

[DosaiLvr]

I wonder how many of us will come out successful after a similar appraisal![/quote]

Originally posted in the Jokes thread, one could definitely see real life applications for this idea in the small business world.

[DosaiLvr]

Companies let go of troublesome employees. Is it ever a good idea to apply the same practice to troublesome customers?

Look what Jack and Suzie Welch had to say... I recently read another article or a book, where the author makes a case for choosing the right customer inorder to keep focus on growth.

A recent discussion I had w/ someone was, how to ditch a long time, but a troublesome customer?

Any ideas?

[DosaiLvr]

What would be interesting to note on this forum is to poll how many have struck on their own since R2I.

It would be useful if they could elaborate on their experiences.

-Qleap[/quote]

Done, but w/ a broader view/pop. in mind, and thanks for the suggestion.

[Chicago Desi]

A recent discussion I had w/ someone was, how to ditch a long time, but a troublesome customer?
Any ideas?[/quote]

This topic is discussed in marketing classes that cover CRM and Welch is not really a thought leader on this issue. One should fire unprofitable customers just as one would fire a non performing employee. With sensitivity. Attempts should be made to keep the customer by changing his habits and firing should really be the last resort. In business, goodwill goes a long way.

[DosaiLvr]

The original quoted post is in this thread

DosaiLvr,

'My diary' concept is really good to keep track of all R2I issues in a single thread.

You said you'll be self-employed. That's really interesting. If it's not too much intrusion in personal details I have following questions:
1. Did you already setup something or will be doing it after going to India?
2. What line of business this will be?
3. Do you expect self-employment income will cover all your monthly expenses?[/quote]

FS,

I'll answer the questions by giving my opinion rather than getting into specifics about myself.

1. Did you already setup something or will be doing it after going to India?

It will be tough for one to relocate and then start a venture unless s/he has the resources - time and money, to tide over the initial years. IMO it takes 2 to 3 yrs before most new ventures survive, establish and go beyond the breakeven point.

They say that most ventures fail w/ in the first year. Most entreprenuers will not realize any "true" income for the initial 2 - 3 yrs because of growth, reinvestment and/or operating expense prior to reaching the breakeven point.

Also consider the interest (~10%) that could have been earned by making safe investment elsewhere and the salary one could have earned by working elsewhere during that period.

BTW, someone had provided a link to Marty Nemko. Even if some of what he says about Self-Employment may seem very simplistic, I found that Nemko puts in to words that which we may call intuision or gut feeling

2. What line of business this will be?

Service and retail are good sectors to be in. Usually service ventures need less investment and more sweat. Retail is boring and needs higher investments but involves less hassle/risk..

3. Do you expect self-employment income will cover all your monthly expenses?

I believe there are opportunities for those that are willing to take the risk. It's also best to stay diversified even in business.