Raj K Pathak

Connecting Entrepreneurs with Information,Knowledge & Networking

Indian e-commerce market size to grow to USD 80 billion by 2020

October 15th, 2015

The growing internet base, with more than 343 million internet users has a direct correlation to the growth of ecommerce in the country.

The Indian entrepreneurs have started setting up their shops online even before a physical setup. Many SME’s are taking the e-commerce route to establish themselves in the Indian market and are using internet not only as marketing tool but also as a tool to enable them to understand if a unique product has high demand in the market.

The e-commerce  sector in India is projected to cross USD80 billion by 2020 and USD3o0 billion by 2030.

SME’s are expected to contribute 22% to the country’s GDP by 2020.

27% of the Indian SME’s who are online today, use e-commerce.

With an investment of just Rs 3,000 an SME can enter into the e-commerce space.

SME’s usuing e-commerce record 60-80% reduction in marketing and distribution costs.

50 million of the 100 million online shoppers shall belong to tier I & II cities in 2016.

————

This post is excerpt of report by KPMG & Snapdeal ‘ Impact of e-commerce on SME’s in India.

 

 

 

 

 

 

 

 

 

Share

Share to Google Plus

Understanding of IPR Must for MSME’s

August 4th, 2015

Importance of Copyrights, Trademarks & Patents

 

Even if you don’t realize it, everyone deals with trademarks on a daily basis. “Trademark” is another way of referring to brands.

Consumers’ purchasing decisions are influenced by trademarks and the reputation such brands represent. It is important for business people to have an understanding of why trademarks are important assets and help grow their business.  Trademarks are an effective communication tool. In a single brand or logo, trademarks can convey intellectual and emotional attributes and messages about you, your company, and your company’s reputation, products and services.

A one day training session on IPR- copyrights, trademarks and Patents was organised by MSME Govt of India and AICOSMIA.

The event was inaugurated by Dr R K Sharma, Scientist ‘G’ & Head Division of CBRN, Defence.

in presence of Shri R K Panigrahi, Director MSME-DI, New Delhi and Shri Sudarshan Sareen, National President, AICOSMIA and

Shri V. M. Jha, Deputy Director, MSME-DIInaugural session

The session was moderated by myself and knowledge speakers were:

-Dr D. Usha Rao, Asstt. Controller of Patents & Design, Govt. of India , Patent Expert.

-Ms. Sunita K Sreedharan, SKS Law Associates, Intellectual Property Expert

-Ms. Tania Sharma,  Trademarks Expert, BRB Legal

-Dr Prithpal Kaur Sidhu, Asstt Registrar,  Trade Marks & GI Govt. of India.

 

Concluding session was moderated by Mr Faiz Askari, Editor, SME Street and other panelists were:

-Shri Anil Kumar, Ex Director, IPR, MSME,

-Prof DD Pandey, Indian Law Institute

- Ms Vikkie Anand, MD, Vikkie Touch & Glow.

There were many queries from the participants, which were very promptly addressed by speakers.

57 MSME entrepreneurs participated.

 

 

 

 

Share

Share to Google Plus

Speaking at 5th CSR Expert Talk

July 19th, 2015

CSR EXPERT TALK Series is an initiative launched by APE Communication and Delhi Management Association to connect people with information and knowledge on CSR & Social entrepreneurship.
5th CSR Expert Talk series theme was “SKILLING INDIA” .
We had Mr Hegde from NSDC, CEO’s of 2 recently formed Sector Skill Councils.

Share

Share to Google Plus

9 Tips for #startups

July 19th, 2015

It indeed was a pleasure to have an opportunity to address young startups of Indore at the invitation of Indore Entrepreneurs Network on Jan 14th eveing at 2 hours session held at Hotel Sarovar Portico, Indore.

20 young startups participated. It was sponsored by ACROPOLIS Group of Institutions.

Later next day, I went for one to one meetings with select startups and had meaningful meetings at their office.

Pleasure to

2 hour session "9 Tips for Startups"

2 hour session “9 Tips for Startups”

share review by one of the participants who very well captured the gist of my presentation and also shared review : Kavita Jhala

https://www.facebook.com/kavita.jhala/posts/10152753885734081?fref=nf&pnref=story

Share

Share to Google Plus

Rs 20,000 Crore CSR Opportunity

April 30th, 2015

President of India Shri Pranab Mukherjee inaugurated the CII National CSR Summit

cii 1

Plenary Session with eminent panelists

Cii 2

 

4 Secretaries of Central Govt at post lunch panel discussion on CSR.

cii 3

 

 

CII National CSR Summit had very knowledgeable sessions  and provided good opportunity to learn and network, too.
Some take away’s:

- CSR is considered to be a Rs 20,000 Crore opportunity.
-NGO’s , Govt, Corporates, Experts are partners and not agonists.
-NGO’s keen to attract funding under CSR funds should get themselves rated through agencies such as CRISIL.
-NGO’s need to perform to get money and should be willing for ” Measurement Reviews & Impact Assessment”.
-CSR Funds are for “Not to Profit” organisations only.
-Social Entrepreneurs being “For Profit” entities, are presently NOT covered under CSR Funds.
-2500 ITI’s available for Corporates to adopt under PPP model/CSR.
-Skill Development & Entrepreneurship Policy about to be announced and put up for public response/suggestions.
-DISHA -National Literacy Mission & ‘IT for Jobs” by DIT are attractive opportunities for Corporates/ NGO’s to work.
-Corporates should look at NGO’s as partners in development and not merely as vendors.
-NGO’s lack-project management skills, Business Strategy & Implementation strategy.
-Money spent on social agenda should be well spent and misuse of same should be penalised.
-New form of capitalism is now the reality of global economy ie socially responsible capitalists.

 

Share

Share to Google Plus

Is your business really a startup?

March 8th, 2015

Who actually is a ‘startup’?

India is certainly bubbling with lot of entrepreneurial activity. I am not surprised to learn that India  now boasts of second largest entrepreneurial eco-system on the world just behind USA. One just needs to look up at platforms like facebook, meetup etc and there are hundreds of startup groups, regularly having meetings, lectures and conferences. I am in startup space for almost 18 years now and therefore can say it from my own experience that a decade back, there would be just one startup activity a month in city like Delhi where as there are now 10 startup events happening every day.

But who is a startup? Is every newly founded business  a startup?

Large number of young entrepreneurs, I come across have idea and want to start. They think or assume that as a startup, it is necessary to work on technology, or take venture funding, or have some sort of “exit.”

Ninety percent of small businesses today are family businesses, which can be very successful, satisfying, and small by design. It’s a strategic decision to start a startup. If your passion is to change the world, or even dominate an industry, scalability is the only way to multiply and that is start of  a startup.

Startup is a company which is designed to grow and grow very fast. The only essential thing is growth. Everything else we associate with startups follows from growth.

For a company to grow really big, it must (a) make something lots of people want, and (b) reach and serve all those people.

If you write software to teach Tibetan to Hungarian speakers, you’ll be able to reach most of the people who want it, but there won’t be many of them. If you make software to teach English to Chinese speakers, however, you’re in startup territory.

 

Any other venture which is not scalable doesn’t fall in the definition of a startup though it may be a newly founded company.

Lacs of companies are being started in India annually. However only fraction of them meet the definition of a startup.

A startup has to make something it can deliver to a large market and idea is scalable fast. A venture that is labour intensive and staff intensive is certainly not scalable and this would be called a newly found company and not a startup.

A scalable idea is the one which can be automated to the maximum. Scalable idea means “hockey stick ” growth curve which attracts investors.

So, hope now you know if your business is a startup or just any other newly founded company.

Happy starting!!

————–

 

 

Share

Share to Google Plus

Pre Revenue Valuation- Science or Art

January 29th, 2015

I was recently invited by “Indore Entrepreneur Network (IEN) ” to address startups. The boardroom was house full, a reflection of startup revolution going across cities and towns of India.

I was happy to see 3 women out of 20 startups present in the room though I hope to see more percentage of women at such startup events in time to come.

Major concern raised by budding entrepreneurs was “how do investors value a startup?”.

Let me confess, this is the most frequently asked question at any startup event or investor panel. So, I was not surprised if it was raised by this bubbling with ideas and enthusiasm group, too.

However, the unfortunate answer to the question is: it depends.

Startup valuation, as frustrating as this may be for anyone looking for a definitive answer, is, in fact, for some, a relative science and for others, it is more of an art than a science.

So,  the practice of valuing a startup business is squarely in the domain of little confusion.

Nevertheless, entrepreneurs need to put a value on their startups in order to raise money, and investors need to put a value on their investments to generate liquidity.

Most important for any startup is need to constantly think of how early he/she can make the start-up project attractive enough for investor to invest.

My part experience with IAN and discussions with VC friends tells me that startup need  to focus on the following to attract funding at Pre Revenue start-up phase.

Today, fortunately, VC’s & Seedfunds and angel investors are in abundance and looking for attractive investments. However for them to take a decision on valuation of Pre Revenue startup ,they look for the following things:

Founding Team :

Is founding Team committed to work on finding solution and filling identified gap for next 5 to 7 years. If founder team has ample experience, networking ,knowledge on key factors of business, all the better. Additionally, founders with success in past tend to get higher valuation.

Traction & Expected Near Term Revenues :

If start-up has 100 plus pilot customers with 50% of them near becoming paying customers, the valuation is much higher.

Growth & Engagement :

If there is existing good amount of user database and same is growing at 30% pm plus good percentage of them spend 20 mins of more daily, valuation is certainly higher.

Market Size :

VC always wishes to know the market size in terms of potential users.If 10 Million potential users is possible, higher the valuation. If 100 Million potential user can be projected, valuation can go through the roof.

Competition :

More the existing competitors or else easy for entry, lessor the valuation.

Quality of Early Investors :

If startup is able to attract organisational funding  or reputed/respected angel investor/seed fund for startup/pre-startup phase, it becomes easier to raise second round of funding at later stage.

 

————

 

 

VC Image

Share

Share to Google Plus

Startup need to forsee the cash crunch

December 19th, 2014

Startup need to forsee the cash crunch

I happened to visit young entrepreneur friend of mine yesterday. Last time I had met him few months back, he was bubbling with lot of ideas and had plans to expand at the speed of light.

His fitness franchise model was doing good and centres were being opened in major cities at the rate of one per month. He sure seemed to be expanding at fast speed. However, when I met him again, yesterday after a gap of 6 month, he seemed to be depressed. In his expansion drive, he lost track of cash flow and now is facing major cash crunch. What is worse, nor has he approached any bank or investor and neither he has any business plan ready.

Cash is the fuel that drives business, and many financial analysts consider the condition of a company’s cash flow to be one of the most important indicators of that business’s financial health. After all, a well-managed flow of cash–like a strong heart–is usually indicative of a healthy business, while poorly managed cash flow, or a weak heart, can cause problems that affect the entire business.

Cash flow management requires more than just a financial fix. It requires a holistic approach that focuses on making a company’s entire supply chain operate more efficiently. After all, the faster goods move from seller to buyer, the faster sellers can be paid. And while working with a bank to open a line of credit or amending an existing financial instrument can certainly help, the only real way to address a cash flow problem is to take a holistic, long-term view of the issue.

Fixing a cash flow problem requires companies to examine and improve the three key flows of commerce: goods, information and funds.

Though my young entrepreneur friend has financial statements of last 2 years that too audited, however, both years, business is shown to run in loss. And the reason for the same is that though actually the business made reasonable profit from first year itself, however loss was shown on advice of his CA to help avoid paying taxes. Unfortunately, Banks or any lender wants to lend the money only to profit making business and not a loss making enterprise.

My advise to young startups:
1- Please show profit in your business as it helps attract funding from Bank and investors as and when you may need it. Don’t avoid showing profit just to minimize your tax liability. That is foolish idea in the long run.

2- If your business is growing, even if you may not need money in present times, however it is advisable to keep dialogue open with potential investor and bankers. Also keep updating your financial and business plan. You don’t know when you may need cash for short term, mid-term or long terms.

3- Don’t blindly depend upon your CA rather learn a little bit about balance sheet, best practices in cash flow management and about legal compliances and taxation etc.
—————————————— —————————

Share

Share to Google Plus

3 mistakes worth avoiding by a start-up

November 16th, 2014

 3 mistakes worth avoiding by a start-up

 

Years ago while I was Advisor with CyberMedia,I had the opportunity to hear one of the most admired entrepreneurs of current times namely Azim Premji, Chairman Wipro Technologies. He had accepted prestigious “Lifetime achievement Award” by DATAQUEST, the star publication of CyberMedia and had come to receive it in person at my favorite venue Hotel Maurya Sheraton, New Delhi.

According to Forbes, Azim Premiji was the richest Indian during 1999-2005 and is currently the fourth wealthiest Indian, and the 61st richest in the world, with a personal wealth of $16.4 billion in 2014. In 2010, he was voted among the 20 most powerful men in the world by Asiaweek. In December 2010, he pledged to donate $2 billion (approx Rs 8000 Crore at 2010 rates) for improving school education in India. This donation is the largest of its kind in India till date.

In his acceptance speech, Azim Premji told the audience that while he was on his way to the conference hall, a young journalist wanted to know the secret of his success. Premji further said he wondered why media only talks about success and never about failures. Talking about failure is equally important as it is impossible to taste success without experiencing few failures. He went on to share failures he experienced before he tasted success.

Yes, failure is a stepping stone to success. Unfortunately in India, a failure is not taken kindly by anyone therefore it makes sense to avoid a failure as much as possible.

Many startups fail just because of mistakes they make which could have been avoided. Due to a lack of experience, many startups face the misfortune of failure.

I have shortlisted 3 of such avoidable mistakes.

1- Having an idea but no business plan. Having an innovative idea is wonderful. But unless it is put on paper, it is of no much use.

Many startups think writing a business plan is necessary only if one wants to raise finance. Wrong. A business plan plays a vital role in determining future success. A business plan, after all, serves to guide the startup in the right direction by answering many questions such as:

  • What is the gap your startup is going to fulfill?
  • Who are the potential customers?
  • Who are the company’s competitors and what are they doing?
  • How can the company measure success?

In other words, a sound business plan determines every aspect of the startup. And whenever the company is stuck or a new venture is to be launched, refer to the business plan.

And yes, a ready business plan always helps in raising money quickly.I have come across many startup entrepreneurs with great ideas, having invested their own money too at initial stages of business but couldn’t raise finance from banks or VC’s as they didn’t have business plan ready at right time.

2-Want to go alone. It is a proven fact that startup driven by single person have usually not tasted much success. Moreover, a startup anchored by one founder rarely gets VC funding.

Establishing a company is hard work and it often takes more than a single individual to launch a business. There are highs and lows, not to mention some tasks that few can undertake alone. Crushing blows and setbacks sometimes make it hard to continue on without another person’s encouragement mention some tasks that few can undertake alone. Then there’s a need to market the plan and build the product or service. Money has to be raised to launch the startup.

In most situations, it’s an incredibly daunting to tackle all this alone. A little help from friends and professional colleagues can help in launching the startup.

If your connections do not work, you have no choice but to find a stranger as a co-founder.  You can find them on startup networking websites or else you can  find them at startup networking events  or at  shared startup co-working facilities.

3. Low on Financial LiteracyWeak financial literacy may be the single biggest reason why startups don’t succeed. Many business owners, who start with an idea or a problem that they want to solve, seem to have difficulty with financial management tasks.

A study  shows 97 % of entrepreneurs make their debut with less than Rs 2 lac, mostly funded out of their own pocket in the form of personal savings, credit cards and lines of credit. As they build their businesses, entrepreneurs find themselves navigating through obstacles that include filing taxes and managing payroll.

To finance growth, entrepreneurs need to speak the same language as banks, venture capitalists, governments, etc. Financial literacy is more than just hiring an accountant. It includes building a knowledge base which enables an entrepreneur to make important decisions about company finances.

A startup needs to understand the importance of preparing financial statements from a long term perspective. The purpose of financial statements is to communicate the state of affairs of your business. The three most common and important financial statements for a startup or for that matter any businesses are balance sheet, an income statement (profit & loss account) and a cash flow statement.

Additionally, Financial literacy helps a startup know about his rights and obligation under Business Rules & Regulation, Taxation and various Central & state Govt Acts .

How many startups would  actually know if and when they come under the compliance of Service Tax, VAT, TDS etc. Large number of the startups don’t know when tier enterprise would have to comply with Employee Provident Fund or ESI Scheme.

Having financial literacy, the knowledge that enables an individual to make critical and practical decisions with regards to finances, is extremely important for entrepreneurs and critical to successfully growing a business.

____________________________________________________________________________

Share

Share to Google Plus

Tips on Working from Home

October 1st, 2014

I have been working from home for quite a while now. I hear a lot of people say things like, “I could never work from home.”, “I need to go into an office.”, or “I’d get distracted.” This can happen, but only if you let yourself. Here are the tips I’ve learned about working from home and staying productive:

Setup an office for yourself:  Reach your “office” everyday at a fixed time, and leave your “office” at a fixed time. Set up a routine as it helps remain devoted.Office means office ie should have if required printer cum photocopier,notepads, pens, and other office materials.I have a decdicated room for my office,with my working table,printer,landphone,pads etc.

Develop a schedule and follow it: It helps to set yourself guidelines and a schedule to follow so you actually accomplish your work. Aim to work atleast 8 hour per day.Have fixed timings for tea break, lunch etc.I am in my homebased office by sharp 9 am and work till 1130 at one go.Than I take a 15 minutes tea break.Later I work till 130 pm and take a 1 hour break for lunch and that includes afternoon nap(one of the luxury of operating from home).From 230 pm to 630 pm I am one my working table with 15 mins tea break in between.Later I go for evening walk and catch up with my friends.The day I have a meeting outside or a conference to attend,I work late night or early monring to cover up the lost time.

Take a real lunch break. There’s a reason companies are required by law to give you a lunch break. You will come back refreshed and working harder than before.So,make sure even if working from home,you should take a lunch break.Eat in front of your favorite TV show,  or meet a friend for lunch.

Set boundaries. Your clients should know not to call you at 9 pm at night. The best way to establish these rules and good behaviors are by setting boundaries for yourself and letting your client know what hours you work. I dont take official calls between 9 pm to 9 am,come what may.

Set goals. Make to-do lists and stay organized, just as you would at any other job. Set realistic goals for yourself to achieve daily, and hold yourself accountable for them. You won’t get anything done if you don’t make goals.

Enjoy working from home.I am enjoying it every day.

 

Share

Share to Google Plus