By definition “an entrepreneur is a person who sets up a business or businesses, taking on financial risks in the hope of profit”, but is it that simple, adding a vanilla to it, is it that simple in our valley.
Let us examine it briefly across the flow chart/value chart and apply the hardships our young entrepreneurs face in the valley at each milestone of the flow chart and how we should look towards optimising its effect towards the success trajectory of our young buds/ entrepreneurs.
An idea and its Germination in an entrepreneurs mind
Sketching of the idea on the drawing board and reviewing its practicality/scalability
Making the actual Detailed Project with all process flow and financial sheets
Arranging the CAPEX and OPEX
Physical set up of processes & its actual operations till it is in auto mode
Looking out for PEs for up scaling it
Idea
It all begins with an idea in mind as they say, “An idea can change the world”, and here, it is the entrepreneur’s world and the ecosystem associated with it. Out of a thorough thought / out of some accident, for an alert vigilant mind/ out of some experience from the past/ out of a passion towards something, an idea is always mingling with the brain waves of an entrepreneur. It is just about the exact time, when he feels he is ready to devote some more time to his idea and make it into something, which he always wanted. And when the time comes begins the physical process wherein an entrepreneur ventures out to do a bit research about the viability of his idea and to consult somebody and take his opinion/advice. It happens at different stages of life with different entrepreneurs.
What our budding entrepreneurs have to see in this phase is to devote maximum time to planning and research. In our region the viability of the idea has to be seen keeping in view the demographics of our region, keeping in view the external environment in which the idea has to germinate, keeping in view the problems faced by the channels of dissemination in our region, keeping in view the actual operational time our idea is going to have at its disposal. We cannot just clone any idea which is there in other parts of the country or world.
Sketching
Sketching is a phase wherein an entrepreneur just lists the steps involved in actual gathering of the different process components of his idea, he weights different processes of his business idea, links and assembles these to make a full running unit, it is just similar to the drawings of an automobile engineer, when he has to make a new car. He identifies the different processes of his business idea and thereby the sources which can feed to these processes. Here he sorts/ arranges different processes through which his idea is going to traverse and he devotes his energy and time in finding, identifying, comparing and thereby selecting the best sources which can feed to these different processes.
In Kashmir, our budding entrepreneurs need to sketch and assemble more minutely as their vehicle has to pass through very rough roads. Knowing the external environment in which their business is going to operate they need to minutely see the viability of different processes with respect to the external environment in which it is going to operate. Each and every process individually should interact with the environment and derive energy from it, which is viable for it to carry on.
Detailed Project with financial sheets
This phase is very important for an entrepreneur wherein he now encrypts every detail of his project. The actual viability and its returns are clearly visible on paper and the success of the idea into business can be very easily understood here. This remains a very crucial phase for a business; it is the mirror for the entrepreneur to get a glimpse of his business in and the CV for his business to external world. It actually interacts with you and tells you the viability of the idea into business and the ROI of that business. These sheets depict the returns, sustainability and continuity of the business and always remain critical for an idea to actually turn into a business.
For the budding entrepreneurs of our region, this phase is very important as here he has to see the ROI of his idea vis-à-vis the environment, within which he is operating. He has to consider the working days his business will actually be operational, which are very less than the business days everywhere else, outside the valley. His sustainability and wealth and value creation of his idea should get more weight age in our region than the ROI, even if his IRR is less than the recommended one in his business, he can very well keep in his mind the Brand Equity which his business will generate over the period of time. But he should be sure of the worth and Brand equity, since these things usually are intangible in the beginning of the business, so he should very closely strike the balance between the IRR and Brand Equity.
Arranging the CAPEX and OPEX
This is from where, now, the physical existence of business starts, an entrepreneur ventures into the market looking for venture capitalists, angel investors and banks to gather funds, for his idea to get transformed into a tangible business.
For the budding entrepreneurs of our region it is even unique than the rest of the country/world. We don’t have venture capitalists here, we don’t have angel funds, we just have the banks and our only angels are our parents, friends or our relatives. I strongly feel that if your idea has passed these many phases till now and your DPR/ drawing sheets and statements are crystal clear and understandable we can bank on our only angels and banks, after all what banks need is expenses of their money and what angels need is returns on their money and if it is obvious from your sheets that these two are going to get generated and will flow, the CAPEX and OPEX is definitely going to come from Banks and your angels respectively.
Physical set up of the business
It is here where your idea gets its parts physically assembled to get transformed into one tangible money-generating machine. This phase needs thorough diligent physical presence of mentor and he needs to employ his entire mind towards this assembling, this date the idea gets animated exactly into what he had thought. What a reward once he actually sees the baby crawling slowly. Once the business starts picking the pace, an entrepreneur employs all his efforts and resources to put it on the trajectory what had been sketched initially, so that it generates the capital expenses and part of the returns of the angels. This care extends till this business gains inertia and runs into an auto mode and an entrepreneur there after needs to steer and fine-tune it.
For our budding entrepreneurs this phase is even different, our region has so many attributes attached to it, which make it sure that the businesses don’t go to auto mode, or if these go, the time taken is exactly double, if not triple, than what it takes for similar businesses outside the valley. Our entrepreneurs have to be patient and resilient here, they have to keep motivating themselves that their business for which they have done that much due diligence is going to go into boom; they have to remind themselves that they have already accounted for the delayed returns and instead have stricken a balance between the Brand equity and returns. They have to fine tune the Expenses and make these optimal; they have to somehow try to get the economies of scale into play for their businesses to get the vibes and energy from.
Up scaling
This phase is just the replication of the business model on a much higher scale, than what have been achieved so far, for which an entrepreneur needs funds which he either gets through debt or equity pouring from private equity (PE).
It might not be that different for the entrepreneurs of our valley, even though we don’t have big private equities pouring funds into the businesses of the valley, a successful business always gets sure shot debts at much lower debt expenses and I am a strong believer that debt expenses are always better and cheaper than giving off the value and equity of your business, till the time becomes an absolute necessity for mega up scaling.
Whatever the idea, whatever the business, a successful business person is always the one who adapts to the external factors and climate in which he is operating, as has nature taught us in evolution; evolve/mutate for betterment. Businessmen doesn’t give excuses they give employment.
PS: Long before, in early days of my career, me and my Jordanian friend left employment same time, with him starting his own business in UAE and me shifting to another job. Years after I am planning to join his company as development head.
Author is the Head Business Development for McDonald’s for North, East and Central India region
mutaher@gmail.com