This event was held on the 21st May 2015 which lasted for two fruitful hours. And the expert for the day was Bhavesh Kothari.
Bhavesh is a Graduate in Science with chemistry majors, with a Post Graduate Degree in Event Management, PG Diploma in International Trade, an MBA in International Business. He comes with a 17 years of rich and diverse industry experience in leadership roles. He is currently the CEO of BK Global Media Group, Director – Partnerships & Alliance @ Conference Asia and Head Mumbai Bureau – SME WORLD Magazine. He has to his credit more than 100+ articles published in various magazines on Entrepreneurship, SMEs and Digital Media. He has mentored and helped many start ups to grow successfully.
Bhavesh answered questions from group members on various aspects of Start-ups and How to Make them Successful. We have presented below an edited version of the Chat Session. The session was moderated by Shraddha Patil, CEO, The Success Route. The summary of the chat session has been captured and presented below by Deepthi Ravi, learning and development consultant.
Question: I started my company with zero investment. Now I would like to expand but do not know how to go about it. Are there any concrete methods that we need to keep in mind?
Bhavesh: You need to keep in mind the top 5 factors such as Business model, Client topography, Quality of Service, Expansion strategy and most importantly funds. The best way to expand is to ensure that you have a strong balance sheet and large number of clients in your kitty.
Question: I am not sure, whether the order will come or not. And if it comes I need a good number of resources. How to tackle such situations?
Bhavesh: In my opinion you should start the process of hiring parallel to the order process as training, mentoring them will take time. This will also make the team well prepared for the project.
Question: What is your view on Exit Strategy after starting any business? When do you suggest we should plan for one and what holds us back from not having an exit strategy?
Bhavesh: It is fairly difficult to predict an exit strategy; primarily founders who want to get their investments back. Exit strategy will depend on various factors but primarily on the business model/service/product. For example; a service oriented business that was in the market which compliments a large service and you know that this service will be integrated within. Also, exit strategy will solely depend on the fact that you no longer wish to run that business. While mergers are a good way to an exit strategy; IPO is another bigger approach to exit.
Question: As a start-up, the first funds are always limited. How does one attract the right talent within limited budgets? What are the processes that are best established early on?
Bhavesh: Getting the right talent can only happen if you ensure the team buys your mission and vision. Also they must understand that it’s an opportunity for them to learn and grow much faster in the ranks and in perks. When it comes to processes I always say Focus on 3Ps – People, Partners and Processes. There has to be a robust process of Cash flows. Unfortunately, most start-ups fail to manage cash flows. The other side of this would be to manage the talent via rewards & recognition. Having effective partners such as vendors, clients and suppliers is the best way to work towards building a robust organisation.
Question: Do you think size of your enterprise as an entrepreneur matter. How would you define a successful entrepreneur?
Bhavesh: Every business should be started with growth/scaling in mind. Scaling up of your business is critical as it helps you to put your enterprise on the growth track because your objective to quit your job and start your own is to have freedom and also build a business that you can grow. As an Entrepreneur it’s a must to scale your business as it will also enable you to build more entrepreneurs/leaders. We as entrepreneurs are also responsible to give back to the society.
A successful entrepreneur is one who has been able to nurture another entrepreneur within his/her enterprise. This can either mean competition or diversification. As an Entrepreneur one must not fear that his /her team member can become a competitor.
Question: A friend of mine runs a corporate gifting company and has lost 25 lakhs in his start-up venture. Though he is still running the same business after this setback, he is struggling every day. What would you advise him? What you think he lacks? Good networking, inability to develop a good biz model or something else?
Bhavesh: In my opinion all he has to do is put the jigsaw puzzle together, as he already knows where he failed. If his ideas are potential he should go for funding, though he will have to share some stakes. For such businesses; he will have to strengthen his cash flows. Focus on quality and Customer Service. In my opinion, he lacks a good way of presenting his business and it’s potential. He should be able to portray his vision and how he can scale his business. Investors ideally look at how confident the founders are because that’s what they invest in – People.
Question: What is a Business Model?
Bhavesh: Business model is the most critical aspect for any start-up. Unless one is clear of what’s the business is going to be about, revenue models, Scaling, business strategy, Customer acquisition, CRM. Cash flows, People etc. One must spend good amount of time in putting the business model. Share it with family/friends in whom you confide as they can give you better insights as at times we as entrepreneurs fail to see what might go wrong.
Question: What are the top 3 reasons why Start-ups fail?
Bhavesh: Top 3 reasons, bad cash flow management, Failure in Understanding of Market dynamics and poor pricing strategy.
Question: How imperative is Soft Skill Training Investment along with technical Training and is this normally a neglected area by most Start Ups that affects their pace of growth?
Bhavesh: Though soft skill training is imperative but many start-ups can’t afford to hire external trainers due to tight budgets or rather no budgets. Many start-ups have founders spending time with the team. Also OJT is the best way to acquire skills. A: Basics related to training. It depends on the area of expertise or focus. Target Audience, Pricing, Delivery model- is it offline or online. What issues / challenges does it really address? What is the Value preposition? Business models can be Online/ offline or a mixed of both. It can be simulation based or can be based on Gamification. A: Bringing in multiple investors can ensure there are enough cash flows for expansion. Equity is the only solution for debt there are other alternatives. Ideally, it should be a mix of equity and debt but that’s at a later stageQ: You are the current head of Mumbai Bureau of SME World. What steps this body is taking to improve the start-up eco-system in the country?
Question: When is the right time to start a start-up company? Is there a right time to start-up?
Bhavesh: There is no right or wrong time to start up. However, before starting up one must keep in mind few things-Market, Services/ Products and a business model. Also it’s very important to have faith and belief in your own start-up. Ensure you have enough cash flows to sustain for 3-6 months. Take risk. Be practical. Take advice. Be aware of market dynamics.
Question: You are heading the Mumbai Bureau of SME world. How is SME World contributing towards building a start-up eco-system in the country.
Bhavesh: SME World is a monthly publication that addresses the challenges / issues and market dynamics for Small & Medium Enterprises via articles, opinions as well as understanding of the opportunities available. It also talks about how technology can enable companies to grow. SME world addresses issues such as governance, funds, policies, etc. which can help entrepreneurs to grow. It’s a mouthpiece in creating awareness among businesses and thus bridging the gap.
Question: What if one of the founders isn’t delivering? How to you deal with it and also how to deal with a disengaged team that isn’t getting along?
Bhavesh: In my opinion its purely internal conflict of interest /opinions. Try to find out the reason for non-delivery, or maybe they are not domain experts. Another reason can be due to unclear vision and strategies. The founders need to sit together and talk it out. It must be clear within the whole team – Shape up or Ship out. That’s the only way and in the interest of the company. Same applies to the disengaged team.