To sustain and grow any business, we must generate revenues in excess of what was generated the previous year.

It works best to follow the famous PDCA cycle (Plan-Do-Check-Act) to achieve sustained growth.

The following are the essentials of business forecasting PDCA cycle.

1. Forecast the revenue for the year.
2. Identify the practical difficulties in achieving the revenue
3. Have a plan (or keep working on a plan) to minimise such difficulties
4. Set the revenue target for the year based on the forecast
5. Track progress against forecast
6. Adjust forecast based on the progress
7. Achieve the target, exceed the target or get as close as possible to the target (as the case may be)

First thing first, the exercise of forecasting is an intimidating thought to start with. But one MUST go ahead and do the forecasting. The exercise is worth it for any business.

Sales Management Essentials

Revenue forecasting for a business typically starts around February of every year (if the financial year cycle is from April to March).

We prepare a business forecasting sheet which is nothing but a detailed listing of potential sales for the year.

We collect potential sales for the year with the following attributes

1. Region from which the sale is expected
2. Name of the potential customer (if this is not known, a virtual name such as BANK1, BANK2 is used)
3. Name of the project
4. Deal category (product / solution. There can be more categories).
5. Approximate deal value
6. Weight percentage
7. Weighted value
8. Quarter in which the sale is expected to happen
9. Customer is known or unknown
10. Stage of the deal (Projected, Identified, Proposed, Negotiated, Won/Lost,OnHold, Gone Cold)

Accuracy of the forecast data is very essential as all investment and expense decisions for the year solely depends on your forecast. However, getting the pipeline forecast accurate is quite tricky.

To achieve accuracy, we split the forecasting exercise into two phases (1) The initial Sales Forecasting exercise (2) Ongoing Monitoring.

Sales Forecasting

As first step of initial forecasting, individual sales leads are collected from all those who are involved in sales. The lead generators provide the 10 attributes for each lead they bring.

We consolidate these leads in a common location. we use a simple spread sheet based tool for this & this file is currently the bible of our business. Enterprises use lead management tools, but small companies may not be able to afford it. A home grown, excel tool works effectively for small businesses.

Having collected all the leads, we conduct one to one session with the lead generator(s) on each lead item they have brought (or they believe they could bring). This session resembles an interrogation session as the strength of the lead is assessed with no room for emotions.

Here I must share a few points to remember which will define how you decide the strength of each lead item.

1. How much information is available with the lead generator on the lead, influences the strength of the lead. Here the word “strength” means whether the lead has a reasonable potential to convert into a sale or not. So let the lead generator talk as much as he can on his own about the particular lead and independently make up your mind on the strength of the lead.
2. The distance a lead has to travel before it materialises influences the strength of the lead. If a lead generator says that a deal is 3 quarters away, it usually doesn’t qualify beyond 10% probability. Also, in our experience, a lot of external dependencies affect the time taken for a lead to move from “Identified” stage to “Won” stage. If your sales staff calls a lead as “Identified” and can be won shortly, view this with suspicion.
3. Value of the lead needs to be accurate. The accuracy of the value can be achieved only by experience. However while arriving at the value the following needs to be considered.
   1. Is the lead a first time customer. If so, you need to give the first deal at a low price in order to gain entry into the customer place and achieve repeat business.
   2. Is the sale a 1^st time same. If so, your product pricing itself will fluctuate greatly as there isn’t a market yet and hence the market has not valued such a product before.
   3. How big or small is the potential customer. A big potential customer has better ability to pay, but also negotiates well as he knows that you need future business. A small customer has a small purse and hence he will expect your pricing to be low or he may not buy.
   4. Is the region in which the lead exists a green field market or a market with many competitors. The challenges differ between green field market and a well evolved market. Nevertheless challenges do exist.
   5. If yours is a first time sale, you may have to use some innovative ways of establishing your product such as partnering with your potential customer to enhance your product and also to get reference site. This often means a low price or no price. You must think this through.
   6. By closely monitoring the budget sheets, we realised that our pessimistic estimates turned out to be reality. This is debatable, but we have decided to pick up the pessimistic value of a lead for our budget estimation and tried to maximise the actual revenue.
   7. It is better not to add / remove buffer from the estimated value of the lead. Instead, we take the weighted value of all the leads to arrive at the total revenue budget of the year.
4. The weighted value of a lead is arrived at by giving the probability of sale (in other word, how confident are we that we will win this deal. While we take inputs from sales team about their comfort on winning the deal, we make up our mind on the strength of a lead by discussing the lead with the “deal closer”. The person who has demonstrated the solution to the customer and the one who negotiated the deal. At the time of forecasting, no “deal closer” is available at least for the deals that are far in the pipeline.
5. To tackle this, we follow a gut feel probability to verify and ensure that we are not too off track in our perception. It is as follows.
   1. “Projected” leads – any probability, provided the lead is more than 6 months away.
   2. If a lead is “Projected” and is less than 6 months away then the probability is < 10%
   3. “Identified” leads – <= 10%
   4. “ Proposed” leads <= 50%
   5. “Negotiated” leads <= 90%
   6. “OnHold”<= 30%
   7. “Unknown” items (where the customer is yet to be identified) may have upto 50% probability provided the lead has 9 months to materialise. Need a lot of debating before agreeing this item.
6. We track closure of leads by quarter. So each lead item has a quarter of closure. This helps us identify a pattern of closure by quarter (which can be specific to industry). But it helps us improve our forecasting skills continuously.
7. In almost all deals we have done, there is a period between “Proposed” state and “Won” state of the deal. This has been the wait period during which, we as vendor are in a difficult position to influence the speed of the closure. Please note that we could influence the out come, but the time taken is difficult to influence. This has to be factored in while deciding the quarter of closure. Providing a time buffer to accommodate this phase is good especially if this is a new customer for you. For repeat businesses however the closure happens much faster (one more reason why bird in hand is worth two in the bush).

Deliberation of Forecast

Each pipe line item which is gathered from the sales team gets deliberated in detail to meet the criteria mentioned above. We took around half person day per pipe line item.

This provided us with a clean list of pipeline items with their names, potential sales value, weighted value, probability, quarter of realisation etc. There were a few dilemmas though.

It was easy to forecast the first quarter revenue as we knew the potential customers we are talking to, what do they want, how much is their budget etc. The information on revenue potential for quarter 2 and quarter 3 became weaker and less accurate, quarter 4 was a total unknown.

One way to tackle this is, to deliberate the pipeline for quarter 1 and and 2 in as much detail as possible and finalise quarter 1 and 2. Look for similarities between quarter 3 pipeline items and quarter 2 pipeline items and apply same logic from quarter 2 to arrive at quarter 3 budget. Quarter 4 budget can just be taken as quarter 3 budget + 10% to 20%. The idea is, as time passes, we will pick up cases for Q3 and Q4 pipeline items.

Another problem we faced was, some of the pipeline items keep changing their attributes on a daily basis. This gets tricky especially when the value associated with the item is significant. The best way to deal with this during the process is to give the most pessimistic probability, and give the guaranteed value of the project if the deal is won.

The list containing the consolidated pipelines identified and deliberated as above, is the revenue budget for the year and becomes the baseline must win revenue for the year.

It is better to use a nice excel tool which could automatically provide the following, by taking all the attributes of each sales item defined above.

1. Target sales by quarter (as per the baseline)
2. Change in target sales by quarter as on current date and time
3. Baseline Vs Current comparison for each quarter
4. Ability to drill down each quarter to know the items within
5. Ability to leave snapshot of performance at the end of each month

We have done it in such a way that at the end of each month, the pipeline position at the end of that month is available for future reference. So at the end of the year, we know exactly how we progressed month on month during the year.

Monitoring Progress

This pipeline tool is the single most important utility in our organisation. All sales people and management team closely monitors this tool regularly.

One member of the management team, is responsible to maintain the status of each pipeline item on a daily basis. Thus any movement of each pipeline item (value, probability, quarter, status etc) is immediately updated. Any major shift in any attribute which has the potential to disturb sales performance is reported to the rest of the management team, consequences of the shift are discussed and action taken immediately.

Our management tracks our progress against our baseline every month. Our quarterly performance against the corresponding quarterly baseline targets is as important as our performance of the year. The reason why the quarterly performance is given importance is because, if a pipeline item which was targeted for a quarter slips to the next quarter, the reason for slippage can be identified, and a preventive measure can be put in place to ensure that the quarter 4 items don’t slip to the next year.

The monthly review of the pipeline also helps us identify, which customer pays us quicker, which product has potential to sell and generate revenue quickly etc. Thus we are able to prioritise our customer focus as a byproduct of this exercise.

It also throws up our vulnerabilities such as high exposure to one potential project / customer, seasonal slow downs(E.g. sales in ME during Ramadan is difficult).

Besides, we get to know, the consequence of reduction of price or reduction in project value, on the overall revenue of the year, enabling us to better identify the most competitive price for our customers.

Conclusion

We follow the pipeline management process more seriously this year compared to the previvous year. One important benefit we derive now is that, last year, when the results came out, we believed that we did the best we could. This year, we know what best we could achieve and we are now working to better that best.

We are just beginning to learn pipeline management. But the learning so far has definitely helped us.

Please share your critical comments with us and help us improve.

However it is usually after two or three months into your entrepreneurial journey that you realise that your financial responsibilities get heavier by every month. You are not only responsible to find a stable source to keep your personal finance intact, but you are also responsible to keep your business finance “sound” (read it as barely “above water”).

This blog is my attempt to pass on the advantage of hindsight I have now for the benefit of those budding first generation entrepreneurs and/or those who start with very little initial investment.

We all know that any new venture provides immense challenges. What does not occur when you begin is that you will face challenges continuously and you will need to fight challenges relentlessly over at least a few years, if not more. Hence, it becomes almost imperative that you are not alone in it. Choose a trusted bunch of people who will be with you, come what may (much easier said, but thats the way it is) and start your entrepreneurial venture with their total involvement and commitment. Along with some good suggestions for finance management, they will also lend moral support when the chips are down.

Managing finance is a significant challenge. More importantly, it is JUST one of the significant challenges. The other challenges include nurturing your unique idea, marketing, managing suppliers, managing HR and administration, retaining employees, landing the first deal, compliance to legal requirements and on and on…

It makes a lot of sense to split responsibilities such that, each one of you can FIGHT challenges that you take. Nevertheless, always make decisions (big or small) on consensus. In my experience, democratic decision process saves you from falling flat, though it may restrict you from being aggressive. Often for a small company, wrong decisions can be potentially fatal. So safety always wins over aggression.

Expenses are real, Income is virtual

- From the day you start functioning, you are either incurring expenses or committing to incur expenses. E.g. Getting a land line means, signing up for regular expense. Entering into rental agreements, recruiting staff all of it mean that you commit to spend every month.
However, you will take a few months (sometimes even a few years) before you have a firm income.
So you need to know in advance, how much you will spend every month and how much you will earn and when to cover for these costs.

Revenue Plan
The following questions become very important to be answered for your revenue plan.

1. Who will give me this revenue (the industry, potential customer if any)?
2. What will they buy from me ?
3. Why will they pay so much to me for what I provide ?
4. What is the time by which the revenue will be REALISED.?
5. Can I generate lead, identify need, position my solution, convince, get the purchase order, deliver, prove to customer that the delivery is complete, raise invoice, get them to process the entire invoice value and REALISE the revenue WITHIN the planned time frame ?
6. How much will be the NET revenue ? (Net revenue is invoice value minus tax deducted at source, penal charges if any)
7. What is the plan to sustain if this entire process mentioned above either slips or does not materialise?
8.Almost all start ups end up giving their product / service for free or at throw away for their first n number of customers, just to establish & prove their worth. Include this cost and time to your expense sheet.

Try to be realistic with a tilt towards pessimism to answer the above questions, for the closer you are to being accurate the better you are to tackle them when the situation actually unfolds.
Discuss your answers with people from industry to see how real you are. Information / feedback is worth its weight in gold for any entrepreneur.
Do not be critical of or discard anybody who plays the devils advocate. You need realistic answers and as much confirmation as possible that you can actually make the projected revenue in the projected time frame.
One thing is for real, you are most likely bound to over shoot your expense budget. So you better have your revenue projections as close to accurate as possible.

Expense Plan
Your expense budget must include two aspects. Accuracy and exhaustiveness.

For exhaustiveness,
1. Try to search and gather as many expense items as possible, to the extent that you are tired of searching for expense items.
2. Understand the nature of each expense item and accommodate that in your budget. For example, laptops are bought when a resource joins. However when a resource leaves and a new one joins, the laptop may be reused. Such a nature of expense must be accommodated in your expense budget.

For Accuracy
1. Gather practical cost data from market.
2. Utilise software tools such as spreadsheets to make a comprehensive expense calculation
3. Apply the nature of expense in spreadsheet
4. Do not discard decimals.
5. For assumption based budgets such as marketing travel / wining & dining expenses, discuss with subject matter experts (marketing head of the same industry) about the nature of your business and what you can reasonably expect.
5. Debate the expense sheets with your partners
6. Get trained accountants to verify the expense sheet and justify the cost to him and try to convince him.
7. Where costs are dependent on assumptions, note the assumption clearly so that when the actuals unfold you can update the budget based on the real experience.
8.Avoid the temptation of adding buffers to each budget item. It is better to add a single buffer at the end of the budget. The need is to get as accurate as possible to the real cost. You cannot afford to be slip away from actual cost on either side of it.

Once you have answers to the above questions, you will know the duration for which you will be spending without any revenue and this will also tell you approximately how much you will spend before your revenues start compensating for your expenses (at least partly).

You need to find a source to fund this expense until the revenue unfolds. We funded our fixed expenses through loan options. If you will take this route as well, while budgeting for working expenses it is important to include expected loan repayment schedules into expenses budget.

It makes good sense to give serious consideration to all sources of revenue at the beginning of a venture, to tide over the expenses. At the same time, care must be taken to ensure that the effort and attention involved in generating such alternate form of revenue does not derail the execution of your original business plan.

Choose your banker
It is important to choose a right bank for your organisation. The moment you start your business, you are starting to create a history of transactions, all of which get recorded in your bank statement. The banker you bank with is in the best position to judge your financial soundness, value your relationship and provide you benefits such as business loan / cash credit facilities in future. If your banker is sound, you will automatically get the maximum benefit. If not, your transaction history will provide limited value to you in future.
So check the corporate credit facilities, general credit policies (aggressive, safe etc) and other corporate banking facilities of the various banks you are eying and decide on your banker. It is important to check if the bank can give you references of their corporate customers similar to you, who have been banking with them for at least three years. Take the feedback of such corporate customer before deciding on your bank.
Facilities such as cheque pickup/delivery etc don’t count much in choosing the banker. At least we did not use such facilities much.

Once you start your business, it is all about trying to keep your actual expenditure as close as possible to your budget. You will find that almost on a day to day basis, you will find unforeseen expenses in spite of an exhaustive expense budgeting. Be prepared for it.

Question each expense as and when they appear. Also question what you loose if you don’t incur the expense. In many occasions, not incurring an expense can be damaging. So better to incur such expenses even if it hurts financially. Its a tough call some times. But take it.

Tackle the never ending cycle of cash flow

You need to know all your expenses in advance in order to ensure that you can provide for those when they occur. To achieve this, have a list of recurring expenses listed by date of month in which they recur. Example, salaries happen on 30th/31st of every month. Bill payments, loan EMIs occur around 5th of every month. So you will have a total of payables on each milestone.
This will give you the approximate value you need at specific milestones each month.

Your accountant can prepare a list of non-recurring expenses every month, for the forthcoming month. The combination of both will give you an idea of the amounts you need to have in your account at specific milestones of the coming month.

You need to prepare a list of POTENTIAL receivables with POTENTIAL date of receipt against each item in the list.

Important Note:In countries where service tax is levied, the customer pays a standard service tax, which your company is  supposed to receive and pay the service tax department. Ensure that the service tax collected is  not mistakenly included in your disposable income.

By matching the potential receivables with the real expenses, you will get an idea of your CASH FLOW position for the up-coming month.

Armed with the above information you need to do two things.

1. Plan to realise the potential receivables on or ahead of the POTENTIAL date of receipt
2. Priorities / adjust payables to ensure that payables fall within the available cash in bank on any given date.

Any short fall needs to offset by external debt and it is to arrange for this debt, that you need time and hence all the above planning ahead of the due date.

The following must be considered while arranging for debt.

1. The debt for cash flow management must be short term (in days). So you must have a visibility of an upcoming revenue which can quickly pay off this debt.
2. If there is no visibility of such an up coming revenue, then better to opt for long term debt with EMI facility. However you must try and keep such long term debt to minimum, as you are trying to cover for a revenue short fall and not funding a fixed expense.
3. It is better to have a permanent source for such short term debt financing. So choose one debt financier and have an arrangement for regular financing of shortfall. Cash credit facility from your banker is the best option. However, your banker may take a few years to know your ability to repay before they open up such facility for you.

In case there aren’t any external debt available consider the following options or a combination of it.
1. Quick loan from family and friends, which can be paid off by upcoming income.
2. Prioritise important payment. Request for time to clear payables with lower priority.
3. Negotiate for increased credit period at a slightly higher payout.

Some tips on payable prioritisation
1. Loan repayments and Regulatory payments usually take top priority
2. Junior staff salary takes priority over senior staff salary.
3. Director salary falls last in the priority list of salary payables.

NOTE: These are only short term fixes. Please do not forget that you need to make payments every month. So you must clear the months short fall the same month and plan for the next month. You must not let the payables accumulate as this will quickly spiral to an unbearable situation.

By now you would have figured out how important it is to earn revenues to cover your expenses every month. There is no real alternative to a consistent revenue source when it comes to helping you clear your expenses. Hence your real focus must be in generating consistent revenues.

Finance management is about keeping the cost low enough so that the fluctuating revenues can cover the cost. The trick is, the cost is constantly pushing upwards due to inflation, increasing salary payables and others. Revenue does not necessarily grow as cost grows. It is smart and prudent expenditure that can yield returns in future.

So corporate finance management is a constant rope walk. It is usually a full time activity. So if any one of your partners is an accountant or a commerce person, leave this job to him and leave him with it.

Strategy, marketing and corporate finance must not be handled by one individual. As a strategist, you must keep visualising without worrying about the current state of affairs. If your current state bothers you, you will stop dreaming and you company will have a curtailed vision.

Similarly as a sales and marketing head you will spend a lot on travelling and meeting potential customers without any corresponding revenue. If you are worried about the financial state, you will curtail your marketing expenditure, which will surely show in the future revenues.

So keep finance away from your strategist and your marketing Director.

As an entrepreneur, you must plan your finance consistently, demonstrate high levels of prudence in expenditure, aggressive strategies for invoice recovery. Consistent application of these three traits in tandem results in healthy financial position of your company.

Go walk your rope and have your share of cherished experiences.

1. We need something so that we can sell. Sure, it is obvious. However the characteristics of that “something” defines the entire business. Google sells internet search and hence it is a multi-billion $ company. So it is very important to know what is the best “something” that you can sell and what is its long term potential. After all you want to be as successful as you can and want to and the product you sell should not become the limiting factor.

2. The most powerful means of customer acquisition is reference based acquisition. When a potential customer has heard about your company or your product from a counterpart in his business domain, that opinion, is pretty much unshakable in his mind. If he heard “they are a good company and they provide good service…”, then the customer becomes a pipeline item for you with a 90% strength. If he has heard “….they are….ok…not bad”, then the customer is your pipeline item with 50% strength. If he heard anything lesser, you can forget about that customer and move on.

3. No one sells a product or a service in isolation. “Customer acquisition” can (and must) be rephrased as “relationship acquisition and nurturing”. Each time you go to sell a product or service to a customer, the customer is looking to find out, if a good relationship can be established and nurtured for long. This process happens so much deep within the customer’s mind that it is never spoken about.
If we can make the customer realise that the relationship can be established and nurtured, the battle is half won. Besides, this will definitely result in the customer saying “they are a good company and they provide good service…” to your next potential customer (remember the pipeline with 90% strength?).

4. The first call and the first meeting with the customer is key. During this interaction, the customer is sizing you up. He wants to know how stable, reliable, capable, efficient and trustworthy is your entity (“entity” here includes company, product, service, the BD executive). Hence it is important to put up a good show. So try to look like a responsible company with a decent size and capability.
Trying to get technical or even into the details of features can frustrate the customer in the first meeting or call.
Instead, gauging the background reason why they are looking for a product or solution, the pains they are trying to solve and addressing those pains/ passing such information back to your company helps in making the right pitch in future.

5. Letting the customer talk and listening is always beneficial than talking a lot during a sales pitch. In banking industry at least, pain of one bank is usually a good representation of the pain of the banking industry itself. So the ideas for solution best comes from a talking customer. We have developed not less than 4 products in the last 6 months just by listening to a talking customer. All such products have been acknowledged by many other banks as “we need it”. I guess that this concept can apply to industries other than banking as well.

6. It is important to meet some one as close in the hierarchy to the decision maker early on. The farther we are to the decision maker, the farther we are from the deal and less probable is the deal. This is because, the decision maker and those closer to them in hierarchy are sure about the priority order of their various requirements. So you will quickly know if your product / service / solution is within their immediate priority list. If yes, you have a pitch. If no, you can save your time.

7. Though the deal is signed by one or two top decision makers, no product / service / solution is bought without the end user, supervisor, implementation manager and the decision maker are all DELIGHTED about your offering. I call all of them as decision sponsors. So you must convince them all.

8. The decision sponsors negotiate with you on technical matters, implementation matters, support matters, price matters, training matters etc. They do ask tough questions and be critical as well many a times. It is easy to hate them. But remember this most important point. They are your internal SPONSORS. They HAVE to go and convince their bosses why they must buy your product/service/solution and not your competitors. You must make them WANT to do so. If you have a weak internal sponsor you WILL loose that deal. Period.

9. One more point about negotiation. No one who earns his money hard will part with it easily. So you must hard earn your money. Hence do not be surprised or disheartened that you are being hard negotiated. But they will return favour by giving you consistent good references, becoming a flagship customer in your elite list of customer, heap praise about you with anyone they meet.

10. Customer acquisition is about two things, relationship and patience. We spoke about relationship at length. Now, patience. You call a customer asking for a demo slot. He asks you to call next week end. You call next weekend, he says call the next week again. You call and he is out of station for two more weeks. You call after two weeks, he gives you a demo slot two weeks from then.
The whole experience can be frustrating. But if you are confident that the customer needs a solution which you offer and it is in his priority list, then keep your patience intact. Your customer is chasing his business, which is always his top most priority.

11. If a particular behaviour of your customer confuses you, go talk to the procurement manager at your office. He will know exactly when he will behave the way your customer has behaved with you. In fact it makes a lot of sense to have your procurement head involved in preparing a sales pitch for all your key prospects. They will ask you such questions which you will otherwise face only at the customer’s place. Do a mock negotiation with your procurement head before you go for a final customer negotiation. You sure will benefit from it.

13. Look good always. Be well groomed at all times. If I want to buy anything that is significant in value to me, I will buy it from someone who looks responsible and capable. If someone is not responsible enough to look well groomed always, I will judge him as not responsible enough to give me something of good value to me. Will you judge him differently?

14. My boss once told me that customer’s get influenced a lot by the passion with which we sell . I have seen that happen myself. So have genuine passion and energy for what you sell. If the product or service you sell, does not make you passionate, change the product or change the company you work for towards a company you like more.
Someone told me this story. I am not sure if this is true. But I believe it anyway. Anil Ambani went for an important negotiation session. He was an obese man then. The customer asked him, if you cannot take care of your weight, how can you handle such a big deal? Anil Ambani promised to trim down in 3 months. He stuck to his deadline and picked up the order. That shows his passion for what he was selling.
Additional information. Anil Ambani runs in the Mumbai marathon’s every year.

Customer Acquisition is all about people skills. You don’t need an MBA in marketing. If you have it, it is an added advantage.

Happy “Relationship acquiring and nurturing”

I recently met someone who had attempted to start on his own, struggled for more than a year and was forced to withdraw amidst mounting debts, family responsibilities and harsh market conditions. I am sure there are many such, who must be feeling defeated, though I believe they are among a brave few. I tell you why…
A start up (what ever field it may be in) faces the following challenges (not in the least bit exhaustive).
1. Extremely low availability of cash, unless funded by an Angel investor who is a close relative, friend or an associate, who usually takes away lions share of equity, eroding the passion away from the entrepreneur.
2. Good partners who will walk the distance. Distance often means, indefinite duration of time with unpredictable and unimaginable challenges. The trick is, you start with partners believing they will go with you through the most difficult of times. Time decides the tensile strength here. If the strength isn’t good enough, all partners pay dearly.
3. Un-trusting customers. Your idea may be great. The proof of concept may be great and attractive. But customer wants stability of their vendor. As a start up, there is not much you can do to prove your stability sufficiently for him to place his cash on the table.
4. Difficulty in retaining good staff against MNCs who can afford big packages, AC work environment, Gym, regular outings etc.
5. Unpaying customers. When you are a start up, one of the main reasons a customer is interested in you is that you are willing to do the job at a throw away price. Many start ups I know have folded up due to poor collections. Often startups end up being treated like use and throw coffee cups by unprofessional customers.
While most of the above can and to some extent, should be addressed by the entrepreneurs by themselves, the first point (about cash) requires a wider infrastructural support. Availability of cash at disposal or not should not determine if someone can dream of a venture. As a beginner you are bound to make mistakes. If you want to learn from mistakes and go ahead, you need the monetary support to “go ahead” rather than bundle up after the learning.
I understand that in the US, venture funds, universities incubate startups for more than 18 months by taking minority stakes and even letting go the entrepreneur if the start up fails. The argument is, if one start up out of 6 grows to its potential, the investment in all the 6 startups can be recovered and more. Music to my ears.
Indian venture funds are interested in mid size companies which have stood the test of time and are looking to grow further. Even that market is crowded with many companies looking for takers.
Infrastructure to incubate startups is hardly available in India. A few top business schools do this with reasonable success. But the number of start ups craving for cash, far out number what is available.
While entrepreneurship is a word which creates a lot of awe, many capable men and women are discouraged to take this path for one more reasons.
The Security, Comfort, luxury and social respect of working as a senior staff in an MNC.
When your name is followed by a “VP – Marketing” or “CTO” at an MNC supported by a salary which can compete with your counterpart in US or Europe, quitting that to call yourself a Director of x company with no salary for unimaginable number of months (may be years) is a choice which makes a stupid out of you instantly, until you prove the world wrong at the end of it all.
But in spite of all this, there is a definite surge in the number of people taking this path.
It is only a decade since India has seen the power of entrepreneurship. It is just a matter of time before infrastructure support is sufficiently available for more people to try their entrepreneurship skills without having to worry about their kids school fees. When this happens, we will see another wave of prosperity in the country. Successful start ups of yester years have already started venture capitals of their own. They are bound to take a hard look at start ups soon.
If anyone thinks, India lacks entrepreneurial skills, take this. My milk man sells vegetables during the day, cleans cars in the evening and does gardening over weekends. This is enterprise purely driven by need.
My friend lives in an apartment in Bangalore. His gardener started as a watchman there. He has now formed a “company” which handles all domestic requirements (cleaning&washing, car cleaning, plumbing, electric work, gardening and so on..) of 4 such apartments in his colony.
We may well see these people growing into billionaires one day and sow the seeds for many more after them.

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1. Latest Achievements of Evolvus Solutions
2. Latest News of Evolvus Solutions
3. Banks, Financial Institutions,
4. Economics – Indian and International
5. Monetary Policy
6. Entrepreneurship
7. Anything coming from fertile imagination of Evolvus Bloggers