Startups & New Ventures
India’s startup ecosystem continues to develop at a rapid pace. The Government is playing its part to stimulate the country’s startup ecosystem, by rolling out ambitious projects, notable examples being Startup India, Make in India, Digital India and Skill India. The Economic Survey of India (2015-16) signifies the existence of around 19,400 technology-enabled startups in the country and that’s quite a ‘number’. Add to the list, new ventures (outside the technical definition of ‘startup’) that have been launched in the last two to three years and you will realize how ‘enterprising’ our economy has become.
The information and social media have been publishing a number of articles, blogs and reports, indicating the huge rate of ‘crash and burn’ for startups and new ventures. It will be worthwhile to know how the approach of the ‘successful’ lot has been different, with ventures not only surviving but also growing over the period. While each success story has a number of tips for the new entrants in the business world, the two critical aspects that, we believe, differentiate the approach of potentially successful ventures are ‘Meticulous and thorough planning’ and ‘Effective management of the plan’.
You might have a great idea. But, unless an articulated blueprint, in the form of a Plan, backs that idea, success would be based on a stroke of luck. To start with, the idea needs to be explored through market research and the financial viability of the idea, from a long-term feasibility perspective, needs to be evaluated. A viable idea, then, needs to be supported by a meticulous and thorough plan of action. Think about the ‘purpose’ of your venture; is it ‘money’ or is it a ‘solution that fills an existing gap?’ What is your 5/ 10 years’ mission (what are you trying to achieve)? What are the milestones that need to be completed in the next 12 months, which will help in achieving the mission? Visualize your organization structure and assign ownership for each milestone. Your ‘Plan’ would include all these, and more. If you are contemplating on raising funds, you also need to strong ‘pitch’ to help you put your story across to the potential investors. A detailed assessment of financial feasibility and a comprehensive plan for your venture would signify your sincerity and conviction towards your idea and complement your quest for raising funds.
A plan would give results, only if managed well. Many a report on business failures cites poor management as a primary reason for failure. New business owners frequently lack relevant business and management expertise in areas such as finance, purchasing, selling, production, and hiring and managing employees. Apart from articulating the plan of activities, they need to recognize what they don’t do well, and seek help, to bridge the gaps. They must also be educated and alert to fraud and put into place measures to avoid it. Care must be taken to regularly study, organize, plan and control all activities in the venture’s operations.
At LEAD, we have designed solutions to help you in your entrepreneurial journey. Connect with us and we shall be happy to schedule a discussion.
Manufacturing
Manufacturing has emerged as one of the high growth sectors in India, with increasing focus of industrial bodies, associations and policy makers. Besides the ‘Make in India’ program, to place India on the world map as a manufacturing hub, the Government has set ambitious targets of increasing the contribution of manufacturing output to the Gross Domestic Product (GDP). The increasing focus on the sector indicates immense opportunities in the near and long-term period.
Almost 90% of the total industrial units in the country fall under the Small and Medium Enterprises (SME) category. A large proportion of these units are family run ventures, with the baton being passed on from earlier generations. Apart from guidance from the Government and industrial bodies, SMEs in the manufacturing sector, especially those run by the new generation entrepreneurs, are looking out for professional assistance towards helping them manage their ventures efficiently. They realize the value, in terms of time, control and brand image, that could be garnered through a structured approach to managing the ventures.
There are a number of ‘enablers’ that could help SMEs, in their pursuit for efficiency. Documented policies and procedures, efficient organization structure and articulated job descriptions are some such solutions. Businesses could leverage on ERP solutions, for better controls and improved decision-making. Technology solutions could be evaluated, towards automating certain aspects of operations, with a view to reduce dependency on ‘people’, on the one hand and for effective utilization of ‘time’, on the other. A robust ‘Dashboard’ can be developed and utilized for quick information-enabled decision-making and for better control over the business.
We have a number of solutions to cater to your needs, irrespective of the stage of your business. If you would like to know how LEAD could help you, Connect with us and we shall be happy to schedule a discussion.Healthcare
The Indian Healthcare sector is growing at a brisk pace, owing to its strengthening coverage and services as well as increasing expenditure by public as well private players. The country’s competitive advantage lies in its large pool of well-trained medical professionals and cost competitiveness, as compared to other countries. The overall Indian Healthcare market is worth around US$ 100 billion and is expected to grow at a Compound Annual Growth Rate (CAGR) of over twenty percent, over the next couple of years. Sixty five percent of the overall market is constituted of healthcare delivery, which includes hospitals, nursing homes and diagnostic centers, and pharmaceuticals.
The increasing demand, backed by increasing consciousness of the Indian medical service consumers, towards their healthcare upkeep, has ushered an era of super-specialty centers swarming up at Tier II and III cities as well. Not only do the centers attract good talent, they invest heavily in infrastructure, to provide a comfortable environment and experience to their patients. The pain of competition is being felt the most by the new generation, taking over the family owned and traditional establishments and looking to move to the next level. They are struggling to enhance, if not match, their patients’ experience.
Some of the common attributes that have been limiting the growth of smaller players in the sector include:
- Inability to effectively utilize public relations and marketing strategies;
- ‘Least cost’ sourcing strategy, instead of ‘value for money’;
- Ineffective organization structure and low manpower productivity;
- Micro management, instead of effective delegation;
- Lack of policies, procedures and operational guidelines;
- Poor records management and absence of analytics;
- Lack of focus on automation to improve patient experience, engagement and satisfaction.
The success of smaller centers would depend on the speed with which they evolve, in this competitive arena. An effective organization structure, lucidly articulated responsibilities and clearly defined policy framework are a must. Besides, documented processes and delegation of authority would ensure smooth and effective operations. In the Healthcare space, documented policies and procedures are imperative, especially if the organization is aiming for accreditation by National Accreditation Board for Hospitals and Healthcare Providers (NABH).
Technology is one of the biggest drivers in today’s evolving business landscape. The market hosts a number of unique solutions, to cater to the various needs of the healthcare service providers. It is essential for the institutions to capitalize on these technology solutions to reduce errors and costs, on the one hand and for effective utilization of ‘time’ and ‘resources’, on the other.
If you would like to know how LEAD could help you overcome some of your challenges, Connect with us and we shall be happy to schedule a discussion.Media & Entertainment
India has quite a lot to boast, when it comes to the Media & Entertainment sector. It has one of the largest broadcasting industries in the world and houses a fast growing animation industry. With a positive push towards digitization, the Indian film industry has also witnessed exceptional growth in recent times. Rising incomes and evolving lifestyles continue to boost the demand for the sector.
In the ‘Films’ segment, India produces the largest number of films annually, constitutes the highest number of tickets sold annually and has the second highest screen count in the world. Increasing share of Hollywood content in the Indian box office and 3D cinema is driving the growth of digital screens in the country. Realizing the immense potential, large brands as well as smaller cinema houses are expanding their reach across the Tier II and III locations, either with a new setup or by acquiring an existing one.
Intensifying competition, especially from larger brands and the attitudinal shift of viewers towards quality has brought the smaller cinema houses under tremendous pressure to enhance customer experience, when it comes to their existing setups. On the other hand, absence of operational guidelines and skilled teams is not only slowing down their growth, but also forcing leadership to spend significant time in handling operations. The issue in hand is their mindset – ‘micro-manage’ and ‘do not spend’.
Given the immense potential, smaller players in the industry need to adapt quickly, to the changing dynamics of the sector. They need to direct their efforts towards strategy and governance, not only to grow, but to survive as well. Operational guidelines, compliance checklists and a trained core team to disseminate operational know-how at the new centers are fundamental needs of the hour. Periodic assessment and benchmarking of customer experience is vital as well. The mindset needs to change quickly.
We have solutions to fulfill your fundamental needs and more. Connect with us and we shall be happy to schedule a discussion.Communication Enablers
For most professional services Firms, the term ‘Telecommunications’, in the context of sector, implies telecom service providers. We believe it is important to include enablers like equipment manufacturers, value added service providers and application developers (to name a few) in the fraternity, to have a deeper understanding about the performance as well as potential of the sector.
In terms of the Indian market, the communication fraternity has been witnessing ‘innovation’ as well as ‘disruption’. Service providers are facing immense pressure to cope up with the customers’ evolving expectations on the one hand and costs to meet those expectations, on the other. Luring the customers through ‘freebies’ has become a norm and convenience has been ever increasing. “The customer is the King” is a phrase that rightly fits in the sector.
With increasing competition and a number of options available with the customer, innovative products, dynamic marketing and quality of service are key elements that should form part of the strategy for all players in the sector. What is the impact of our marketing activities? Does our product line meet the customers’ expectations? Are we solving our customers’ issues promptly and adequately? Where do we stand, compared to our competes in this competitive market? These are questions that leaderships deliberate, often, especially when it comes to telecom service providers. The need, for them, is operational excellence, complemented with benchmarks against market sentiments. Documentation of policies and procedures is not sufficient, they need to be reviewed and amended frequently, to adapt to the evolving business landscape. Getting first hand impression of customers’ perception is imperative, to get answers to some of the questions. Refer our ‘Services’ section for an interesting solution (Customer Life Cycle Assessment) to gauge customers’ perception.
The pressure is not only on telecom service providers, but also on their allies (enablers). Value Added Service providers and Application Developers need to be on their toes too, given the immense potential of the sector. With an increasing smart phone market, the speed of producing quality products is imperative and so is timeliness of servicing their customers. In order to achieve all this, leadership needs to focus on strategy, rather than operations. But, that can happen only when the operational aspects of the business are clearly defined and adopted. Documented policies and procedures, clearly defined organization structure, delegation of authority and automation of controls are some of the enablers that leaderships need to invest in, to be able to extract time from operations and focus on strategic aspects, instead.
We have extensive experience in the telecommunications sector, having serviced a number of businesses in India and outside. If you would like to know how LEAD could help you, connect with us and we shall be happy to schedule a discussion.
Real Estate
Indian real estate is a large, growing market. The demand for residential properties has surged due to increased urbanization and rising household income. Besides, our growing economy is driving the demand for commercial and retail space too. Relaxation in Foreign Direct Investment (FDI) norms and the plan to build Smart Cities signifies Government’s focus as well as the potential for the sector. Given the negative traits of some of the players and to protect the interest of public, Government is also tightening the regulatory grip around the sector.
What differentiates large players in the sector (a handful in India) is not the quantum of their ‘land bank’, but their ‘vision’ and ‘strategy’. Yet, when it comes to operations, most of the large players, as well, lack effectiveness. They may have defined policies, but not documented procedures. Job responsibilities and backups are unheard of and customer engagement is mostly centered on ‘follow up for payments’. Besides, customer engagements frequently turn to debates, given the lack of knowledge about tax regulations and responsibilities of the different parties involved in development projects. Imagine the brand perception, should the Customer Relationship Management (CRM) tools be utilized to keep customers informed about the progress of their project(s).
Smaller developers of residential projects are high in ‘ambition’, but ignorant about the ‘structures’ needed to achieve their goals. Not only do they need to enhance their marketing strategies, they need to ‘up’ the skills of their sales force as well, that too, considerably. Like most small to medium sized organizations, real estate developers ignore the adoption of policies and procedures, unless they suffer from project delays and mounting costs. When it comes to development of real estate, documented policies and procedures are imperative, considering the dependence on contractual staff, high rate of employee turnover and a number of projects being serviced at the same time. Most players also lack adequacy, in terms of planning and monitoring project milestones and fund flows, leading to project delays. With tightening government regulations, such delays would result in incurrence of costs in the form of interest and penalties, in the near future.
On the ‘commercial’ real estate front, the construct of the lease contracts with customers is a key area that requires focus and control. Smaller organizations, having taken over the reins from the earlier generations, are struggling to recover costs, owing to non-standardized agreements and ineffective contractual terms pertaining to maintenance of ‘common area’. This has led such developers to absorb the additional outlays, due to the increasing trend of costs towards maintenance of the common area. Developers continue with the traditional approach, though the current generation owners have an inclination to change. While being ambitious, what holds most of the small players back is their sluggish decision making capability, when it comes to investing in ‘structures’ for growth.
No wonder the sector has immense potential and the demand is anticipated to grow considerably, in the near-to-long term (i.e. within a decade). It is, indeed, the right time for players in the real estate sector to ‘gear-up’, to make the most of the huge demand forecasted for the next couple of years. They could benefit immensely, by taking professional help, to set their house in order.
If you would like to know how LEAD could help you gear up for times to come, connect with us and we shall be happy to schedule a discussion.
Trading of goods & services
The Indian retail industry has experienced high growth over the last decade with a noticeable shift towards organized retailing formats. However, much of it is still in the unorganized sector, with less than four percent of the segment (Indian Retail) being organized. Trading of goods and services is the most common form of business, in the MSME space. A unique feature of this form of business is that most of them are family owned, the baton of control having been passed through generations.
Over the last few months, even before LEAD was conceptualized, we have had numerous discussions with the businessmen (traders), of different ages and backgrounds and across Tier II and III towns and cities. Amongst other aspects, we have discussed the nature of their challenges, at the time of taking control as well as their present ones. Having spent over two decades interacting with and helping large corporates, deliberations with the smaller ones have been intriguing, indeed. There’s increasing ‘ambition’, but crippled by traditional thought process; there are ideas, but lack of acceptance due to differing viewpoints; there’s need for professional help, but the need is concealed because of misguided perception of ‘cost’, instead of ‘investment’. The right phrase that applies here is ‘Most of the business owners are stuck’.
‘There is light at the end of the tunnel.’ The newer generation of business owners is receptive to the idea of ‘change’. They understand the need to break traditional barriers, to ‘un-limit’ their potential for growth (and that of their ventures). They are exploring means to ‘evolve’ and ‘govern’ their ventures in ways that would help them balance their personal and professional lives, keeping the growth trajectory intact. They are open to ideas of delegating authority, embracing automation and institutionalizing appropriate checks and balances in their operations. But, they need guidance!
There is immense potential for the trade segment to grow rapidly, by focusing on ‘composing’ their businesses. Embracing technology, delegating authority, setting up processes and systems (especially for multi-location presence) and digital marketing (instead of traditional advertising) would be beneficial. Use of analytics could help in merchandise planning and management as well as control over inventory costs and supplies. Given the rising prominence of E-commerce, some of the businesses could explore the prospects of expanding their reach through the digital retail channels. In short, there are a host of strategies and solutions that can be leveraged on. However, one needs to explore and evaluate the options with an open mind.
We can help you explore options. Connect with us and we shall be happy to schedule a discussion.
Franchising
Franchising in India has witnessed progression from a debatable format to an acceptable approach for business growth, with major global companies emerging to grow by the route. Retail, health and wellness, food and beverages, education and customer service are some of the key industries that possess high potential for franchise opportunities, the concept having gained satisfactory recognition amongst entrepreneurs across the country. Market reports forecast the industry’s contribution at approximately 4%, to the country’s gross domestic product, by the next year. Increasing consumption, growing preference for branded products, global exposure and use of international brands are some of the factors driving the demand for franchising.
Buying a franchise can be an easy move for a prospective entrepreneur, who does not want to create a new business from scratch. However, it’s a myth that franchises are less prone to failure than other small businesses. In reality, they generally go out of business at the same rate as any other venture. Some of the common reasons for failures include reliance on vague statistics and common wisdom, lack of detailed market research, ineffective financial evaluation and ambiguous contractual terms.
Ignorance, in franchising, is not bliss—it’s a potential nightmare. The decision to acquire a license needs to be backed by detailed market research and thorough financial evaluation, considering the different scenarios (worst-case, probable-case and best-case). One needs to look beyond the minimum requirement for buying a franchise, usually listed as the franchise fee and the cost of equipment. Getting a franchise up and running might involve substantial marketing costs and the need to survive on break-even books, or a period of net losses, before the business catches on. One needs to assess the quantum of capital required to cover both business expenses and personal living expenses, for the time being invested in.
Even with such a large proportion of business failures around, small to medium sized business owners continue to cut costs, when it comes to utilizing professional help for assessing market feasibility or carrying out a thorough financial evaluation. They base their decision, for hiring ‘professional services’, on the ‘lowest quote’, rather than considering the credentials and past performance of the Firms. As a result, they end up getting reports that are not comprehensive enough to back their decision, resulting in ‘bad’ judgments and imminent failures. They could benefit from professionals with adequate experience, to guide them on the financial (i.e. sales projections, upfront investment, working capital needs, impact of debt, etc.) and other aspects (i.e. systems and procedures, operations manual and control tools, etc.). Besides, given the absence of disclosure norms in India, it would be worthwhile to engage a lawyer to oversee the terms being agreed to, with the franchisor.
If you would like to know how LEAD could help address some of your needs, connect with us and we shall be happy to schedule a discussion.