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TWO YEARS INTO ENTREPRENEURSHIP MORE BETTER THAN WORSE.

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Presentation on theme: "TWO YEARS INTO ENTREPRENEURSHIP MORE BETTER THAN WORSE."— Presentation transcript:

1 TWO YEARS INTO ENTREPRENEURSHIP MORE BETTER THAN WORSE

2 AGENDA WHICH BUSINESS? FUNDING FINANCIAL PLANNING WATCH YOUR BACK

3 My story in a nutshell 2000: Completed my MBA : Worked with a venture capital firm 2004: Did initial research for venture. Commissioned market research study. Sep 2004: Incorporated company. Started recruiting the core team. Sep 2005: Launched services. Feb 2006: Funding by ZICPL. Present status: Presence across Mumbai. Over 200 customers. 26 staff.

4 About Calorie Care Customized, health meals Calorie-counted. Delivered to home/office. For fitness-conscious, upper income customers. India’s largest collection of calorie-counted recipes. Dedicated modern Health Kitchen.

5 What business? Lessons I learnt from my venture capital experience –Avoid crowded sectors. –Be the early bird. Wait for the market to develop. –Start small, but choose a business model that is scalable. –Expect surprises, create some financial cushion. –Stop the cash burn quickly. Then be patient. Why Calorie Care? –Fitness is a sunrise industry. Great potential. –First mover advantage in our niche. –Scalable model. Opportunities to diversify. –Relatively less capital intensive.

6 Funding The pros and cons of venture funding versus bank funding –Loans are always cheaper in the long run –Bank loans require collateral or guarantors. Timing and amount of funding –Rule 1: Delay venture funding to get maximum value. Valuation jumps at each step: Commercial launch Achieve monthly profit Establish valuable intellectual property (brand, software etc.) –Rule 2: Always keep a financial cushion for a few months at least. Rule 2 is more important than rule 1. Don’t expect others to take more risk than you.

7 Funding Venture funding options: Angel investors (rich individuals, friends, family) Funding decisions are based on relationship with or reputation of founder. Venture investors (ZICPL, govt. bodies, financial institutions) Funding decisions are based on market potential, team background Growth investors (financial institutions) Funding decisions are based primarily on financial performance.

8 Financial planning Initial investment –Takes a few months to get a reasonably accurate grasp of this. Leave % cushion at least. Plan for initial losses. Create a projected profit and loss account for at least two years –Know your costs. Leave assumptions to the minimum. Know the worst case. –Keep overheads low. –Keep revising your projections. Know where you’re headed. Cushion for unexpected costs –BMC liaison costs –Utility expenses

9 Watch your back Strong financial control and MIS. For any purchase that exceeds 5% of monthly sales, you must negotiate yourself, no matter what. Keep multiple suppliers. Don’t get lazy and rely on one. Be inquisitive with your staff. Its good to have the reputation of being a miser. “Your employees will do not what you expect but what you inspect.”

10 Network When you’re not working, you should be networking.


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