|
 There's
a hush in the hall every time I come to that slide. It's approximately
halfway through the presentation I'm called to make most often-"Where
to find the money to start a business."
By then I've tried to build up a case that
it doesn't necessarily take a lot of cash to set out on your own-something
between Rs 15-50 lakh usually can get you from start up till break
even in most cases.
I've also gone over some rules-of-desi-thumb:
don't pay yourself more than Rs 35,000 a month till you break even:
the lesser the better. Rent or lease equipment-don't buy it till
you can pay for it through your earnings.
Perhaps by the sixth month it should be costing
you about Rs 3 or 4 lakh to run your firm-this is when you should
start making money, if you haven't already. By the tenth month,
it may be costing Rs 5 lakh a month to run your company-but you
should already be earning that much regularly, so you'll be at what
Excel-heads call break even. (Considering that the nearby kirana
shop makes that much, if not more, it's not an unfair target. Put
in dollars, $10,000 a month seems even more approachable-and a huge
bargain compared to what it'd take to break even in the US.)
Now is the time to stabilise-and think of going
to VCs to find more capital. So the only start up funding you need
is to fund the deficit between your expenses and income. That typically
should be around the 15-odd lakh or so one spoke of.
The questions then fly fast and furious. Where
do we even find that initial capital, I'm asked?
The next slide causes the sharp intake of breath.
For I ask the audience if they think their families have that much
either in the value of their mortgage-able homes or-blasphemy!-in
the jewellery lying gathering air-conditioned dust in their bank
lockers.
Our culture and all that aside, I think the
second biggest waste of potential in India is the amount we sink,
mindlessly, into jewellery and other expenses related to weddings.
(The biggest waste for me is the way we discourage women from working
and starting businesses-but I'll keep that for another column.)
Someone once tried to reason with me that jewellery
was a good investment-as it didn't go down in value over time. My
point of view was simple-if you don't ever sell it (and I haven't
heard of too many who ever do), then it isn't an investment-it's
a dead loss.
The expenses on weddings are even more insane-it's
the insecure and foolish who need to flaunt their position in society
when they can't afford it.
I often think we could solve half our problems
of poverty, low GDP, and slow growth by simply getting this wealth
out of our lockers and putting it into circulation in the economy.
Use it to fund your own business-or at least, melt and sell the
darn thing to live a better life. How about a punitive tax on all
purchases, and a tax benefit on all sales of jewellery, Mr. Finance
Minister?
Before somebody called Zaveri puts out a contract
on me, I should add jewellery is good business, for the jewellers
that is, and they're doing a fine job by putting India on the world
map. What's needs changing is our mindsets as consumers. And I don't
know if it's related to the next column I hope to write, but the
biggest mindset change needs to be among our womenfolk.
How could I convince you, ma'am, that the betterment
of your family lies not in putting spare rupees into gold and silver,
but into education, opportunities and, sometimes, even businesses?
Yes, sometimes you can lose that money. But isn't it better to pay
for that experience than leave it lying dead in a box anyway?
The successful businessmen and women you could
produce will create a much brighter glow around your family than
any 24-carat necklace can. Oh, and PS: no matter what they say,
fake jewellery looks just like the real stuff-and won't end up bankrupting
you.
Mahesh Murthy, an angel investor, heads
Passionfund. He earlier ran Channel V and, before that, helped launch
Yahoo! and Amazon at a Valley-based interactive marketing firm.
Reach him at Mahesh@passionfund.com.
|
