Friday, April 27, 2007

Notes from a first generation entrepreneur

The title of the post is grand, but all I am trying to do in this post is note down things that I learnt during the past two years as a part time entrepreneur (yes, it is possible to do so). And for those who are new to the on going circus that is my career, please read this first.

I entered the trucking business along with my brother in law, tentatively by buying a single truck with almost all our savings put together. I had taken time to prepare the business plan and had calculated my break even conservatively, still the fear was always there. In the initial days, I used to check up on how much we made each trip. Each rupee of profit gave a new high. There are people for whom the process of making money is an end in itself rather than spending the money. I am one of them, who enjoys the thrills of pitting wits with the market and trying to come out on top. The first year was good, so the nxt year I added one more truck to the fleet. Things were going smooth and steady until a dollop of good fortune came our way, with one of the major players falling out of the market. Some one had to fill the vacuum and due to a combination of timing, service levels and plain good luck we were able to step into that gap.

Till this point of time, we didn't have much to do other than deal with the drivers and a couple of clients, so part time enterpreneurship worked fine. But once this opportunity rose, I had to spend more time travelling. This started eating into my current job of potato selling. Hence I was faced with a choice, whether to quit the day job and plunge into business or not. Around the same time things started to get a little sour at the current work place too. I half heartedly tried for other jobs, but didn't get anywhere, probably because of my unconventional resume. So that sort of made the decision for me. I am now a full fledged transport fleet operator.

Things I have learnt so far about being an entrepreneur :

1. Think why you want to do it. If you want to start a business just because you can't get along with your boss, don't.

2. Prepare a business plan. Keep your expenses high and your revenues low in your plan. If you still think it is feasible, do check with others to see what you have missed.

3. If nobody is doing a business, then there must be a good reason. Find out why others aren't thinking like you.

4. Tap your email lists of college friends and ex colleagues for funds. It works. Don't feel shy about it. You aren't asking for a personal loan, you are offering them a business proposition. Make it clear upfront what are the returns that you are promising.

5. Keep a close watch on the way the business is doing in the initial days. You will be your own accountant, auditor, clerk and peon. Focus on the cash flow, check whether you are making operating profit. I have seen businesses fold because they didn't find out that they were spending more than what they were earning.

6. Read a lot. Not the self help books, but those about businessmen who succeeded. If you are in India, do not miss to read Business Maharajas and Business Legends by Gita Piramal. Other books I would suggest are Made in America - Sam Walton, Made in Japan - Akio Morita, Losing my Virginity - Richard Branson (despite the title, it is a good business book). Recently there were two good interviews of Mukesh Ambani and Sunil Mittal (Free registration reqd). Look out for such articles. CK Ranganathan of Cavikare and Mahesh Murthy too have been my role models.

7. Dream big, but make sure that there is some arrangement for running your day to day life. If your dad has left you a fortune, good for you. Another option is to have one spouse working full time while the other is chasing his/her dreams. All my risk taking is possible only because of the solid support of my wife, who takes more than her share of the family burden.

8. Have a mentor, preferably a older person who has been in the business. Check notes with him, don't feel shy to ask for help. You need lots of them.

9. Pay your staff well. In transportation, the success or failure is in the hands of the driver. I make sure that we pay them more than the market rate, and they pay it back by working doubly harder. All businesses boil down to people, so treat them well.

Madman has written about this better than me, do read it. Other bloggers who have switched over as entrepreneurs I know are Badri Seshadri (Publising), Kasi Arumugam (Tamil blogger, home appliances), Bala (Stock Market Trader), Prakash (Industrial Information Systems) . I am not much aware of the web 2.0 guys, so that is my list.

This post is more for myself than others. If it did help you in some small way, good for you.

14 comments:

ada-paavi!!!! said...

saar another few point

1) Cant stand the idea of working for someone else, getting a monthly paycheck, waiting for a raise, sucking up to boss for another round of promotions. in essence detest the idea of working for some one else.

2) have an appetite for risk and failure, enjoy digging urself into a hole, and then the challenge of climbing out of it. i wud say thepossibilty of this in a 9-5 job is lower. here the costs r higher.

ada-paavi!!!! said...

also, its surprising ur the first generation of entrepreneurs in ur family

icarus prakash said...

Chenthil : good Luck. Welcome to the club.

I would recommend 'India Unbound' by Gurcharan Das to the list of books you've mentioned.

K.Shyam said...

Chenthil;
I don't know how much this piece of info maybe useful for you, but now-a-days, truckers in india use some kind of trackers to make sure that their trucks do not run into problems en-route.
I think they are of the GPS kind

Bala said...

Chenthil,

Vaanga vaanga. welcome to the club ;-)


==
i can add a few pieces of "wisdom"

1)Dont put personal expenses in the company account. (even if you are a one man firm). its a bad bad habit.

2)Dont get complacent. Small time entrepreneurs often dont have the financial or motivational depth to afford mistakes. So until you hit big (or medium) time, be paranoid.

3) If you are from a middle class background, it would be better if you dont speak to your family and relatives about what you are doing. In most cases either they dont understand or pretend they dont.

4) Do not employ relatives or friends (unless you dont have any other choice). They are not worth the trouble they bring.

Nilu said...

I gather that English is not a requirement.

மா சிவகுமார் said...

Senthil,

Nice write up. I wish I had some one to give me these advices when I started in 2001. Learnt everything the hardway, by burning my fingers :-)

Your tamil blog is also nice. One request: If you can write your business articles in tamil also, it will help many others.

anbudan,

Ma Sivakumar

Chenthil said...

Vatsan, my immediate family hasn't been into business, but there are a lot of people from my community who are entrepreneurs.

Prakash, thanks. Will read that book.

Shyam, GPS has been in India for quite some time now. Reliance has introduced it for truckers, through their company Reliance Telematics. I have been toying with that idea for sometime now.

Bala, Points 1 and 3 are very true. Forget relatives, explaining to my dad that I wanted to be in Lorry business when all my contemporaries were coding in America was difficult.

Nilu, it is not.

Ma Si, I wanted to include your name, but didn't know what business you were in from reading your blog. Will try to post in Tamil about business subjects more often.

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Karthekeyan said...

Congratulations and good luck with your new endeavor.

apu said...

Very nicely written piece with down-to-earth advice. As someone who is considering entrepreneurship, it was very useful, thank you!

Yuva said...

iam currently a quest to identify-- what to chase and how to chase?..

this sure did gave some insight...

thanks... /Yuva

Kasi Arumugam said...

The points are nicely put, Chenthil. There are some projects (like ours) that takes a long time before the first paisa is earned. It takes more grit to withstand during the 'development' time! I fully agree with your suggestion of not telling relatives about what you do, but think may not be practicable. Appreciations to you for choosing truck business over 'coding':-)

Shalini Gowrisankar said...

Im currently a student of engineering but I always wanted to be an entrepreneur... You have a very useful article here thanks.. Thx for giving the list of books too.. A book " Men of Steel" authored by vir sanghvi is also a good read ...