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SME – THE GREAT NEWS
Management ability: They usually have strong management abilities
Ecosystem Ready: They have a committed ecosystem
Network: Usually, they have access to bigwigs – industrialists, politicians,
celebrities etc.
Individual stamp: They give a promoter flexibility to develop the business as per
his nature
Self-sufficient: They have an SBU that is generating profit and are self-sufficient
Regulatory comfort: They are able to work their way through several regulatory
hurdles
SME - AND STILL MORE GREAT NEWS
The common man is coming centre stage in the field of business too. Here is a profile
of companies that became market leaders in the last 10 years. SMEs, with their
robust system, are well-placed to emerge as business leaders.
SectorMarket Leader Sector
Market Leader Sector
Market Leader
Media UTVConsumer Electronics Micromax Books Flipkart
Logistics AllCargo Conglomerate Adani Directory JustDial
Retail Future Group Finance Indiabulls Education ISB
Internet Google Food Dosa Plaza Exchange NSE
SME: SPECIFIC LIMITATIONS
Common man of the business world: An SME is a common man in the business
world & thus is short-changed regularly.
Time Management: The promoters don’t have much time in hand
Perception issues: They have network with people who matter but they already
have formed an image of the SME.
Growth fears: will I lose existing business if I aim high
Lack of basic exposure to big businesses: Often the SMEs are very capable of
doing everything themselves. However, they may not be aware of these
opportunities.
SME – GROWTH BOTTLENECKS
Generating awareness & exposure to opportunities: How do I go from being a
small retailer to a Future Group, Flipkart or even Adani Group?
Mobilizing a high-end network : They need to create a team that will help them get
the big jump in size
Mobilizing those working below : An emerging problem is not only finding the right
person, but also motivating them right
ECONOMIC DEVELOPMENT STRATEGY
Part A: Understanding the opportunity & working
towards this ambition
Part B: Today, SMEs or industrialists or start-ups
– everyone is facing deep economic
crisis/danger. We need to understand this.
SHOWCASE OF OPPORTUNITIES
Before 1990s
Finance was tough to obtain from outside circle
Bank loan was the method of getting finance
To be big, you needed big budgets
TV, paper advertising
Prime location shop
Access was limited – you wanted to put in a word with a minister/industrialist, you had to work through several gatekeepers
After 1990s
Finance is available from – banks, VCs, foreign investors
Finance can now be obtained by selling equity
You can destroy the maximum power with minimum means
Cheaply started websites have crossed become market leaders
Social media can used by small & big businesses equally
Access Unlimited – one-to-one contact, e-mails, easy access events have brought opportunities to the doorstep
THREATS TO SMES: MAINTENANCE & GROWTH
Marketing: Even though easy means are available to SMEs, these means are in fact
being used aggressively big companies. This is taking away existing turf/market share
from SMEs
Regulatory: A select few industrialists decide industry policies because of their access.
Small businesses are not participating in policies.
Start-ups: With youngsters being more comfortable with technology, ideas & developing
their own ecosystems, they too are capturing market space quickly.
Financing: While SMEs are not used to the methods of investing offered by VCs,
billionaires, it is going to start-ups & the select few who get easy patronage from them.
Manpower: With high job mobility of man power, the SMEs are competing hard to find
the basic raw material that makes businesses successful
Technology upgrade: Technology & hi-tech can help us take care of several issues but
that too is not being easily adapted.
THE LARGER PICTURE: WHY JUST THE SME THE WHOLE WORLD IS IN DANGER
• The whole world is in danger. The systems that have served us well are no more working for us.
• There are no model countries left. Also, there is no specific reason to believe that economy will take off sometime soon.
• Also, it is becoming increasingly clear that growth for a person/company is often at the cost of other people/companies growth.
• Everyone is looking for economic restructuring –industrialists, small businessmen, traders, contract workers, vendors, white collared employees, blue collared employees, unemployed & the unemployable people.
Is it possible to narrate everyone’s problems? Will the spotlight on real issues help for a solution to emerge? Enter, the business manifesto.
BUSINESS MANIFESTO
Our team, led by me, studied various problems of people from various strata of
society for a period of 6 months
Consultants, businessmen, investors, employees, labourers, industrialists,
economists, CEOs were widely included in discussion on economic problems &
economic development
We reproduced the findings in the form of a business manifesto – whose aim is to
highlight everyone’s problems & suggest a road-map for everyone.
We considered current human, company behaviour to provide a road-map
SOME KEY INSIGHTS INCORPORATED
Economic development for country is not equal to economic development for all
Profitability leads to firing & reducing of salaries. Thus, employees are not willing to work
sincerely towards reviving company fortunes
All learning is for destructive purposes – We will use acquisition of power to dominate others.
This in-built fear stops us from empowering others. And others empowering us.
Financing options have opened up – but we all can see investments not getting closed. This is
because we know that promoters don’t drive the business alone anymore – white-collared &
blue-collared employees & freelancers are controlling business these days regularly and not
giving them enough motivation will make investors jittery intuitively
Thus, the manifesto has tried to address business/economic problems of a wide section of
society & tries to bring them together
Change is only brought about by use of force, thus, while the message of the manifesto is
noble, the overall execution method is not about appealing to goodness or generosity but is
calibrated to a ruthless, selfish system.
RE-VISIONING ENTREPRENEURSHIP
Re-Visioning Entrepreneurship: Through technology, a small saree-makerin Varanasi can service rich NRIs in Mauritius, Malaysia, Singapore andmore. The format of growth will be to provide advisory, mentoring and anopportunity to make a billion dollars for the saree-maker. The industrialist-investor can mint this opportunity by being an investor and later developa fully-integrated Indian fashion label for the markets acquired by thesaree-maker.However, such potential though identified is not being brought to fruitiondue to lack of opportunity understanding amongst the talented people,lack of initiative from society at large and trust deficit caused by increaseddisparity & marginalization in society.
WHAT IBF INTENDS TO COVER
Inclusiveness for the following is covered in the format
Entrepreneurs
Industrialists
Intermediaries
NGOs
Educated employees
Small Investors
Mentors
Unorganized help-seekers
Uneducated employees
Influencers
Service Providers
Vendors
Contract manpower
Micro-entrepreneurs
Icon Business Forum
Minority Community
INDIA BUSINESS PROBLEMS:
Industrial houses
Promoters: Growth has come to a stand still for promoters. Inadequate valuation of business.
Employees: Inadequate combination of – salary, security and growth opportunities.
Contract workers: Inadequate combination of income level and recognition and bonded-labour trap.
Vendors: Bigger and more resourceful the firm, poorer the terms and conditions. Too much work on credit basis.
Mid-size/Upcoming firms:
Promoter – issues on raising investment at good valuations & mentoring limited to middle-level growth
Employees - Work load issues, salary cuts if firm suffers, inadequate upside if firm super performs
Vendors – Liquidity crisis of firm makes credit-giving vendors very vulnerable
Contract labourers – inadequate recognition, certification of work apart from low level fees.
Shops/Very small firms
Businessman sidelined by increasing corporatization in all sphere of lives
Businessman not getting mentoring/opportunities to adapt new technologies
Workers/employees have little access to upside in business if business is succeeding
WHAT ARE THE BROAD PROBLEMS FACED BY THOSE
INVOLVED IN ENTREPRENEURIAL WORK?
Big investors/industrialists in India don’t get small size deals with right infrastructure and independent support. IBF will help them by aggregating these deals and providing these enterprises a strong network infrastructure
Entrepreneurs – Become investible and get a shareholding structure that gives them enough room to have management control of the company for a substantial period.
Employees – stock options for key employees is still to pick up. Sizeable increments are tough to get.
Educated/experienced unemployed: No guaranteed commitment to them in economic growth.
Blue-collared employees – they don’t get sufficient minimum salary and no pie in case of success
Micro-entrepreneurs – with too much emphasis on mega-scale enterprises, they don’t get investment easily
Contract employees – their terms are poor, payments delayed and inadequate recognition and job immobility
Small investors – they should be accommodated in deals that are relatively safer
Vendors – delayed payments cycles have made it difficult for small vendors to sustain themselves
Minority Community – They are being left out of ownerships everywhere
CURRENT STAGE & ROAD-MAP
Current Scenario:•Industrialists work towards expanding global footprints by acquisitions.Industry leaders in India not able to become global stars with Indian set-ups (manufacturing units, vendors etc.).Indian entreprises continue to work out of ghettoized set-ups with no real efforts towards global/wider/corporate benchmarking.
Road-map suggested:•Take enterprises out of these ghettos (compared to their potential, they are ghettos e.g. Kalbadevi should be a Bandra-Kurla Complex type)Mobilize them by creating a road-map for everybody’s growthEncourage them to compete within a larger landscapeA well-connected, widely benchmarked business set-up will be harnessed by incumbent Indian industry leaders to become global stars.
MISSION FOR 2015
Mission100 Entrepreneurs Empowered:
Closing 100 angel financing deals of more between 5-20 crores each.
• These are deals where the business is scalable in the immediate future and
evolving into industrial houses.
• Overall, if we make a mission of closing 100 such deals, than the impact on the
industry will be huge and other people/institutions can replicate the formula on
the own. The target under this is to do deals where the first investment size is 5-
20 crores.
• The above formula seems executable for some of the entrepreneurs groomed by
me. However, modifications will be made as views are being obtained widely. The
above formula would get adapted for various sectors & stage of investment.
MISSION FOR 2015
Mission10000 Local Icons:
• A great number of businessmen can transform their business with a capital of Rs. 10 lakhs.
• These are firms that are a cut above backed by a substantial domain experience and likelihood that the business will definitely deliver value to investors. Thus, there should be a mission to invest between Rs. 5 lakhs – 5 crores. To be delivered through various possible forums:
• A large number of women, backward community entrepreneurs can get a kickstartthrough this.
• Mid-size investors can keenly develop an interest in this area and specialize as per personal tastes
• This can delivered after arriving at a fixed to-do list on part of entrepreneurs –grooming & ecosystem development that he is strongly advised to undertake to fulfill investor interests.
MISSION FOR 2015
Mission 1 lakh Entrepreneurs Encouraged:
To incentivize entrepreneurs across the rung to realize their potential, there
should be grant of Rs. 25,000- 2 lakhs given to 1 lakh entrepreneurs to develop
websites/proto-type & start pursuing business in a modern way.
These will be given across several geographies and after giving them a day-long
briefing on what could how they can scale-up their business if they succeed.
The intent and purpose is to create a wave of investment help for entrepreneurs
The quantum of grant-investment is low as the success ratio is likely to be 1/100
MISSION FOR 2015
Mission 1 crore Energized:
Several forums have been put up to help people working in the sphere of entrepreneurs to build communities. The same forum should be available to a wider set of people – entry barriers need to be demolished to actively pursue inclusiveness.
Thus, there should be a ‘Vyapar Sabha” in every town some day. This Sabha will manage & organize entrepreneurs and will be their window to the world of bigger opportunities. We reckon that this can be done through:
Get some of the existing forums to partner
In every town & city, a basic unit gets developed – businessmen, advisors, diaspora that wants to give back, local sponsors
Sabhas should enjoy good inter-linkages so that resources can be shared.
Some of the luminaries in the city may want to visit villages & towns to go back to society if it is structured like this.
Also, there should be atleast 10-20 invitees who are paid to attend – as our understanding is that even free entry forums are not able to touch the lowest rungs.
MISSION MEDIA PRESENCE
Media use to be an agent of change, of lending a voice to upcoming work and people. Over the years, it has now completely been swept by unsustainably high level of commercialized space.
However, the potential power of the common man has also increased. Advertising and being well-known through internet & new media has made him potentially more powerful than ever before.
It is strongly encouraged that the participants & well-wishers of our mission, do the following to the extent possible:
Get as many small businesses & self-employed people on facebook & twitter
Develop content, blogs & articles on these upcoming businesses
Use internet, whatsapp & other tools to disseminate this content
Usage of ebay & other websites to sell products in same platform as big business to be encouraged
Urge Vyapar Sabhas to develop local & regional media & channels that can cater to their business interests.
EMPLOYMENT MISSION
Stigma or being jobless & underpaid has to go completely now. There is also a disbelief element amongst candidates when employers show great hunger for their talent. Employers who are crying for employees are forced to wear a mask of exclusivity. Providing jobs is as much employers need as an employee’s need.
Thus, there should be missions that can actively tackle unemployment through following means:
Employers/Interviews will do cold-calling on homes with job profiles in their hands. They will either interview those in the house who want to work. Alternatively, they will offer a small referral fee if someone in this house hold refers you to a candidate who finds a job.
This mission can be launched nation-wide and independently.
Visit to household is advantageous to employers also as this will also give them a realistic picture of the prospective candidate and serves as a strong security check.
VYAPAR SABHA’ CONCEPT
EVERY CITY, TOWN, VILLAGE EMPOWERED
We propose the idea of Vyapar Sabha for every village, town and city in
India. These are going to be units with an all-inclusive DNA. While Icon
Business Forum will attempt to be a template for these Sabhas, these
should be organized independently by people – local sponsors, local
businessmen, employees, blue-collared workers, educational
institutions etc.
Every town has a semi-empowered ecosystem: It has chartered
accountants, doctors, professors, students who access knowledge of
high worth. Every town has a local heroes who reside in cities but who
are willing to give back to their towns. Also, there are investors who are
looking at these towns to deliver them growth.
VYAPAR SABHA - CONTOURS
Compulsory free & all-inclusive entry format
Adequate measures to ensure participation from all communities
Those who are working on fringes – daily wage folks, should attend in adequate numbers. They should be sponsored an equivalent of a day’s wage to attend these sabhas.
Event costs should be met by local sponsors who should find the package attractive enough to actively participate.
Icon Business Forum will function more as a ideological partner. While some initial help will be provided to extent possible, any substantial support mechanism will thwart empowerment.
Icon Business Forum will attempt to list investors & mentors as per region so that the Vyapar Sabhas can just tune in to forum site & get leads. This can be undertaken by other companies & websites.
Websites/WhatsApp/Facebook will become likely medium of sharing resources across & within localities.
MOTIVATION IDEAS
….Thus, we feel that following can be given on immediate basis suggestions:
Provide non-monetary incentivize to win employee motivation & goodwill:
Give all permanent employees a listing in their website
List all contract/temp staff in the website if they have served for more than 3
months
Analyze the time commitment given to the firm & reduce by 10%.
To blue-collared employees, provide training that helps them enter mainstream.
Monetary incentives:
Allow for clauses to let employees pursue additional income, non-compete work
that demands no more than 20 hours a month
MOTIVATION IDEAS
The following can be undertaken linked to company’s future growth:
Company should give away wealth equivalent to 1% of its equity across all
employees who were part of the company in that year, should the company get
more than 7% growth in revenues.
Amongst the new hires, 20% should be amongst the unemployed category.
To avoid jobless growth, firms with more than 5% growth in revenues should limit
working hours of employees to maximum 40 hours a week. Any additional work
put in at a particular month should be set-off against day-offs in the next month.
MISSION MEDIA PRESENCE
• Media use to be an agent of change, of lending a voice to upcoming work and people. Over the years, it has now completely been swept by unsustainably high level of commercialized space.
• However, the potential power of the common man has also increased. Advertising and being well-known through internet & new media has made him potentially more powerful than ever before.
It is strongly encouraged that the participants & well-wishers of our mission, do the following to the extent possible:
Get as many small businesses & self-employed people on facebook & twitter
Develop content, blogs & articles on these upcoming businesses
Use internet, whatsapp & other tools to disseminate this content
Usage of ebay & other websites to sell products in same platform as big business to be encouraged
Urge Vyapar Sabhas to develop local & regional media & channels that can cater to their business interests.
EMPLOYMENT MISSION
Stigma or being jobless & underpaid has to go completely now. There is also a disbelief
element amongst candidates when employers show great hunger for their talent.
Employers who are crying for employees are forced to wear a mask of exclusivity.
Providing jobs is as much employers need as an employee’s need.
Thus, there should be missions that can actively tackle unemployment through
following means:
Employers/Interviews will do cold-calling on homes with job profiles in their hands.
They will either interview those in the house who want to work. Alternatively, they will
offer a small referral fee if someone in this house hold refers you to a candidate who
finds a job.
This mission can be launched nation-wide and independently.
Visit to household is advantageous to employers also as this will also give them a
realistic picture of the prospective candidate and serves as a strong security check.
THANK YOU
Tarun Agarwal
Icon Busines Forum
+91-9920113907
Twitter: @ibfentrepreneur
Facebook: IconBusinessForumOfficial
Linkedin: Icon Business Forum
E-mail: [email protected]
Blog: www.businessmanifestobytarunagarwal.wordpress.com