Enthused by seemingly glorious life
of a business owner ahead of me, I took the plunge. My last salary been
credited into my account. And true to my resolve I lived frugally.
How hard can it be? I thought to myself. People who I know
to be dumber than me are running successful businesses. So it shouldn’t be a
huge deal for me to make money out of mine. I gave myself 6 months. (Turns out
it took 3 years.)
Frugal though I was, my money ran out.
First my spending money.
Then my savings.
Then my investments.
All gone.
First my spending money.
Then my savings.
Then my investments.
All gone.
The end of 2005 and was probably the worst period in my
life, financially speaking.
I didn’t have any money at all. Literally.
I hadn’t paid my house rent, I hadn’t paid my cell phone
bill. I was about to run out of food in a week.
What I did to survive and what happened to me have taught me
pretty much everything that I know about business today. And here are those
lessons.
SURVIVAL INSTINCT IS THE MOTHER OF
CREATIVITY
I needed to come up with a plan quickly. Or I was going to
sink. My landlord would throw me out of my house and I would starve.
At this point, I was on the verge of begging my old employer
to take me back. What stopped me? Just my pride I guess. Instead I decided to
ignore that option completely. I decided to think like a businessman.
I decided to come up with a business that met these
criteria;
a) What can I offer RIGHT NOW?
b) What can I offer with no investment at all?
c) What can I offer that has a reasonably large market?
d) What can I offer that will earn me money NOW?
b) What can I offer with no investment at all?
c) What can I offer that has a reasonably large market?
d) What can I offer that will earn me money NOW?
I had been a corporate trainer for GECIS, the first BusinessProcess Outsourcing Company in India. I trained fresh hires to do their job. At
the cost of sounding immodest, I was rather good at it.
I decided to approach companies that were hiring fresh
graduates vigorously and sell them on the idea of a College to Corporate
transition training. Basically I would train them on the etiquette of working
in a corporate environment. How to communicate, how to get ahead by acing your
appraisal, how to make a professional looking presentation and so on.
If I hadn’t been in such a tight spot, would I have been
able do something like this? Maybe not.
YOU DON’T NEED MONEY TO START A BUSINESS
My cell phone bill had been due 3 days ago. The woman from
collections would call me twice a day to ask if I had paid it. Twice a day, I
would lie to her that I had. I knew that the good folks at Tata Indicom would
cut off my outgoing calls ten days after the due date on the bill. I had seven
days to make a sale or starve.
I wrote a pitch and started dialing numbers. I picked out
companies that were looking for fresh graduate on the monster.com. I figured if
they were hiring, they probably needed to get those hires trained.
I would call the company and talk to the training manager
then send them a follow up email pitch.
It took me five more days to make a sale. LogicaCMG hired
my services for 8 sessions, with the option of 8 more, of the College to Corporate
Transition Training.
Must have been something about my desperate situation, but
those were some of the best sales pitches I ever made. Billy Mays Ha! You ain’t seen nothin’.
I learnt an important lesson: not only do you not need money
to start a business, it’s probably better that you don’t have any.
As Ushtara grows, I hope that I never forget this lesson.
The only way to run a business is as if your life depended on it.
When people tell me that they aren’t starting a business
because they don’t have money, I just smirk at them. You don’t need money to
start a business. You need desperation.
BUSINESS IS A JIGSAW PUZZLE
In December 2005, a Bangalore girl was raped and killed by her
driver.
By March of 2006, the outrage had risen to fever pitch. Employers and employees alike were clamoring that something needed to be done.
I decided that my training company would run a short self defense course for women. In the first part of the training, we would talk about how to avoid getting into a bad situation in the first place. In the rest of the training the trainees would learn easy to master martial arts moves that they could use if they got into a bad situation anyway.
I created an email pitch and started sending it out to the security managers of every company in Bangalore. The interest generated was tremendous, but every company wanted to witness our training first hand before they would hire our services.
How could they witness our training when we weren't even running it?
I hired a psychologist and a martial arts trainer on a paid-per-training basis under the condition that their first session would be free of cost to prove their abilities.
I then told LogicaCMG, to whom we were already supplying other training services, that I would run one session free-of-cost for their employees if they would let some guests sit-in.
I invited the training and security managers of half a dozen companies to sit through the program. After seeing the program, 3 companies hired our services for 4 to 5 sessions each.
I offered a can of pepper spray to every participant free of cost and then built the cost of the pepper spray into the cost of the training.
If you think about it, any business operates only amalgamating a whole host of things, People, Money, Products, Services and so on. When even one of these pieces is missing, there's nothing. When they all come together, it turns into something beautiful.
MARKETING IS A MUST-HAVE SKILL
When I was marketing to the self-defense training to corporates, I wrote an email pitch, as a follow-up to cold calls.
Instead of writing about the training, I wrote about the feeling of helplessness that a victim of mindless feels. I looked inside myself, to understand what value I was really offering through the training.
The pitch vibed strongly with the market. It helped us differentiate from a host of companies offering similar trainings. Even though we were slightly higher priced than every one else, our customers perceived us as being the best choice to fulfill their needs.
I learned a very important lesson: You might have the best product or service in the world, but the only way you can get your customers to buy it, is if they see it as fulfilling their unique needs. This is a skill that can be learned and honed. I will talk about this again and again in other posts.
FINANCE IS THE LANGUAGE OF BUSINESS
When I closed my training company in 2008, I had achieved something which most people would consider impossible;
With essentially no money invested, no employees on the rolls, no physical building, no investment in intellectual property, working an hour or two a week, I was generating nearly $50,000 dollars in revenue a year with a net profit margin of approximately 60%.
Sweet right? So you ask, why did I close the company?
2 reasons;
a) It was not scalable. My analysis showed that to achieve each 20% growth in revenue, the contribution margin per training would need to be 10% higher to offset the additional overhead. This would impact our competitiveness.
b) A DuPont analysis to analyse the return-on-revenue achievable from the training company vs. investing the same money in Ushtara revealed that Ushtara would be better in terms of asset turnover ratio, profitability, tax efficiency and leverage. So my money and time was better invested in Ushtara.
If you don't know what those things mean, don't worry about it. I didn't either, until someone taught me.
Why do you think they speak Pashto in Afghanistan and Albanian in Albania?
I think it's because the language that people speak in, has evolved to meet the one-of-a-kind requirements of its speakers.
Finance is the language that business people speak in. If you want to be a business person, you MUST learn this language
Till Next Time
Sunil
By March of 2006, the outrage had risen to fever pitch. Employers and employees alike were clamoring that something needed to be done.
I decided that my training company would run a short self defense course for women. In the first part of the training, we would talk about how to avoid getting into a bad situation in the first place. In the rest of the training the trainees would learn easy to master martial arts moves that they could use if they got into a bad situation anyway.
I created an email pitch and started sending it out to the security managers of every company in Bangalore. The interest generated was tremendous, but every company wanted to witness our training first hand before they would hire our services.
How could they witness our training when we weren't even running it?
I hired a psychologist and a martial arts trainer on a paid-per-training basis under the condition that their first session would be free of cost to prove their abilities.
I then told LogicaCMG, to whom we were already supplying other training services, that I would run one session free-of-cost for their employees if they would let some guests sit-in.
I invited the training and security managers of half a dozen companies to sit through the program. After seeing the program, 3 companies hired our services for 4 to 5 sessions each.
I offered a can of pepper spray to every participant free of cost and then built the cost of the pepper spray into the cost of the training.
If you think about it, any business operates only amalgamating a whole host of things, People, Money, Products, Services and so on. When even one of these pieces is missing, there's nothing. When they all come together, it turns into something beautiful.
MARKETING IS A MUST-HAVE SKILL
When I was marketing to the self-defense training to corporates, I wrote an email pitch, as a follow-up to cold calls.
Instead of writing about the training, I wrote about the feeling of helplessness that a victim of mindless feels. I looked inside myself, to understand what value I was really offering through the training.
The pitch vibed strongly with the market. It helped us differentiate from a host of companies offering similar trainings. Even though we were slightly higher priced than every one else, our customers perceived us as being the best choice to fulfill their needs.
I learned a very important lesson: You might have the best product or service in the world, but the only way you can get your customers to buy it, is if they see it as fulfilling their unique needs. This is a skill that can be learned and honed. I will talk about this again and again in other posts.
FINANCE IS THE LANGUAGE OF BUSINESS
When I closed my training company in 2008, I had achieved something which most people would consider impossible;
With essentially no money invested, no employees on the rolls, no physical building, no investment in intellectual property, working an hour or two a week, I was generating nearly $50,000 dollars in revenue a year with a net profit margin of approximately 60%.
Sweet right? So you ask, why did I close the company?
2 reasons;
a) It was not scalable. My analysis showed that to achieve each 20% growth in revenue, the contribution margin per training would need to be 10% higher to offset the additional overhead. This would impact our competitiveness.
b) A DuPont analysis to analyse the return-on-revenue achievable from the training company vs. investing the same money in Ushtara revealed that Ushtara would be better in terms of asset turnover ratio, profitability, tax efficiency and leverage. So my money and time was better invested in Ushtara.
If you don't know what those things mean, don't worry about it. I didn't either, until someone taught me.
Why do you think they speak Pashto in Afghanistan and Albanian in Albania?
I think it's because the language that people speak in, has evolved to meet the one-of-a-kind requirements of its speakers.
Finance is the language that business people speak in. If you want to be a business person, you MUST learn this language
Till Next Time
Sunil
Continue on to the next chapter
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