30 Businesses under Rs 10 lakh
By Anagh Pal
A Google search for inspirational quotes for entrepreneurs throws up many lists, but one that finds its way into every compilation is that by a student in entrepreneur Warren G. Tracy’s class, “Entrepreneurship is living a few years of your life like most people won’t so you can spend the rest of your life like most people can’t”.
There are perhaps no better words to embody the spirit of an entrepreneur. Entrepreneurship is about freedom, about leading your life the way you want, but, at the same time, it is a lot of hard work. And yes, it requires money.
Fortunately, however, it doesn’t take a fortune to start a business. With an entrepreneurship ecosystem that is fast developing and availability of low-cost technology, starting a business is more about passion and skills that you bring to the table than having a fat bank balance. In this story we bring you 30 businesses that have been started for an initial investment of less than Rs 10 lakh. The capital ceiling has a few implications. It has thrown up certain categories of start-ups which require a low investment up-front, with service and technology start-ups forming a majority. We have discussed these in broader detail in the following paragraph. A low start-up capital also implies that, more often than not, the entrepreneur brings certain skills to the table, the ‘intellectual capital’, which complements the money that is put into the business. Finally, it means that these entrepreneurs almost always do not depend on any external source of funding and use their savings to get their business off the ground.
How much do you need to start?
This is a question that all entrepreneurs need to answer. Broadly, it consists of these three components—development costs (for the developing the product or service), infrastructure costs (the cost for all business infrastructure—office space, computers and so on) and customer acquisition cost (cost incurred in reaching out to the customers.)
This figure is what you need to get your business started, assuming that you pump revenues back into it. But there should be a contingency fund in case the business takes longer than expected to take off, or does not take off at all. Ideally, this should be six months to a year of operating expenses. When an entrepreneur is not depending on an external source of funding to start off with, or 'bootstrapping' in startup parlance, it becomes important to keep startup costs under control. We take a look at some of the prominent trends we have observed in our list of businesses.
Student start-ups. It is not a coincidence that we have a large proportion of student start-ups. Passionate, vibrant and eager, these entrepreneurs have decided to take the plunge even as they are studying.
Laura Parkin, co-founder and chief executive officer, National Entrepreneurship Network, a community of entrepreneurs, says that a number of student start-ups have grown rapidly over the last few years among its member institutes. “I have got nothing to lose!” say students who are not burdened with family responsibilities and EMIs. They are, thus, free to follow their passions. Laksheeta Govil, a fashion student, New Delhi; and Abhinav Mehra, a management graduate, teamed up to launch Fizzy Goblet, which makes designer hand-crafted shoes. Says Mehra, “We are experimenting with new material and technology to scale up.”
Dorai Thodla of The Start-up Center, an early-stage start-up accelerator with an initial focus in the mobile, Web and software technology space, says: “As a student one is not contaminated by the knowledge of how things are done; so they can explore novel ways of doing things from building products to creating a business model. Technology does not scare students, so they can come up with innovative uses more easily. They learn fast.”
To read the rest of the Outlook Money article, click here.