Start-up tips: How to raise funds for your business
In an online chat with readers on December 19, Amit Grover, founder, Nurture Talent Academy addressed queries on how to pursue entrepreneurship and offered advice on how to raise funds and improve their business prospects.
For those who missed the live chat, here's the unedited transcript:
AMIT GROVER says, I am Amit Grover, Founder of Nurture Talent Academy, India's 1st institute for entrepreneurs. I will be taking up your queries related to entrepreneurship, and hope to have a nice session with you all.
Manishkumar asked, Hi, I have an idea to start. I want to know any right time to start business or if you have an idea then just start it. I am single now but carring some family responsibilities. Let me know your views on it.
AMIT GROVER answers, at 2012-12-19 16:07:16Hi Manish, There is no perfect time to start, as it is like LOVE, it can happen anytime. However, considering your case, I will suggest you to work for a couple of months upto a year to clear off your family responsibilities, save some money, learn new skills and nurture your idea to start a business.
asrt asked, how to start a business in india?
AMIT GROVER answers, There are many ways to start a business - you can be a franchise owner of an existing brand, start on your own and build it from scratch, buy a loss-making business and turn it around, or become a partner in existing business of a friend. It depends on your personal choices.
kamini asked, is the environment conducive at present to start a new business, sir?
AMIT GROVER answers, Kamini - the current environment is very supportive of new entrepreneur, barring some hiccups in the global economy which have potentially no or negligible effect on a small venture. Media is writing about small startups, there is recognition, customers are willing to try new things, investors are interested in early stage ventures, so there is no better or worse time to start. The time is NOW.
james asked, pl.let us know the steps to be taken before starting the business
AMIT GROVER answers, James - I think best is to spend about 100 days in giving a shape to your idea, learn the basics of finance, marketing, business planning, meet potential customers and develop a basic prototype of your product/service. As early as you can get validation of your idea, better it is. Once convinced and feeling passionate, you can jump in.
Sachin asked, I Have started up a coaching with a new name in the market. since last two months i am doing marketing but not in vast scale since business is low budget. reponse is quit slow. though new admissions are taking place but only 2 or 3 in a month.....what to do?
AMIT GROVER answers, Sachin - hold 1-2 demo classes and show to your potential students that you are a great coach. You can also offer scholarships based on % or grades students got in their exams. Hold competitive tests, and invite a big personality to give away the prizes or certificates. Hone your teaching skills, and if your students endorse you, nothing better than word of mouth marketing. If you are confidence there is nothing wrong with your teaching style, then just be patient - and things will start picking up. All the best
Vijay asked, What's d scope of ecommerce shopping portal
AMIT GROVER answers, The scope of ecommerce is small but growing in India, as new categories get added to the choices on offer to Indian customers. Last year, new websites were started in the area of jewellery, baby products, cosmetics and doing well. There are new possibilities beyond travel, marriage and jobs!
NxKxS asked, Mr. Amit, I am first generation entrepreneur & find it very difficult to build relationship with customer...Is this personality disorder?
AMIT GROVER answers, I may not be able to say if it is disorder or not. However, if this is hampering your business, you should hire people for this role and get out of the day-to-day handling of customers.
devraj asked, Hi..Amit..I would like to know the qualities one should have for becoming Enterpreneur..
AMIT GROVER answers, Passion and energy are 2 important qualities. You need both - look at Sachin Tendulkar and Vinod Kambli - both had talent but not both achieved greatness.
devraj asked, What are the future sectore?..
AMIT GROVER answers, Agriculture, education and healthcare are my favorites.
srikanth asked, Amit, Can you please let us know current Venture Capital Market stage in India and in seed stage what % do leading VC's take ?
AMIT GROVER answers, Most VCs in India are unlike their US counterparts and risk averse to invest in early stage ventures. They want entrepreneurs to achieve significant revenues and customers before investing. In seed stage, they take about 20-40% of the stake.
viral asked, I want to set-up a retail outlet for my sweets and confectionary business. I am hunting for commercial properties, I need capital for property purchase, branding and other logistical requisites like the website, creatives, brochure printing, employee salaries etc.. would you suggest going for an sme loan or a commercial property purchase loan. Also, in terms of rate of interest, which loan is a viable option. also, where can i apply for collateral free sme loans?
AMIT GROVER answers, Viral - you can go for sme loan as your main business is not real estate. I am not aware of rate of interest as it is very dynamic and varies from bank to bank and scheme to scheme. You should approach public sector banks, as they are more inclined compared to private banks for providing collateral free loans. Also check out CGTMSE scheme - credit guarantee scheme for micro and small enterprises.
Ronen asked, Amit, Just wanted to know is it compulsary for sole properiter to register in shop n estb act?? What do we need to open current account of a firm??
AMIT GROVER answers, Yes, shops and establishment license is compulsory. Additionally, for KYC norms of banks, you need PAN no, service tax or vat registration and a rubber stamp of your business name.
Ronen asked, Any comments and tips for placement agencies considering current market scenario??
AMIT GROVER answers, Placement agency is a very competitive and crowded space, so it will work only if you can capture a niche. It may be profitable but not very big scale.
Kumar asked, Any successful mantra for trade in services?
AMIT GROVER answers, Focus on customers - thats the only mantra. Chose 1-2 customers you can delight as much as possible early in your business, and showcase their case study to other clients.
devraj asked, Hi..who is your favourite entrepreneur?
AMIT GROVER answers, Narayan Murthy of Infosys, I worked there for 2 years and he was the one who gave me degree when I passed out of IIT Delhi!
ahtiash asked, What are the possibilities of E commerce in Indian culural products
AMIT GROVER answers, There are lot of possibilities and if you can establish a credible supply chain, then it can do wonders. However, do not depend on Indian consumers only, and try to build customer base outside India also.
Mayuresh asked, I wnat to start of my own, but i need to have the gudiance to start. I have an background of 10 years of IT experience. I have an asset which is unutilized till date. currently i am unemployed. kindly help to start with.....
AMIT GROVER answers, Mayuresh - chose 1-2 areas or ideas that you feel you can use your talent and experience. It can be consulting, IT Training, etc. Once chosen, build 1-2 key capabilities in that area, make a brochure (online/offline) and send to customers. Launch early, keep correcting fast and keep moving.
ra asked, at present I am working -- what type of business can I start without leaving the current job --- with very very little investment
AMIT GROVER answers, You can become an insurance agent, professional blogger, school/college teacher - it depends on your skill and passion.
avy asked, How to raise funds amit for the second round?
AMIT GROVER answers, What is the nature of your business and how much money do you need?
srinivas asked, i started my it company 6 years back. but not going to the next level . because of funds and lack of daring .. how to over come this
AMIT GROVER answers, Have you met investors for funding?
SKUPADHYAY asked, Iam thinking to start the chain of medical stores in eastern UP . I am making very good model for discount and better profitability to customers . pls suggest some dos and donts
AMIT GROVER answers, It is a good idea to start a chain. Dos - focus on team building from day 1 (dont do everything on your own), Put softwares for systems and processes to be followed (there are lot of theft and wastage in medical business), build a channel with DGHS, govt hospitals etc. and also with retail customers. It is all a matter of relationships.
Karan asked, how are the gaps in the incubator space in India?
AMIT GROVER answers, Most incubators provide office space or part-time mentors but what is needed by entrepreneurs is money, customers and product development. If someone can provide 1 or all of these, there is space for 100s of such incubators.
Illustration: Dominic Xavier
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'I want to start a business, but budget is a problem'
MANGLESH asked, Hi Amit,I am planning to start Security(Guard) Company, what do u suggest?
AMIT GROVER answers, Do you have experience in this area? Any contacts with customers who need guards or where to recruit guards?
seune asked, i would like to start women wear business by opening up one outlet and then going in for franchisee system and online business. How much funds do i require to start this. I have around Rs.10 lacs Is it a viable propotition
AMIT GROVER answers, 10 lacs is ok to start a small outlet or maybe 2 small ones and sustain for some time. However, if you wish to grow pan-India, and build your own brand, then it is not enough. You need atleast 10-15 crores over 1-2 year period to build a good brand in womens wear.
rrdash asked, hi amitji,I want to start up my own transport agency.How should I move?Is registration and other details are required ?
AMIT GROVER answers, Please check out www.mca.gov.in for registration details.
guest asked, how important are political connections in real estate business?
AMIT GROVER answers, Political connections are very important in real estate business, as it involves dealing with lot of govt dept, handling land mafia, police dealings, security issues etc.
jay asked, i am interested to carry out a small real estate development project,however my major constraint is finance,how should i manage
AMIT GROVER answers, Jay - you can apply for a bank loan. Most public sector banks have schemes from time to time for promoting this. You can also go for customers advance EMI schemes, and manage your cash flows.
Nimit asked, As per you which is the most flourishing business that will play in the next 5 yrs
AMIT GROVER answers, Agriculture, education and healthcare are my favorites.
viral asked, Thanks Amit, just a follow up question, Can i use the SME Loan Funding money into buying a commercial property for my cake shop? Also, would you rather suggest in buying a property outright or taking a property on rental, just a general view in terms of future holdings and assets aspect. Thanks again.
AMIT GROVER answers, I think it is better to go for rental and invest in building a brand, if you are going in for a really long-term business. It is not good to take sme loan and buy property with that.
Rutuja asked, I have already started project but to boost with proper force 1) Should i find any co-founder/ partner or hire CTO 2) Should manage with existed small fund or apprch to invester for big start 3) For investor Prof. investor option is good or apprroch to TATA or Reliance for tie up pls comment
AMIT GROVER answers, I am not sure if Tata or Reliance will be interested in tying up or investing in you if you are small. However, you can look at other options like getting an investor, incubation or get co-founders.
Padmanabha asked, I want to start a new business, but buget is the problem, how to overcome this?
AMIT GROVER answers, how much money do you need to start your business?
Ravi Swami asked, Hello Amit, Thanks for the reply of my first question. i Have one more question. How should i go about in the business of e - commerce. How to start up online website ( I mean registring with all legal aspects )
AMIT GROVER answers, You can check out registrations details on www.mca.gov.in. You can buy a website domain name for 500-1000 rs and domain hosting space for 1000+ Rs, and there is not much paperwork for that.
alok asked, Amitji how to think about the concept that we can sell
AMIT GROVER answers, Best if to try it out with 5-10 customers and asking them to pay for it. 1 paying customer is better than 1000 who show interest.
madhavan asked, Is venure capitalits will show interest for trading or manufacturing of textiles raw matrials?
AMIT GROVER answers, Trading and manufacturing are not seen as giving high returns expected by Venture capital investors.
Viswanath asked, Any start up ideas on cloud with 10 laks investment.
AMIT GROVER answers, Viswanath - there are lots of areas you can get into. Latest is booking of cabs, event ticketing, which are good trends in market.
Dhirasai asked, I have seen that the VC's are more interested i your personal background rather than your business idea. It is easier for an IIM/IIT guy to recieve the start up capital. Your comments
AMIT GROVER answers, It helps if IIT/IIM brand is there. However, there is no guarantee to that. U r right that investors look for the people behind the idea, as they bet on the team's capability to execute as ideas keep changing and taking new shape as they progress.
AMIT GROVER says, Friends - we will end the session here, thanks for participating. If your queries are not addressed, please feel free to email me on firstname.lastname@example.org, and visit www.nurturetalent.com. I sincerely hope all of you do great in your life ahead. Best wishes, Amit Grover, Nurture Talent Academy
Illustration: Dominic Xavier