Chapter 5: Some Broad Guidlines

If you want to start a business all that you need to do is to commercially connect three stakeholders (a) supplier/vendors, (b) yourself (or your team), and (c) customer (that’s the first step, of course, employees will come later) ... so ask yourself (a) are there any supplier available within your easy reach of the product or its raw material who can give you supplies necessary on easy terms or perhaps on credit? (b) Are there customers of the same product available within your reach or of some of your contacts, who can also agree to pay an advance against your product or service in case the supply side such facility isn't available? (click here to learn more about how to find a business idea) If you have a big idea in your mind, consider scaling it down into something so simple that you can handle it with ease but outside of your comfort zone. For example, if you want to start a fast-food chain, start with a small french-fries or burger-cart which would not take more than Rs. 30,000 - 40,000 to establish. If you're feeling some shame, check how KFC and McDonalds started, or Shaan Foods or Sitara Textiles started. Dr. Amjad Saqib’s book ‘Kamyab Log’ is full of such examples …

OR If you intend to set up an industrial stitching unit, and export garments then start with a tailoring shop if your resources and experience limit you ... If you want to set up a factory of shoe manufacturing, this can be started with a small investment in the purchase of raw material only by outsourcing the production to already established small manufactures, while selling the shoes online. An entrepreneur is one who scales up a simple business model by creating a system to perform all business functions automatically like a synchronized machine. An entrepreneur is initially self-employed, as he or his team has to take care of all the operations themselves. However very soon they realize that various routine tasks can be simply dedicated to a specialized person. So they may write down the details of the processes to make work-flow-charts or Standard Operating Procedures (SOPs), and hire a person to hand over the routines. Gradually they may divide all the routine tasks being performed in all key functions like purchase, sales, production, accounts, marketing, operations, etc., and slowly create a structured organization by hiring individuals suitable for each set of functions. See the book E-Myth by Michael Garber for details.

Of course, there will be uncertainties, surprises, disappointments, etc., but that’s part of the game, and that’s exactly how we learn, but eventually, structure refines, and gradually business functions are taken up by employees.

Once this is done, entrepreneurs end up creating a system to manufacture a product or deliver a service to the customers. He is now relatively free to take up other challenges or think about scaling up, or start some new ventures, or whatever. This system is the real product of an entrepreneur, says Michael Garber, which also has a price tag, and can be sold to another party, if required. Once you have started a simple business, and have been able to successfully manage the flow of product in one direction (supplier to customer), and flow of cash in the other direction (customer to suppliers), you are now aware of the challenges, barriers, pitfalls, hurdles, etc. faced in the process, and how to go around them... this experience brings you an insight about the dynamics of the market and reveals any gaps which are required to be filled.

If you haven't been through this, and haven’t jumped into the ocean, your evaluation can only be hypothetical and would lack any authentication or backed by experience ... therefore conventional gap analysis was done by Business School students, and subsequent development of a business and marketing plan around the gap might end up in disappointment, and loss ... This typical business school methodology also requires a considerable amount of market insight, and the ability to foresee how things would turn out to be in the market ... but the dilemma is, in a market place things change fast, and no one is sure what will happen next.

Therefore the ability to quickly respond to the rapidly changing environment is more important than the ability to foresee what’s coming next ... at the end of the day what matters is how agile you are. Entrepreneurs who are not exactly entrepreneurs, but are self-employed with lots of helpers, cannot afford to be agile, entrepreneurs who have designed a system are not overburdened to react to the changing environment; they also design their systems to change accordingly.

To cut the story short, to be an entrepreneur the practical steps one needs to take can be summarized as follows:

1. Don't plan something too big that it’s beyond your capacity to manage, even if it can be materialized somehow...

2. Reduce your idea into a small simple practical trade based model. Slowly move toward processing or production if required...

3. Change the model to the extent you can. Find supportive suppliers, and willing customers; hold back your passion for a while...

4. Experience managing the cycle of delivering the product, and accepting payments...

5. Find the gaps in the market you have stepped into already, and have tasted the bitterness...

6. Be agile...

7. Create a flexible system for routine operations...

8. Expand gradually by hiring employees...

9. Refine the system, smoothen the flow, sit back, and enjoy the show...