Top 10 reasons why small businesses fail in India

Not long ago my brother-in-law started looking at various avenues to start a business in India. I started seeing in him, what I had seen in a few people before. Once the entrepreneurship bug bites you, you become less and less resilient towards your job. While it is overwhelming to see one of your closest acquaintances trying to come out of the nut shell and venturing into something new, the conservative and non-assertive person within me is keeping his fingers crossed to see this leap into a successful landing.

To give him some ideas, I have been researching the problems start-ups face in India for the past couple of weeks. Here is what I have compiled so far.

1. NEGLECTING INFLATION: Countries like India, which do not have a controlled inflation, are not start-up friendly. Loss occurring due to the rise in inflation in one month can eat up the profit attained in four months. To cater the same, start-ups should be prepared to pump in money continuously until they are stabilized. 

2. ALTERNATE SOURCE OF INCOME: Generally people who start businesses in India tend to keep the profit out of their businesses as their primary income even during the earlier stages. This theory has been widely questioned. Small business owners should keep an alternate source of income to keep their families running without disturbing the cash outflow from the business. Start-ups should sit on the cash pile until they are stabilized. Alternate source of income can be anything from taking up an employment until business gets stabilized, or in case of a partnership firm a couple of partners working while another one of them taking care of business or bringing in a new managing partner who would manage the business without investing any capital. 

3. FAILURE TO UNDERSTAND STABILITY: This is again another mistake done religiously by the small business owners. Often times, they think break even as synonymous to stability. But a start-up can attain a break even during its earlier stages long before it attains stability. Stability for a business means instituting itself as a brand among consumers, competitors, vendors and employees. 

4. EMERGENCY SOURCE OF FUND: This is again a crucial entity for start-ups and varies from business to business. Emergency source of fund is a pile of cash sitting underneath the business without yielding any returns. The threshold could be demonstrated by the span of time the cash pile can run the business if the business runs at a loss. Standard time is four months for many start-ups. Any profit the businesses make until they get stabilized should be accumulated into the emergency source of fund. 

5. INCORRECT BUSINESS PLAN: This encapsulates everything, including vision, goals, budgeting, operations planning, revenue growth etc. Small businesses should always focus on their short term goals and take one leap at a time. If a business wants to increase its customer base, revenue or office locations it has to be done in baby steps. Over expansion will kill the business. 

6. DISTINGUISHING BUSINESS EXPENSES & PERSONAL EXPENSES: Not only for big business players who fall under the tax department’s or share holders’ radar, but also for small businesses the expense heads are often forged or manipulated, sometimes willingly and many other times unknowingly. An evening get together among partners in a public house can very well be a business expense or a personal expense depending on how it is accounted. But it is imperative for start-ups to not get carried away by tax relaxation and to account expenses with the best of their ability and honesty. It not only keeps the balance sheet clean but also gives the business owners a clear idea on their own revenue, expense, operating margin and profit. 

7. LACK OF BRAND BUILDING ACTIVITIES: Brand building is not something which is limited to an established business. In fact it is even more important for a start-up than for an established business. Not all brand building activities are expensive and unlike other business establishment activities, brand building can be coupled with a cause. Sponsoring a sports event for under privileged children or sponsoring a race to cure event for breast cancer can be a great brand building activity. 

8. CUSTOMER SERVICE: Small business owners should understand that imbibing the necessity for coming to them on the minds of the customers is the key to success. Many a times customers do not wish to give a second chance to businesses if they fail in the first chance. It is imperative to try to keep them satisfied during their first visit. This could be as simple as giving them a 10% discount during their first visit or giving a discount coupon for their next visit. 

9. DATA, DATA, DATA: Like they say “LOCATION, LOCATION, LOCATION” in the real estate world, it is “DATA, DATA, DATA” here. Collect as much data as possible. For example, if you have set up a Greeting Card & Bouquet shop, everybody knows that most business activities happen during the Valentine’s Day. However, there could be a particular period of the year in which the birth day cards sell the most, which can be found only if you have the data. 

10. SEEK PROFESSIONAL HELP: Like you do not rely on the internet or friends to do an open heart surgery, or on your expertise in mechanics to fix a leaking gas line in your house, you should not rely on any non-professional guidance for starting a new business. Setting up a new business is no joke and it requires a professional guidance and supervision. There are many organizations which do everything right from analyzing the business worthiness of your idea, to setting up the business, speculating the risks, gaining loans, etc. It is money well spent in seeking their guidance and help.

Good luck.

An Appeal

நண்பர்களே! எனக்கு உதவும் கரங்கள் திரு. வித்யாகர் அவர்களிடமிருந்து வந்த மின்னஞ்சலை உங்களுடன் பகிர்ந்து கொள்கிறேன். உதவ விருப்பம் உள்ளவர்கள் தயவுசெய்து உதவுங்கள்.

Dear Sathya,

Anaga is all of sixteen with dreams of becoming a nurse and would like to discover a painless way of giving injections. Each time she goes for blood transfusion, she cringes when she sees the needle. Her mind keeps repeating will the smile of the nurse, reduce her pain, will the size of the needle reduce her pain, the pain is unbearable but she knows that her life depends on these transfusions. After all she has undergone Blood transfusion 278 times.

Anaga is suffering from Thalassemia. She has been undergoing blood transfusion regularly every 21 days. At present she is suffering from Hepatitis C and it may potentially damage the liver. The treatment will cost Rs.2, 00,000/. Little drops of water make the mighty ocean. Please help Anga what ever way you can. She has never let Thalassemia affect her zeal for life. She enjoys talking to her friends, playing shuttle with them. She likes to watch her favorite heroine, Tamannah on screen. She dreams of going to a nursing college. She wants to be the best and kindest nurse. She knows that a kind heart and a smiling face can lessen every pain. We want you to lend a helping hand in achieving her dreams.

You can contribute online thru our website http://www.udavumkarangal.org, which gives all details about our activities.

For contributing by Credit card or Net transfer click on the button “DONATE TO OUR INDIA OFFICE” under the menu “DONATE” and its link address is https://www.myhelpinghands.org/Donate_india.aspx

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Wishing you and your family a healthy and peaceful life.

Thanks & Regards
Vidyaakar

What it takes to be an American President?

Yesterday I was hopping through yahoo and was completely shocked when I saw this news. An Israeli newspaper has published Barack Obama, the Amerian Presidential Candidate's prayer notes which was kept at the Holy Western Wall. I don't want to specify what the note reads here.

But for a country that respects privacy the most, which demands a separate bedroom even for a 5 year old kid, which feels intrusion of privacy is an offense, which prohibits even recording of a telephone conversation without either party's consent and treats it as a crime, this behaviour of its media seems atrocious. Afterall we demand privacy in 3 places at the least, bedroom, restroom and prayer hall, don't we?

Okie, forget the serious stuff. The below is a forwarded email I received from one of my friends.

John O'Reilly hoisted his beer and said, "Here's to spending the rest of my life!, between the legs of my darling wife!"

That won him the top prize at the pub for the best toast of the night!

He went home and told his wife, Mary, "I won the prize for the Best toast of the night."

She said, "Wow, what was your toast?"

John said, "Here's to spending the rest of my life, sitting in church beside my wife."

"Oh, that is very nice indeed, John!" Mary said.

The next day, Mary ran into one of John's drinking buddies on the street corner.

The man chuckled leeringly and said, "John won the prize the other night at the pub with a toast about you, Mary."

She said, "Yeah, he told me, and I was a bit surprised myself. You know, he's only been there twice in the last four years. Once he fell asleep, and the other time I had to pull him by the ears to make him come."

The below is another good one received from the same guy.

The inventor of the Harley-Davidson motorcycle, Arthur Davidson, died and went to heaven.

At the gates, St. Peter told Arthur. "Since you've been such a good man and your motorcycles have changed the world, your reward is, you can hang out with anyone you want to in heaven."

Arthur thought about it for a minute and then said, "I want to hang out with God."

St. Peter took Arthur to the Throne Room, and introduced him to God.

God recognized Arthur and commented, "Okay, so you were the one who invented the Harley-Davidson motorcycle?"

Arthur said, "Yeah, that's me..."

God commented: "Well, what's the big deal in inventing something that's pretty unstable, makes noise and pollution and can't run without a road?"

Arthur was a bit embarrassed, but finally spoke, "Excuse me, but aren't you the inventor of woman?"

God said, "Ah, yes."

"Well," said Arthur,

"professional to professional, you have some major design flaws in your invention!

1. There's too much inconsistency in the front-end suspension.....!!!!

2. It chatters constantly at high speeds.......

3. Most rear ends are too soft and wobble about too much.......

4. The intake is placed way too close to the exhaust....???!!!

5. The maintenance costs are outrageous!! !!"

"Hmmmmm, you may have some good points there," replied God, "hold on."

God went to his Celestial supercomputer, typed in a few words and waited for the results.

The computer printed out a slip of paper and God read it..

"Well, it may be true that my invention is flawed," God said to Arthur, "but according to these numbers, more men are riding my invention than yours".

And the original joke ends there. The below is added by my friend, which I think is the funniest part of the joke.

Arthur then said to God,

"That's because you have had your product out for a longer period of time. You have created a monopoly, though now admittedly a very small fraction of men are trying out other options. And finally – Your product has no resale value! Infact it costs more to get rid of than to acquire it."

Have a great weekend.

Billa……….

I can hear people screaming out there “Et tu Brutus”. I am afraid I’ve to say “Yes”. I watched the film today. Is this the review of the film? Me reviewing a film…….. No way… Let the people who are best at it do it. These are just my thoughts after watching the film.

The first thing that awestruck me was the richness in the film. Right from the introduction scene of David Billa, the mafia don, where he gets down from a black Mercedes AMG coupe till the end, the film is crammed with richness. It’s richness richness richness everywhere. In the forms of bimmers, jaguars, yachts, silk robes, couches, ray-bans, rolexes, costly sets, mind blowing locations and what more ??????????

At the intro scene I whispered to my wife, “Can I buy that car?” and she replied “Of course, only if you can cut the check for a 100K” wow………. That’s too much for me. Sometimes I feel I am poor.

For people who watched DCH way back in 2001 and still waiting for such a stylish rich film in Tamil, Billa ends their wait. Remember it's only stylish and rich and is no where near DCH. Forget DCH, it’s not even near Sharukh’s Don.

The next thing which impressed me in the film is the costumes. Director Vishnu’s wife has done a commendable job. Kudos to her. The third one is the background scoring. Yuvan rocks these days. But I should say this, he has let the songs go off…… Except “Vethalaiya Pottendi” no other song makes an impact.

The action sequences are great. The car chase and the fights over the bridge were shot extremely well and could well be a trend setter for the future Tamil films. Cinematographer Nirav Shah has done a remarkable job in those sequences.

After a long time I am seeing an action film of a big star with a script which demands the lead lady to accompany him in almost every scene. Nayanthara does a good job though only next to her predecessors Zeenat Aman, Sripriya and Priyanka Chopra. Vishnu seemed to have more confidence in Nayan's cleavages than her acting skills.

Prabhu as DSP Jai Prakash has done his job but ofcourse nothing greater than Iftikhar or Balaji or Boman Irani. The suspense factor added over Boman Irani and the surprise ending in Sharukh's Don are missing here. Vishnu has done a honest remake of the old Billa without attempting any experiments in the screenplay. However the Pran, Thengai Srinivasan, Arjun Rampal character has been trimmed in this film. Raguman comes as the interpol officer and also as villian.

I liked the sequences in which Prabhu trains Velu (Ajith). Velu's reactions and dialogues bring in some humour. Santhanam as Velu's friend also tries to stimulate our humour sense.

On the flip side, Ajith fails to create the same impact Sharukh created. It trepidates us more when the later kills the infiltrator with a golf ball than when the former kills him with a dagger. The lack of suspense factors in the screenplay makes it boring towards the end. Probably Vishnu would have thought people to expect those after watching Sharukh's Don and lack of them would itself be a suspense.

Namitha is as usual wasted. The girl who used to be with the villians in the film Pokkiri could have been used. She would have done a better job than Namitha in this film.

Twin Tower backdrop coming in every alternate scenes irritated me a lot.

After watching all the four versions of this great entertainer, I would rate them in the following way.

1. DON (Sharukh) -- For the stylish presentation and screenplay
2. DON (Amithab) -- For original screenplay
3. BILLA (Thalaivar) -- Ofcourse for Thalaivar
4. BILLA (Ajith) -- Read the post :-)

Today I needed to take care of my 5 year old nephew and when he was reluctant to watch a Tamil film in theatre I convinced him rather fooled him by saying this film was the most thrilling movie ever made in the history of the cinema. When the movie started, to my surprise, it turned out to be true. Isn't it watching a 3 hr long movie in the theatre alone most thrilling and haunting experience? I think I got ESP. What say?

About Me!

I was born and brought up in Trichy a beautiful town in Tamil Nadu, India. Having born as a third son of a typical south Indian middle class parents, I was always required to focus on my studies rather any other extra curricular activities. Though I did not have much inclination towards anything in life other than studies, I did have a very good apetite for reading books.

When I was 12, I read 'Ponniyin Selvan' for the first time. I could appreciate the writing skills of Kalki at that age. Then on I would have read that novel for a cool 100 times (trust me...... no joke). After that I started reading Kalki's novels like 'Sivakamiyin Sapatham', 'Parthiban Kanavu', 'Mogini Theevu' , 'Magudapathy', 'Alai Osai' etc. Not only Kalki intruded into my childhood days, but also Jegachirpian, Ra. Ki. Rengarajan, Jayakanthan, Cho, Sujatha, Balakumaran took some of my childhood days.

I also grew up watching Tamil movies and listening to Tamil movie songs. Ilayaraja's Anthimazhai or Panivizhum Malarvanam in SPB's voice replenishes me more than a cup of caffeine on early mornings. My perfect day has always been, raising from bed listening to Ilayaraja's song, watching a very good Tamil movie on a DVD, spend an hour or two in a coffee shop with friends and end my day with a classic Tamil novel.

I did my schooling in E. R. Hr. Sec. School, Trichy and graduated from Shanmugha College of Engineering, Tanjore. I beleive both these institutions are great in their own ways. I am grateful to my teachers, lecturers and professors, whom I believe were institutional in shaping me up. But for them I would not be what I am today.

After graduation, I worked for Siemens Automotive Systems Ltd., Chennai and then for Infosys Technologies Ltd., Bangalore before finally coming to Ashburn. Now I am employed with SRI Systems Inc., NJ.