Entrepreneur june 2010

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HOMEBUSINESS

@30 kick-ass businesses you can start from your backyard

WANT TO STAY AT HOME AND MAKE MONEY?

Building a dealer network: The Hero Honda wayGet free mobile applications for your businessSafety tips for online bankingAssess your company’s income for tax

Hom

e Businesses Solar Startup

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table of contents

BUSINESS @ HOMETurn your home into

your entrepreneurial haven.

MAKE MONEY @ HOME 28THE BASICS OF STARTING

A HOME-BASED BUSINESS 60IS YOUR SIDE BIZ READY

FOR A FULL-TIME FOCUS? 6210 ESSENTIAL HOME OFFICE TOOLS 64

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WOMEN ENTREPRENEUR76 UNDER THE ARCLIGHTSWe raise the curtains on Arundhati Nag, the woman behind Bengaluru’s Rangashankara drama theater.By Shonali Advani

SOCIAL ENTREPRENEUR78 FOR YOUR EYES ONLYAravind Eye Hospital epitomizes successful social entrepreneurship in India.By Pranbihanga Borpuzari

OPPORTUNITIES80 A SECURE OPTIONZicom Electronic Security Systems is ‘safeguarding’ its position in the highly sought-after private security domain.By Pranbihanga Borpuzari

INSIGHTSAstute advice from experts and industry veterans.

20 WISE GUYInsights from Guy Kawasaki

21 BANKANOMICSBusiness tips from Bharat Banka

22 WOMEN IN CONTROL Nandini Vaidyanathan on the importance of investing in yourself

23 VC INSIDERBrad Feld takes you inside a VC’s mind

24 IDEA DECKIAN’s Joe Fernandes on what makes a business idea exciting

26 SANU SAYSPerspectives from Silicon Valley

27 SOLUTIONS FOR SUCCESSVijay Anand on the art of finding profitable solutions

IN CONVERSATIONFace to face with those who matter.

82 CHIEF ECONOMIC ADVISOR TO THE GOVERNMENT, KAUSHIK BASUIndia’s governmental problems and possible solutions pour out of this advisor to the Ministry of Finance and C. Marks Professor of Economics at Cornell UniversityBy Pranbihanga Borpuzari

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7Entrepreneur + June 2010To read more, grab the June issue of EntrepreneurTo Subscribe, visit www.entrepreneurindia.in

table of contentsSME FOCUS90 GOOGLE’S GOOGLYGoogle’s dedicated SME division in Gurgaon has been dealing with some curveballs, thanks to the Indian SME market.By Pranbihanga Borpuzari

SUCCESS STRATEGIESHow to play your cards right.

85 WHEN SECOND IS REALLY THE BESTBy Mark Henricks

88 HERO HONDA: “OUR GROWTH IS DUE TO OUR DEALERS” By Anil Dua

MONEY DEPARTMENTWhere to get it, how to make it, how to keep it coming in.

93 THE COST OF FOUND MONEY

94 DIP INTO THE DEBT MARKET

96 FINE ART OF INVESTMENT

97 TOWARD GREENER, SAFER ROADS

98 IS ONLINE BANKING SAFE?

TECH DEPARTMENTCool ways that tech can help you grow.

99 TRAP THIS APP

101 FIGHT THE POWER CORD

102 KNOWLEDGEWEBB IS POWER

PLACESIf you want to do business, do it here.

126 AHMEDABAD: VIBRANT HUES

LIFESTYLEGears and gadgets to rev up your business.

128 CAN CHEVY BEAT FORD FIGO?

BACKSTAGE130 TEN REASONS TO RUN A BUSINESS FROM HOME

REGULARS

9 ONLINE

11 RESOURCES

12 NEWS IMPACT

14 SME DOCTOR

16 STUMPSPEAK

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COVER DESIGN

NIRMAL BISWASCOVER ILLUSTRATION

CHAITANYA SURPUR


105Entrepreneur + June 2010

109 Circle of BusinessIf you can’t beat them, join the smaller fish! That’s what is working wonders for the fast-growing social networking site, Apnacircle.By Pranbihanga Borpuzari

110 Car-namaHome Safe’s drivers will get you home, no matter how late it is or how drunk you are!By Pranbihanga Borpuzari

112 Hang ’Em Up!Premium brands are getting hung up on a unique form of advertising—on environment-friendly hangers—courtesy Hangvertiser!By Ankush Chibber

114 The Loan RangersBankBazaar.com is simplifying life for loan seekers.By Shonali Advani

THE HOW-TO GUIDE116 Get VC Funding – Part V

117 Set Up and Run a Home-based Business

118 Use LinkedIn for Business

119 Get Free Publicity

120 Assess Your Company’s Income for Tax

123 Write a Business Plan – Part V

124 Set Up a Medical College

HOT STARTUP OF THE MONTH

106 Dark No MoreInderpreet Wadhwa is attempting to solve India’s power problems—and is cashing in on the sun!By Ankush Chibber

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start ups[Contents]

To read more, grab the June issue of EntrepreneurTo Subscribe, visit www.entrepreneurindia.in

Entrepreneur + June 201028

cover story

Make Money @ HomeYou don’t need fancy offices to

start up. Use your home and start making money.

When it comes to selling products and services, the best home business is one that fits your interests

and abilities.

Read on to know about 30 sure-shot businesses you can start from home

and make money.

By Ankush Chibber, Pranbihanga Borpuzari, Shonali Advani & Shobha Mathur

Styling by Ruchi Shah, Chaitanya Surpur & Neha Mithbawkar

Photographs by Neha Mithbawkar.

Entrepreneur + June 2010 29

Travel and tourism has been a big Forex earner for India and its tour operators.

SCOPE It is believed that the sky is the limit for enterprising travel operators who are fully conversant with IT and are quick to block hotel rooms anywhere in the world before the onset of the peak season.

VIABILITY Foreign tourists book entire holiday packages in foreign currency, which when converted into Indian rupees rakes in a bounty for package tour operators. However, foreign tour packages are not as lucrative as they lead to slimmer margins being shared across foreign agents and being paid for in Indian currency.

START UPTour operators should possess a personal knowledge of the food, local sightseeing

spots and lodging options at holiday spots. Also vital to this business is access-ing travel literature from relevant depart-ments, to easily draw travel schedules.

PITFALLS TO AVOIDThe tour operator has to be careful while hiring a guide or tour manager, so that customers are not misguided or cheated on tour schedules.

THE INDUSTRYAccording to industry estimates, export earnings from international visitors and tourism goods are expected to generate $51.4 billion by 2019. This year, for exam-ple, over 2.5 million foreign tourists and 4.5 million domestic tourists are likely to arrive in Delhi for the Commonwealth Games. The foreign tourists coming to India will depend on local travel agents for tour itineraries, hotel bookings, flight reservations and visas.

Specialty Travel Services

Photo© Sivaraman Kitta

Operators organize special package tours for international and domestic tourists. Similarly, they create tailor-made holiday packages for Indians who wish to travel abroad.

TRAVEL-WISE SEED CAPITAL Rs.25 lakh

ROI PERIOD Over three years

RESOURCES Bachelors degree in Tourism and Travel Management, Madras University; PG Diploma in Tourism Management, Indian Institute of Tourism and Travel Management, Gwalior; IATA Diploma Course in Air Ticketing; National Institute of Tourism & Hospitality Management, Hyderabad; ITDC organizes travel agents meet every six months to one year to discuss holiday destinations

EXPECTED REVENUE Rs.1 crore per month between 5-10 years. Profit margin from incoming foreign tour-ists: 25-30 percent; Profit margin from foreign package tours: 7-12 percent

OFFICE REQUIREMENTS 1,000 sq. ft. office with IT support and eight employees, including tour manager for drafting tour itinerary, coordinator for liaising with clients, two employees for air ticketing, one for looking into passport and visas, one for handling Forex issues and one for marketing. Air ticketing staff must complete correspondence course of IATA. Four MUVs with drivers are also needed. Tourist guides can be sourced from Tourist Guides Federation of India LICENSING & PERMISSIONS IATO recognition, TAAI recogni-tion, license for tour operator from Government of India Tourism Office (to be renewed every five years), recognition from IATA

SMOOTH OPERATORMohammed AfzalA zoology graduate from Loyola College, Chennai, Mohammed Afzal was inter-ested in the tourism business from his early days as his father was a lorry trans-porter. Afzal began in a humble way in 1980 while studying, with a single taxi and Rs.15,000. His agency, Parveen Travels, rented taxis for tour packages arranged by travel agents. A decade ago, he started as a tour operator. Today Afzal, MD, Parveen Travel and Holidays Pvt. Ltd., possesses a fleet of 150 taxis and tempo travelers, besides 750 tourist coaches and has on board a network of 50 travel agents and 43 branches in South India. Parveen Holidays Pvt. Ltd. has so far clocked Rs.12 crore while Parveen Travels Pvt. Ltd. is nudging Rs.110 crore.


cover story

SCOPE This business has tremendous potential and can graduate from the level of a small dabbawalla (lunch-box) service to operat-ing a seven-star hotel.

VIABILITYCatering is a viable industry pan-India, especially in towns with a cosmopolitan crowd, as people love food! To be success-ful, you could prepare cuisines of differ-ent parts of the country. For instance, in South India, Bengali, Gujarati or Rajasthani specialty food would be an instant hit. This works on the premise that people prefer a change in their tra-ditional food styles.

START UPIn the requirements list, for a small-scale catering service restricted to packed

lunch boxes, a small home kitchen with a couple of supporting staff would be ideal. As the business expands, a larger kitchen fitted with gadgets like commercial gas stoves will be required. A staff of 10 members, including cooks, dish-washers and an office assistant, will be useful.

PITFALLS TO AVOIDYou have to work with single-minded dedication until you gain recognition in the market. Any compromise on food quality will not be forgiven by clients. Similarly, food wastages while cooking or meal-delivery will cause financial losses.

THE INDUSTRYUnorganized players dominate a large chunk but slowly organized players like restaurant chains are acquiring or merg-ing with catering industry members.

Catering Services

Photo© Sivaraman Kitta

This could involve simple lunch box drop-offs or a full-blown food catering service at specific locales or events. The food could be prepared on site by the caterer or, alternatively, cooked food could be supplied after adding finishing touches to it before serving.

POT SHOT AT SUCCESS SEED CAPITALRs.10,000 for delivering 200 tiffin boxes daily

ROI PERIOD Immediate (it’s a cash/carry industry)

RESOURCES 2-4 year diploma courses are run by the Oberoi Centre of Learning and Development, New Delhi, Taj Institute of Hotel Management, Aurangabad and Welcomegroup Graduate School of Hotel Management, Manipal. Most reputed hotels run catering institutes. Courses are available at National Council of Hotel Management and Catering Technology, Delhi and Institute of Hotel Management and Catering Technology, Chennai

EXPECTED REVENUE Bottomline ranges from 10 to 15 percent

OFFICE REQUIREMENTS A small kitchen unit run from home will require a space of about 100 sq. ft. with two helpers

LICENSING & PERMISSIONS No permissions or licenses are required for home dabba services. For a commer-cial catering service, you will need regis-tration from the Directorate of Commerce and Industry, state government, service tax registration under the Central Board of Excise and Customs, food handling license by the Municipal Corporation

COOKED TO PERFECTIONPradeep and Madhulika MathurHusband-wife duo Pradeep and Madhulika Mathur were both fond of dabbling in the kitchen. Madhulika, a post-graduate from Rajasthan University and a radio singer, took the plunge in catering in 2002. A year later her husband, who was a management graduate and corporate professional, joined her. A service that began with delivering five lunch boxes per day to Frost & Sullivan has today morphed into corporate catering, primarily of North Indian food. Their catering company, Maruti Foods, runs two cafeterias for Mahindra Satyam at Chennai. The duo also orga-nizes food festivals of Rajasthani and Hyderabadi food and delicacies from Uttar Pradesh and Punjab.

Entrepreneur + June 2010 53To read more, grab the June issue of EntrepreneurTo Subscribe, visit www.entrepreneurindia.in

“Our entrepreneurs will get a leg-up if we energize

our bond market” 82 Entrepreneur + June 2010

Photo© Shamik Banerjee

ENTREPRENEUR (E): Our smaller home- grown industries have been hammered by cheaper Chinese products, while coun-tries like Bangladesh are competing with our textile sector. What is the issue here and what do we do about it?KAUSHIK BASU (KB): The most important ingredient for success in the sectors where we face competition from Bangladesh, Vietnam and China is infrastructure—both hard and soft. By hard infrastructure I mean the usual—ports, roads, rails and steady power supply. By soft infrastructure I mean the efficacy of the bureaucratic machinery—the customs work and the various permits one needs to send goods abroad. Delays in these can destroy the prospects of exports. Export, as a sector, is very punctuality-dependent; this is especially true for textiles and apparel. The other factor that has hurt our manufacturing exports sector is our labor laws and, more importantly, the cul-ture and norms they have spawned. They have disadvantaged our manufacturing sector and prevented it from reaping the full advantages of the economies of scale. Actually it is the small to mid-sized firms that have been most adversely affected by these laws. Many of them do not ap-ply to very small firms, so they are not affected by them; and the really big corporations have the money power to iron out the hurdles.

Ironically, it is the workers—in both the informal and formal sectors—who have lost out the most because of these laws. The laws have contributed to keeping the demand for labor low and, as a consequence, wages have remained low. It is trade unions that should be demanding more flexible labor laws. The rupee exchange rate also has played a role in restrain-ing our exports sector.

E: Is the cluster development program re-ally working? KB: Cluster development is important to get some of the advantages of returns of scale. When you have several operations taking place in one area and infrastructure can be shared between different units, there can be large div-idends. I do not think we have done well in this regard and I cannot give a one-line answer as to why we have not done well. Bangladesh should be a good lesson for us since we have inherited similar histories. We have come out of similar colonial pasts and certainly sectors like textiles

He is the Chief Economic Advisor to the Government of India, Ministry of Finance, and C. Marks Professor of Economics at Cornell University. An outsider to the government machinery, Kaushik Basu talks about his frustrations, the changes needed to labor laws and the lessons to learn from our neighbors.By Pranbihanga Borpuzari



IN 2008, AMY WEBB watched as many of her former journalism colleagues, including those who had been employed by the shuttered Rocky Mountain News, lost their jobs. Many had worked in newsrooms for most of their careers and weren’t confident in mastering the technology necessary for them to change careers, or even become successful freelancers.

Webb, a former reporter and the CEO of Webbmedia Group, a Baltimore, Md., company that creates marketing and media programs, created a free webinar to help teach jobless journalists everything from how to set up a home office to using the social networks. More

than 100 people have participated in the first free webinar.

Continuing demand led Webb to launch Knowledgewebb.net, an online learning center where freelancers and small-business owners of all stripes can learn the technology for their businesses. With more than 150 hands-on lessons, the website has recently undergone a relaunch to serve more customers more effec-tively. To date, the site has trained tens of thou-sands of people.

©Entrepreneur May 2010 by Entrepreneur Me-dia, Inc. All rights reserved.

Knowledgewebb is PowerA site that teaches people new to the job front not to sweat the tech. By Gwen Moran

CUSTOM CURRICULUM For those struggling with the “what next?” aspect of starting a busi-ness or re-creating a career, the site offers access to coaches who can help members identify opportunities as well as the skills and training they’ll need to take advantage of those opportunities.

SMART ROOMSThe site features a discussion board for members to commu-nicate and network with one another. Live chats provide information quickly and on-point to members seek-ing help. Members can check the site’s calendar for the next scheduled chat and join in.

MEMBERS ONLY“One of the things that bugs me about other training sites is that you’re laid off or you’re desperate to learn stuff and you join for some initial fee, but then all of the good stuff comes at an a la carte fee, so it’s $10 here and $20 there,” Webb says. She made all of her site’s content and services available for one $129 annual fee. Current memberships are in the multiple thousands, she says.

KNOWLEDGEWEBB LIVE Webb and her team are plan-ning regional meet-ups and conferences to allow members to network face-to-face. “We’d like our members to be able to connect in person and meet some movers and shakers at our events,” she says.

tech department[Web Sight]

99Entrepreneur + June 2010

TRAPiPhone, Android or BlackBerry? Whatever you use, we have one free app each your small business cannot do without.By Ankush Chibber

DROPBOX FOR IPHONEThat Dropbox was one of the most awaited iPhone apps would be an understatement. What is it? It is a cool service that lets you store and sync files online and makes it accessible from multiple comput-ers. And about half a year ago, you could access them on the go on your iPhone, thanks to the Dropbox app.

If you haven’t ever used Dropbox, this is how it works–a Dropbox folder sits on your desktop and you can upload files to this folder up to 2GB

free. And when you are connected to the Internet, it will sync these files automatically to other computers you may have Dropbox installed as well as the iPhone app.

What all can it hold? Word, PowerPoint, Excel, images, pages and numbers docs, PDFs, HTML pages, Keynote presentations, txt files and vcards. It can even stream music and movies directly off the app. As a bonus, you can upload photos from your iPhone’s photos or upload a new one. This one, ladies and gentlemen, is a winner.

REQALL FOR BLACKBERRYThe BlackBerry as a phone does as much for the small business owner as perhaps any app. My guess is most business owners keep a BlackBerry even if they have another handset. But even the BlackBerry can do with some primping. I am a big fan of any app that can help you do lists. My only problem is that you mostly have to key them in and that does not work well for the lazies amongst us. ReQall solves that issue well. Essentially, ReQall helps to remind you of things you need to do. The difference lies in the entry method. You could type in “Smack Ankush at 5” and ReQall will recognize who Ankush is off your contact list and turn that entry into an appointment. But if you are on of the lazies, you can also add

items by calling ReQall using the phone following the voice prompts. You could also use the voice recognition from your phone that will help you make an entry without making a call. The best bit about ReQall is it recognizes the difference between certain keywords and categorizes accordingly. No way will you get a “Shopping with VC” entry unless you do go shopping with your VC.

CASHBOOK FOR ANDROIDHow bad are you keeping track of your expenses? How do you manage them on the road? Do you still call your office assistant and update her on what you have spent and what you haven’t spent?

Enter the simply-namedCashbook–an app that makes it easy for a small business owner to keep track of earnings, daily expenses, bank and credit card statements and other regu-lar small business expenses. This app will let you keep a record of all your

expenses so that you may keep them handy for tax and reimbursement reasons. You can even cate-gorize your expenses and income and delete or add as per convenience. The best thing about this app is that it lets you save and then export your records by e-mail in CSV format that can then be opened in Excel. And you know how the taxman loves Excel.

THIS APP

tech department[Cool ways tech can help you grow]

To read more, grab the June issue of EntrepreneurTo Subscribe, visit www.entrepreneurindia.in

Dark No MoreThe sun has thrown up the mother of all

opportunities in India’s power sector. Wake up to it like Inderpreet Wadhwa has with Azure Power.

By Ankush Chibber

106

hot startup


Did you know that Germany has an installed capacity of almost 9,000 MW when it comes to solar power?

In comparison, India has less than 12 MW of installed capacity.

This when Germany has 250 days of sunshine compared to India’s 320 days and a drastically lower land mass exposed to sunshine. Notice the imbalance?

Solar power has for some time been mentioned as the source which will solve India’s constant battle with its power needs—set to double from the current annual need of 600 TWh by the year 2020, according to a KPMG estimate.

But while the mumblings have been there, solar power generation has always been looked upon with an air of cautious-ness due to a number of reasons like the high cost of photovoltaic cells, land support etc. Thankfully, there are a few brave souls who believe enough in the potential solar power holds in India to take a few concrete steps.

This includes souls like former Silicon Valley techie Inderpreet Wadhwa, whose firm Azure Power Pvt Ltd set up what can be called India’s first private utility scale power plant in India in December 2009.

The 1 MW plant, located in Awan, 40 km from Amritsar, today caters to 32 surround-ing villages and the 20,000 people who reside there by pumping power into the Punjab Electricity Board’s local grid.

In effect, Wadhwa is a pioneer of sorts as he is the first entrepreneur to build a solar power plant of MW-scale in India’s private sector. And he took the long way round to get there.

Born and raised in Punjab, Wadhwa was already running a startup when he was in engineering college in the early 90s. “I was part of a software startup that was into train-ing,” he says. “We made a lot of money when the going was good for such companies.”

Once his engineering education finished, Wadhwa sold his part of the busi-ness and went off to the U.S. where he worked for Oracle for more than a decade. “It was there that I sharpened my startup skills in building businesses,” he says. “I was part of the operation where we were acquiring and building a lot of businesses from scratch.”

Confident by now of his abil-ity to build and nurture companies, Wadhwa got out to set up a business in the Loyalty programs space. But even as things were going good, Wadhwa longed to do something more.

“It was at my evening MBA program that I began thinking about what my last company would look like,” he recalls. “I had a desire to build a socially-conscious business in India.”

The business of solar power was, Wadhwa thought, in a sector of direct social impact. And the need for power was a problem that presented a viable and immediate business opportunity given that almost 500 million Indians still live without electricity.

In 2008, Wadhwa returned to India to set up Azure Power and began the hard grind that is typical of the power sector. He approached the nodal agencies, the Ministry of New and Renewable Energy (MNRE), the utilities etc. And he was pleasantly surprised at the favor-able response.

“It was around the time the MNRE had launched its pilot 50 MW program that offered incentives for grid-connected proj-ects,” he explains. “So there was some sort of understanding of solar power being able to electrify households.”

Unlike other “solar entrepreneurs” in India who have focused their efforts towards small home and street lighting, Wadhwa was keen on setting up medium-scale power plants, the size of 1-5 MW, that could achieve economies of scale.

The next few months went in what he calls education; that is, educating people at the ministries, nodal agencies and utilities why his idea of private solar power generation had merit. Here, Wadhwa had to fight the traditional thought process that solar power was too expensive to bet on.

“My contention was that solar power had to be looked at with a long-term view,” he adds. “Even if the capital cost of setting up a power plant is high, there were long-term advantages that offset this initial expendi-ture.” He explains that while it costs around Rs.15 crore-Rs.16 crore a MW for setting up a solar power plant, mainly thanks to the

Photo© Shamik Banerjee

SUNNY SIDE


Photo© Neha Mithbawkar Styling© Ruchi Shah & Chaitanya Surpur

10Reasons to

Run a Business

From Home

3. Never having to miss another cricket match again. Bliss

4. No manipulative co-workers to deal with. Just manipulative kids

5. Having full discount meals. Yesterday’s leftovers make for the cheapest lunches6. Being able to listen to Iron Maiden at full blast. Or Himesh Reshammiya. Whatever rocks your boat7. Being able to make your own coffee just the way you like it. Bootstrappers know how important that is8. Eating your meals at your desk. Or make your dining table your desk. Whatever is lazier for you9. Never having to dress up for work. Never.

Two words for you—boxer shorts10. Never being nagged again for not coming back home in time. That is real freedom!!

2. Going green by default. You wouldn’t be driving to work, would you, genius? 1. Getting up at 9 am. Or 11 am. Or not at all. You could work from your bed

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Entrepreneur june 2010