Entrepreneurship Series How Business Works. Review Businesses involve people doing things for other people and being paid for it. Businesses satisfy our…

Entrepreneurship Entrepreneurship SeriesSeries

How Business Works

Review

Businesses involve people doing things for other people and being paid for it.

Businesses satisfy our… Needs: basic qualities that a

customer would expect of a product or service.

Wants: extra features that are not necessary but desired by a customer

How Do Businesses Make Profit?

Good management High prices Hard work Quality service to customers

Business success is therefore a matter of service.

How Does a Business Grow?

Imagine there are two people: Hiren – works in a company in

Gujurat. Ramakant – Hiren’s friend who has

some extra money to spend.


Hiren starts buying materials to make torches with the money he makes from the company. He sells them in his free time.

He owns it all, and manages the business himself.


His side business is a success, bringing in about Rs. 4000/month. But he needs more space and more workers to keep up with the demand.

What should he do?


He asks his friend, Ramakant, if he can put in some money to help him out.

Ramakant agrees.

Hiren and Ramakant are now partners, meaning they share the profits.


Hiren opens a shop in the village, naming it Ramren Torches. The new business is able to hire more workers and sell more products.

Everything is running smoothly, but both Hiren and Ramakant realize they want to grow bigger but need a little more money.


The problem is that both of them do not know anyone (friends or family) who will give them money.

What should they do?


Since they have no family or friends to ask, they decide to ask others to invest and buy shares of the company.

Those shareholders are now part-owners of Ramren Torches (which subsequently changes its name to Torches Pahije Limited). The shareholders make money when Torches Pahije Limited makes money but lose money when the entity loses money.


With the new capital, Torches Pahije builds a new, big company building and hires many local villagers to work on the production line as well as the business unit.

And that is how a business grows…

Business Growth Without Banks

Notice how throughout the growth of the company, Hiren (nor Ramakant) turned to the bank for money.

You can avoid bank loans and still start a very profitable business.

Profile of a Real Entrepreneur: Harivijay Kanchan

Mr. Harivijay Kanchan at Urlikanchan, Tal: Haveli, Dist. Pune

Vegetables Seedlings & Nursery business


Harivijay Kanchan was born in Urlikanchan to a middle-class family.

He finished his Bachelor of Science in Agriculture from Mahatma Phule Krishi Vidyapeeth Rahuri.


Since the beginning he was very interested in the field of agriculture, hence he wanted to start his own business specifically in the agriculture sector.

On a piece of land he owned, he started experiments on seedlings. After seeing success with experiments, he started getting tremendous response from farmers in and around his village.


He wanted to expand his business but needed money.

When he presented his business plan, not a single bank from his village was supporting him for starting his seedling business because he did not have any collateral, security, mortgage and influence. It was hard times for Harivijay when he was looking for the support.


He approached an Entrepreneur Organization who saw his entrepreneurial qualities and potential, and sanctioned to him a loan amount of Rs. 50,000/-.


He started the seedling production of vegetable, which was a unique business in his village area. Others were having ordinary flora, garden nurseries but no one was providing such type of products to the farmers.

Slowly and steadily he grabbed the market due to more demand of the product by farmers. As his product is high in yield and method of production is so qualitative, it has helped to reduce the wastage.


During that time, he faced lots of problems such as financial problem, marketing problem, electricity problem, etc.

Once his product and business got popularity, his market credit had increased and he got credit from banks easily.


After starting with one greenhouse he never stopped and expanded his business four-fold within a span of only six months. Now he has a lot of orders from all parts of Maharashtra. He has spread his network through quality product which has much more yield capacity and is ultimately beneficial to Indian farmers.


His business revenue for 2007 was Rs. 10,70,236/-

For 2008,

Rs. 12,75,625/-!


Initially he started his business with 6 employees. As his business is grown he has 10 employees at present including self. In addition to that he is providing indirect employment to approx. 15 person including transporters, tray makers etc.


Harivijay was short listed for Youth Business Award which is an international award. There were applications from 30 countries from all over the world.

Unfortunately he could not come in top three, but Harivijay says that being selected in top 10 from 30 countries makes him proud.


His future plan is to expand his seedling business to cater all parts of Maharashtra and then to whole nation. He wants to start his own private limited company. For this purpose he has started expansion of market and demand has increased for his products.

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Entrepreneurship Series How Business Works. Review Businesses involve people doing things for other people and being paid for it. Businesses satisfy our…