How to sustain a business idea

It is a great idea! That is the line with which an entrepreneur should knock the world with enthusiasm. Plethora of business ideas remain in the shell due to their inability to collaborate key resources required to build a successful venture. Even if one takes the courage to transform his/her business idea into action, they end up spending valuable time and money in their dream project, which sometimes goes in vain.

Industry experts and investors believe that incubation centres have a key role to play here. They help entrepreneurs validate the idea and provide the required support system with the help of mentors. Mentors tell entrepreneurs how to translate the idea and business plan into proof of concept. Once that is done, entrepreneurs can reach out to investors for funding.

Sunil K Goyal, Founder and CEO, YourNest Angel Fund, shares, “One should translate the idea in a very effective manner, which in turn would encourage investors to come forward and invest in their ventures. Entrepreneurs should be able to translate the idea into customer proposition and once the customer validates the idea, investors are then ready to invest their money in it. It only happens when you become a part of an incubation centre and get the initial Rs 10 to 20 lakh.”

Sustaining the idea

Once the idea of the business gets validated by the consumers and investors, the next phase is to follow a strategy in order to sustain the idea for a long term, which seems to be an incessant process.

Intellecap is one such example. Ten years back, the company was started with a capital of Rs 1 lakh. Over the ten years, the company has grown into a group of 700 people. Currently, the firm has Rs 500 crore of assets and management within the group.

“We have built multiple businesses along the way, which includes consulting business, investment banking business, research business and angel networks. Within a group, we have a micro-finance company, which does SME debt financing. We also have platforms, which bring together various social enterprises and investors looking to invest in such businesses, corporate who are interested in the inclusive business space and government & academicians who are researching that space. So, it is a collaborative platform for action,” says Anurag Agrawal, CEO, Intellecap.

Selling the idea

Business plan only gives the idea of financial competencies, which give investors a sense that an entrepreneur is raising the right amount of money. Risk is one of the most important elements, which an entrepreneur should be aware of and from an investor perspective, if an entrepreneur does not acknowledge the risk then it will give a negative feeling to the investors. An entrepreneur should pass through basic tests in order to get the capital.

“Investors say that 50 per cent of our decision is based on the founders, his passion and his understanding of what needs to happen. A founder has to be extremely clear of whether they are solving the problems of the customers and that is fundamental to any business to scale up in the long term. It gives investor an overview of whether there is any value in this venture. That is the fundamental on which your business should start building up,” concludes Ananth Rao, Chairman, Focus Skillpro. 

Getting listed on stock exchange

In order to raise equity capital for entrepreneurs in a cost effective manner, BSE has set up BSE SME Platform on 13th March 2012 to abide by the rules and regulations laid down by SEBI. The platform offers an entrepreneur an investor friendly environment, which enables the listing of SMEs from the unorganised sector scattered throughout India into a regulated and organised sector.

The criterion to get listed in the BSE SME platform is to have net tangible assets of Rs 1 crore. In 2 years, the platform has got around 63 companies listed, who have raised a capital around Rs 530 crore.

Today, the market capitalisation of these 63 companies is around Rs 7,800 crore. On 11th February 2014, the platform allows companies to get listed without an IPO. With the help of this platform, one can get fund for expansion, acquisition, strengthen balance sheet and increase visibility in manifold.

The SMEs when gets listed on the BSE SME Platform can have access to a lot of finance for further growth and development. The platform will also enable them to be a part of the main board of BSE as per the existing rules and regulations.

Ajay Thakur, Head, BSE SME says, “We are the pioneer of the capital market but in 140 years, we have got 5,300 companies listed and today, the market capitalisation of these 5,300 companies is Rs 80 lakh crore. Our contribution in country’s GDP is $2.5 trillion. So that is the contribution of BSE towards the growth of the country and the entrepreneurs.”

He further adds, “Normally, we think that capital market is meant for the larger and not for the smaller companies. Most of the companies who have grown were once used to be small companies.”

Thus, in order to generate growth and opportunities for organisation, it is very crucial to deploy the perfect entrepreneurial attitude, which will further help to sustain the business in the long period of time. An entrepreneur should stay focused on their dream and ambitions of turning their venture into a successful enterprise.