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While everyone aspires to be tagged along with something big, Rajeev Karwal, with over 25 years of experience of brand building, opted to work for start-ups. His company, Milagrow, acts as a one-stop destination for micro, small and medium enterprises (MS
While everyone aspires to be tagged along with something big, Rajeev Karwal, with over 25 years of experience of brand building, opted to work for start-ups. His company, Milagrow, acts as a one-stop destination for micro, small and medium enterprises (MSMEs) by providing them knowledge solutions for building businesses. Rajeev Karwal spoke to Shambhavi Anand on the vision behind Milagrow, a venture catalyst.
When and how did Milagrow come into being?
Three years ago in March 2007, I started with a dream to establish a business, which could do social good, be effective in bringing about a change in the society and still be sustainable. Thus came into existence Milagrow, which is a step towards nation-building.
What inspires you to work for SMEs?
In India, government, suppliers and industry chambers all want to work with the big businesses and almost ignore the small businesses. These big businessmen may or may not be entrepreneurs by choice, some of them might have inherited their business. For SMEs, who really want to be entrepreneurs, accessibility to finance is almost absent. It is this sector, which needs help. Milagrow tries to understand their individual needs and helps them, accordingly. We try to convert a small company into a brand.
What is your business model? What all services are offered by you?
Basically, we provide consultancy services but we call ourselves venture catalyst. We provide solutions for HR, starting from recruitment to capacity building and the like. We have tied up with the world’s best HR company, Dale Carnegie. We also help SMEs with funding.
We charge our clients for our services. Our fee structure takes care of the cost and other expenses. Sometimes, we get stakes in the company. We also have revenue and profit-sharing model. We create value together and reap the benefit.
How are your mentoring services different from other organisations in the fray?
Mentoring is just a part of the model, wherein one gets coaches and trainers, who give an insight into the target audience of a business. But just mentoring cannot help one cope with the pressures of being an entrepreneur. There are so many intangible areas attached to mentoring an entrepreneur, which most of the people miss out on.
We induce confidence in our clients so that they can handle pressure and become capable of taking difficult decisions in their ventures. Skills can be acquired by experience. But to acquire that experience one needs the confidence to sustain for a certain period of time. We help to induce that confidence in them so that the best is brought out.
Do you provide mentoring services to overseas SMEs as well?
Yes, we have clients outside India as well.
Does the Indian socio-economic scenario provides enough impetus to entrepreneurship in the country?
No, I don’t think India provides enough impetus for the MSMEs to grow. The MSME space is large and diverse. Every enterprise, like a human being, has its own needs and characteristics. All the ventures cannot be treated as one, but they are, in India.
India as a country is structured in such a way that power is divided between the state and the Centre and also different ministries. The role of the Ministry of MSME is that of a facilitator vis-à-vis the other ministries. Not that the ministries are not doing their work, but 70-80 per cent of the MSMEs are not aware of the policies or facilities available to them. Not even the apex industry chambers are helping the MSMEs in real terms.
Do you think if ideas like facebook, hotmail had come up in India, they would have been financed?
The best investors for a business in India are angel investors like friends and family. Then there are incubators. But they are also not able to provide all kinds of support, as these small companies need working capital to grow in the second stage, which is not available to them. For getting a loan sanctioned from a bank, one needs to go through a lot of paper work.
The only choice that a SME has is to go to the market and raise fund. These funds are available at higher rate of interest, which makes them uncompetitive. Once, they reach a certain stage and go to banks for loan, their balancesheets get weaker and their request for loan is declined. It is a vicious cycle. The system is such that nobody knows who the hunter is and who is hunted.
As you mentioned, finance is the biggest problem for SMEs, how do you help them tide over this problem?
We do not assist every enterprise with funding. We conduct some research on a company. If the business model is sustainable, we facilitate funding. We do this through our network.