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Aug, 10 2013

Biz Tales: From scratch to billions

Looking to start a business? With numerous business ideas juggling in your mind, here are some inspiring stories of a few leading entrepreneurs who started their venture with a meager investment and turned it into a success story.

When Jamsetji Tata, also known as the “Father of the Indian industry”, started his own business, presently the Tata Group of companies, with an amount of Rs 21,000 in 1861, he just had a vague idea of the business he wanted to start. He never knew that it would turn out to be one of the biggest companies in the country. Many entrepreneurs have moved from rags to riches with the right idea and a perfect blend of hard work and determination. Here are a few business propositions which are pocket-friendly.

A walk to remember

It was a trip down memory lane for most of these businessmen. For Mahesh Gupta, Chairman, Kent RO, it has been an overwhelming journey full of hard work and determination. In the beginning it was a challenging journey but exciting at the same time. The journey which started from a garage, now has carved its own niche, says Gupta.

The company has an offbeat journey. Kent RO is a brand which started its voyage from a garage and today has become a Rs 450 crore company which has grown immensely and is still growing. It has a market share of 40 per cent in RO and is considered as the pioneers of the revolutionary Mineral RO technology in India. “I am a mechanical engineer from IIT Kanpur and an alumnus of the Indian Institute of Petroleum, Dehradun. I began my career in sales in 1978 with Indian Oil. With more than half a dozen technology patents to my credit, I went commercial under the brand name Kent Oil Meters in 1988. It was my first innovation through which one can check the quality of oil. Then in 1998, when my teenage children, Varun and Surbhi, fell prey to jaundice, and realising that drinking water was the culprit, I was forced to look for water purifiers to install at my South Delhi home. Unimpressed by what was available in the market and being an IITian from Kanpur, I decided to noodle on the technology and flesh out on my own ideas. I researched and analysed the available water purifiers in the market. After several trials, using my expertise and just Rs 20,000 in hand, I made my own water purifier for my family. When things worked out very well and the purifier\'s performance was impressive, I wanted to promote healthy and happy life for other families as well. That boosted me up to market this self-invention for the welfare of others,” says Gupta.

Steel Bird Hi Tech Ltd is another company, which was started way back in 1964 with a capital of Rs 3,000 and it initially produced water filters. It was started by Subash Kapoor, father of the MD of the company, Rajeev Kapoor. His father used to manufacture polybags initially, and then he met one person who had an expertise in automobile filters. He convinced Rajeev\'s father that there was a lot of money in it. Following his advice he invested another Rs 3,000, but the man ran away. This motivated his father to conduct a survey on automobile filters. Rajeev Kapoor joined the business in 1989, and in 1994, in collaboration with the world\'s best helmet company, Steel Bird started manufacturing helmets. In 2000, the company signed an agreement and started supplying helmets across the world. The company set up its first plant in Baddi in 2005 for manufacturing helmets. It set up the second plant in Italy in 2007. A similar story is that of an imitation jewellery brand, Trenz, which started trading imitation jewellery from the flea market in Chandigarh, Sector 22, which is now known as the Shastri Market. “I started my business of imitation jewellery from Chandigarh, which had a high density of fashion- conscious youngsters. Starting with a small kiosk in Sector 22, we received a good response from the youth of the city as fashion jewellery and accessories were in demand,” says Dhiraj Arora, MD, Trenz Jewellery. The brand was started in 1990 when Dhiraj was 12-year-old. His elder brother started it with a meager capital of Rs 17,000 and there has been no looking back since then. Dhiraj\'s father took a shop on rent in Shastri market in 1991 and started franchising in 2003. They started manufacturing jewellery as well in 2005.

Following in the footsteps

With years of experience these entrepreneurs have their set of suggestions for starting and running a business. Gupta believes in “honesty is the best policy”. He says, “If you are dealing honestly, everybody supports you. This kind of philosophy will drive you in the long run.”

Elaborating on it he said that he started his expeditions from a small garage where he used to design these purifiers with his own patented technology. “For me it was a one man show, as I was all alone and had no back up or guidance from anyone,” he says. He imported ideas from abroad and it was really helpful for him. Subsequently, he thought of launching it in the market. And that\'s how Kent RO came into being.

For Kapoor an entrepreneur should first understand his strengths and weaknesses before starting a business. “Business is a matter of choice, thus, it is important to have faith and confidence in your business,” he says. Agreeing with him Arora of Trenz Jewellery says that for running a business successfully two ingredients are important: first, believing in oneself and secondly, hard work. About the upcoming sectors, Arora feels online retail has very good prospects, and very soon Trenz will be launching its own portal too.

Handholding franchisees

After establishing the business successfully, it\'s important to provide the best of services to consumers and partners. Thus, almost every brand ensures providing ideal training and support to its franchisees. If one buys the franchise of Kent Ro, the franchisee is expected to bear the entire cost of setting up the store. It is expected to be in the range of Rs 5-10 lakh, depending on the location. However, this entire cost will be reimbursed to the franchisees in 36 EMIs by the company. “We will provide support in terms of trained staff, training their staff, after-sales servicing, etc. The expected break-even period is one year in which we expect to do minimum sales of Rs 10 lakh per month of all products put together, which is likely to go up to Rs 15 lakh and above by the end of one year,” specifies Gupta of Kent RO.

Trenz Jewellery has two kinds of business models on the platter for its franchisees, elaborates Dhiraj. “One business model is a dummy investor where the franchisee just invests and everything else is managed by the brand, while in the second format the franchisee himself manages the kiosk. We also provide complete training and support to our franchisees with 1-2 months training. Our trained staff imparts its skills to the franchisees,” says Dhiraj of Trenz.

Overcoming challenges

Like any other startup company, these entrepreneurs also faced their share of challenges and are still coping with them. After successfully designing a water purifier Gupta had a long journey to undertake. “When things worked out very well and the purifier\'s performance was impressive, I felt like promoting healthy and happy life for other families as well.  That boosted me to market this self invention for others\' welfare and pushed me to lay the foundation of Kent RO SYSTEMS. But this wasn\'t the end of my journey,” explains Gupta. The biggest challenge was to break the hard mindset of the people who used to have a purifier for as low as Rs 5000 (Eureka Forbes UV Water Purifier). To sell a KENT product for Rs 20,000 and with newer technologies and face the competition at the same time were the challenges faced.

After this primary stage, the biggest problem was how to promote the product. Gupta did not have the resources and trained manpower to accomplish the task. He worked in the garage all through and performed multiple tasks to make his dream come true. Still, sales in the first few years were quite depressing. The sales pitch made was for corporate clients. In the initial years, he went marketing Kent water purifiers as an industrial product. “We were highlighting the various advantages of the product, but there was no emotional connect. And this was probably my biggest mistake, which sooner or later I realised and rectified by adopting a consumer-centric marketing approach, which included adopting a brand ambassador, going for electronic media and other BTL route. In 2006, we roped in Hema Malini and went to the electronic media with our advertisement campaign. That really helped us build the brand over a period of time,” he says.

While Arora of Trenz says the basic challenge he faced pertained to skilled manpower which was lacking and  also lack of funds.

Expansion on cards

For further growth Kent RO is investing extensively in expanding the distribution network and ramping up manufacturing capabilities. In addition, it has set up three state-of-the-art manufacturing facilities in Roorkee and the fourth one is coming up in Greater Noida. The brand is planning to take the franchise route to reach out to its customers, as it is coming up with Kent\'s own Shoppe\'s across India.

Besides, Kent RO has taken another step in its journey by bringing Electrolux brand to India. This will meet the ever-increasing demand of Indian consumers for water purifiers that not only provide clean drinking water, but also add to the kitchen\'s luxury. Post this development, Kent has two independent brand lines i.e., Kent RO products and Electrolux Products. Both brands have different TGS and the brand has designed the communication accordingly.

Shilpa Shetty has been appointed as a brand ambassador for Electrolux range of purifiers, as she seems to be an ideal choice for Electrolux keeping in mind her image “women on the move” and a mother too, which fits prudently in brand positioning. Electrolux is planning to tap the premium segment of this market and Shilpa Shetty definitely has that appeal. The company hopes to sell 50,000 units of the Electrolux range of water purifiers in the first year and then expects to grow at 25 per cent year-on-year. Initially, the company will be present in top 50 towns, and it will invest substantially in marketing and promoting the brand across the country.

Steel Bird is looking for a pan-India expansion and Trenz aims to expand in North India.

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