[Reader-list] Some more Stories of Entrepreneurship
askshetty at rediffmail.com
Tue Jun 21 02:41:18 IST 2005
My sixth posting, for those who read the earlier ones and want to read more...
Case : A Multimedia Projector Maintainance Agent
Since the late 1980s this Multimedia Projector Maintainance Agent, worked with Videocon Electronics, specialising in household electronics. In the mid 1990s, Videocon entered into an agreement with Toshiba, Japan to market the new multimedia projectors in India. It was a time when the Indian industries small and big were all entering into competition and marketing products required high sophistication. This sophistication in marketing brought in the age of Power Point Presentations with a simultaneous requirement for equipments that could handle these presentations. The multimedia projectors in the market were expensive. We in the Architectural Institution had an experience, where we smuggled a four lakh worth machine from New Bombay into Mumbai to avoid an Octroi tax of about thirty two thousand. This was the first time I met this man in his early thirties.
He was one of the twenty-two employees from Videocon who went to Japan to undergo a training programme for marketing, maintaining and servicing the multimedia projector. After coming back from Japan, he visited several institutions and corporate offices to market these products. He was also able to sell some 26 projectors in the first six months. His job description also included maintaining, servicing and repairing small problems with these projectors. Along with problems such as dust accumulating on the lens, minor problems of electric supply, damaged tilt screws, damaged fans etc, one of the major problems in the machines, was bulb- damage. Intense care had to be taken of these bulbs as they got damaged due to overheating and heavy wear and tear. Since most clients were Institutions and Corporations, where multiple people handled the projector, the bulbs invariably got damaged. Our agent was called to replace these bulbs. These being extremely expensive, the clients started complaining. Though at that time, several other agents who were marketing some cheaper bulbs approached him, he was forced to use the expensive Toshiba make due to the agreement between Videocon and Toshiba.
Until 1998, the small sized, portable Toshiba multimedia projectors had competition only from the other smuggled brands. But soon after that, several other companies came into the Indian market with small and sleek multimedia projectors giving a stiff competition to Toshiba. Several small maintenances and servicing agencies started business using smuggled spare parts that were also cheaper. Toshiba projectors did not stand a chance with other projectors, as they were not only highly priced, but the company-provided maintainance was also expensive when compared to services given by other agencies.
As demand for the Toshiba projectors started decreasing, the relationship between Toshiba and Videocon also severed, and Videocon stopped marketing and servicing Toshiba projectors in late 2000. Since his mobile phone number was available to a number of his earlier clients, they started calling him for repairing the Toshiba projectors. I met him again in 2002, when we made this phone call to him on his mobile phone to repair our multimedia projector at the institution. He told me that he was no longer a Videocon employee, but would come and repair our projector.
After the Videocon-Toshiba break up in 2000, our agent found himself shifted to another wing of Videocon that dealt with Televisions. There was also a cut in his salary. In partnership with another employee, who was in a similar situation, he decided to start an agency to service the projectors independent of Videocon as they were both receiving a number of calls for projector repair.
They decided to use cheaper spare parts and provide service at half the price that Videocon gave. They both started marketing their agency by visiting various institutions and corporate offices offering their service. In mid 2001 both of them left their jobs at Videocon and settled as a multimedia projector maintainance agency. They did not have an office or a workshop, but operated from our agents house. They had to cut costs in all sectors as they did not have the cushion of Videocon reimbursing their travel and food costs. Moreover, travelling within the city increased, as they had not only to visit the clients, but also spare part dealers. The mobile phone bills also increased steeply. They had to encroach into their earlier savings for the first few months. Also the security of a monthly salary that arrived in the beginning of every month was gone and the family members started worrying. But they realised that the demand was very high for this specialised service, and they had made a right decision. Money started coming abruptly. They started getting used to borrowing and credits. Sometimes money would come equalling the amount of four month of the earlier salary, while other times, it would just trickle to cover the essential costs. Within six or seven months, things started stabilising and contracts with institutions and corporates started getting finalised and they soon found that they were unable to handle the volume of jobs themselves.
In early 2003, they decided to rent a small room in Vikroli in a slum as their workshop cum office and hired two persons who were appointed through their informal contacts. These boys were college dropouts and were trained in computer hardware from some local private training centre. Our agent and his friend took these two boys with them to the clients and trained them in servicing and maintaining the projectors.
With the boys also having knowledge of computer hardware, the group decided to extend their agency into offering services in computer maintainance. They also started selling assembled computers. The group soon hired four more persons and now the enterprise consisted of six persons. While the boys would take care of the computer wing, the two older agents would take care of the multimedia projector sector. There is no strict job description and all employees work across all sectors. One of the employees is hired to run errands for the enterprise as several trips are required not only to gather and handover products and spare parts; but also deliver invoices and collect cheques.
They are now in need of a larger space in a building, as the space in Vikroli is small and is in a slum, where they cannot invite their institutional and corporate clients. They are contemplating on whether to buy a new place with a loan or to rent a place. With cheap and easy loans, the buying option seems better as this would be a fixed asset and they seem to lean towards this. They have also hired a chartered accountant to maintain their accounts. This was not simply to pay their taxes, but to help them with acquiring a loan!
Case: A Soft Toy Maker
She graduated from Ruia College in Central Mumbai and got married in 1988 to a man who had a family-run business, manufacturing and selling plastic household products. While her maiden house was in Central Mumbai, the husband bought a new one-room kitchen house in the Western Suburbs after separating from a joint family staying in the Eastern Suburbs. He had bought the house before marriage with some help from his brothers. The new bride came into this house. The plastic factory was in Taloja, around 80 km from Mumbai and her husband being incharge of the factory workings would spend a lot of time in Taloja. Sometimes he did not come for a couple of days and during this period, she spent her time in her mothers house. After a year of marriage, they had a girl child and she started spending more time at her mothers house. She left her job after the child was born.
Before her marriage, she had learnt to make soft toys from her neighbour. During her stay at her mothers house, she started investing more time on making these toys. She would buy old books from second hand shops, buy fur from the market and make toys. Within two years, her brother got married and family pressures forced her to spend more time at home. Here in the western suburbs she started teaching other women to make toys. Later she was invited to a womens gathering to take toy-making classes. She saw a potential of making some money by teaching people this craft. She printed some cheap pamphlets to advertise her teaching and got them circulated through a local newspaper delivery boy. She got some few students and she would charge them Rs. 100 per session (few sessions were required to master the craft) plus the material cost. She started preparing small kits for making toys with cardboard cut forms and would distribute them amongst her students.
A neighbour at her mothers place, who was a merchant in textiles, advised her that she could sell her kits as well as her toys at a mass scale to stores. He also offered to find her some owners of such stores who could be her clients. She met her first client soon and gave him all the kits and toys that were already prepared during all these years. The toys and the kits got a very good response and soon the shop owner started asking for more. The textile merchant neighbour advised her to diversify her clients and approach more shop owners. She did the same and got a few more orders. The savings and the money from the earlier sales were used to buy the material for the new jobs. She approached the neighbouring women to help her make these toys. They agreed on a payment per piece. Soon the whole building became an industry with various toy body parts being produced in various houses. One of the houses undertook assembling all these body parts.
She realised that she was not the only one in the business and there were quite a few number of women supplying soft toys to various shops in the city. She had to become more innovative, re-strategise her clients and produce for a lower price. She started advertising her toys being made of imported fur that were less harmful for small children and this was the big step she took. Soon she had to find a supplier who would provide her with imported fur. The textile merchant neighbour helped her get in touch with such suppliers with whom she started making deals for her requirements for imported fur. She also started contacting large stores and other companies that were involved in the business. While Archies and other stores gave her some orders, she found that companies like Bubbles that produce soft toys work with outsourcing their work to smaller manufacturers who produce toys for them. She got in touch with one of the higher officials of Bubbles through a shopkeeper friend and got some orders to produce large quantities of toys.
Her workforce from her neighbourhood was becoming small for undertaking such an activity. Meanwhile, her husband had some differences with his brothers and had severed business relations with them. The family business broke down and each brother walked away with his share. The husband decided to help her with her growing enterprise. They decided on investing the money they got from the husbands share in a small workshop in a slum, which they rented, with a deposit of Rs. One lakh. They were now searching for a tailor who could manage the running of their workshop. From the contacts of the textile merchant neighbour, they got in touch with a tailor who worked with a garment-manufacturing agent. He was from UP. He was ready to work with her and give up his job with the garment-manufacturing agent and make toys. She brought him to the workshop and gave him a tailoring machine to start work. He would live in the same workshop. The workshop was close to their house and all the raw material and the finished products were stored in the same place. The enterprise started growing with the workshop and the workforce from the neighbourhood unable to handle the demand. The tailor offered bringing some of his relatives from UP for assistance. She and her husband agreed and rented another house in the same slum for the new work force to stay. The tailor now no longer has remained a mere employee, but a friend and an advisor for all technical matters. He also started coordinating between various women who were producing different parts of the toys.
They soon bought a Maruti Van to transport their raw materials and the husband learnt driving. Their one room kitchen house was becoming too small to accommodate all the activities of a household industry as well as the needs of a growing child. While they were confident of mobilising money for a new house, they were not sure if they could develop the same network in the new neighbourhood that would become the workforce. Her father who was a real estate agent advised her to invest on a house at that time (1999) as property prices in Mumbai were at their lowest at that time. They started looking for a new house and chose one in a newly developed building. They thought that it would be difficult for them to mobilise the workforce in the new neighbourhood as it had a higher class staying there with most women members working. They decided to work with the same old neighbourhood, but shift their residence to a new place.
The tailor has bought his family to Mumbai and has shifted to larger house in a same slum. They have also bought a larger workshop and have hired several workers. The network in their old neighbourhood has slowly dissolved as several families from the older neighbourhood also shifted residences. Now all the work of making toys is being handled at the workshop. Their daughter is now fifteen years old and they in their late forties. Their current focus is on getting their daughter to pass her tenth grade examination with a very good score so she gets to study in a good college.
Residence: 501, Marigold, Opposite Shakti Motors, New Link Road, Malad (W),
Mumbai 400 064 INDIA
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