Entrepreneurship for YOUTH
1
YOUNG TURKS In year 2005, during holidays in Diwali, Phanindra Sama could not get bus cket to go back to Hyderabad. When we were all busy in celebrang Diwali, Phanindra went to bus operators to understand what causes bus operators to run the lame Bus Transport System. He pondered and decided to make bus ckets online. Along with few BITS Pilani college friends, he studied the system and came up with online bus cket website. He took help of TiE, Bangalore by subming his idea and duly received support from them to shape up his business. Mentors from TiE asked him to work on small issues to understand the bus system like the number of buses, the number of routes, and average price of a cket, how people buy ckets, the profile of customers, how much commission a bus operator pays to an agent, etc. Aſter all the studies on issues of bus system they created online site called rebus.in. They first targeted IT companies to create awareness of online reservaon of bus ckets by standing outside the companies and distribung the pamphlets. Their first success was of just 5 bus ckets with one bus operator who had given them chance to sell it online. Now their operaons grew exponenally by 5000 ckets per day with more than 700 registered bus operators. The first year of Redbus was not good. They did 50 lakh worth business with zero profit. The very second year the turnover reached to 5 crore and now they have projected turnover of 150 crore for year 2011. Esmaon says market of bus cket online booking is around Rs. 15,000 crore in India and redbus.in is just 1% of Indian market size despite of such huge success. So what is there in your mind now? TURKS YOUNG 07 pg INCUBATE, INNOVATE AND FLOURISH Ashish Khare [email protected] ENLIGHTENMENT ENTERTAINMENT EMANCIPATION EDUCATION EMPLOYMENT EXPOSURE VOL. 1 NO. 9 BHOPAL / METRO www.youthengine.net 06 MAR - 12 MAR 2011 YOUNG TURKS B rew your usiness Seng up of rural BPOs is no longer being perceived as just corporate social responsibility. These are viable businesses. Many educated village youth are joining the BPOs that are being set up in villages of India. Popularly known as rural BPOs, they include players like Rural Shores, Tata Business Support Services (earlier know as Serwizsol), DesiCrew Soluons and Comat Technologies. Some of the organizaons that get services from such centers include HDFC Bank, Kotak Mahindra Bank, Axis and many telecom players. Work Most of these centers provide services like data entry, email responses, document checks, data and bill processing. Social Impact On a macro level, the rural BPO model has potenal for greater impact given that approximately 70% of India's populaon resides in rural areas. If 50 people working in 1000 towns/ villages earn Rs 5,000 per month - that is Rs 250 million per month being infused into local communies through local residents. On a comparave scale, average monthly household income of these employees would have been Rs 1,500 per month. Proposion With the telecom industry aiming to increase its rural subscribers base and the central bank asking banks and financial firms to cater to the rural sector, businesses will have to find ways of servicing customers. Lower infrastructure costs, salary levels and low arion rate make rural BPOs a suitable business proposion. Other than the cost of infrastructure, the salary levels are also 15-20 per cent lower than the urban centers. In some cases, where the centers are located in the interiors, salary levels can be around Rs 3,000-7,000 per month. Arion rate is also very low. Challenges Seng up centers in remote villages is not an easy task. Firms need to provide power and invest accordingly. The other issue is training of the employees. While the me taken for training is around six months, sending mid-managers to these centers is a tough task. Need help? Submit your business plan to Rural Technology Business Incubator (RTBI) at IIT-Madras Major Players AegisBPO - Going to invest 300 crore to setup various BPO in rural areas. GramIT - 5 centers in AP and invesng in Madhya Pradesh. Comat Technologies - has about 800 centers in Karnataka and 300 centers in Haryana. But since these are in the remote areas, each centre has a capacity of 2-3 seats. Going ahead, the company plans to set centers in UP, Uarakhand, Tripura and Sikkim. SerWizSol - It is perhaps one of the few companies providing voice based-services from rural areas. It has one centre each in Andhra Pradesh (Ethakota) and Gujarat (Mithapur). Phanindra Sama, CEO, redBus.in Age - 26, Education - BITS Pilani Company turnover in 2010 - Rs. 60 Crore N R Narayana Murthy, chairman and chief mentor of India’s second-largest IT services firm Infosys Technologies, has christened his venture capital (VC) fund the ‘Catamaran Venture Fund’. Murthy said the fund would primarily look at early stage investments or ‘angel funding’. For now, he will be the only person who will manage the fund. Although, he added that he planned to have a team of three-four experienced people to manage the fund at a later date. Limited Partnership A business arrangement in which the day-to-day operaons are controlled by one or more general partners and funded by limited or silent partners who are legally responsible for losses based on the amount of their investment. You have business idea but where is dedicated team? Hire like-DNA Like DNA doesn’t necessarily mean like personalies. Hire people who get it, who see the world the same, but that have complementary skills. There’s an old saying that “it takes all kinds,” but don’t take that too literally. If you do, you’ll have analysis paralysis and you won’t accomplish anything in a meframe that maers. Too many chiefs Don’t hire too many execs; being top heavy isn’t fun. It comes with egos, turf wars, high expense to your cash and cap table. A VP level role must be severely jusfied. Just because someone is the first employee, doesn’t mean they’re a VP. And just because someone’s a founder, doesn’t mean they’re a VP either. While we’re here, “founder” is not a job tle, so avoid behaving as if it were. Build a low fat company People tend to over-hire so that they can scale to meet the demands of a hockey sck business that’s coming any day now. Don’t hire unl it’s clear you have one of those hockey sck situaons. SCOOP of ENTREPRENEURSHIP WORLD TERMINOLOGY in ENTREPRENEURSHIP WORLD AN IDEA can CHANGE YOUR LIFE continued on page 15 First Played World Cup in - 1996 Best Result in World Cup - Round 1 Player to look out for - Ryan ten Doeschate Netherlands Group B ODI Ranking - 12 Captain - Peter Borren Premier batsman Ryan ten Doeschate has the highest batting average (71.21) in International Cricket. PREVIOUS MATCH : 03 Mar - NED Vs SA Result: South Africa won by 231 runs Man of the Match : AB de Villiers NEXT MATCH : 09 March - IND Vs NED - Delhi GROUP STANDING : 7 (0/-3.058) Opportunity is missed by most because it is dressed in overalls and looks like work.” – Thomas Alva Edison, Inventor and Entrepreneur SETTING UP A RURAL BPO A CASE STUDY
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Entrepreneurship for YOUTH
Transcript of Entrepreneurship for YOUTH
YOUNG TURKS
In year 2005, during holidays in Diwali, Phanindra Sama could not get bus ticket to go back to Hyderabad. When we were all busy in celebrating Diwali, Phanindra went to bus operators to understand what causes bus operators to run the lame Bus
Transport System. He pondered and decided to make bus tickets online. Along with few BITS Pilani college friends, he studied the system and came up with online bus ticket website. He took help of TiE, Bangalore by submitting his idea and duly received support from them to shape up his business.
Mentors from TiE asked him to work on small issues to understand the bus system like the number of buses, the number of routes, and average price of a ticket, how people buy tickets, the profile of customers, how much commission a bus operator pays to an agent, etc. After all the studies on issues of bus system they created online site called rebus.in. They first targeted IT companies to create awareness of online reservation of bus tickets by standing outside the companies and
distributing the pamphlets.
Their first success was of just 5 bus tickets with one bus operator who had given them chance to sell it online. Now their operations grew exponentially by 5000 tickets per day with more than 700 registered bus operators.
The first year of Redbus was not good. They did 50 lakh worth business with zero profit. The very second year the turnover reached to 5 crore and now they have projected turnover of 150 crore for year 2011.Estimation says market of bus ticket online booking is around Rs. 15,000 crore in India and redbus.in is just 1% of Indian market size despite of such huge success.
So what is there in your mind now?
TURKSYOUNG
07pg
INCUBATE, INNOVATE AND FLOURISH
Ashish Khare youngturks@youthengine.netENLIGHTENMENTENTERTAINMENTEMANCIPATIONEDUCATION EMPLOYMENT EXPOSURE
VOL. 1 NO. 9BHOPAL / METRO
www.youthengine.net
06 MAR - 12 MAR 2011
YOUNG TURKS
BrewyourusinessSetting up of rural BPOs is no longer being perceived as just corporate social responsibility. These are viable businesses.
Many educated village youth are joining the BPOs that are being set up in villages of India. Popularly known as rural BPOs, they include players like Rural Shores, Tata Business Support Services (earlier know as Serwizsol), DesiCrew Solutions and Comat Technologies. Some of the organizations that get services from such centers include HDFC Bank, Kotak Mahindra Bank, Axis and many telecom players. WorkMost of these centers provide services like data entry, email responses, document checks, data and bill processing.
Social ImpactOn a macro level, the rural BPO model has potential for greater impact given that approximately 70% of India's population resides in rural
areas. If 50 people working in 1000 towns/ villages earn Rs 5,000 per month - that is Rs 250 million per month being infused into local communities through local residents. On a comparative scale, average monthly household income of these employees would have been Rs 1,500 per month.
Proposition With the telecom industry aiming to increase its rural subscribers base and the central bank asking banks and financial firms to cater to the rural sector, businesses will have to find ways of servicing customers. Lower infrastructure costs, salary levels and low attrition rate make rural BPOs a suitable business proposition. Other than the cost of infrastructure, the salary levels are also 15-20 per cent lower than the urban centers. In some cases, where the centers are located in the interiors, salary levels can be around
Rs 3,000-7,000 per month. Attrition rate is also very low.
ChallengesSetting up centers in remote villages is not an easy task. Firms need to provide power and invest accordingly. The other issue is training of the employees. While the time taken for training is around six months, sending mid-managers to these centers is a tough task.
Need help?Submit your business plan to Rural Technology Business Incubator (RTBI) at IIT-Madras
Major PlayersAegisBPO - Going to invest 300 crore to setup various BPO in rural areas. GramIT - 5 centers in AP and investing in Madhya Pradesh.
Comat Technologies - has about 800 centers in Karnataka and 300 centers in Haryana. But since these are in the remote areas, each centre has a capacity of 2-3 seats. Going ahead, the company plans to set centers in UP, Uttarakhand, Tripura and Sikkim.
SerWizSol - It is perhaps one of the few companies providing voice based-services from rural areas. It has one centre each in Andhra Pradesh (Ethakota) and Gujarat (Mithapur).
Phanindra Sama, CEO, redBus.inAge - 26, Education - BITS PilaniCompany turnover in 2010 -Rs. 60 Crore
N R Narayana Murthy, chairman and chief mentor of India’s second-largest IT services firm Infosys Technologies, has christened his venture capital (VC) fund the ‘Catamaran Venture Fund’.Murthy said the fund would primarily look at early stage investments or ‘angel funding’. For now, he will be the only person who will manage the fund. Although, he added that he planned to have a team of three-four experienced people to manage the fund at a later date.
Limited Partnership A business arrangement in which the day-to-day operations are controlled by one or more general partners and funded by limited or silent partners who are legally responsible for losses based on the amount of their investment.
You have business idea but where is dedicated team?
Hire like-DNALike DNA doesn’t necessarily mean like personalities. Hire people who get it, who see the world the same, but that have complementary skills. There’s an old saying that “it takes all kinds,” but don’t take that too literally. If you do, you’ll have analysis paralysis and you won’t accomplish anything in a timeframe that matters.
Too many chiefsDon’t hire too many execs; being top heavy isn’t fun. It comes with egos, turf wars, high expense to your cash and cap table. A VP level role must be severely justified. Just because someone is the first employee, doesn’t mean they’re a VP. And just because someone’s a founder, doesn’t mean they’re a VP either. While we’re here, “founder” is not a job title, so avoid behaving as if it were.
Build a low fat companyPeople tend to over-hire so that they can scale to meet the demands of a hockey stick business that’s coming any day now. Don’t hire until it’s clear you have one of those hockey stick situations.
SCOOP ofENTREPRENEURSHIP WORLD
TERMINOLOGY inENTREPRENEURSHIP WORLD
AN IDEA canCHANGE YOUR LIFE
continued on page 15
First Played World Cup in - 1996Best Result in World Cup - Round 1Player to look out for - Ryan ten Doeschate
NetherlandsGroup BODI Ranking - 12Captain - Peter Borren
Premier batsman Ryan ten Doeschate has the highest batting average (71.21) in International Cricket.
PREVIOUS MATCH : 03 Mar - NED Vs SA Result: South Africa won by 231 runsMan of the Match : AB de Villiers
NEXT MATCH : 09 March - IND Vs NED - Delhi GROUP STANDING : 7 (0/-3.058)
Opportunity is missed by most because it is dressed in overalls and looks like work.” – Thomas Alva Edison, Inventor and Entrepreneur
SETTING UP A RURAL BPOA CASE STUDY
