Running/starting a business - frequently asked questions

Q. What will be the tax structure for a sole proprietorship?
A. As a proprietor, you will create a profit-and-loss account of your business. Here you have the advantage of putting in a lot of your business/personal expenses into the P&L account. This should ideally be avoided as you grow, but initially you can reduce your tax burden with this. The tax you will end up paying is only on the *profit* of your business, and not on all the income. If you accept income directly on your name, you will have to end up paying tax on all the income. So proprietorship is the smarter choice.

The other tax component you need to be aware of is Service Tax. If your revenues exceed Rs. 8 lakhs per year, you are liable to pay Service Tax every quarter at the rate of 12.36% on the income. For this you will need to obtain a Service Tax number by registering yourself at the local excise office. This is for services. If you are going to be selling products, you need to register for Sales Tax or VAT (depends on the rules in your particular state). For this as well you need to check with your local excise officer. More information on Service/Sales tax is available here
http://cexmumbai3.gov.in/


Q. How do I start from scratch?
A. Good to hear that you're looking at becoming an entrepreneur. There are basically two approaches to starting your company:
1. You could plan, map your strengths, product offering, and then see whether there is a market need for it, what resources you would need, how much funding you would need, and then build all of this into a business plan.
2. You could jump right into the deep end of the pool, and follow a 'shoot-from-the-hip' kind of cowboy style of doing things

I adopted approach #2, but wouldn't always advise it. The important common points in either approach are:
1. You have to offer something that the market will pay you for
2. It has to be something you would love doing irrespective of how much you get paid for it

The current economic and business situation is such that you could start off on an experimental basis while you are still working. And then you could quit and begin full time. I was slightly advantaged because I started at 20-21 and didn't have a family to support. Those sorts of things add responsibilities and must be duly addressed.

I started my company with a Rs. 2 lakh capital, and built it into a 100 times that in about 6 years. My blog does contain posts on how to start your business from scratch. Take a look and see if it helps.

Q. Can you tell me if VAT and Service Tax are applicable for freelance software solutions provided locally and for abroad?
A. Service Tax, yes, only if your annual turnover exceeds Rs. 8 lakhs
VAT would be applicable only if you resell other software products, or you have built your own products.

Q. Do I need a PAN card for a proprietorship firm?
A. No, you can use your personal PAN number. A separate PAN will be required only if you have incorporate it as a Pvt. Ltd. firm. Approach the nearest Income Tax office and get in touch with the PRO (Public Relations Officer) for details.

Q. Do I need to register for Service Tax or VAT?
A. Service Tax, yes, only if your annual turnover exceeds Rs. 8 lakhs
VAT would be applicable only if you resell other software products, or you have built your own products.

Q. Where do I get my seed capital from?
A. As to your funding requirement, I suggest you first list out exactly how much money you need, for how many months, how you intend to earn revenues, how much revenues you are targeting on a monthly basis vs. your monthly expenses to run the company. Basically, try and build a rudimentary profit-and-loss sheet, and see where your break-even point is. How do you intend to pay back the entity who loans you the money.

Taking money from friends/relatives may sound easy, but it isn't always so. What if your venture doesn't succeed as much you had planned. You will damage the relationships also. But if it is a small sum, and you are confident of returning it, then this is the best option. Banks will ask for collateral to give you a loan, and this might be difficult, unless you mortgage some family property or other assets you have.

But first come up with the exact amount of money you need and then try and figure out your sources of funding.

Q. I am currently working at a Pvt Ltd Co. and am starting my own propreitorship firm from my home. Its a services business where I would be launching my first portal soon. I have acquired a gumaste license. Kindly inform me about the other requirements specially relating to taxes. Do I need a seperate pancard for the firm and besides registering for the service tax which other taxes do i have to pay?
A. If you are running it as a sole proprietorship, you can continue using your personal PAN number. For purposes of tax calculation, you need to prepare a profit-and-loss account for the proprietorship firm, and then include only the profit (if any) into your total taxable income computation. But if you incorporate it as a Pvt. Ltd. firm then you need an additional PAN card.

Besides service tax, if you have employees you would have to pay Fringe Benefit Tax on the benefits you provide to your employees (such as travel, food, conveyance, entertainment, petrol diesel, etc.). You also need to register for Professional Tax for your proprietorship firm. If you sell or resell any products, you would also need to register for VAT or Sales Tax. If you have employees, you need to deduct tax at source, and for this you need to register for a TAN number.

Please check with a professional CA and CS (Company Secretary) for the latest laws and regulations in this regard.


Q. Can I have a current account (as the sole Prop) in my name but have an operational business name for website/visiting cards etc. Is it mandatory to have the name registered?
A. Your clients will know you by the name being used on your website and visiting cards. But then when you bill them or ask them to make a payment, it will be a different name. This will create a slightly negative impression in their minds. It is best to focus on brand-building right from the start.

How to register for Sales Tax / VAT in India

Recently, we got into reselling products in line with our consulting work, and also developed a couple of new products. But in order to sell products within India, we need to register for a Sales Tax or VAT (Value-Added Tax) number. This process is pretty straightforward:

1. Locate the office of the Central Sales Tax Office in your city. Being in Mumbai, a simple Google search turned up the location of the office at Mazgaon - http://salestax.maharashtra.gov.in/communicationcenter/contactusShow.php
2. Approach either the Public Relations Officer's desk there, or go directly to the Registration Department and collect the forms.
3. We needed the following supporting documentation along with the form:
• Company's PAN Card
• Director's PAN Card copy
• Two proofs of Director's residence - I used my passport and a phone bill
• Two proofs of place of business - we used our Leave & License agreement, and the electricity bill
4. The form is pretty straightforward to fill, and you need to ask for the one related to Voluntary Registration (VRS). You will need a Sales Tax Professional to sign on the form, and the Mazgaon building also houses the central office of the Association of Sales Tax Professionals, so finding one shouldn't be all that difficult.
   
5. It cost us Rs. 5000 as fees for VRS, and nothing under-the-table
6. The Sales Tax or VAT number is sent across by post in about a week's time

The main thing to keep in mind is that VAT returns need to be filed every quarter, and you will need to get a qualified CA who is capable of auditing and signing-off on VAT returns. My current CA has expressed his reluctance to process our VAT returns, so we are on the lookout now for someone who can do this.

10 ways to get business when bootstrapping

Some of these headlines are beginning to read like the advertising gimmicks from fly-by-night online operators. But when you're bootstrapping your business, and don't have much in the way of funding. And possibly no sales or marketing staff, here're some ideas on how you could get leads. Caveat: this would work best probably only for consulting companies, but then again, it just might work for anyone. Here goes:

1. Subscribe and post to mailing lists: In our line of work, there are a number of mailing lists. Some of these have subscriptions of over 1 million members (Bugtraq). When people send in queries, and if you have sensible answers to give, it helps to put your name out there. If I read someone's reply to a query, which I find useful, I will often check up on that person's website, and see if there is any business potential. Similarly, if you post answers and put your contact information in your signature, it helps to put your name out there.
2. Write articles: Often, when we don't have business in a particular segment of our work, say SAP Security, we'll go ahead and write up on it. If an online or offline journal publishes the article, that's great. If not, we put it up on our website, and sooner or later the search engines will pick it up and send inquiries your way.
3. Speak at conferences - big or small: Within your area of business, there would be a number of professional societies. These would normally meet weekly or monthly, and quite often they invite guest speakers. If you take membership of these societies and take an active role, you're very likely to get noticed. They are also often short of good speakers, so if you can play it to your strength then you would again be able to put your name out there.
4. Write a blog (not an anonymous one!): If you post good stuff on your blog, especially directly related to your area of expertise, business is quite likely to come your way. Of course, anonymously blogging like here doesn't help much in the way of getting business, but then again that was not really my objective :)
5. Call up the bigger fish: In any line of work, there are bound to be the big guys who would be more than willing to send business your way, especially if you specialize in a niche area. For us, initially our area of expertise was (and hopefully still is) penetration testing. The big consulting firms were more interested in large audit projects, and were more than willing to offload the smaller ones to us.
6. Call up existing clients: Asking for referrals is one of the best ways to get business. In fact, why just clients. You could call up everyone you know - vendors, suppliers, friends, ex-employers, etc. It doesn't hurt, and most of our large deals have landed up in the most unexpected fashion.
7. Get your website listed: Build a cool-looking website and get it listed in a number of online directories which may be specific to business in your area. Both Yahoo! and Google have directories and you could try and get it listed there. There are also online Yellow Pages-style sites and you could try getting listed there
8. Drop flyers in your office complex: This might be a slightly desperate measure, but what the heck. Get one-page flyers printed and post them around your office complex or in buildings next to the one you work in.
9. Put up hoardings if possible: Where we work, the law of the land allows us to put up a hoarding outside our office. And thankfully for us our location is right on one of the busiest roads in town. So everyday thousands of people see the hoarding. Not that we've gotten a lot of direct business from it, but every now and then we meet someone who's seen it and it helps create recall value.
10. Do work gratis: This is probably the last resort, but if a large client is willing to give you a letter of appreciation or recommendation for some free work, then you might as well do it. When starting out, we did a few free assignments, but this must be avoided to the extent possible.
    

10 Questions with a woman entrepreneur - Shibani Jain

Shibani Jain is the CEO of Craftsbridge India Pvt. Ltd. A first generation woman entrepreneur, she has stuck through a lot of ups and downs to build a very unique and inspiring business – bringing India’s traditional crafts and arts to a wider market, using the Internet and direct marketing as tools to ensure the craftsmen get their right recognition and dues. I interviewed her online a few weeks ago, and gained some significant insights into a woman’s entrepreneurial journey.

1. Could you brief us about your company's main offerings?

Shibani: We offer designer and special skill products which map current corporate requirements. We work with special skill groups across the country and our sales help these small rural urban groups to generate income.

We offer corporate promotional and motivational products like desktop products and office accessories.

We arrived at this focus after a lot of trial and error. We tried many other things at first – home textiles which we were exporting; retail sales for domestic markets (garment apparels, etc). We even had our own stitching unit. But then, we realized its not possible to do so much; especially since they were all virtually different businesses – with separate infrastructure requirements, different markets and different production bases. We decided to cut down and we focused on the business where we had the strongest market traction.


2. Since your website is one of the primary marketing channels, what strategies would you advise to promote one's website and make it more productive in terms of customers and revenues?

Shibani: Our website is only 7% of our total business today. I would advise the following for similar ventures:

1. Unique offerings
2. Decent strategic tie-ups/partner sites to ensure you get the eyeballs
3. Constant renewal of offerings and content

The web site is more a promotional tool for us, today than bringing in real business. But we find it useful to refer our customers to our site.

3. What prompted you to begin your current venture? What thought process led to this idea, and what initial challenges did you have to face?

Shibani: I was a web and multimedia designer and always interested in handicrafts. We thought that we could make a difference to this business (even if it was done in a small way to start with) with our ability to understand current market norms, design and bring in professional inputs.

We were also excited by the concept of "customized crafts". Being handmade product, it is relatively easier to customize a product with a special message or specification or color, even in small quantities. We thought of how a "grain of rice" can be packaged nicely with a hand written message and magnifying glass and sent off anywhere in the world.

And we were excited about the fact that we could be the one middle point between the end buyer and the end producer. It was exciting to visualize a situation where we could be the bridge between the rural/grass roots producer who has no market access and the end buyer who has no idea about the craft producer and their stories. It was interesting from a social and creative perspective.

We felt this was possible with a dot com model - with producers on one end and buyers on the other. In fact, we were incubated as a dot com. We made it through incubation funding, but were late in the dot com boom. The bust ensured that no one even heard us out as a dot come investment. The choice before us was either to shut down or change the model. We changed the model and started selling directly to corporate buyers.


4. When the chips are down, how do you deal with those kinds of situations?

Shibani: We have had many times when the chips were down. And we persevered. I did not give up. We evolved and sharpened our model in terms of cutting costs, reducing overheads, sharpening our focus, building systems and processes. We had to go through really tough transitions, like when I closed down the home textiles exports business – it was a harrowing time. We had to let go of trained staff, say no to customers who had started initiatives with us and manage all excess raw material fabric stock which was left over. At this time we simply stuck to our guns, gave ourselves a time line and swallowed our losses on this.

Another transition happened when my partner who headed the corporate business suddenly decided to quit after 5 years of managing this business. We then had to transition and learn many things afresh. The knowledge of the business went with him. We had a huge struggle just to re-educate ourselves about our customer requirements, vendor capabilities and issues and so many other things. But this transition actually resulted in us moving from a one man show into a 'team' approach. We built a team and dependence on one person is much reduced today. We also focused on more documentation, systems and processes at this stage.

5. What plans do you have for the future for your company?

Shibani: We have many dreams – of them one is that of having our brand recognized in the form of retail stores of our own. The other picture is to take our gifts offerings to foreign shores.

6. If you had to do it all over again, what would you differently?

Shibani: We had very high costs when we started up - manpower, office, etc. I would now start like a garage operation if I had to restart. I would also focus, focus and focus from day one.

7. What drives you to work everyday?

Shibani: The thought that there is so much more to do, that we have only scratched the surface. The fact that I have something new to learn every day some new idea to pursue.


8. What three things would you advise aspiring women entrepreneurs?
Shibani:
1. Be courageous. Do not worry about the fact that you are a woman and chances are that others will not worry about it either. Very often the problem is not external if it’s not internal.
2. Find and use external support. Today women entrepreneurs have a lot of external support- special funds, working capital loans, network groups- find them & use them well. Am not exactly aware of which ones, but banks like SIDBI, women's cooperative banks are women friendly. To be honest I have not had to find one myself- but they are there- on the net/banking community/funding groups.
3. Manage your guilt well. If you also have a family to look after. Guilt is not good for you/your family/your business. You might as well realize that this is what you love to do and your family might as well realize this too! Honesty is the best policy here in more ways than one!



9. What books or events have inspired you the most?
So many books! From Ayn Rand (We the living, The Fountainhead) at 16, to Herman Miller (Siddhart) at 20 to Celestine Prophecy (colin wilson?) To Conversations with God recently.

I was also influenced by books like "All paths lead to gold" and "Winning" by Jack Welch.

On events – I did a course in Vipassana meditation in the mountains of Igatpuri- this is a 10 day silent course- and it changed my life. It taught me to view life in perspective- and the fact that mind control is the most important control to have. The mind must not dictate you- you must control your mind.

Also every time I see street children in India, I feel compelled to do something. Anything to alleviate the suffering that so much of mankind seems to have. I feel outraged that so little is done and about the unfairness of it all.

I feel sad when i see beautiful, skilled products, sold in a shabby way, at shabby prices and in a shabby manner. I feel bad that the artist who created such a beautiful product is not getting his/her due- neither price nor recognition. I just feel that it’s all a criminal waste.

10. What advice would you have for aspiring entrepreneurs in general, and women entrepreneurs specifically?
1. Out of 10 start up businesses only 3/4 survive. The trick is to persevere and to believe in your picture.
2. Being at the right time and at the right place is important when you start- a good idea is not enough- a hard look at viability is a must.
3. Being an entrepreneur is very tough- it’s even tougher if you are trying to do something different/not done before/charting a different path. I would advise all young people trying to start a business to go in with their eyes open, but also with dreams in their mind.
4. For women I would say- your job is even tougher- like it or not, the family looks at you to keep the home fires running-but the flip side is that you may not have to be the bread earner! Enjoy this freedom and do something that you truly want to do. This is not to say that your success is not important- it is just as important, but you may have the option to choose!
5. For women I would also say, that consider the logistics of your life as a serious matter - like how far is your office from home? How much support do you have (family and otherwise), good help at home!!! These are small, practical and according to me imperative tips for the women entrepreneur. I could never have run Craftsbridge, if these logistics were not in my favor.


Intrepid: Thank you so much for all the time and effort you put into answering this long list of questions! Would it be OK, if readers of this blog wanted to get in touch with you?

Shibani: Sure, they can email me at shibani@craftsbridge.com

Common errors in technical writing

Today I attended a session of the Mumbai chapter of the Society for Technical Communication . The first session was by Gurudutt Kamath, who is probably the most well-known figure in the tech writing community in India. My interest in attending the session arose cause someone I know was also speaking there, and also because a lot of the work that we do involves a significant amount of technical writing. So while, we may not be professional technical writers, consulting does require us to have excellent written communication skills.

Guru (as he is popularly known) was speaking on common errors in technical writing. I think many of these errors occur in daily business communication as well. He made it a pretty interactive session, so the other tech writers also piped in with the errors they have seen occur most often. Here's the list we came up with:

1. Not identifying the purpose of the document. Each document should have a set of objectives and a context in which it is being developed. Is it a user manual, or a marketing collateral, or something else. This leads us to:
2. Not identifying the right target audience. If you don't know whom you're writing for, you're quite likely to miss the mark in terms of getting your point across. You could come across writing increasingly dumbed-down documents, or your writing could be so filled with jargon that it would be impossible for the average reader to understand. Having identified the target audience, you need to be sure that the next error is taken care of:
3. Not getting the right sample audience to review your document. The right reviewers can make a huge difference in the final quality of your writing. I have often had non-technical editors review some pretty technical articles, and miss out on stuff that a more technical reviewer would easily have helped improve upon. Some of the better journals have a peer review system, so you ensure that a wider sample audience reviews your writing. A lot of the times, we end up submitting stuff without review - which is almost sacrilege!
4. Inconsistency. Whether it's your formatting styles or your use of numbering systems, or your choice of words (British English or American English or apna Indian English), you have to be consistent. This also applies to:
5. Not selecting the right examples. Guru gave the example of an article, which was about choosing relevant examples, and was woven around Amercian baseball. Now the author might have written the original article for an American audience, but by the time it got syndicated, it was published in other regions, where most of the baseball metaphors fell completely flat.
6. Common grammar and spelling mistakes. "It's" vs. "Its". Not pressing the F7 key. Enough said!
7. Wrong references. In larger documents, references to sections or figures within the document can go wrong when the document changes. For a book, that I was recently co-authoring, I had to keep changing the references to snapshots and figures as I kept inserting more, requiring me to renumber the earlier ones, as well as change references to them. Apparently, the right way to do it is to add a reference field, and point it to the location within the Word document, so that when the referenced section changes, the reference changes with it.
8. Cookie cutter nightmares. Ok, so we've all done this. Opened up a previous proposal or report, and simply pressed File Save As, and the old client name pops up in the most embarrassing places. We once failed to get a customer reference, because during the closing meeting they brought up the point that they had been put off because an old client name had cropped up in one of the documents we had submitted in the project. Based on the inputs from the other participants in the session, this happens to the best of them.
9. Use of cliched graphics. Using the MS supplied clip art in Powerpoint presentations, not getting the graphics done professionally, and using irrelevant graphics. Of course, Powerpoint gaffes are a whole thesis subject by themselves.
10. Punctuations errors. I am most guilty of these, especially with mis-placed commas. Just don't seem to get them in the right places! Other errors include inconsistent quotation marks, misplaces colons and semi-colons, the use of ;&amp instead of 'and', etc.

Guru recommended "The Elements of Style" as a good first book to get your technical writing in good shape. Others also recommended the "Microsoft Manual of Style" and the "Chicago Manual of Style". Guru also has a whole series of articles on common errors on this website.

Changing chartered accountants

I keep harping to everyone about getting a good CA when you start your business. Looks like I should have been taking my own advice.

When we started out, the first CA we got was someone who came in through family contacts. He had been doing the income tax returns for some family members, and we thought it's a good idea to give my company work to him as well. When we were running a small operation, and ledger entries were a dozen a month, it was all good. But as we started to grow, this person proved unequal to the task. Minor hassles such as taking all our files and papers over to his office suddenly became major hurdles in getting the work done. What used to be one box file, was now a dozen and then some.

We started to look around for another CA, and just when we found one, we were told that we needed a no-objection certificate from the first guy in order to start dealing with the new one! Sheesh! Now this was a really delicate matter. Not only was the first chap doing my accounts, but he was also doing those of many more family members now. This meant he was privy to a lot of accounting information.

Anyways, the break came recently and in a very unexpected manner. We moved a couple of family member accounts away from him, since he lives at one end of town, and we at the other. That was an excellent reason to tell him that the entire process of dealing with someone who rarely visits us at home or office was proving to be too cumbersome. The next day he called us to say that he was upset at this decision, and had therefore decided not to do the rest of our accounts either. Of course, this decision comes at a very precise moment - 31st October is the last date to file our company income tax returns.

Thankfully, we have a good accountant working for us. Recently when doing the returns for my father, his insight into some of the laws related to stock investments resulted in a significant tax savings. This was something the CA should have been doing! Again the fees of a CA or the salary to an accountant is usually well worth it in terms of the savings they bring in and the accounting discipline that helps keep a better handle on one's cash flow.

The same situation occured with the Company Secretary. After promising to bring our documents up to date (we had been very lax on this front), and even taking half his fees in advance, he never showed up again. This is the same guy who had done our initial registration. Finally, we got a new CS to work for us, and filed in all our returns with the Registrar of Companies, and ended up paying a lot of back arrears and penalties as well. Yikes!

HP's boardroom scandal - update

I had posted earlier about the HP scandal that forced its chairperson Patricia Dunn and Chief Ethics Officer Kevin Hunsaker to resign. In the post I mentioned that it would have been best if HP had made a clean breast of the entire issue at the first instance, and not waited until things got muckier.

The latest news is that the California Attorney General has indeed filed criminal charges against Dunn, Hunsaker and the others. The most interesting note is the use of computer forensics to unearth much of the evidence in this case. Although, one accused is reported to have destroyed his hard drive with a hammer - pretty effective I must say. I'll go out on a lark here and predict that the new HP CEO, Mark Hurd might have to end up resigning too, because its quite likely he knew pretty much enough about the whole "pretexting" investigation to make the call that they were indeed crossing the line.

CNet News has a comprehensive coverage of the entire story, which promises to reveal a lot more about what went on behind the scenes at one of America's largest corporations.

Another related item on corporate ethics is Steve Jobs' apology to shareholders where certain stock option grants were pre-dated so that they were shown as being given on an earlier date when the share price was lower, thus bringing immediate benefits to those who received them.

The simplest SEO formula - it still works!

Whenever I speak with any budding entrepreneur, I cannot help but stress the importance of search engine optimization. Over half our business comes through enquiries generated through our website. In fact, in the first four years we never had a dedicated sales/marketing team, and still managed to earn 6-figure revenues through consulting.

About a year ago, we shifted our domain from a .co.in to a .com. And also changed our branding to reflect our global aspirations. As a result, all the SEO that we had done on our original domain came to naught. Our Google page ranks for the new website were less than 3 on most pages, and our website was simply not turning up in search engine results. So obviously, business enquiries almost suddenly dropped. We took it up on priority to boost our page ranks and get back to the levels we were on with the previous domain. And from that emerged vindication that our SEO formula still works, and is as simple as this:

• Build a nicely designed website - everything is logically structured and your services, products and company profile are well presented
• Add good content to the website. Ours carries a lot of articles that our team writes, and a couple of blogs
• Identify the keywords that you think potential customers would search for
• Add these into your title and meta tags
• And the key to it all - have other high-ranking websites link back to you. This is main challenge, and you got to put up great content, which people will read because it's interesting, not because you're trying to sell it to them directly.
  

A couple of days ago, the latest Google crawls had just finished - our page ranks were 5 or 6 on all the pages, and we were figuring in the top 5 results for most of our identified key words and phrases. And the most significant proof - business enquiries through our website have gotten back to their previous levels! So if you're getting into business - any kind of business - pay attention to SEO, and you'll go a long way in aiding your sales and marketing efforts.

Asian Women Entrepreneurs Fair

This seems to be an interesting event - the 3rd Asian Women Entrepreneurs Fair. However it is being held in Bangladesh, and seems a slightly politically hued event (what with a Minister for Commerce and Water Resources inaugurating. But very much a step in the right direction. If nothing else it would be an excellent platform to network and grow business. I wonder if anything of this sort happens in India?

Communication disorder

This article by Wired News laments the sorry state of affairs with regards to our ability to communicate. While cellphones and emails have increased the amount of communication we do on average, it has greatly killed the art of communication. A survey quoted in the article, conducted by Yahoo! and OMD shows that the average family is doing 43 hours of multi-tasking work in one day!

Look all around at the emails and SMS's we receive and the horrible spelling and grammar of it all. And how frequently people will end up chatting on IM with someone who is in the very same room! I hate it when someone who could have picked up the phone and spoken to me about an issue would rather send me an email or worse still chat with me on IM. Chatting has to be the #1 communication killer, especially when other options are easily available.

While email would ensure putting things on the record, I'd personally prefer the following order of communication:

1. Meeting in person. Especially in business, a face to face meeting can have far greater positive outcomes than simply email or phone communication. It is quite likely that a client or partner may be more convinced about doing business with you if you go visit them than if they have only spoken with you or emailed you.
2. Phone call. It is extremely tedious at times to give an explanation of an issue over email. And how often do we feel tempted to resort to emoticons to convey the emotion behind our message, even in formal emails. Because very often the text of the email simply fails to communicate the tone of the message. Just pick up the phone and talk! There's nothing like the sound of a human voice at the other end of the line to change the way the other person perceives you.
3. Emails. Compared with the blasphemy of doing business or personal communications over SMS's with their 160 character limits, I'd prefer email any day. Also, when doing business internationally, emails are one of the best means of communication, unless you use Jajah.
4. Chatting. It's cheap, but it's horrible in terms of actually getting one's point across. While I might be mid-way through answering the first question, the other party is already onto their next point. Grammar and spelling are usually the first casualties.

Sidenote: The one mode of communication that simply defies logic is the scrapping that happens on social networking sites such as Orkut. Intimate, personal conversations all out in the open, and a nightmarishly clumsy way simply to keep track of conversation threads. Maybe I am a bit old-fashioned, but send me an email instead of a scrap...

Review: Bootstrapper's Bible - Seth Godin

In one word - brilliant!

If you're starting off a business from scratch, or struggling through the pains of keeping your overheads low and competing with the big guys, then the Bootstrapper's Bible by Seth Godin is for you. It's available free for download here.

Some gems from the book:

• A brilliant idea will kill you. Go for an idea that is likely to make you money, not necessarily something that you personally think is great. He gives the example of the Inc. 500, which is a list of the fastest growing small companies, and almost all of them are bootstrapped, and many of them are in boring, mundane lines of business (the #1 company makes toothbrushes).
• Don't get too caught up in trying to become a Bill Gates or a Jeff Bezos or Steve Jobs. What may have worked for them is often an exception to the rule. While their business models get all the hype, very few people can actually replicate them.
• Focus on sales and advertising. Often entrepreneurs - including yours truly - focus on the services and the products, and shy away from marketing. Personally, I have always felt I am really bad at marketing (so my next big challenge is already staring me in the face), and so haven't focused on meeting customers and pitching to them. But the importance of this is simply too great and very often overlooked by bootstrappers.
• Get a mentor. And some pretty cool ways of going about getting mentors and dealing with them so the relationship doesn't go bust.
• Ideas for calculating your cash flow. Based on what you've been spending and earning in the past 9 months. And the best point about getting credit from suppliers instead of trying to get money from banks or loans from family/friends. Very neat!
• Just start! Don't plan so much that that's all you end up doing. Go out there. Get in front of customers. Talk to partners and vendors and peers. Get your idea into execution, even if you're holding onto your current job. Whatever you do, don't just sit around waiting for the right time, the right idea and the right execution plan. As Goethe apparently said, “Whatever you can do or dream you can, begin it. Boldness has genius, power and magic in it.”

The only downside would be that he doesn't directly stress the importance of practical things like search engine optimization or partnering with the right companies to get outsourced business. But at a strategy and thought-process level this book hits the mark.

Entrepreneur success story - Javed Habib

Most of us in Mumbai who may have opened Page 3 of the newspapers could not have missed reading about Javed Habib. With his long list of celebrity clients, he is the most prominent face of Habib's hair and beauty enterprise. Started by his father, they clocked a turnover of Rs. 10 crore (USD 2.2 million) last year, and are planning for an IPO in the next fiscal!

They already have salons - many of them through the franchisee model - not just all over the country, but also in New York and the UK. They also have their own training institutes to teach the stuff. Amazing, how far you can take something as mundane as a hair-cutting salon.

Why ethics makes good business sense

Another corporate scandal - this time at one of the more respected companies - HP. As the story goes, HP found out that one of its board members was leaking confidential information. They hired private investigators to find the source of the leak, and probably gave them carte blanche. What the PI's then did was to impersonate the directors and obtain telephone records and other personal data on seven directors, nine journalists, two employees as well as family members of those targeted individuals.

To add insult to injury, the HP board simply dithered over taking any concrete action once the scandal was outed. And even before that when they knew that the PI's had overstepped the line by a big margin.

Now, Patricia Dunn who headed the board and oversaw the investigation has been asked to resign, and Mark Hurd has taken over. Hurd then comes out with a statement on the scandal, which has some real gems in it:

"I understand there is also written report of the investigation addressed to me and others but I did not read it. I could have, and I should have."
A director is implicated as being the source of leaks. A high level investigation is launched. A written report of that investigation is available, and Hurd says he knows about the report, but didn't read it!

"In, I believe, February 2006, I was informed by the investigation team that they intended to send an email containing false information in an effort to identify the source of the leaks. I was asked to, and did approve the naming convention that was used in the content of that email. I do not recall seeing nor do I recall approving the use of tracer technology."
What's naming convention?

He refused to take questions about it later on.

While pressures from Wall Street, venture capitalists, customers and employees always creates an emphasis on results, when those results come at the cost of corporate ethics, you know the truth will out someday, and the shit will hit the ceiling fan. Even now, HP should have made a clean breast of the entire situation, given that they're going to have to answer a Congressional committee on the same issue, and more "facts" will come tumbling out.

If nothing else, ethics in business makes sense because you know that the fallout from the truth emerging into the public domain will probably create a far greater loss than the gain you are looking at. In HP's case, they were of course motivated not by financial gain, but from the eventual cost of sensitive information being leaked out. The question that begs to be asked is which loss will be greater?

Charan Gill - curry tycoon brings Scots to India

Chanced upon a very interesting rags to riches story - Charan Gill landed in Scotland with nothing to his name, and worked long hours at dockyards, before getting an apprenticeship at a restaurant. As the story would have it, he started to manage a franchise of that restaurant chain, before branching out on his own, and making his millions with a 16 chain restaurant with a turnover of £12 million.

Advertising tactics included finding a guy called Rick Shaw, and having him make deliveries in rickshaws! Also, having curries delivered by chopper.

He sold off his chain last year, and has now started a new venture to promote Indian markets to the Scots.

Also worth reading should be his autobiography "Tikka Look At Me Now". Proceeds from the book sales will go to the Harlequin Charitable Trust. Very cool stuff, I say.

All right, so give me something I can actually buy!

For a car enthusiast and constant traveler, the one thing that hurts me most about India is the sheer lack of variety in the cars that are available for purchase. Add to that the exorbitant prices that most cars are at, especially when compared to the prices the same models command in other countries, and you begin to really feel you've got a bad bargain.

Let's take the Honda Accord for instance. In India, a standard Accord is priced somewhere in the Rs.16-17 lakhs range, approx USD 40,000. If you add in all the options, and road tax and insurance, you end up at a bit under USD 50,000. And suddenly you feel (quite rightly) that you've bought yourself a high-end car. Globally though, the Accord is a mid-range car usually priced at USD 20,000 to USD 25,000. Or the Mitsubishi Lancer, which in India is again somewhere at the upper end of the mid-range cars along with the Corolla - USD 20,000 I think. We were recently looking at a car for our Middle East office, and a brand new Lancer comes in at approx USD 12,000 - that's about Rs. 6 lakhs - almost half what it would cost in India. The same goes for other run-of-the-mill models such as the Skoda Octavia or the Ford Mondeo, which are considered status symbols in India. For God's sake, all the taxis in Dubai are Camry's!

And now comes news that Audi has launched its drool-worthy Q7 priced at a whopping Rs.61 lakhs or USD 140,000! Enough to dry up your throat for a pretty long time.

And that's only the pricing saga. Look at the sheer lack of car models on Indian roads. Where are the cute Peugeot's? Or the Mazda 6? Where're the two-door sports cars? I mean do you expect me to buy sedans, when I should ideally be buying a sleek two-seater coupe?!? Even Hyundai hasn't bothered with its Coupe, and neither have Honda, Ford or Toyota. The least they could have done is offered coupe versions of their already popular models. So one wouldn't have to pay a foot and an arm to guys like Dilip Chabria and look like wannabes in the bargain. Or end up only dreaming of the super-sexy
Mercedes SL-class roadster, which comes in at a cool USD 200,000 only, if you please.


I now live in a constant state of mortal fear that I'll be hitting a mid-life crisis when these models actually become available and affordable! Sigh...just give me a good car, with a price that makes sense. I am already paying a pretty penny for fuel.

PS: I have been informed through reliable sources that Harley Fat Boys will be available within the Rs. 3 lakh price range. Anyone know more on this? Though the cynic in me says that this might be just another case of a multinational dumping obsolete, slightly remodeled, renamed vehicles.

Starting young, really young!

Here's an interesting article about three young Brits who've started their entrepreneurial journeys really young.

Jake Lunn is 10 years old and has an online business selling customized napkins to yacht owners. He's saving up money to buy his own yacht some day.

Oliver Bridge, aged 17, sells large-sized shoes at Biggerfeet.co.uk

Sarah Green, aged 20, sells furniture online and turnover is expected to hit £400,000.

What is noteworthy is they all bootstrapped their business, and their offerings are primarily online, although sales are of actual goods - napkins, shoes and furniture.

You know you're in Mumbai...

Back home after a few weeks, and feels good. You know you're in Mumbai when:

• You're out driving, and it's all nice and sunny, and in two minutes it begins to pour and everyone is scampering. And then two minutes later the scene is exactly the same as it was earlier, except everything and everybody is now moving through a sheet of rain
• You have to meet a friend who lives on the other side of town, and both of you whole-heartedly agree that it is best served by taking a local train instead of driving through evening rush hour.
• You have to attend a friend's wedding with three elaborate functions, and your friends and you are conspiring to get away by attending only the reception. Mostly because of work, but also because if we attend just the wedding, that's all right too, yes?
• When you have to navigate half a dozen rickshaws, two BEST buses, random cyclists, and twenty pedestrians just to get into your office lane.
• When out of any 10 random conversations in the day, the probability that one or more of the following topics will be covered is very close to 1:
• The stock exchange, and the latest hot stock tip
  
• The situation of potholes on the roads
• Which movie is playing, and what's the latest Bollywood gossip. Not that I care, but did you know that Dia Mirza is seeing Kunal Kapoor!
• You don't hesitate before calling people up on weekends, cause hey if I am working, so should he!

Ah, good ol' Mumbai...

Posting now at blogcritics.org

I've just signed up to post at blogcritics.org. All posts that would not neatly fit into the categories of this blog are likely to be posted there. The first one is on the aftermath of the Israeli-Lebanon war.

"I have a dream" speech day

Just a bit of trivia. Today is the day when in 1963 Martin Luther King Jr. delivered his historic "I have a dream" speech at the Lincoln Memorial, culminating the March on Washington for Jobs and Freedom.

The audio and text of the speech are available online and the video is also available on Google video. The sad part of course is that in my lifetime, I don't remember any leader having delivered a speech that comes even close to giving one goose pimples the way King does. There's some real passion, a clarion call for action and accountability ("we have come to cash a check"), evocation of Biblical references, emphatic repetition (especially of the key phrase "I have a dream"), and most of all a compelling vision of the future where all men and women will be treated as equal.

Here is an interesting analysis of the speech.

Asia's top young entrepreneurs

One of the key factors in a country's economic success is how conducive the overall environment is to entrepreneurship. This includes the regulatory, financial (credit availability), and social environments that influence how many entrepreneurs are created, and how many of them are successful. One of the most heartening things that has happened in the past few years, not just in India, but other Asian countries, has been the number of young entrepreneurs coming up.

Businessweek.com recently selected 20 of these young capitalists as part of a special report and has a competition going where you can login and vote for your favorite candidate, who will win the best Asian entrepreneur of the year award. Here are my favorites (disclaimer: I have a bias against scions of business houses):

• Arif Ayub, Softflux, Pakistan. Offers all sorts of software development, management consultancy and then some, with 70 employees and targeted revenues of $120 million by end of the decade. Ooh boy. The dude also has a private equity fund Saltflow!
• Sasikanth Chemalamudi, Habits, India. Is a creative learning company, and is also involved with projects in rural India to promote self-employment. Probably the only chap on the list with a strong social entreprenuerial streak.
• Mao Kankan, Majoy Entertainment, China. Tthis guy takes online gaming to a whole new level. Players actually play from the same physical location, and games involve players shooting each other with infra-red pistols. Bring it on, I say!
• Kentaro Iemoto, Clara Online, Japan. This guy is simply amazing. Battles and survives brain tumor at 14, launches his company at 16, and now manages six data centers.
• Victor Lang, Global Futures, HK and Chicago. This is one of the most unique ideas I have come across. Provides educational material for those interested in learning about international conflict resolutions and diplomacy. They also host simulated UN conferences!
• Hendy Setiono, Baba Rafi, Indonesia. I am a foodie, so this choice is now biased. This guy runs a chain of fast food outlets from portable booths to shopping center outlets.

The biggest disappointment is that there are no women in the list. They could easily have found a number of women with great ideas, and who are possibly already more successful than the 20 on the list. The other downside is that a majority of the entrepreneurs are in the ICT space, with four of them offering solutions in the mobile phone space.

PS: Of course, I would've qualified too, except that I'm 26. Anyone doing an under-30 list?