BUSINESS TIMES

By M H Ahssan

Salaried employees take the business plunge even as young B-school grads join family businesses, their dream job a recession away.

On a crisp Sunday morning recently, four young boys in their mid-20s busily packed fish fries and chicken leg pieces in clean plastic containers, throwing in sumptuous amount of sliced onions and lime and liberal helpings of ‘salan’ with their special fried chicken biryani. That this work of taking orders and packing food was a far cry from what they did on weekdays wasn’t obvious. After all, one of them is a banker with a multinational, another a techie, the third an IITian employed with an international consulting group and the fourth partner of this ‘take away’ venture is an assistant professor in an engineering college.

Much like these young boys, who make for rather unusual businessmen, there are more who have been bitten by the entrepreneurship bug. From restaurants to event management and from project management to business outsourcing units, these 20- and 30-somethings say they have found their calling in ideas that make business sense. In fact, at an ongoing entrepreneurship meet at a college the ideas have seen a shift from launching software companies (a favourite concept until last year) to setting up restaurants, internet marketing firms and portals this year.

These ideas are low in risk, reason wannabe entrepreneurs. Moreover, they note that these ventures would insulate them from the recession since having their own venture would help them tide over bad market situations such as these when layoffs and salary cuts are the order of the day.

For instance, the four partners of the take away venture, Kostha Ruchulu in Kukatpally Housing Board, say they did not start it because of the downturn but chose food as a business option since it “does well through the year’’ irrespective of the market conditions. “We had two ideas. One was to start a movie theatre and another to start a take away joint. The latter required less capital compared to a film theatre the investment for which would have run into crores,’’ explains 24-year-old K Shailender Reddy, one of the partners. He says that their investment of Rs 7 lakh (as on date) is paying out well so far with the daily food sales ranging between Rs 6,000 to Rs 10,000. The venture hopes to break even in a few months’ time. The partners say that this appeared as a much better option compared to a software firm or some such idea as a food joint guaranteed returns.

Another IITian Ravi Mundoli, who did his masters in the US and worked there in a software firm for four years, is now in India with his own venture on software construction and project management. Intriguingly, Mundoli had started this business keeping in mind a US-based real estate clientele. But he hastily shifted his focus to India seeing the rapidly sinking US market. “Now we are also diversifying and dabbling in other verticals such as manufacturing and exploring other non-software opportunities with construction companies,’’ he says. “It is low risk,’’ he reasons.

These businessmen say that they themselves are cost cutting to tide over the recession but still have the financial security that a regular salaried job would not have provided them in such times.

Besides, they say they are surprised they are managing to stay afloat in these hard times. And how? “We provide back office services. Companies have to take care of accounts and finance and this is where we step in and provide these services at a price which is cheaper than recruiting staff for each of these functions. In the process, we even get familiar with best practices in various industry sectors and then apply it in our service as well,’’ says R Raj Shekhar, director with Oremus Corporate Services.

Businessmen like Raj Shekhar say that initial days of ventures are ridden with problems but it all settles down. His venture, for instance, started off from a one-room office saw bad times initially when the investment of Rs 50,000 made by each of the three partners was exhausted in three months. However, now the firm employs 30 to 40 people and has opened offices in Bangalore and Chennai.

Even MSR Murthy or DJ Murthy as he is popularly known went through a lean patch when he started his business. “I had to use all my savings. There were no short cuts. We worked from a paltry sum of Rs 500 to reach to Rs 25,000 today. We now have 12 permanent employees and we also hire part time staff for gigs and events,” he says, adding that it was all worth it. Murthy, who has a degree in environmental engineering and M Tech, started his own label called Frequency with a friend to collaborate with international artists and bring them to Hyderabad. “I wanted to make money doing what I wanted to and that why I charted my own career. This way I don’t have to play at wedding and other such functions,” he says.

The new businessmen on the block point out they too are coping with the economy downturn. Mundoli, for instance, is cutting down on meetings at plush hotels and other transport expenses. He admits that he does think of the MNC options that could be waiting for him, but says that he brushes the thought each time.

The Homecoming
Until two years ago before Rohit Chowdhary joined a business management course in Hyderabad, the 23-year old wasn’t exactly keen on helping his father and elder brothers in their ageold family business of importing Petro chemicals, nor did he prefer to return to his native city, Kolkata, soon after college. Rather, what his heart longed for was an independent life as a multinational firm employee probably settled in a high-flying city like Mumbai or Delhi.

But now, he finds it only logical to use his marketing skills in expanding the traditional chemical business. The reason, he promptly puts, is the global slowdown hitting firms leaving the placement season dry this year. “I was looking for a package of at least Rs 6 lakh. But these are bad times and the maximum companies are offering is Rs 3 to 4 lakh. That doesn’t make sense to me as our chemical business promises me more,” he says.

Ditto for Shreyans Bardia, another 23-old student in Hyderabad who says working for his family business of generator manufacturing wasn’t the job he dreamt of during college. “I am forced to join it now since no offers are coming my way,” he says. His family, he says, is more than happy with his decision to be part of the family run business but admits that his dream of a job in a high profile firm has been put on hold.

These are hard times, say these young businessmen and rue that their B-school nurtured wishlist of a plum job in a reputed firm now appears as a distant dream. However they are thanking their stars as they have a good back up plan that can save them from a jobless state, which some of their batchmates have entered now.

In fact for some, moving back to family business almost comes as a saving grace. For instance Rahul Tripathi, who recently resigned from his job as a manager in a leading bank now plans to help his mother manage an Indian restaurant she runs abroad. “The industry is facing a real hard time with the employees forever in the fear of losing jobs. I may want to continue with my present lifestyle but the conditions are suggesting me to think otherwise. Now I only wish market improves soon so that I can join my banking industry again but right now, I feel satisfied with my decision to help my mother run the restaurant,” he says.

Even Vinay Middha, 28, an IIM Calcutta grad and working with a leading bank in London, feels the axe hanging on his head. After a stint with various multinational companies he now, for the first time, sees bright opportunities in his family undertakings of a hotel and a school. Even his younger brother, studying in IIT Kanpur, is now keen on following his elder brother’s footsteps. Both now are busy chalking out plans to expand their age-old business.

‘India needs young entrepreneurs’
K Harishchandra Prasad, senior vice president, Federation of Andhra Pradesh Chambers of Commerce and Industry speaks to HNN about the entrepreneurship trend. This trend of young people turning to entrepreneurship is a chain reaction. The job situation is very gloomy these days and opportunities are uncertain so a number of people are either returning to their family business or setting up their own ventures. Placement offers from companies in even top MBA and engineering colleges are not as good as they used to be so the present graduating batch is not left with too much choice. Those who haven’t managed to secure job offers are either going for higher studies (albeit in small numbers) or people are getting together to start a business if they are able to pool in some money. A number of graduating students are giving serious thought to starting their own establishments and this thought process is steadily settling in.

There are two kinds of people who would like to become entrepreneurs—those who already have the drive for it while others are people who change according to the current (market) scenario. Today there are definitely more entrepreneurs and people are looking at entrepreneurship programmes.

In a developing country like India there is a constant need for young, enterprising entrepreneurs. Unfortunately due to recession the environment is not too conducive for breeding entrepreneurs. Banks are tight fisted while giving loans and thus people who want to start their own business need to generate their own resources from savings or require financial assistance from family and friends. However a number of people who are managing their capital are still looking towards entrepreneurship and family business and the trend is definitely leaning towards entrepreneurship.