Swaroop C H

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My Benchmark for Entrepreneurship

30 Jun 2009

Here is a guy who sells dosas and rice items in his push cart every evening.

Road-side eatery

I didn't realize that he was my entrepreneurial benchmark until my friend explained it to me:

And he doesn't intend to go to VCs any time soon ;-)

It's only when you get into this entrepreneurship thing that you realize how hard it is to make money.

I hope every wannabe will plan to have at least as good as this guy's cash flow ASAP for their startup.

Comments

Pramod Biligiri says:

Beautiful post.

Gowri says:

but whats his costs? Thats what determines what he really makes.

I used to know someone in this business and he said that all the policemen and corporation people who come and eat for free (and take parcel) everyday eat up a huge chunk of his profits. If he refuses they wont allow him to do business...

Neerav says:

Agree with Gowri. Besides the raw material cost, 'hafta' to govt. officials eats into the revenues. But even after these costs, they make decent profit.

Swaroop says:

@Pramod Thanks :)

@Gowri @Neerav That's why I said cash flow and not profits, but even then, they make a decent living through that.

Hari K T says:

:) . You missed something . The cost of the production . His efforts and all . So he may be getting around 50,000 a month .
Anyway that's a huge amount , than many s/w developers .

swaroopch says:

No, I didn't miss it. That's why I clearly said "cash flow" and not "profits."
My point being that cash flow is critical to a startup, everything else comes later, including profits.

Irrespective he does make a decent living. Isn't it interesting that even after so much education, most s/w developers, as you said, can't do better than him?

Prakash says:

;-) I thing I did engineering and lost such opportunities! Good observation. Two or three days before we [some of my friends] we discussing about such people particularly the "gadavala" sellers in "short meal" category.....! There are many like these in every metro and town earning much-much better than many of the engineers and doctors! I think this field is worth giving a "special-study". why don't they need VC? Nice topic thanks!

the_other_swaroop says:

I agree with Prakash - I too at times think the same - Did engineering actually blind me to the other opportunities and challenges that are around us ?
Did it configure me to be another run of the mill guy ? I ponder with worry !




Neerav says:

@Prakash, @the_other_swaroop - it totally depends on the individual whether he lets education ruin his dreams or help him achieve his dreams..

satpal says:

Me your roadside Cart guy is not an entrepreneur but a forced entrepreneur. He make 1LPA cash flow based on facts

a)that he do not pay any real-state infra cost (50 % of startup working capital)

b)No taxs (30 % corporate tax in india)

c) do not generate any empoyment ( or child labour wch is hugely underpaid),even he employ do not raise standard of living.

d) Lack possibility to scale. working in a highly competive , low margin bussiness.
his business do not generate a recurring income.

I had similar experience when I was in delhi and was living in a student community. My dhaba waalaa was the only tawa roti maker in area got huge follwoing, i use to wait for 30 min for my dinnner. Many time I wondered why he is not expending. later within 3 month there were 5-7 (yes ) new players. I realised how all of my estimates about his business work wrong.

Cash if good but is not the only benchmark of real entreprenuial activity. innovation, value, scalibility, profitibility, legality are alo important.

Swaroop says:

@Satpal Agreed with all that you said. But the point I was trying to make was that he starts of on a much better footing than the current web startups which try to go the Free route which needs large funding to sustain with the hope of making money off of ads. I hope you are seeing the contrasting situation. That is what I was focusing on.

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