entrepreneur october 2010

Greener Telecom with GTLThe HTC Desire: iPhone Killer?The Benefits of Banking OnlineDo it Right with Yes Bank’s HR StrategySanjna Kapoor and the Revival of Prithvi Theater

OCTOBER 2010 VOLUME 2 ISSUE 2 Rs 100

THE ULTIMATEBUSINESS

GUIDE

PROFIT FROM FOREIGN LANGUAGES NICHE MARKETING OPPORTUNITIES

TAMING THE DRAGONHOW TO DO BUSINESS WITH CHINA

10

Ways to Start and Invest Tools to Close a Deal

Tips to Source, Sell and Export Smart Steps to Protect Your IP

INSIGHTS

20 THE GARAGEAnkush Chibber goes from writing about entrepreneurship to actually living it.

21 LOOK OUTWondering if open source or proprietary software is the way to go? Bindi Mehta helps you decide.

22 SOCIAL MEDIA MARKETINGSurajit Agarwal puts social media marketing to the test.

24 WOMEN IN CONTROLNandini Vaidyanathan on what entrepreneurs can learn from Rafael Nadal.

26 SOLUTIONS FOR SUCCESSVijay Anand on the increasing use and misuse of the word ‘innovation’.

28 SETTING STANDARDTANDARDT SJaspal Bindra explains how Standard Chartered Bank is tapping into a new consumer segment—women.

30 BUSINESS BASICSPradeep Sindhu on the journey from idea to accomplishment.

32 STRONG FOUNDATOUNDATOUNDA IONSRajeev Karwal on the value of having values in a business.

34 SANU’S CORNERWhat makes Indians corrupt? Sankrant Sanu explores the root of the problem.

35 MEET YOUR MENTORIvy Hughes shares tips on finding the perfect mentor for you.

WOMEN ENTREPRENEUR38 ALL THE WORLD’S HER STATAT GEHow Sanjna Kapoor turned around the fortunes of Prithvi Theater through her innovative initiatives. By Bindi Mehta

tabletabletabletabletabletabletabletabletabletabletabletabletabletabletabletabletabletable of contentsof contentsof contentsof contentsof contentsof contentsof contentsof contentsof contentsof contentsof contentsof contentsof contentsof contentsof contentsof contentsof contentsof contentsof contentsof contentsof contentsof contentsof contentsof contentsof contentsof contentsof contentsof contentsof contentsof contents28

62 ENTER THE DRAGONPack your bags and get ready to enter the biggest market in the world—China. By Ankush Chibber

66 ACROSS THE WALLTaking your business to China is actually easier than doing the same in India.By Ankush Chibber

68 MADE MADE IIN N IINDIANDIAWant to export your product or service to China? By Pranbihanga Borpuzari

70 SINO SOURCINGIndian companies will be sourcing extensively from China in the near future.By Pranbihanga Borpuzari

72 SELLING TO THE DRAGONThe most common mistake when selling in China is thinking of it as a single market. By Ankush Chibber

74 PROTECT YOUR IP IN CHINAChinese authorities are taking steps to prevent piracy and counterfeit operations.By Darius F. Dalal

76 CHINESE CHECKERSAn Indian couple shares their experience of living in Shanghai.By Kumud & Ashwin Bondal

78 BREAK THOSE CHINESE MYTHSContrary to recent prognosis, China is a market worth investing in.By Arindam Ghosh

80 ALONG THE SILK ROUTEThe President of NIIT China talks about the ease of doing business in China.By Prakash Menon

83 HAND-IN-HANDMahindra & Mahindra has identified a huge potential in the Chinese tractor markets.By Pravin Shah

84 THREE WAYSTHREE WAYSTHREE WA TO KILL A DEALIN CHINADefinite no-nos you would need to keep in mind while doing business with the Chinese.By Joanne Yao

TAMING THE DRAGON

666 Entrepreneur Entrepreneur Entrepreneur Entrepreneur Entrepreneur Entrepreneur Entrepreneur + October 2010 October 2010 October 2010 October 2010 October 2010 October 2010 October 2010 October 2010

36

38

42

MONEY

96

By Rajiv Rai

98

By Rosalind Resnick

99

By Jennifer Lawler

IN CONVERSATION36

SOCIAL ENTREPRENEUR42

By Shonali Advani

GREEN SIGNALS44

By Bindi Mehta

OPPORTUNITIES46

By Bindi Mehta

52

By Shonali Advani

56

By Kate Lister

+

36

38

42

MONEY

96 SPREAD THE NET OVER YO SPREAD THE NET OVER YO SPREAD THE NET OVER Y UR BUSINESSThe myriad advantages of online banking.By Rajiv Rai

98 FLYFLYFL HIGHERBenefit to the max from your airline travel rewards program.By Rosalind Resnick

99 PUT YOUT YOUT Y UR CUSTOMERS TO WORK FOR YOR YOR Y UBuilding businesses inexpensively through client referral incentives. By Jennifer Lawler

IN CONVERSATION36 “CHINA HAS MORE TO LEARN FROM INDIA THAN THE U.S.”Peter Yip, one of the first Chinese businessmen to float a software and internet firm on the NASDAQ, talks about doing business in China.

SOCIAL ENTREPRENEUR42 MISSION 20/20Dr. R.V. Ramani’s Sankara Eye Care Institutions help the visually-impaired in rural India. By Shonali Advani

GREEN SIGNALS44 PURE CELLSATIONS!GTL offers a host of solutions to keep the environment clean. By Bindi Mehta

OPPORTUNITIES46 TALK TALK T GLOBAL, THINK LOCALLanguage is more than just a means of communication. It throws up a host of options for entrepreneurs to choose from.By Bindi Mehta

52 CARVE YOCARVE YOCARVE Y UR OWN NICHENiche merchandising is on the upswing in India today.By Shonali Advani

56 FREELANCE NATIONAlmost every single company in the U.S. is outsourcing. Are you benefiting from it yet?By Kate Lister

7Entrepreneur + October 2010

THE ULTIMATE 'HOW TO'BUSINESS GUIDE115 Shut Down a Private Limited Company

117 Name Your Startup

119 Write a Business Plan – Part VIII

121 Get Venture Capital Funding – Part VIII

123 Track Your Startup’s Performance

125 Select Your Legal Advisory

TECH DEPARTMENT90 THE REAL ONEWith the Desire, HTC just might claim the smartphone throne.By Ankush Chibber

92 ADAM GOES TO WORKThe younger of Dell’s two Adamo lookalikes packs in quite the punch.By Ankush Chibber

93 COLLABORATION OR AGGRAVATION?Two small-business owners stick to two sides of the fence regarding SharePoint.By Craig Asher & Justin Singer

94 WEBSITES IN MOTIONTips on designing your website for use on the mobile web.By Mikal E. Belicove

95 BEWARE THE BITTER TWITTERDo’s and don’ts for using social networks for communicating.By Ericka Chickowski

CLASSROOMS100 THE HARDER YO YO Y U WORK, THE LUCKIER YO YO Y U GETA father’s wisdom helped his son realize his dreams.By Rana Kapoor

102 BE REALISTIC ABOUT PAYBAC PAYBAC P K PERIODSThe importance of an honest business plan. By Ved Prakash Arya

106 HOW CAN YO YO Y U SPOT THE RIGHTTALTALT ENT FOR YO YO Y UR STARTUP?Find the right talent for your startup—and keep them onboard.By Nirmit Parekh

108

123

90

SPEND IT126 THE BIG PICTURECheck out these cool products.By Team Entrepreneur

128 CLUB CLASS!Trilogy brings upper crust pub culture to Juhu.By Ankush Chibber

REGULARS10 ONLINE 12 FEEDBACK 14 RESOURCES 16 NEWS IMPACT 18 STUMPSPEAK 130 BACKSTAGE

HOT STARTUP OF THE MONTH

108 The Mall MechanicAll is not well with the malls in India.By Ankush Chibber

112 On RecordVinit Chordia’s venture Records Guru makes managing and retrievingdocuments a breeze. By Shonali Advani

COVER DESIGN

NIRMAL BISWASCOVER ILLUSTRATION

CHAITANYA SURPUR

SUCCESS STRATEGIES86 YES! BANKING ON HUMAN CAPITALHow YES Bank created multi-pronged strategies in order to get the best out of its employees.By Bindi Mehta

tabletable of contentsof contentsof contentsof contents

8 Entrepreneur + October 2010

To read more, grab the October issue of EntrepreneurTo Subscribe, visit www.entrepreneurindia.in

TECH DEPARTMENT90

By Ankush Chibber

92

By Ankush Chibber

93

By Craig Asher & Justin Singer

94

By Mikal E. Belicove

95

By Ericka Chickowski

CLASSROOMS100

102

106

90

SPEND IT126

By Team Entrepreneur

128

By Ankush Chibber

REGULARS10 12 1416 18130

COVER DESIGN

COVER ILLUSTRATION

SUCCESS STRATEGIES86

By Bindi Mehta

+


QUALITY IS THE KEY:Manoj Desai, Chairman and MD, CTI

Subhra Doshi, a 24-year-old IT executive recently went on a trip to Kochi. She vis-ited an Ayurvedic Treatment Center, where

the young therapist gave her a soothing head massage. However, the communication between the two during the two hours of the treatment was restricted to a lot of smiles and a few gestures. There was no common ground for them to start a conversation, because the nurse spoke no English or Hindi, while Doshi did not speak or understand Malayalam. Doshi’s experience in Kerala, the most literate state of the country, is similar to what many of us have experienced in different parts of India, even at the most prized tourist hotspots and urban pockets.

Well, in India and globally, not everyone understands and speaks one language. However, all of us transact with each other, share resources and are bound by common human sen-sibilities. In this linguistic diversity that defines our world lies a lot of untapped business opportunities.

IF A IS FOR APPLE, M IS FOR MONEY Just like you teach the alphabet set to young kids, there is a lot of potential in the market to coach young professionals and adults in English and several foreign languages. “It is

TALK

THINKGLOBAL,

LOCALLanguage is more than just a means of communication today. It throws up a host of options for entrepreneurs to choose from...By Bindi Mehta

VOICE OVER

often difficult to find the resources to learn multiple languages under one roof. Access to cultural books, dictionaries and other resources that make one familiar with the language is restricted. From my experience, I decided that

I wanted to make the learning process simpler and more interesting for stu-dents,” says Professor Amrutha Joshi Amdekar, a foreign language transla-tor, interpreter and teacher based out of Mumbai. Joshi runs the Academy of Foreign Languages and Culture in Mumbai and her students can pick any of the 22 foreign languages she offers coaching in. However, Joshi goes a step further and gives free counseling to potential students to help them pick the language that will best align with their careers. “An engineering student can benefit from learning Japanese as he would be likely to work with a manu-facturing company that uses Japanese technology somewhere. A travel and tourism student, on the other hand, would gain from learning Spanish as he would probably need to interact with Spanish-speaking customers,”

explains Joshi. Since 2002, Joshi has coached about 680 students at the Academy. “There are about 80-100 fresh pupils every year,” she says. Joshi’s fees start at Rs.5,000 for learning the first or base level of any language. The duration

FOCUS ON ASIAN LANGUAGES:Amrutha Joshi Amdekar, foreign languages trainer

for this could be either six months or one year depending on the frequency of classes that the student chooses. While Joshi’s USP is that she offers a wide plethora of languages, there are other players in the market, who have carved a niche for themselves while offering single lan-guage coaching. “Our main customer segment comprises young professionals. After joining the workplace, many young adults come back to add value to their profile by learning a new lan-guage,” says Giola Rodrigues, Public Relations Director, Instituto Hispania. This Spanish insti-tute today has six centers across the country and enjoys FIDESCU accreditation. “We cater to professionals from the IT, pharma, travel and tourism and hospitality sector,” says Rodrigues. The institute charges Rs.7,000 for the first level of the language and the prices go down as the students advance to higher levels.

ENGLISH, STILL A ‘FOREIGN LANGUAGE’ If Spanish is the second most-used language in international commu-nication and, therefore, demands a market, we cannot forget that English still remains the primary and most-used language of global communica-tion. And now it is also the language in which Indian companies conduct their operations. “Over the past 10-15 years (following the liberalization of the market), a large number of foreign companies and MNCs have entered the Indian market. The jobs that are available with these companies make it a must for young Indians to be fluent in English. This has created a huge demand for spoken and written English skills in the market, especially in tier II and tier III cities,” says Manoj Desai, Chairman and MD, Corporate Training Institute (CTI). After getting over 15 years experience in sales train-ing and recruitment functions across various industries, Desai stepped out of the corporate world last year to start CTI in Surat. “There are several players in this sector and consumers are paying money too. However, due to various reasons, their needs are not being met. The right course structure needs to be emphasized upon. When

we learn to talk in our mother tongue, nobody teaches us tenses to begin with. The stress on grammar before basic reading and conversa-tional skills are acquired often spoils the case,” says Desai. It is evident here that a gap exists in the market for a successful course structure and English coaching methodology. Desai’s institute offers a one year corporate grooming course for graduates and young adults that includes three months of coaching in English communication skills. From his own experience of starting up, Desai estimates that in a tier II city, an entre-preneur can start an English coaching institute with an investment of about Rs.3 lakh (this includes property rental, resource cost and mar-keting expenses for the first six months), charge an annual fee of Rs.10,000 for a comprehensive, well-structured curriculum and break even in the first year itself even if he manages to get 50 students in the first batch. “The location plays a very important role for any coaching class.

Photo©Neha Mithbawkar 47Entrepreneur + October 2010

opportunities


Illustrations© Infographics© Nirmal Biswas

Neighbor. Mao. Enemy. Bruce Lee. 1962. Noodles. Jackie Chan. Communism. Floods. Population. Jet Li. These are

the answers I got on asking a random bunch of people to respond with the first thing they think of when they hear of China. These were average Indians, from all walks of life. Now, ignorant as they may seem to informed readers, the common Indian does really associate China with these things. We know it is a folly, because China is now so much more than that.

That ‘much more’ has to do a lot with China’s still rapidly increasing economy, which has now come within touching distance of the economies of the U.S. and Japan. In 2009, when the entire world was still shaking off the worst depression in almost a century, China’s economy grew by 9.1 percent. Her GDP stood at Rs.393 lakh crore, just behind Japan and the U.S. In the same year, it also made Rs.54 lakh crore in exports, just behind the exports made by the entire European Union.

These are jaw-dropping figures when you consider that till about 1978, China had a pre-dominantly centrally-planned economic sys-tem which was closed to international trade. It was only after a series of systematic reforms were undertaken under Deng Xiaoping that the system turned into a market-oriented economy by the early ’90s. From then on, fuelled by the availability of cheap skilled labor and a determined government, China has rode on to become the economy of this century.

To explore the greater Chinese picture, however, is the mandate of other publications. Our job though is about informing and educat-ing our readers, who are mostly entrepreneurs and small businessmen, about opportunities and how they can best tap them. That is what exactly this issue on China will focus on.

Further down this issue, we will give you on-the-field information on how you can take your business there and how you can do business with the Chinese. These will be practical and informed steps and tips that entrepreneurs can deploy in order to break through the China wall. But going in uninformed about the fac-tors that make China’s economy and market what they are would be foolhardy.

RISE OF THE CAPITALIST CLASSBeginning in 1978, China undertook a series of reforms akin to Russia’s Perestroika that saw the development of civic infrastructure,

ENTER THEDRAGON

The biggest market in the world cannot remain closed to Indian entrepreneurs. Pack your bags and get ready to jump

across the great wall. By Ankush Chibber


cover story

Source: Roland Berger China Car Consumer Survey 2009, Focus Groups, Dealer Interviews, Roland Berger analysis

IN 2009, CHINA’S RETAIL SALES HIT RS.81 LAKH CRORE, UP 5.5 PERCENT FROM 2008. THIS WAS A YEAR THAT SAW DECLINING SALES EVERYWHERE ELSE IN THE WORLD.

networks and public transport. Quite naturally, this transforma-tion has changed the standard of living for the average Chinese citizen as well. And that is evident in the changes they have made to their spending and lifestyle patterns since the economic reforms began.

Till the late ’80s, shopping in China was boring and uniform. There was a lack of vari-ety in the products available and supplies were perpetually short in state-owned stores. But now, the average urban Chinese consumer is sitting in a market miles away from those times. In 2008, China was home to about 549,000 retail enterprises, each with an average of 15 employees. According to the PRC Ministry of Commerce, China had about 2,400 foreign-invested retail enterprises in the country as of August 2009.

And the Chinese love having a choice. In 2009, China’s retail sales hit Rs.81 lakh crore, up 5.5 percent from 2008. This was a year that saw declining sales everywhere else in the world. What this data has made evident is that the better living standards have now created a class of people that has moved on from the basic needs of life to pursuing a better lifestyle.

According to available government data, in 2008, China’s urban and rural households spent 37.9 percent and 43.7 percent of their incomes on food, respectively, down from 44.7 percent and 53.4 percent in 1998. Again, between the years 2001 and 2008, the aver-age Chinese household more than doubled its spending on clothing, healthcare, transporta-tion, and telecom services.

The Chinese now have extra cash, thanks to the growing incomes. And they are spending

it. In 2009, the per capita dispos-able income in urban areas reached Rs.1.1 lakh, three times over 1998. In cities like Shanghai, the average per capita disposable income is more than Rs.1.7 lakh. This is a class on the urge to move higher. And entrepre-neurs should ride with them.

GET OVER THE SIZEYes, you need to get over the size of China

pretty quickly. You also need to understand that the 1.3 billion people are actually groups

of people of much smaller populations clubbed together by over-eager economists who see it as a sort of Shangri-La for their clients. These economists don’t tell you that China’s eco-nomic development and wealth distribution varies greatly from east to west and from south to north, thanks largely due to a variation in population density.

While western China is very thinly popu-lated, eastern China is one of the world’s most densely populated. And thanks to a policy of the Chinese government to develop selected cities on the western coast on the Hong Kong model to lead its economic transformation, there now exists a staggering economic gap between China’s eastern and western regions.

According to data from the Chinese gov-ernment, GDP of the western regions is 58 percent of the national average, far below that of the east, where it is about 85 percent of the national average. Further, according to the Boston Consulting group, in urban cities, incomes have been growing at about 10 per-cent annually in recent years, while incomes of rural people rose only 1 percent a year. Much

Sample Size = 353 First Criterion Second Criterion Third Criterion Fourth Criterion

Imported products usually purchased Reasons for buying imported products Perception of imported and local cars

Perceptions of import quality

63Entrepreneur + October 2010To read more, grab the October issue of EntrepreneurTo Subscribe, visit www.entrepreneurindia.in

MADE IN Looking to export your product or ser-

vice to China? The present picture may not be too rosy, but the future certainly looks full of possibilities. Figure this:

If China frees her currency, on one hand her export will become costlier and on the other, import will be cheaper. The moment imports become cheaper the normal tendency is to curb imports by non-tariff measures. This is bound to happen in China and Indian exporters would do well to take note of this.

“While the change in the demographic profile of China will play a key role, it is not that Indian products will become competitive all of a sudden. China has started paying attention to social welfare now, which has meant higher wages by as much as 40 percent, enabling higher purchasing power and, at the same time, denting the cost-competitiveness slightly,” says Ajay Sahai, Director General & CEO, Federation of Indian Export Organization.

When India reaches the export mark of 28 percent to China, imports are expected to be steady and therefore, at that time, the trade

balance would be in India’s favor. Of the Rs.49,500 crore

export-related business that we have with China today, close to 70 percent is in

iron ore, cotton, iron and steel, alu-

minum and copper and inorganic chemicals. Of this, iron ore exports forms about 50 percent of the total exports to China. Of late the “Made in India” tag has started making a mark as the

country steps up its exports in auto compo-nents, pharmaceuticals and gems & jewelry (about Rs.3,375 crore last year).

“There are, however, a number of issues regarding exports to China. While the sys-tem is difficult, countervailing duties, factor cost advantage, pricing advantage because of economies of scale, and weak currency aggravates the situation. Despite the current trade deficit being on the higher side, we are not perturbed and should see a correction in the next few years,” says a senior official at the

Here’s taking a closer look at the three main sectors which form the backbone of Indian exports to China today:

JUTE, COIR AND COTTONMany exporters in the jute sector have started exporting to China because, barring Bangladesh, no other country exports jute products. The case is similar for coir; with Sri Lanka being the only other country which pro-duces it. This means India has virtual monopoly in these two products. Last year coir got a good response from China. Cotton exports faces tougher competition but that does not dimintougher competition but that does not dimin-ish the scope. In labor-intensive sectors like ish the scope. In labor-intensive sectors like coir, jute and cotton, we can supply a varcoir, jute and cotton, we can supply a var-ied number of products. The emphasis on ied number of products. The emphasis on coir products is gaining ground as coir products is gaining ground as the world attempts a ban on the the world attempts a ban on the polluting plastic products. polluting plastic products.

PHARMACEUTICALSThe future holds much The future holds much promise for Indian pharmapromise for Indian pharma-ceuticals and medical ceuticals and medical equipment manuequipment manu-facturers. Today, facturers. Today, it is difficult to get it is difficult to get a registration for a registration for

MADE IN looks full of possibilities. Figure this:

If China frees her currency, on one hand her export will become costlier and on the other, import will be cheaper. The moment imports become cheaper the normal tendency is to curb imports by non-tariff measures. This is bound to happen in China and Indian export-ers would do well to take note of this.

“While the change in the demographic profile of China will play a key role, it is not that Indian products will become competi-tive all of a sudden. China has started pay-ing attention to social welfare now, which has meant higher wages by as much as 40 percent, enabling higher purchasing power and, at the same time, denting the

country steps up its exports in auto components, pharmaceuticals and gems & jewelry (about Rs.3,375 crore last year).

“There are, however, a number of issues regarding exports to China. While the system is difficult, countervailing duties, factor cost advantage, pricing advantage because of economies of scale, and weak currency aggravates the situation. Despite the current trade deficit being on the higher side, we are not perturbed and should see a correction in the next few years,” says a senior official at the Indian Ministry of Commerce.

Here’s taking a closer look at the three main sectors which form the backbone of Indian exports to China today:

JUTE, COIR AND COTTONMany exporters in the jute sector have started exporting to China because, barring

MADE IN The U.N. Comtrade

report says that by 2050 India’s exports

to China will account for 28 percent of its total exports, up from the current six percent. By Pranbihanga Borpuzari

percent to China, imports are expected to be steady and therefore, at that time, the trade

balance would be in India’s favor. Of the Rs.49,500 crore

export-related business that we have with China today, close to 70 percent is in

iron ore, cotton, iron and steel, alu

minum and copper and inorganic chemicals. Of this, iron ore exports forms about 50 percent of the total exports to China. Of late the “Made in India” tag has started making a mark as the


cover story

INDIAa pharma company in China. Even big compa-nies like Ranbaxy found it difficult to supply pharmaceuticals from India to China and had to resort to setting up a unit there. Barring the usual processes, the only other requirement for export to China in this sector is that one needs to have the Drugs and Pharmaceutical License, whether you produce or export. In the case of medical devices, a Free Sales Certificate from the government is needed.

Additionally, you have to register with the Chinese authorities for export and this is problematic. “The Chinese market is highly-regulated and under influence from pharma multinationals, making it tough for smaller multinationals, making it tough for smaller units to enter the market. It will be worthwhile units to enter the market. It will be worthwhile for Indian companies to move for process patfor Indian companies to move for process pat-ent and then, if possible, move collectively ent and then, if possible, move collectively for Chinese registration or get into a for Chinese registration or get into a venture with a local company venture with a local company in China. For a single SME, it in China. For a single SME, it may be difficult to enter the may be difficult to enter the Chinese market,” says Sahai. Chinese market,” says Sahai.

AUTO COMPONENTS AND MACHINERYIndia has the advantage here because car modIndia has the advantage here because car modIndia has the advantage here because car modIndia has the advantage here because car mod-els undergo frequent changes and upgrades. It els undergo frequent changes and upgrades. It els undergo frequent changes and upgrades. It is not easy for Chinese companies to quickly is not easy for Chinese companies to quickly is not easy for Chinese companies to quickly

cater to such changes. “China can procater to such changes. “China can procater to such changes. “China can pro-duce goods in bulk but it is not easy duce goods in bulk but it is not easy duce goods in bulk but it is not easy duce goods in bulk but it is not easy for them to quickly adapt to changes. for them to quickly adapt to changes. for them to quickly adapt to changes. for them to quickly adapt to changes.

In the next 10 years, we should be doing In the next 10 years, we should be doing In the next 10 years, we should be doing In the next 10 years, we should be doing auto exports of about Rs.22,500 crore to auto exports of about Rs.22,500 crore to auto exports of about Rs.22,500 crore to auto exports of about Rs.22,500 crore to

China. China has a growing middle China. China has a growing middle China. China has a growing middle China. China has a growing middle class with a strong auto market and class with a strong auto market and class with a strong auto market and class with a strong auto market and this will help India,” says Sahai. this will help India,” says Sahai. this will help India,” says Sahai.

However, the emphasis has to be However, the emphasis has to be However, the emphasis has to be However, the emphasis has to be on exporting finished goods and on exporting finished goods and on exporting finished goods and on exporting finished goods and

not raw materials and intermenot raw materials and intermenot raw materials and intermenot raw materials and interme-diaries. Many Chinese compadiaries. Many Chinese compadiaries. Many Chinese compadiaries. Many Chinese compa-nies are already inking JVs with nies are already inking JVs with nies are already inking JVs with nies are already inking JVs with

manufacturers in Chennai. “Small machinery is also exported to China. I personally feel that in the next few years, with India becoming the R&D hub of the world, we will be exporting more and more sophisticated machinery to China,” says Sahai.

The only other criterion to meet is that the vendor has to be approved by a car manufac-turer and you cannot send your components until you have an established contact.

PROCEDURES FOR EXPORTING TO CHINATo export goods from India, you first need to have the Import Export Code (IEC) number have the Import Export Code (IEC) number

which is a permanent number which is a permanent number given by the Director General given by the Director General

of Foreign Trade (DGFT). For of Foreign Trade (DGFT). For this, you need a PAN and this, you need a PAN and bank account. bank account.

If you want to avail certain benefits under certain benefits under the current Exim policy, the current Exim policy, you have to apply for you have to apply for

a Registration-Cum-a Registration-Cum-Membership Certificate Membership Certificate

(RCMC) of the concerned EPC or at FIEO. (RCMC) of the concerned EPC or at FIEO. “These benefits will include duty-free imports of products meant for exports, duty drawback etc. The RCMC is generally valid for five years. If you want benefits of service and excise duties, you have to register with specific authorities,” says Sahai. Most goods have an excise duty and exemption can be claimed for such duties.

This can be done under self-declaration after which goods move from your factory to the ports or ICD. If you want customs clear-ance to be done at the factory, excise authori-ties will inspect the goods at the factory, seal the consignments and the goods will move from the factory to the ICD or port. Usually

the goods are not inspected after this at the goods are not inspected after this at the ports, unless the seal has been the ports, unless the seal has been

tampered with. tampered with. Once the export takes Once the export takes

place, you will have to place, you will have to negotiate documents like negotiate documents like commercial invoice, certifcommercial invoice, certif-commercial invoice, certif-commercial invoice, certificate of shipment and the icate of shipment and the

bill of exchange within 21 bill of exchange within 21 days to realize the payment, days to realize the payment,

since most transactions hapsince most transactions hap-pen between bank to bank. pen between bank to bank.

69Entrepreneur + October 2010To read more, grab the October issue of EntrepreneurTo Subscribe, visit www.entrepreneurindia.in

[Tips to stay ahead]

Banking on Human Capital YES!

YES Bank has created multi-pronged strategies to get the best out of its employees.By Bindi Mehta

Photo© Neha Mithbawkar

'PROFESSIONAL ENTREPRENEURSHIP':D.R. Kurane, President, HCM, YES Bank, (extreme right) with his team

Entrepreneur + October 201086

success strategies

Amit Shah was an engineer working with L&T till a few years ago. Today, he heads a unit of five people within

YES Bank’s Corporate Development, Innovation and Strategy (CDIS) team and enjoys direct mentorship of Rana Kapoor, the bank’s Founder, Managing Director and CEO, as the latter overlooks the CDIS team. Shah quit L&T to pursue an MBA degree and joined a consultancy firm thereafter in 2007.

“It was a good job but there was no kick in it. It is no fun sitting in an ivory tower and advising company presidents and CEOs without knowing whether the strategy you devised for them will ever see the light of day,” he says. Shah wanted to get closer to an industry where there were challenges and opportu-nities for growth. “I wanted to do real work, not just plan and present,” he says.

When YES Bank opened its doors to new recruits through its flagship YES Professional Entrepreneurship Program in February 2008, Shah was one of the first to apply. He was hired within four days and there has been no looking back since. Shah’s transition from a non-banking professional to someone skilled enough at the job to train juniors and contribute to corporate innovation makes you stop for a while and think, wasn’t that quick?

YES Bank has put in place a host of human resource initiatives and programs that feed what the bank defines as ‘profes-sional entrepreneurship.’ “This simply means the ability to take ownership for what you are doing on the job. If you own a neighborhood grocery store, you will never let a bunch of misbehaving youngsters enter your shop. However, if you work with a supermarket chain, you may think differently and overlook the kind of customers walking in. We want to erase this difference in attitude,” says D.R. Kurane, President, Human Capital Management (HCM), YES Bank. And how exactly does the bank plan to achieve this?

“We let employees take charge of the ideas they conceive. We put the ball in their court and let the onus rest with them. If our sales guy goes out and acquires a new customer, we have devised his profile in such a way that he then becomes wholly responsible for that relationship. Both the good and bad of it rest with him. Most banks segregate the customer acquisition and relationship management functions but we have converged both so that the customer deals with only one person and the employee feels a sense of ownership,” he says. This move also helped YES Bank to secure the quality of its end customers.

THE Y-PEP, A SPECIAL PLANThe bank’s trademark lateral talent acquisition program has a tale of its own. “There was a point when we felt the paucity of good people at the middle and junior management level. That is when we did some brainstorming in our Delhi office and the Y-PEP was conceived over a midnight coffee session. With the introduction of this program, we started digging into alumni networks of reputed B-schools and opened our doors to young people from non-banking backgrounds like FMCG, engineering, manufacturing etc,” says Kapoor.

The CDIS team partnered with the HCM team to roll out the initiative across the country. Till date, the bank has recruited over 450 people through Y-PEP.

“The performance metrics for a bank may be advances, deposits, book size and the like, but when the growth trajectory is high, the fuel is undoubtedly its people. We go to B-schools today and ask students what their dream jobs are. Before we go there, we prepare ourselves well. We know exactly which departments of the bank can accommodate how many people. If we can give them what they want, we take them on board through the Y-PEP. We believe that one of the hallmarks of an entrepreneur is he knows exactly what he wants,” says Kurane.

The program is devised in such a way that a Y-PEP personnel is inducted, groomed and put into a leadership role in the early stages of his career itself. In a span of two years, Shah has recruited four people from the Y-PEP for his team and one of them recently moved to Delhi to head a team of his own. “The program makes you understand the nuts and bolts of the banking business. You are put on special assign-ments and given the freedom to approach any senior with your queries. When I joined in 2008, there were a lot of challenges before the bank-

ing sector due to the global economic meltdown. However, I feel that my learn-ing was immense due to the challenges. In good times, learning is restricted. I got to witness first-hand the execution of a lot of risk management and cost optimization programs,” says Shah.

YES MENTORThe main criterion for a person to be a YES Mentor is his ability to engage with people around him. “‘Is he a people’s person?’ is the question we ask ourselves before designating anyone as a mentor,” says Kurane. Like every other organi-zation, YES Bank has formal reporting structures in place. However, the need for a familiar face in each branch/work-place who could champion the values of the bank locally drove the birth of this

THE YES BANK HUMAN PYRAMID

Top: 48Senior: 120

Middle: 663

Junior: 936

General: 1,584

Entrepreneur + October 2010 87To read more, grab the October issue of EntrepreneurTo Subscribe, visit www.entrepreneurindia.in

Have you been to Gurgaon recently? If you have, you must have taken note of the unbelievable number of malls in that city. And many of them empty as empty can be. All is not well with malls in India. By Ankush Chibber

MEC

HA

NIC

Back in the years before the U.S. econ-omy collapsed, taking down with it economies in many parts of the world, malls were the signature a city

needed to attest its prosperity. The number of malls in construction went through the roof in those years, with an estimated 200 malls in construction around the middle of the decade across practically every other city. According to Cushman and Wakefield research, 2008’s second quarter saw new mall supply of approx-imately 2 million sq. ft. across major Indian metropolitan centers vis-à-vis the 6 million sq. ft. anticipated.

Sadly, the bottom fell off for these malls somewhere around this time. The lack of cash and the slowdown that followed made most of these malls bite the dust. According to another Cushman and Wakefield report, the average vacancy across malls in major cities of India increased from 10 percent in the first quarter of 2009 to 19 percent in the second quarter due to a slowdown in the uptake of mall space and loss of existing clients. Hardest hit were those mall developers who, in the rashness that typically accompanies gold rushes, ignored the wants of the end user of these malls in search of that quick buck—the retailers.

“Not many mall developers made malls to the needs of the retailer in the golden days of the economy,” says Susil Dungarwal, Founder and Chief Mall Mechanic at Beyond Square Feet (BSF), a retail advisory firm that works on the business of bridging the gap between mall developers and retailers.

The best malls are the ones that bring together the retailer and developer on one

common platform and in one mutually bene-ficial relationship. “Typically, the developer says that he has put in X amount of money and he wants Y amount of returns,” he says. “The retailer, on the other hand, says that my margins are W and I cannot afford more rent-als than Z.”

This wide gap was Dungarwal’s opportu-nity. He was convinced that a retailer’s require-ments and mall development must move in a parallel direction for success in this space. He had to know. Dungarwal had been in both the mall and the new-age retail sector from their infancy. From the original Big Kids Kemp to the first Shoppers Stop, and from India’s first specialty shoe store in The Loft to the first multi-format discount store in the Loot, Dungarwal had seen both sides of the coin for more than two decades to know how to flip it.

He had first used it for the Prestige Group’s malls in southern India. “Since I knew the retail side of the malls so well, I got into designing malls from a retailer’s point of view,” he tells us. “This is where I learnt how to work with archi-tects, how to read layouts and plans, how to interpret drawings.”

Post a couple of another stints at designing malls for developers, Dungarwal decided to take the entrepreneurial plunge with his skills in mid-2009; around the same time most malls were going belly-up.

The mission was simple for BSF, says Dungarwal. He wanted the mall developer to have the best retailer for his mall and the retailer to have the best mall for his products.

A little over a year later, BSF is today hand-holding four projects. “We handle everything

109Entrepreneur + October 2010

hot startup


Recently, I questioned a successful entrepreneur about the toughest business challenge he has ever faced.

Without batting an eyelid, he replied, “Spotting talent.” This is true for entrepreneurs in every professional field, including film production, politics, education, sports and business. It is not uncommon to see entrepreneurs going over their business plan hundreds of times—minutely looking at the business model, their funding requirements and the market. But little time is spent on the human resources aspect. However, successful entrepreneurs know that the secret is to first identify talent, align them with your business vision, and the rest will follow. If you have the right startup team, the business will reap immense benefits.

Let us accept that it’s really difficult to identify the right talent, and then remember that it’s really worthwhile to do so. Look for people based on their values, first and foremost. Then look for latent intellectual skills, such as creative thinking, analytical abilities and logic. Thirdly, you’ve got to look for chemistry. At the end of the day, business is a human enterprise. If you cannot see the possibility of chemistry between yourself and the talent, or between the talent and the business, it’s probably not going to be a profitable relationship. Fourthly, you need experienced workers, but this is the least important factor.

Spotting talent is the first step in creating a great enterprise. And there is no better individual than you, the entrepreneur, to do this important job. Develop a keen eye to spot talent in others; particularly look for skills you don’t possess yourself. It’s all about finding people who can do a much better job than you can

in every single role. Successful entrepreneurs also make hiring mistakes; but hopefully, your successes will outnumber the failures.

If you have been lucky enough to recruit talent, you come to the more difficult part of keeping them engaged and motivated. You have to play the dual roles of coach and mentor. Development through mentoring and training are some of the best ways to reward those who stand out from the crowd. Talented, ambi-tious young people have high expectations, both for themselves and for their teams. Maximize this attitude and let their talent inspire others to work to the same level. Invest in people, in their training and helpbuild their self-esteem as well as their skills. Communicate regularly with the team; make sure everyone knows the goals, objectives and challenges and feels that they have a part to play. Use their positive energy to boost the overall morale of the company.

Talented individuals thrive on challenge. It is a well-known fact that employees often move on because their employer wasn’t doing enough to help them develop professionally, not because they got itchy feet.

Whether it’s working on something new, taking on more responsibility, or mentoring new recruits, pushing them to the next level is the key to retention.

Help your employees think and act like entrepreneurs—to take responsibility for what they do and not set boundaries for what they can achieve. Value your employees and, in turn, they will value how far you’ve brought them.

How Can You Spot the Right Talent for Your Startup?Here’s how to find the right talent for your startup—and keep them onboard.By Nirmit Parekh

NIRMIT PAREKH is the Managing Director and CEO of 3P Consultants/Penrhyn International.

“Successful entrepreneurs know that the

secret to a great enterprise is to

�r� identify talent.”


class rooms[HR Management]

Shutting down your company can happen in basically three ways—you either shut-down the company as defunct, you sell it or

you wind up and dissolve the company. The last option is the subject of a separate piece, while the first option is what majority of company owners would be going for. Given below is how you can shut down a private limited company by declaring it defunct in an application to the Registrar of Companies (ROC).

RESOLUTIONThe board of the company has to make a reso-lution to make an application to the ROC for declaring the company as defunct. Two direc-tors of the company must sign this application.

NO ASSETS OR LIABILITIESTwo directors of the company have to sign an affidavit, which is notarized, that verifies that the company did some business for a period up to date and then discontinued its operations, and has no assets or liabilities.

INDEMNITYTwo directors have to sign an indemnity bond, that is notarized, which says that should there be any liabilities on the company, such liabili-ties will be met in full by the applicants even after the name of the company is struck off the register of companies.

FINANCIALSThe company will have to file the financial statement for the latest year prepared up to a period, which ended one month preceding the date of application. This will be accompa-nied with a declaration that the statement of accounts submitted gives a true and fair view of the company’s financial position.

OTHERSCompanies which discontinued their opera-tions, after carrying the same for some period, should file audited financial statement for the period up to which they carried on the business provided that period is of one accounting year or more. Also, if there is any unsecured loan, then a waiver letter needs to be submitted.

THE FINAL NAILIf the registrar is satisfied with the application under the current laws, then it will proceed towards striking the name of the company and declaring it as defunct and thereafter publish a notice in this regard in the official gazette.

The entire process of closing a company can change at least once each year. It is best to keep a track of the Ministry of Corporate Affairs website to keep yourself abreast of all the latest rules. The entire process takes about two months and can cost you about Rs.25,000, including the fees and miscella-neous charges.

Shut Down aaPrivate Limited Private Limited CompanyWe hope you never have to. But if you do, then do it right.By Ankush Chibber

Illustration© Chaitanya Surpur 115Entrepreneur + October 2010

how to[… do just about anything]

Here’s how to find the right talent for your startup—and keep them onboard.By Nirmit Parekh

NIRMIT PAREKH is the Managing Director and CEO of 3P Consultants/Penrhyn International.

“Successful entrepreneurs know that the

secret to a great enterprise is to

�r� identify talent.”

+

[HR Management]


entrepreneur october 2010

Documents

business basicspradeep

chinese mythscontrary

ankush chibber68

ankush chibber74

ankush chibber66

market worth

biggest market

single market