May 28, 2021
GURU GYAAN: TiE Pune Mentors respond to your business challenges.
TiE Pune’s Nurture Accelerator has launched many a start-up ship to success. In fact, our success rate is 39%. While Nurture mentees are selected, we offer you the services of our gurus through InSync. Reach out to us with your business queries, like BidWheelz and Zeal HR did. And get solutions. Email us at: firstname.lastname@example.org
NAKUL KHANDELWAL, Founder BidWheelz
Our business is a portal to auction cars. We launched last year and did only digital marketing. We spent Rs. 4.5 lakhs on digital marketing and saw a good number of hits. We had 40,000 people who visited our site, but our conversion ratio is not good. We got just 2% conversions, and we sold 110 cars last year. My problem is that I want to reach out to more customers and increase the number of sales on our portal. I think people do not understand that we are different from other such portals in that we do not buy a vehicle. We check it, rate it and then put it up for auction for 2 hours in a day. If after three tries, a car is not sold, then a seller can go in for re-auction. I think my problem is making people aware of our portal and its benefits. Want to know how to communicate our benefits over others to the customers
Kiran Deshpande, Founder Airtight and Mentor, TiE Pune
“Well to begin with your conversion rate is very good. Think of the times you have been bombarded with sales calls, and you’ve refused them. Entrepreneurs need to understand that persistence and patience is the name of the game. From what you are telling me your conversion rate is very good and whatever you did, you should keep doing. This is a long game and has to be played that way. Make your messaging very clear, bring out the differentiation better, so people do not get confused with other brands. You need to get a hold on how big is the used car market and what percentage of that do you want. If you spent Rs 4.5 lakhs and got 110 customers your Cost of Acquiring a Customer (CAC) is 4.5 lakhs divided by 110. That is around Rs 4000. If you want 1% or 50% of the market then your spend would be in accordance to your CAC. You can get creative with your mode of reaching out to your target audience, get more effective, but you will have to continue with your marketing spends. Creating a customer base in an existing market or creating a new market takes time.
Pallavi Godbole, Founder Zeal HR Consulting:
I am a Mechanical Engineer and I set up Zeal HR Consulting three years ago. In the first year I started with servicing SMEs in manufacturing and made Rs. 3 Lakhs. However, I changed track in the second year to focussing IT companies. As things stand, I have 80% of my clients who are IT companies and 20% are the SMEs. In my second year my revenue jumped up to Rs. 25 Lakhs. I want to grow further and need strategic advice. I feel that Contracting business in hiring is very lucrative specially since companies do not want to take on additional liability of having permanent employees. I understand that I will have to hire more people to grow, but before I do any of that I want advice on what’s the best way to grow?
Ashok Bildikar, Founder Neeyamo and Mentor TiE Pune
HR is a highly vast domain. It would be prudent to understand the nature and scope of “consulting” that is being offered as a service. Also, I’m assuming that “contracting business in hiring” here refers to the staffing business.
Recruiting and staffing business is highly competitive. Recruitment is almost a commodity business that is also highly competitive. Differentiation is the key here.
Staffing, on the other hand, is a balance sheet heavy area to operate. Local compliance needs to make the domain sensitive and risk-prone. Managing cash flow could be another issue that will need to be factored in.
Be it recruitment or staffing; my advice would be to –
- Become extremely verticalized since specialization is the key. Possibly start with a few industry segments and build deep specialization as well as industry connections.
- Focus on differentiation. What value are you bringing to the organization outside of core recruitment and staffing. (Domain Specialization will help a lot)
- Being “exclusive” – be it in addressing niche requirements – may be helpful. It is essential to get the customer on board and have their skin on the game.
- Relationships and responsiveness are the keys in both these businesses. Key relationships may need to be owned by the founder. Focusing on customer relationships and customer success is going to be the key to scaling up the business.
- Use of appropriate ATS technology will help as you grow and add teams his business with a belly full of passion and enthusiasm. to support you
There can be additional inputs and if needed we can have a detail call.
Gearing Up For Growth: How WeKirana Did It!
Every start up founder starts his business with a belly full of passion and enthusiasm. However, business needs much, much more than just that. And even when you think you’ve put all the jigsaw pieces of this great business puzzle in, there still are many elements that need fine-tuning. And that is where TiE Pune’s Nurture Accelerator comes in. With a success rate of 39% it is one of India’s best places to go to for business gyaan. In a new feature we present a Nurture Mentee who shares his experience with TiE Pune:
Praveen Sahu does not come from a business family, but entrepreneurship was on his mind. “Since no one in our family had ever ventured into entrepreneurship, it was quite a big decision knowing fully well that it’s ridden with risks.” But Praveen was sure of it. So, about two years back he set up WeKirana.
WeKirana is an app that aims to make life easy for the buyer, that is, the kiranawala and the seller, that is the wholesaler. “Ordinarily a retailer or the kiranawala will visit the wholesale market which often is a distance away, check the prices with different sellers and then decide to buy from the one that suits him best. Since he has to stock up, he has to shell out a lot of money to buy a particular item. So, he ends up taking it on credit which the wholesaler gives. Added to that is the headache of logistics. He has to hire a tempo to take it to his shop as the wholesaler is not going to give a small buyer delivery.
“From the seller’s side, he will have a buyer who will buy but on credit SO his money is locked up. And he has to keep track of all his dues. And here is where WeKirana comes in. We have a data of the wholesalers, the quality of their products, and the prices. We visit the market and do all this for our buyers. Through our study we know who will give the best price and quality. We put up this best price on our app after keeping our margin.”
Seems like a simple idea. Praveen set up the tech end to develop his app. “Technology makes our task easy. As of now in Nagpur, we have 600 kiranawalas signed up, of which 200 are active customers. And we have filtered out 35 wholesalers.
So, what did Nurture do for WeKirana? Says Praveen, “It will be hard for me to list out the many ways in which Nurture helped my business. Right from making my business grow 4-5 times in the last year to many small little things that make you tick.”
“For example, we wanted to buy three vehicles for our delivery. But our mentors Dipesh Ajwani and Satish Mantri told us that vehicles are a depreciating asset. You would be better off spending 15 lakhs on sourcing your products as that is bound to grow and in addition build a relationship with your suppliers, rather than spend on buying 3 vehicles.
“At that time our expenditure was 7% of our revenues, again we were guided on the right path. They told us that this is a very low margin business and our expenditure should not cross 3% of revenues.
“There were many things. Like founders borrow from banks and we pay say 12% interest. No one would’ve told me how to look at this loan effectively. If say, I have to pay Rs. 12,000 on a loan of Rs 10 lakhs then I should be able to turn the money around three times, so I can make a profit and not just pay interest. Which means I buy and sell three times with that loan.”
Today Praveen is well on the growth trajectory. He is planning to test the market in Bhandara (or Vardha maybe), Jabalpur and then Pune. Happy days for WeKirana!