Comments on: What are we starting?

By: Some basic accounting « Bootstrap in Bangalore

Some basic accounting « Bootstrap in Bangalore — Mon, 28 Jan 2008 18:37:44 +0000

[...] Depreciation works like this – any asset you buy has a life. Since you buy a chair and can use it for the next 5 years, the government will force you to expense it piece by piece over 5 years. Lets take an example – say the chair costs Rs 100 and has the life of 5 years (government has prescribed these for various categories, so this is just an example). For simplicity, assume you only made Rs 150 in that year and all you bought was a chair. No other expenses happened. Your bank would have Rs 50 left but your tax won’t be Rs 15 (30% of 50) but Rs 39 (30% of 130). Since only Rs 20 (20% of 100 in the first year) is allowable expense and the rest Rs 80 is an asset that you have created. Fortunately, taxes are paid in in September of the following year which gives you some time to earn the money you need to give to the government. If you are a young business, most likely your revenues are going so fast that last year huge tax looks like this years change (if not, you may not be growing fast enough and maybe on your way to becoming a small business). [...]

By: chandrasaurabh

chandrasaurabh — Mon, 06 Aug 2007 11:30:03 +0000

Thanks, I am glad you find this useful.

Firstly, I would like to clarify that bootstrapping is not the best way to start up. As I mentioned in an earlier post why bootstrap that you should consider it because you can and since other means are not easily available. The best way to start would be to raise money!

Any retail business like you have in mind is usually high investment. Given that you probably do not have prior track record in this field having people put in money would be really tough. This might be a candidate where the idea is good but with the wrong person! See both things have to fit – a good idea, and the right person to execute it.

But I would surely not like to discourage you though. I believe entrepreneurship is about overcoming supposed impossible situations. I would suggest you read how Richard Branson started. Also, a koramangala, bangalore based restaurant by iim grads http://www.brewhaha.in/ may be a case study for you. Go meet up those folks.

By: Anshul Gupta

Anshul Gupta — Mon, 06 Aug 2007 11:04:28 +0000

Hi Saurabh,

I am a 2004 chemical pass-out from IT-BHU and a regular follower of your blog.Would like to thank and congratulate you that you are doing a wonderful job by writing down your experiences and learnings acquired during the journey of entrepreneurship.
I agree with you that unless one plans to scale-up and unless one creates a environment where the start-up is not dependent on the founders, one cannot be called a successful entrepreneur.
Its like untill your baby can’t walk on itself without holding your finger, it cant be said it has learned to walk.
I know that best way to finance your start up is through boot-strapping but sometimes even that may not be sufficient.Like I,along with another IT-BHU batchmate, am planning a cafe a kind of concept.Given the high real estate cost in bangalore I need a hell lot of money.
I would like you to guide me to some resources/banks/FIs/individuals who offer loan facilities for such kind of thing.

Regards

By: Suresh

Suresh — Sun, 05 Aug 2007 13:44:16 +0000

What I liked about this article is the emphasis on scalability and processes. The small businesses often are not aware of it. This awareness is important for people to grow.

There are many examples who did without knowing these terms consciously.
The famous ‘dabbawalas’ (डब्बेवाले) in Mumbai, Kamats, Haldiram to name a few. But amazing are Iranis (corner tea shops in Mumbai) and Udipi restaurants all over. They are not owned by one single person or organization but have adopted almost similar processes and bouquet of products. It may surprise many that ‘chana chor garam masalewala’ (चनाचौर गर्म मसाले वाला ) is another scalable business going on for decades. The ‘khomchas’ (खौमचा) of these ‘chana chor garam masalewalas’ (चनाचौर गर्म मसाले वाले) are owned by one person in a big locality/city. As the city expands – more ‘khomchas’ (खौमचे) are added. Even begging business, if it can be called one, is run on similar lines.

The article has a great value to put the concept in the conscious mind of young ones to become bootstrappers for we know many concepts but seldom put them in practice