You can have the same success.
It was my first major venture, and my biggest heartbreak, that taught me many of the lessons you need to know to avoid catastrophic business failure. It was 1997. After five years of swiftly advancing through the ranks as a young entrepreneur in Mumbai, I was itching to form my own big company.
Along with a partner, we started a firm called “Thaneer Enterprise” for the distribution of the products of a major soft drinks company. We even managed to convince a business man to provide us with a warehouse in the center of Mumbai and we invested 5 lakhs each. The future looked bright.
A month later we had thirty people working in the warehouse. The pace was feverish! I worked seven days a week and a 14-hour day was considered a short day.
We were one of the vanguards, in terms of a distribution network, to launch the company’s soft drink in the Mumbai market. The brand was a highly popular brand of soft drinks across the globe. The company launched its products in the Indian market with much fanfare. Their product as a brand had positioned itself as a champagne amongst the cold drinks and the taste was different and refreshing.
The brand had the potential to become a premium soft drink brand in India. But alas, the brand did not last too long in the market. The company sold their brand to a major conglomerate and we had to wind up the operation through no fault of our own. They had appointed us as the distributers and made us buy 12 trucks (a vehicle is a depreciating asset) as well as make other investments. We were in dire straits.
Where it all went wrong
So what happened? How did a team of hard-working, bright young entrepreneurs with a great idea in a growing industry suddenly get tossed unceremoniously to the curb? Where did we go wrong?
In our rush to take on the world of business, we made a handful of naïve and basic mistakes, the same type of mistakes that doom well over half of all new businesses to failure in their first few years:
- We naively trusted a brand name
- We did not have an exit plan
- We had no idea that the soft drink company had launched its products in India to increase its bargaining price in the worldwide sale of its brand to the conglomerate
- We were in an activity trap, not even dreaming about what was happening on the global level
- We did not validate any of our key assumptions in the market
We learned from the experience but we learned too late to salvage our losses.
Excitement and enthusiasm are important when starting a business. They will carry you through the long hours, unexpected setbacks, and financial strains when starting out. But there is no substitute for experience.
The way I see it, there are two ways to get experience:
- Learn from your own mistakes
- Learn from someone else's
Many new entrepreneurs choose to gain experience “on the fly” as they build their new businesses. They undoubtedly gain experience, but at what cost?
Think about it. You will invest a tremendous amount of time and effort into making your business successful. Most people commit anywhere from one to three years of their life to starting a business. The toll that starting a new business can take on your health and relationships shouldn’t be underestimated.
You might make it flying solo, despite the odds. If, however, your business fails, it’s all been wasted. Unless, of course, if you learn from your mistakes and create a stronger business as a result. Either way, that’s a high price to pay for experience that is readily available elsewhere.
What if you could know whether your idea might work or not… before you ever started?
Wouldn’t it be great to strip away the uncertainty that comes with unfamiliar ground? That’s the benefit of experience. Starting a business is like a long-distance road trip. Experience gives you the tools to help you complete the trip successfully.
Before you get on the road, you need to have a reliable vehicle. You’ll need a map to make sure you travel in the right direction. You’re going to need fuel along the way. Once in a while you should take a break, get some rest, and check under the hood before getting back on the road. Finally, and perhaps most importantly, you want to select agreeable passengers to come along with you.
Before becoming a distributor for the soft drinks company, I had successfully worked with Dukes and Pepsi and the distribution business was not new to me. In spite of that, my inability to see the big picture led to my failure. After my stint with the company in question, I started looking for good people and lesser known brands. For the past decade I have been one of the directors of Springtime. In this period I also spent a year in Mahindra Pride School as a life skill faculty which was an enriching experience.
I have experienced and observed so many successes and failures. I will be happy to share my stories and want to know yours too.
LET’S MEET UP.
Cheers!!!
Pushparaj Shetty.
Director
Springtime Maintenance Services Pvt.Ltd.
