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Is there an opportune time for start-ups to scale up? Or is it all in will and hard work?
Raju Venkatraman, a serial entrepreneur who founded diagnostics services chain MedAll Healthcare, says the move to expand is more or less instinctual – “My first product was agarbattis at the age of 14. Since then, I have been into one thing or the other. The decision in many ways is much like the move to start a business. It involves a bit of risk and reward.”
He was speaking about the business of scaling up at an event titled Lufthansa’s Runway to Success, organised by entrepreneur mentorship forum TiE here on Saturday.
For Premkumar S, Group Chief Executive officer, Apollo Hospitals, there are a set of parameters: futuristic thinking that includes the prospect of scaling up, looking closely at customer needs, accessing the market through the right channel, and legitimacy of the product.
At the same time, even though the essentials such as capital and concrete blueprint for scaling up need to be in place, the people around the entrepreneur must stay invested, says Venkataraman. If a business head keeps the team in the dark about revenues and current/future projects, the enterprise’s vision will not seep down to the lower rungs.
“You cannot meddle and micro-manage, but at the same time you cannot be completely opaque. Holding the employees together is essential when a company is looking at scaling up.” There is another thumb rule about cash: “Equity is always expensive than debt. When an equity investor gets onboard, the purpose is to collaborate with the fund and not permit ideological clashes to create a standoff.”
Arvind Kumar, Chief Executive Officer and Founder of Attune Technologies, which offers IT solutions for hospitals, says misfortunes help entrepreneurs. His venture went into crisis after an investor pulled out mid-journey, forcing the promoters to scout for last-minute cash to pay employees in late 2009. Their diversified product for labs, clinics and hospitals drew another investor, getting it back on track.
“When you are at rock-bottom, you cannot slip further. So, there are risks. But it was learning experience to fail.”
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