A case study on an Entrepreneur

Submitted To: Dr. Anita T Lal(Associate Professor, FORE School of Management)

Submitted By: Khem Singh FMG 19B 191090

The link between my experience as an entrepreneur and that of a politician is all in one word: freedom. – Silvio Berlusconi

Mr Aarish Rathi is a person who follows the above quote in true sense. Freedom was the chief reason for him to try the less travelled path of entrepreneurship. His story is highly inspirational, especially, for all the enterprising young Indian men who desire to be successful entrepreneurs.

Aarish's journey started at Bilaspur in Madhya Pradesh where he was born, moving on to Bhilai where he spent his early years, and from where he did his school and college education, and finally to Raipur. It was at Raipur that he struck gold, that too in a big way. It is the classic, modern-day story of a middle class young man-turned-multi-millionaire.

Aarish describes himself as "a serial entrepreneur and risk-taker who empowers others to accomplish their dream." This is his story.

The Early Years

I come from a classic middle-class family: my grandfather, grandmother, father, and mother all living together in a joint family. Family values were strongly embedded into me as a result of this. I was born in Bilaspur and did my schooling at Shri Shankracharya School in Bhilai and then joined the Vivekananda College to do my graduation in civil engineering. I worked with TCS at Mumbai centre but left it after 2 yrs. During this time I realized that working under someone else was not my cup of tea.

I was not exposed to business of any sort, but my father, dabbled in shares. He encouraged me to have freewheeling discussions on various aspects of business. I was given enough freedom to think freely. My parents were there all the time supporting me and encouraging me.

I didn't realise the value of it all then, but later on I understood the kind of impact those discussions had upon my thinking. More importantly, they encouraged me to take risks. When working in a public sector was considered safe, I was encouraged to go into a field that was uncharted, like logistics. The willingness to do something on my own has always been there. Somehow, those things did not click because of our middle-class background, not having the money, and also because of our inexperience.

Destiny & Lifestyle Distribution

I believe in destiny. I faced bankruptcy many a time in my logistics business; i borrowed money with no assets but somehow I survived. It was destiny which brought people like Ameya to me. Later Ameya became my partner in successive ventures.

In May 2001, the most important thing happened - Lifestyle Distributors private Ltd. Lifestyle distribution is into business of distribution of various fast moving consumer goods and is one of the prime dealers of products of companies like HUL, P&G, Reckitt Benckiser, Colgate Palmolive and many more.

After that we started a logistics firm in Bhilai, parallel to this we were seeking the opportunities coming across. At that time HUL had very few distributor in Chhattisgarh’s rural are because of which they were having problem to distribute in Kanker region. So they want to have a distributor in this area. They were looking for a firm who can manage their distributorship in this area. This was a great opportunity for us, and we didn’t missed it. In a business there are multiple challenges across various areas including capital, resources, finding great people, market acceptance etc. some of them are:

Finance

Finance was the biggest concern for this business as it requires around 3 Crore of investment. HUL wants its distributor to have at least inventory of 15 days (worth 1.5 Crore) which makes monthly 3 Crore turnover. Arranging this was the biggest problem. To resolve this problem I asked my family and friends, from there we arranged 0.5 Crore and a major part came by taking loan from bank on the collateral of family house. But the most important contribution to our start-up came from Mr Nijo Ninan, who was a friend of my father, and took great interest in our business plan. He supported our business to a great extent and kept us confirming that finance will not be a major problem.

Government Regulations

Starting business in India is a big headache. In India registering a company is also an Olympian task. Corruption is so pervasive that for each small work you need to bribe which is irritating many times. But to achieve bigger dreams we have to cross these hurdles.

Finding people

The new venture was unable to attract the skilled labour which can handle multiple jobs requiring different skills. A work force having ability to handle all sort of tasks related to distribution, will make the business run very efficiently and also will cut costs. The issue was if you want to hire people who are efficient it will be costly to your business and else your operations will hamper at quality end .But finally with the efforts what he did for senior positions he had hired smart and efficient persons. For Low skills jobs he had taken people who had low skill but can be taught.

Market Competition

The Industry with many large players having established clients also acted as thwart for operation of Lifestyle Distributions Private Limited. Territory poaching, Margin Negotiation was some of the issues which were coming because of stiff competition.

Journey so far

Nothing is easy in life. With support from our families and the initial set of employees, our journey so far has been not that bad; in fact, it has been quite satisfying. I believe that any time is the right time and every place is the right place. Even in the worst times, people have started

successful companies. I don't think any time is wrong time. I feel you can create your own niche any time and you need to change your plans as per what you see for future.

We have won best distributor award of HUL 2009. We are generating profits and investing them back in the company. Starting with the two of us, we now have 150 full-time employees. We have two offices now; one in Raipur and another in Jaipur. The journey is still continuing.

Future plans

We want to become Central India’s number one distribution company in this segment. We want to be in as many districts as possible and give better service to our consumers. You need to create more jobs and more wealth in this country and the only way to grow is through entrepreneurs. If you look at all the successful economies, you will see that wealth is created by first time entrepreneurs. In India, Infosys, Wipro, Reliance are the best examples.

He is a business man with traits like risk taking, god communication, achievement oriented, and good managerial skills. At the initial stage, as Craftsmen, he handled all the tasks himself. But now he is following the management style of Employee and Employer. Aarish has got a pleasant personality and a strong convincing skill in his speaking style, which he used to his favour to gain trust among retailers and wholesalers

The energy and drive of Aarish is hard to miss. He is pushing all the right buttons to propel his venture ahead. Ask him about what at the end drives him? Quick comes the reply from this man, “the one thing that drives me and my colleagues is a strong vision of being able to find ways of marrying selling products to very rapidly changing consumer behaviour keeping the nuances of both intact”

Information

Name: Mr Aarish Rathi

Firm: Lifestyle Distribution Private Limited

VIP Road, Raipur (C.G.)

India

Contact No: +91 9977562861

Questionnaire

What actually your business is?

When did you enter into this business?

At which age was that?

What inspired you to enter into this business?

What are the problems faced by you in course of starting the business?

Did you start the venture solely, or was there a person to assist you?

How were you able to manage these problems?

How did you get the technical knowledge of the business?

How did you get to know and understand the In and Out of the Industry and business which has lot of complexities and regulations?

Also what about the suppliers credit, because of low credibility?

Who exactly are your suppliers?

What was the initial level of activity (turnover)?

Who was handling all the petty work in the initial stage?

When did you find that manpower needs to expand?

From the stage with low capital, low credibility and very less visibility, how did you compete with the competitors?

What is the present level of activity?

What are the problems faced at this stage?

How do you market or promote your business?

What is the level of staff you have?

In this course of 1.5 years, what are the recognitions/awards the business has been accredited with?

Is there anything else, which will add a value to my case study and also help me to learn about the entrepreneurial skills?