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Scaling Up Your Business PDF
Scaling Up Your Business PDF
Whatistheprofitmarginofthis
business?
Itcharges0(Zero,Zilch)for27%ofcustomers
g
(
,
)
Itchargesafractionofmarketpricefor26%of
customers
Itchargesmarketratefor47%ofcustomers
Whatistheprofit
What
is the profit
g
marginofthis
Company?
45%!
45%!
Itmakes$13Mona
It
makes $13M on a
turnoverof$29M!!
Forbes:aperformance
worthyofanycommercial
th f
i l
venture!
Missionandmaniacalfocus
AgreatMentorSirJohnWilsonhimselfablindman andDR.V
Fightingspirit/Grit/Perseverance/HARDWORK/Empathy
Greatsacrificesoftime,effortandmoney tookdecades
Not incremental innovation breakthroughsolutions
Notincrementalinnovation
break through solutions
Consistency,reliability,clearstandards,lowcosts,dataanalysis
SCALElikeMcDonalds
The mantras The
Themantras
Themoreyoudo,thebetteryouget
more you do the better you get;;get
getlessdomore
less do more
Streamlinedworkflow,wellcraftedprocesses
Reducingmainsurgeonstime;waittime=0
Networkscampsponsoring;localhelp
p p
g;
p
Monitoring Aravind Parameterprogram qualityaudits
TRANSPARENCY
TRUST
Dream vision
Dreamvision
Dr.V journalentryin1970swhenhewasstill
j
y
payingoffthemortgageforthefirsthospital,
wherehewrites:
of
ofhisintentiontosetup100hospitalsacrossthe
his intention to set up 100 hospitals across the
country
Ofthepossibilityoftrainingvillagewomentoassist
surgeons
Oftheurgentneedforgoodadministrators
Ofplansforbuyingland
p
y g
Ofthenatureandpotentialsofyoungstaffmembers
AndofatargetofdoingaMILLIONsurgeriesayear!
ThroughoutthetimethatI
haveknownDr.V,hisvision
for what was possible was
forwhatwaspossiblewas
beyondwhatwasanything
y
y
g
reasonable.
Can do attitude
Candoattitude
We
Weneedtodowhatweneedtodo
need to do what we need to do
Whenyoubegindoingtheworkyouare
meant to do unexpected resources will find
meanttodo,unexpectedresourceswillfind
you
Aravind
A i d operateswithaveryuniquesetof
ih
i
f
selfimposedconstraints;Thatautomatically
eliminatesordinarysolutions
li i
di
l i
CEO f IDEO
CEOofIDEO
Manufacturing revolution
Manufacturingrevolution
WHOsaidUsingIOLsindevelopingcountrieswasnot
merelyunsustainablebutirresponsible.
WhenAravind wantedtomanufactureIOLsinAurolab
they were told they were crazy
theyweretoldtheywerecrazy
Aravind wantedtodoitsotheycanofferIOLtothe
poorat$10 importprice$80to$150
By2009,Aravind
B 2009 A i d wasproducing2millionIOLsper
d i 2 illi
IOL
annumandowned10%ofglobalmarketforIOL,
exportingitto120countries!
Dr.DavidJ.Apple Aurolab lensesclearlymeetand
oftenexceedthestandardofmanylenses
p
manufacturedinUSandEurope.
Money
Money
SwamiVivekananda:whenIaskmoneywillpour
y
p
fromtheheavens!
Dr V:Youmustdothework.Themoneywill
follow
Ifamanhasgoodcornorwood,orboards,or
pigs, to sell, or can make better chairs or knives,
pigs,tosell,orcanmakebetterchairsorknives,
cruciblesorchurchorgans,thananybodyelse,
youwillfindabroadhardbeatenroadtohis
house though it be in the woods
house,thoughitbeinthewoods.
RalphWaldoEmerson.
ThisiswhatStevejobsdidtoo!
j
Narayana HrUdhayalaya
DoinganAravind
Doing
an Aravind inheartsurgeries
in heart surgeries
15%ofallheartsurgeriesinIndia
MortalityratelessthanNewYorkhospitals
li
l
h
kh i l
5outof6donefree
BloodgasanalysiscostsRs8.50against
NormalRs350
AppliesWalMart tohealthcare
Before 1980
Before1980
IdidmyCAarticlesinChennaiin1970s
Atthattimeifyouwantedgoodvegfoodyoumainlywent
toWoodlands driveinorthemainhotelinMylapore
GoodmedicalattentionmeantIsabels,CMC
Good medical attention meant Isabels, CMCVellore,
Vellore,Lady
Lady
willingdonetc(mostlymissionary)
Woodlandshadagoodnameandcouldhavescaledup
Theydidnotanditwaslefttoacleanerboy/groceryowner
They did not and it was left to a cleaner boy/ grocery owner
withgreatvisiontodothatwhoopenedarestaurantin81
Andayoungdoctorforesawwhathealthcarewouldmean
in future and started a private hospital in 83
infutureandstartedaprivatehospitalin
83
Restastheysayishistory~
Now70plusrestaurantsand16moreopening
Saidtobetheworldslargestvegetarian
restaurantchain
Over7500employees
TO$200M PerWikipedia
11countriesandgrowing,growing
Now52hospitals
Now
52 hospitals
Over8500beds
One of the largest in healthcare in India
OneofthelargestinhealthcareinIndia
Globalreputation
TO 12 13 R 3768
TO1213:Rs3768crores
PAT1213:Rs304crores
Tripodapproach
Ti d
h
Product
d
Customer
Employee
Product
Product
Goodquality
InitialtimeofmanyhourswithchefbypromoterRajagopal
perfectingtaste
Bestingredients
Initiallymadelossformanymonths
Customerfeedbackandattendingtothat
Consistency/stadardisation sameprincipleofMcDonalds
Dosa weighs60gms maybemorebutneverless
Highhygiene
Bananaleavesontheplate(alsoeasytowash)
p
(
y
)
Employeesbathebeforework
Haircutonceamonth;nailtrimmingonceaweek
Brandbuilding
Brand building
Customer
Customer
Uniformsforemployees
Uniforms
for employees
Quickservice
C
Courteousservice
i
Nodrinkingbyemployees
Nolatemoviesforemployees
Customer complaints listened to and attended
Customercomplaintslistenedtoandattended
Regularexpansionatgoodlocations
employee
Jobsecurity
y nobreakinservice
Higherpay payaccordingtoneeds
Accommodation
Singaporetripforselectemployees
Abusivecustomerreportedtomanagerwhowill
di
discreetlydealwithhimevenaskcustomertoleave
tl d l ith hi
k
t
t l
Closeinteractionwithworkers(Rajagopal saysheisthe
union leader)
unionleader)
Clearpromotionpolicy
Employeebenefitsgalore
p y
g
seelist
Employee benefits
Employeebenefits
Annualfaretogotonativevillage
2childreneducationuptopostgraduation sameschoolastheone
ownerschildrengoto
Newclothesduringfunctions/festivals;alsoforspouse
LifeandmedicalInsurancepolicy
Life and medical Insurance policy
EmployeeESIpaidbycompany
Attendantandfoodiffamilymembergetssick
Hospitalisationbenefitsinprivatehospital
p
p
p
ParentsgetRs200pm
InvestmentofRs10kperdaughterformarriage(Maniammal
marriagescheme) onedaughteronlyperGovt policy
IncentiveschemeforTV,Fridgeetc
i
h
f
id
Vehicle aspercategory
Phoneathomeforkeyemployees
Proposedhousebuyingscheme
Proposed house buying scheme
SAS best
SAS
bestcompanytoworkforinUSA
company to work for in USA
CEOsays:
CEO says:
Contented
Contentedcowsgive
cows give
more milk
moremilk
justtakecareofyouremployees everything
elsewillbetakencareof!
l
ill b t k
f!
Interviewwithapartnerofmr.
rajagopall
1)Annachi Rajagopal,isadetailsperson,andhenceseta
b h
benchmarkinFoodTaste,Quality,HygieneandService.Thisset
k i F d T t Q lit H i
d S i Thi t
themarketafire,andestablishedhisbrand.
)
g
y Hescaledhisbusinessslowly,ashe
y,
2)Heisagreatvisionary.
hadtoparallelly developateam,whosemembersinternalised
hisobsessionfortaste,quality,hygiene,andservice.
3) Hiscoreteamofabout2000people(Managers,Chefs,and
S i S i St ff) h
SeniorServiceStaff)havedevelopedownershipqualities,
d l
d
hi
liti
and runtheorganisation now.
)
takescareofhisemployees,ashefirmlybelieves
p y ,
y
4)Annachi
thatwhentheyaretakencareof,theyinturntakecareofthe
business.
Grew500%inlast5years!
10%netprofit!
Hugeappetiteforgrowth
25% of revenue is from new productslast 3 years
25%ofrevenueisfromnewproductslast3years
Widearrayofproducts;widerangeofcustomers
Productsmadetoorder
Notmorethan10%saleswithonecustomer;notmore
than30%withoneindustry
Exportsandlocalsales
p
Specialpurposemachinessuppliedbycustomer!
Greatquality,designandR&D manyawards
Owns up mistakes
Ownsupmistakes
Example:
Machinima caterstogamingcrowdandhas14.5m
subscribers
itsvideoshavebeenwatched2Billiontimesamonth!
its videos have been watched 2 Billion times a month!
Howdoestheworldslargestrestaurantcompanyby
unitsscaleup?
it
l
?
YUMwith39000KFCs,PizzaHutsandTacoBellsistheworlds
l
largest;
t
Operatesin130countries
Openedonenewrestaurantevery14hoursforlast16years!
Itistheworldsbestteambuildingco.
i h
ld b
b ildi
HasworldfamousleadershipprogramcalledTakingpeoplewith
you
Mostimportantelement:
M ti
t t l
t Instantrecognition!
I t t
iti !
ProgramslikeWalktheTalkaward,Rubberchicken,PlasticHog!
CEONovak:Imonearthtoencourageothers,liftlives,helpcreate
leaders inspire people recognize others
leaders,inspirepeople,recognizeothers.
Thinkingsmallisacrime
Salesprocessstartswhencustomersaysno
IfIstandstill,Iwillperish;Iscaleuporfadeaway
Iknowhowtofindgreatpeopletoworkforme
Closingasalegivesmethebiggestrush
Itsimportanttoknowofabigproblemthecustomerhasand
Lookforasolutiontothat
Itsnottechnologybutteam,organisation,marketingand
Ambitiontosellthatareimportant
Ithinkandactlikeamarketleader
Ivefireinthebelly
Ifyouansweredyestomostofabovescaleup!
Ifyouarescaredoftakingrisks:
If you are scared of taking risks:
Youmiss100percentoftheshotsyoudonttake.
CanadasgreatesthockeylegendWayneGretzky
Whenmr.rajagopal scaleduphis
grocerybusinessinthepast
b
h
Toimprovehisgrocerybusinesshebuilta2storiedbuilding
Itscostescalatedtoomuch
Hehadtopledgeeverythingheandhisfriendhad
Rentwasjustenoughtopayloaninstallment
DailybusinessinstoreplummetedfromRs 5000toRs 500
Hedelayedpaymentstowholesalersandhadloanseverywhere
Hecouldnotevengetriceforhishome
Hiswifewept,whyisthissorrystateofaffairsinthishouse?
Hesoldthebuildingultimately
Justtoshowallscalingupdoesnthaveafairytaleending!
Dontbitemorethanyoucanchew!
Haveclearvision
DoaSCOT(strengths,concerns,opportunitiesandthreats)
DoaPEST(political,economical,socialandtechnological)
Systematize havepolicies,procedures,processes
have policies procedures processes
GetaCEOifyouarenotCEOmaterial
GooglebroughtEricSchmidt;RedzoneroboticsbroughtChris
Dunkerley
Hiretofillgapsinyourskillset
Bringinpeoplewhoarebetterbutwhomeetyourculture
Delegate
Adequatecapital thinkVC,partners
ProductVservice
Expandproduct/servicevGeography
BrickandmortarVOnline
Outsource
Ubiquiti networksisa$300MTurnovercompanywithover
25% margin which outsources everything including SALES!
25%margin,whichoutsourceseverythingincludingSALES!
CEOsays:Myaimistobuildsomethinggreatasefficientlyas
possible
IInformalworkstyleto
f
l
k t l t formal
f
l
Properfinanceandaccounts
InfrastructureincludingIT
Infrastructure including IT
Remember
Remember
Customersarenotsameasusers
Ryanairwenttosmallmunicipalairportshungryfor
business(cafes,taxis,stores)andtheairportseven
paid them to start a service!
paidthemtostartaservice!
Firstusersnotsameasscalingusers
Mostgamesarefirstprovidedfreetoprofessional
gamerswhosuggestmodsandthenfinalgamegoes
h
d d h f l
online
Firstproductnotsameasscalingproduct
First product not same as scaling product
BAANofferedafreeERPtoSHELLandafter
incorporatingalltheirsuggestionstookittomarket
makemoremoneyasaminority
shareholder
h h ld saletoscale
l
l
Paraspharmamakersofmoov,kracketc
Familybusiness
Soldmajoritystake(63%)toActiscapitalaPEinvestor
2008forRs600crores
Businessscaledup
NewCEORaghunandan
Streamlined distribution
Streamlineddistribution
Internationalexpansion
SAP
Umbrella branding etc
Umbrellabrandingetc
ReckitBenckiserboughtco.in2010forRs3260cr
PromoterPatelmadeanotherRs900cr
Scaling up in todaysshi
Scalingupintoday
hitech
techworld
world
Thenewwayofscalinguporevenstartingup:
y
g p
g p
Movie: Kathalil Sothappuvathu eppadi wasasmall
YouTubevideodonewithnorealbudgetanditwent
viral.Thentheguywhomadeitwasaskedtomakea
i l Th th
h
d it
k dt
k
fullmovieandrestishistory.
Songs:A40secondclipinaHBOMoviecatapulted
Songs: A 40 second clip in a HBO Movie catapulted "II
loveit'totopofthechartsfromnowhere
NewProduct:JustputyourideaonkickstarterPebble:
TheEpaperwatchgot$10Movernightforitsidea
$
makers(Theyjustwanted$100,000!)Imaginebeinga
multi millionaire in a few hours!
multimillionaireinafewhours!
Yourbusinesswill
Y
b i
ill
g
growtothesizeof
your vision!
yourvision!
SOURCES
InspiringPersonality Mr.P.Rajagopal HotelSaravanaBhavan~Get
I i d !!!!!!! D
Inspired!!!!!!!DeepakRaghuraman
kR h
IsetmyheartonvictoryAutobiographyofMr.Rajagopal owner
Saravana Bhavan
SaravanaBhavan
Saravana Bhavan Wikipedia,thefreeencyclopedia
Wikipedia the free encyclopedia
SaravanaBhavanAnnachiRajagopal Cleanerboytoownerof
mostsuccessfulchainofrestaurantChennaiStartup GreatMinds
Discuss Ideas
DiscussIdeas
Howtotakeyourbusinesstothenextlevel ,Howtotakeyour
businesstothenextlevel BusinessNews News MSNIndia
TakingYourHostingCompanytoNextLevelLearnfromMistakes,
g
g
p y
,
CorrectThem Rinse&Repeat!
PrivateequityfundActisCapitalhashelpedIndiancompaniesscale
uptothenextlevel
Sources contd.
Sourcescontd.
FindOutifYou'reaScaleUpEntrepreneurwithThis
p
p
TwoMinuteTest DanielIsenberg HarvardBusiness
Review
Isyourfamilybusinessgettingcaughtupwithfamily
I
f il b i
tti
ht
ith f il
issues
MillionDollarTip#4ScaleUpYourWorkPersonal
Million Dollar Tip #4 Scale Up Your Work Personal
Excellence
ScalingUpWhenYoureStillSmallChiefExecutive.net
ChiefExecutiveMagazine
ScalingUpYourBusinessToAHigherLevel What
Could Be Stopping You The Learning 2 Live Blog
CouldBeStoppingYouTheLearning2LiveBlog
Sources contd.
Sourcescontd.
AnEntrepreneursDilemma Whentoscaleupyour
businessBPlanExpertsBlog BusinessPlanExperts,
BusinessPlanConsultants,BusinessPlanWriters
Thebiggestchallengesforentrepreneursonstartups
BusinessToday
ScalingUpIntuitSmallBusinessIndia
3MistakesMadeinScalingupNewVentures
3 Mistakes Made in Scaling up New Ventures Charles
Charles
BadenFullerandIanMacMillan HarvardBusinessReview
ScalingUpYourBusinessStartupKashmir!
ElevenLessonsforScalingUpFastCompanyBusiness+
Eleven Lessons for Scaling Up Fast Company Business +
Innovation
WhyitssohardforsomebusinessestogrowinCanada
The Globe and Mail
TheGlobeandMail
Sources contd.
Sourcescontd.
Infinite
InfiniteVision
Vision by
byPavithra
Pavithra K.Mehta
K Mehta and
and
Suchitra Shenoy (StoryofAravind eye
hospital)
HowYouTubechangeseverything Fortune
Aug 12 13
Aug12,13
GreatJob FortuneAug12,13