Changing Business

Monday, February 25, 2008

Whenever someone asks me what am I doing in this Jagruti initiative I tend to say that I am making mistakes and trying to learn from them. This indeed is the most appropriate answer I could think of. We never thought of ending up establishing a so-called Self Help Group in such less time. I think all iniatives of this kind do not take time more than what we took but the real challenge lies ahead and that is what next?

After supplying the first lot of pickles to our ready-market we had set the ball rolling but very soon we realized that the surface on which we rolled the ball was having enough friction to stop its motion. The first challenge was to make this business economically viable. Pickle manufacturing depends hugely on the availability of the raw material. During our several trips to the local mandis we came to know that both chillies and lemons (the major ingredients of Jagruti achaar) were brought from South India and as the winter season is almost over so their prices have also gone up apart from having irregular supplies. This made our job more difficult. When we sat with our spreadsheets and tried to figure out the average cost of production for these achaar we were shocked to see dismaying figures. The profit margin per unit cost of production was too less to be called economically viable for the group. Initially we had assumed that the market we are targeting had enough potential to sustain the business of Jagruti achaar but we were terribly wrong. We had targeted mess of all the residential halls within the campus. The demand in a 300 capacity mess is around 20 Kg per month. Considering 17 halls in the campus with roughly this capacity and assuming we get Rs 10 per Kg as profit we ended with Rs 170 per head profit per month. Apart from this the selling price of the pickle manufactured by Jagruti was two and a half times more than that available in the market. I do admit that Jagruti intended to produce different varieties of achaar but to be honest that could not have convinced the mess authorities to purchase achaar at such a high rate. We could not think of selling Jagruti pickle in the markets outside our campus as we knew we were not going to survive. So here we learnt from our mistake. "Do proper analysis of capital, resources and market before foraying into any venture". Sustainabilty was the need of the hour and once again we started using our mental faculty to look out for possible alternatives.

For quite some time we have been coming across the fact that there are a few faculty members who are interested in these kind of initiatives and most importantly they have a prior experience of the same. This was the perfect occasion to meet a few of them and seek their guidance. Here I must mention the names of Prof. D. Lahiri and Prof. S.C. Mohapatra of Rural Development Center for their valuable guidelines. When asked about alternatives Prof. Lahiri suggested to go for processing of spices, ornamental fish culturing, rose oil extraction, honey bee culturing etc. We shared his thoughts with Prof. Mohapatra who showed the designs of several machines he had fabricated for these kind of rural activities. He told us that the spice processing machine is under construction and referred us to Mr. Bhattacharya who owns a company which produces those machines and who also happens to be an alumnus of our institute. We were quite excited to come to know about him and decided to meet him the next day.

Next day myself and Himanshu went to meet him in his factory cum residence. He is some 50-55 years old guy and is managing a production line called Premiere Magneto just outside IIT campus. We inquired about the various machines being produced in his manufacturing unit when he told us about a SAAL-LEAVE-PLATE Manufacturing machine. It comprised of one sewing and one molding machine. The total cost of the machine was coming around 17000 Rupees. We found the new business quite exciting as he also mentioned that the product had got a huge demand in the market and it had also got 100 percent profit margin. As the operation of the machine required no professional training so it was best suited for our Jagruti ladies. Apart from this he also assured to get us connected with the suppliers of raw-material and the target market. From our research we came to know that Kharagpur has got no dearth of Saal leaves so we started giving it a serious thought. We discussed this thing in our group and in that meeting we came to know about a group of students who had already tried their hands in this business but in some other location. We decided to take their guidance in this regard. After talking to that group of students regarding pros of cons of this business we decided to go for it finally.

Now the major task at hand was to raise the funds. We had four options in front of us:

a) Bank Loan
b) Micro-Credit Loan
c) Taking a loan from Prof. G S Sanyal whose micro-credit scheme promotes these small scale business.
d) Use the "trust colateral" of our friends.

I was not surprised at all when each of the group member chose the option "d". Then began the rounds of talking within our closly knit friend circle . We knew gathering 20K is not a Herculean task as all our friends are well placed in influential and highly rewarded positions in various MNCs. Till Now 4 of our friends have assured a 6 month interest-free loans amounting to Rs 17000. Jagruti will ever be grateful for this generous cooperation of our friends. With their confidence in us and our unrelenting motivation I am sure we will definitely be able to show our new endeavor, the light of the day.

Posted by TS at 9:03 AM  
6 comments
Mann said...

seriously dude... great work :D

February 25, 2008 at 11:50 AM  
aks said...

Gr8 work & very nicely put!!!

Keep this group working!!!

February 26, 2008 at 1:22 AM  

nice and inspiring story that one...and it's good you learnt from your mistakes...because that is what is most importat.best of luck:-)

March 10, 2008 at 11:21 PM  
elisha_007 said...

Hearty congratulations, inspiring work.
Were Jagruti women already a part of some self-help group? How did you go about bringing them together to work, convincing them about the whole idea?
Did you face language problems?

July 9, 2008 at 8:50 PM  
Mann said...

no jagruti women were not part of any SHG. lot's of effort went into making them realize and convincing them.

July 11, 2008 at 5:00 AM  
Manjishtha said...

Your initiative is commendable and our country definitely needs young enthusiatic entrepreneurs for uplifting the condtions of our rural populace. Equally commendable is your effort in creating mass awareness through blog posts like these. I would suggest visiting the company website at www.premagnetos.com which promises more employment generation options at grassroot level.

August 25, 2010 at 11:25 PM  

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