Micro Entrepreneurship Exercise - micro SCOPE 2010 @ EABS.

Have we ever imagined, how does a micro entrepreneur (Tea Stall, Wadapav, Sandwich, Dosa, etc . vendor) manages his business?? How does he plan his business activities?? How does he takes important decisions?? How he generates and manages profit, Etc.. Doing a business after learning Management is not an easy job. Just imagine what will the situation be, if one does a business without knowing management. To understand this situation, we got an assignment from our college to spend a day with a micro business. The background of the assignment is given below:

Background: The assignment requires each 1 year PGPM student to adopt a small or a micro business which they will be observing very closely in order to get an insight into the functioning of the business. The size of the business setup has been deliberately chosen to be small so that it is easier for the students to get overall knowledge of the end-to-end business. During the end of the process students can create a value proposition for the business to help him in moving up the value chain.

Duration of the Initiative: Four Months – 1st Jan – 30th April.
Day of Operation – 28th Jan, 2010 morning till closing hours.

I had selected a micro business (Aditya Snacks) located at Viman Nagar in Pune. I started my day at 8 am in morning. The stall opens at same time and we had a calculation of inventory that was brought over for the day. The team was ready and started preparing the food items. Items prepared were (Wada Pav, Idli, Poha, Upma, Tea, Dosa, Medu Wada, Dal Wada, Utapha).

The preparations were made in batches, so that they could stay for 1-2 hours and once it gets over the next batch of food was prepared. We started getting customers from 8:30 am. This stall is quite known for the breakfast and most of the customers come to the stall between 8am -11am in morning and 4pm – 7 pm in evening. The batches that were prepared during this time was in higher quantity.

I was surprised to see the system in which the things were take care at the stall. It was professionally managed and the service was quick which the customers were enjoying it. Goods more than Rs. 50 were sold on an average every minute during the peak hours.

I had collected some statistics from the owner and the details are given below:
 Average Daily Turnover of the stall was Rs. 10500. Below is the list of the item and its quantity that are sold on an average on daily basis.

 
 
 
 
 
 
 
 
  
 

 The stall is opened 6 days a week. And thus the monthly turnover approximate is Rs. 221520 (Rs. 8520*26 days).

 Stall was started in year 2005 by Mr. Sunil Vitkar taking into consideration the IT park developed (Giga Space). He was able to identify the potential of that area before taking this decision.
 He made an investment of Rs. 2.5 lakh (self financed) for beginning this stall. All the assets are owned by the owner and it is not leased.
 5 people are employed by the Snacks stall and salary of Rs. 30K is paid monthly.
 Return on Investment is 30-40 % annually.

The owner Mr. Sunil wants to expand his business and has a vision of starting his hotel one day. I liked the passion he has and also his vision. We management graduates are taught about this. Mr. Sunil has studied till Std 10th i.e. S.S.C. only. He still manages his business well with limited qualification due to some constraints. He also gets involved in the work if any employee is not available.

We calculated the inventory and cash collected at the end of the day. The details of inventory are as given:

 
 
 
 
 
I was surprised to see the accuracy of the inventory prepared. Materials worth Rs. 83 were only wasted at the end of day. The waste was only of 0.97%, which is great.





I did SWOT Analysis for the stall with the help of the owner and the result are as below:

Strength:
 Variety of Food items.
 Location of Stall.
 Competitive price.
 Quality of food items.

Weakness:
 The stall is on Road and some potential clients might underestimate the quality of food items.
 Capital required for opening a hotel is not available.

Opportunities:
 Start Canteen services (snacks) in companies.
 Tiffin services for companies.

Threat:
 Competition from other vendors on road.
 Competition from fast food hotel in the area.
 PMC Attacks.

Suggestions given by me:
 Clean the premises of the stall.
 Put plastic bag in the dustbin and dump the same at the end of day.
 Prepare a Menu Card and Display it on the stall and on the road where the stall is located.

 Start preparing Dosa’s in butter and charge the cost to the customer.
 Increase the variety of Dosa’s and Utapha’s. ( Mysore Dosa, Cheese Dosa, etc.)
 Play soft music (not songs) during the daytime and in evening.
 Start supplying the snacks to canteens in companies of IT park.

From my observation and learning, I found that there is a huge potential for the micro entrepreneurs to grow in this country. But this is not legal in our country and thus these people face problems and have to bribe the BMC’s to maintain their business. Overall, it was an interesting experience and great learning. I thank my college for giving me this opportunity to work with micro entrepreneur and understand their way of doing business with limited resources. They are still able to make profits out of these limited resources.

I will definitely use the important learning in my own venture. Its very important in today’s scenario to reduce the cost and generate the maximum profits with the limited resources.

Thanks,
Nimesh.