What was the motivation for the starting up this company?
While joining a Masters degree program in Manufacturing Technology in VIT University during June 2003, Vendhan had a dream of starting his own business instead of taking up a job. He wanted to be in his own village and wanted to help his villagers by becoming a job provider.
Vendhan had been working in a small scale fabrication industry for four years to get hands on experience of managing a small scale industry. The key motivators for continuing his entrepreneurial path were:
- The freedom enjoyed as an entrepreneur
- Ability to generate wealth and improved standard of life
- Recognition in the community
What kind of training was offered to the entrepreneur?
The Entrepreneurship Awareness Camp conducted by VIT-TBI in December 2003 further motivated him. VIT-TBI is a joint initiative between VIT University, Vellore and the Department of Science and Technology, Govt.of India. VITTBI provides concept to commercialization support to its incubatees which includes seed fund support also. The program gave him an opportunity to interact with some successful entrepreneurs, industry officials, and representatives from government agencies and banks.
The Entrepreneurship Awareness Camp is held every year (with the support of Department of Science and Technology) and the main objective is to motivate a group of students to opt for an entrepreneurial career. Successful entrepreneurs, speakers from industry, government departments and banks provide inputs on topics like, ‘entrepreneurial motivation’, ‘spotting an opportunity’, ‘creative thinking’, ‘funding’, ’project planning and report preparation’.
The main lessons of this training were starting up procedural, legal, and statutory aspects of a business, with guidance on preparation of a fundable project plan. Now the TBI itself is in a position to offer some level of inputs to the prospects. TBI maintains an ongoing relationship with these catalytic agencies and hence it is possible to seek the support as and when needed.
Periodic interaction, updates through news letters, including their participation in TBI events like conferences, workshops, training events and camps helps to sustain the contact.
What were the next steps after this training program?
Immediately after the camp, Vendhan started collecting information on various business opportunities and ended up choosing “Mill Board Manufacture” as there is a good demand for this product. Mill board is product made by recycling waste paper. This is widely used in packaging, textile industry and in stationery making sectors. The business depends on the ability to source the waste paper at low cost, providing product variants and ensuring optimal efficiency using local manpower by sharing skills to them.
How was the company start up financed and did it receive other technical support?
He applied for incubation in VIT-TBI and was offered incubation support from February 2004. There are three schemes of funding assistance available in the TBI. The seed fund scheme supported by Technology Development Board (DST), the Government of India’s Technopreneurship Promotion Program (TePP) outreach centre, and the Lemelson Recogntion and Mentoring Program ( L-RAMP) nodal centre are operational in the TBI.
The focus of the incubation activity had the following components:
- Preparing a bankable business plans and secure finance from a bank
- The main challenge was that the bank was not convinced about the collaterals (because of the risk factor arising out of a distress sale). With persistent efforts and recommendations by the TBI management, the bank accepted the proposal
- Study various technology requirements to overcome some of the constraints in the industry
- No prior work has been done in studying the industry as it is mainly in the unorganized and cottage sector. The VIT university’s Chemical Engineering department and faculty expertise in the field is helping in this
- Work on optimizing the resources
- Negotiating better terms from the supplier (on price and schedule of supplies)
While VIT-TBI provided the necessary business coaching and mentoring support, Vendhan was assigned a Technical expert (Dr. Muruganandam) from the Chemical Engineering department for the technical support. The interaction with Dr. Muruganandam helped Vendhan to identify the core constraints related to Mill Board manufacture, such as varying the stiffness and improving the polish of the board.
As an engineer he had the basic engineering capabilities to plan the manufacturing activities. However, his association with VIT-TBI enabled him to get to understand the nuances of starting and running a business entity. The inputs during many coaching sessions with VIT-TBI were in the areas of planning, Marketing, Finance, Human Resources and soft skills including business communication.
How did business incubation help this company?
VIT-TBI helped him in every stretch by providing necessary information, networks and referrals. The major assistance came by way of assistance in the preparation of a bankable project report for securing finance from Indian Bank and providing necessary syndication support to strengthen his case.
Without VITTBI’s support, it would have taken much more time to start his activities, and incubation had played an important role in strengthening the business. The probability of getting the bank loan was very low with out TBI’s support. Liaison support was also necessary for timely clearance of approvals/ sanctions like electricity connection to an industry unit at a location where there are no provisions (like availability of transformer etc). Furthermore, continuous planning and managerial inputs were important while carrying out the project.
When did the company start operations and what are its future plans?
VIT University’s Chancellor, Mr.G.Viswanathan, inaugurated the factory on March 8, 2007. The factory has employed 26 people in its first year of operation and the number will rise to 35 in the second year. Vendhan also has ambitious growth and expansion plans, which will also be supported by VIT-TBI.
What are the future plan for the VITTBI Incubator in terms of continuing support to entrepreneurs?
For future activities, there is a necessity to carry out activities like entrepreneurship awareness camps, work shops, and business plan competitions to make prospects aware of the support system. Becoming part of start up support events like TiE meetings, www.proto.in, blogs, groups and publishing many more success stories will help to reach out. Periodic publicity campaigns (news release, advertisement etc.) will also be carried out.
Many corporations & MNCs are also keen (Intel, Honeywell, Lockheed Martin) to offer support to incubators and incubates. The government (Department of Science and Technology) is also extending its program-based support and works on a national level network with these players.
For further information about this incubator, please visit the VIT-TBI profile in the Network Directory.