Here is a recap of what’s happening with media businesses:

• Outlook group, as reported in Businessworld is up for sale.
• The INX network has huge distressed assets while NDTV is planning to raise more funds from the market.
• Intense competition may also swallow UTV’s news venture.
• General entertainment channels could end up with an average annual loss of more Rs 300 crore. [source]
• India Today has closed Bengali edition – will restart when market conditions improve. [source]
• Business Standard has shut down its Gujarati edition.
• Mail Today from the India Today group is no longer eyeing a 20-city roll out at least for now.

Impact

• Price Hike
  The newsprint prices have shot up by at least 50 per cent in the last six months and are eating into the profits of newspaper companies.
  Both The Economic Times and The Times of India from the Bennett, Coleman stable have increased their cover prices in different markets. The Times of India now costs Rs 4.50 in Mumbai opposed to Rs 4 earlier. Even DNA has hiked its cover price from Rs 2 to Rs 2.50.
• Lesser options
  Most of the players are going slow with their expansion plans. Many regional players are feeling the heat and consumers will be left with limited options.
• Layoffs
  Times group is evaluating rationalizing its manpower by about a 1,000 people from its internet and print media divisions [source]

If you were running a media company, how would you handle recession? Hike the price? Close down (or Launch) niche magazines/sites?

Image via Wikipedia

How are you adapting your business model to the current circumstances. How are you now thinking about revenue and monetization of business?

At Cleartrip, we’re putting much more emphasis on the things we can control as opposed to those we cannot.

Revenues in the travel industry are always heavily impacted by the macro environment, so rather than focus our energies on more growth, we’re focusing on controlling costs and optimising margins.

That said, there are a few things we’re doing on the revenue and monetization side-we’re taking a much closer look at ancillary revenue opportunities through targeted cross-sells, online advertising sales and, as you already know, we recently launched our trains product and it’s off to a big start.

What are you doing now that you were not doing previously – has anything in your execution changed?

The biggest change is in how we’re approaching costs. It’s an area where we’re being much more cautious and demanding much greater measurement. Costs and margins are both currently under the microscope and we’ve made some good progress, but we’ve still got a few more things identified on both fronts to improve things further.

Is hiring getting tougher – how will you convince potential candidates to join you when they want the certainty of a secure job in a large company?

We’re not really looking to hire much right now, so I can’t really answer that. We have two or three open positions, but that’s it. We’re quite proud of the team we already have-most of whom have been with the company for a long time now and are some of the most talented people in the space.

What are you doing to manage attrition?

Our attrition rates are negligible. We’ve seen a few people leave, but it’s usually for personal reasons and not because they don’t believe in the future of Cleartrip. We have an amazingly committed team. Personally, I regard that as one of our biggest accomplishments. You can literally see the team’s commitment every time Cleartrip launches a new product. Trains or our international flight search or our hotel map search, for example, each set new benchmarks for the online travel experience; and that’s down to the DNA of this team. People here believe in product excellence, there’s no detail that’s too small.

How have your growth plans been affected by the current market situation – are being more aggressive or cautious.

We’re erring on the side of caution, but we’ve always been big believers in building with a long-term focus as opposed to thinking short-term. There’s a couple of key initiatives that you’ll see us being extremely aggressive about in a few months, but I can’t talk about them in too much detail right now.

What activities do you wish you could engage in right now in the current climate?

Heads down execution and a laser-like focus on our core business of online travel, which is exactly what we’re doing.

How are you adapting your business model to the current circumstances. How are you now thinking about revenue and monetization of business?

• Business model is the same – we charge and advisory fee or a distribution fee for selling product
• In the current financial turmoil, we believe that customers need the handholding of a financial advisor even more than they do in normal times. Therefore, we are increasing our engagement with the customer, and identifying more ways in which we can touch customers’ lives
• We have been focused on monetization since our early days because we did not have to create a new revenue model or wait to stumble upon one. We are not advertising driven at all, so not that affected by lower advertising spend if at all that happens in India. Unless customers in India completely stop buying a home to live in, don’t purchase any health insurance or choose to stop investing for their kids’ education or wedding, our revenue model does not need to change. We are getting more creative about alternative sources of revenue from the institutional side and have been keeping the cash registers ringing even though some retail customers’ investment decisions are getting deferred

What are you doing now that you were not doing previously – has anything in your execution changed?

• Spending even more time on the basics that sometimes one loses track of in rapidly growing markets
  • • Consolidating our systems and processes (six sigma service, net promoter scores, CRM, back office software etc.)
    • Tools to better engage with customers at an institutional level
    • Technology investments
• Stronger effort in marketing and brand building. There is lesser noise in the market now, so maybe we have to say might stand a better chance of getting heard now. We continue to focus on being a thought leader in the personal finance space and writing a lot of content for the mainstream and finance industry press that helps us stand out
• Greater emphasis on incentive based pay for the salesforce, rather than solely fixed pay

Is hiring getting tougher – how will you convince potential candidates to join you when they want the certainty of a secure job in a large company?

While hiring is not getting tougher, it will still be a few months before it gets much easier than what its been in the past year. We expect that because the larger companies in our sector have slowed down their hiring, it will benefit smaller companies like ours who are still willing to hire and give better career options to candidates than what they get at large companies.

What the past month has shown is that even larger companies can’t guarantee job security. There are about thousands of people on Wall Street who had a job a month ago but do not have an office to go to today.

We don’t want someone who craves for job security. Such a person is probably better suited to work for a post office with predictable hours and activities. What we offer candidates is the opportunity to be a part of something bigger than themselves, at a start-up that has a game plan to build a branded personal finance company in India, and one that has resources to go after this goal with a laser-like focus.

What are you doing to manage attrition?

We are weeding out non-performers and replacing them with stronger talent. Additionally, if someone wants to leave, there is not much we can do to hold them back if their commitment towards the company has been waivering.

Team members who want to stay and who we want to retain continue to see our commitment in building infrastructure for the future. They see ample evidence through our numerous activities that we are hitting our milestones and are investing in their growth and development.

How have your growth plans been affected by the current market situation – are you being more aggressive or cautious.

iTrust is building a business that solves basic financial needs for people. Our goal is to build an operation and an organization that endures any trough or peak that comes our way by way of the economic cycle. If anything, we are being more aggressive in customer acquisition because a lot of the marginal players are and will exit the market given the prevailing conditions. If there are new players thinking of entering the market, they will think twice or perhaps find it very tough to raise funding. We want to take advantage of this situation and engage with customers in any which way we can.

Even if the customer buys a small ticket product from us, we still invest the time to get the customer on board and experience the iTrust service and back office, keeping in mind the long-term that someday this same customer will return to buy a bigger ticket product from us.

We are being more aggressive in building our infrastructure (online, offline, backoffice, marketing etc.) that we feel will give us a competitive advantage when volumes finally return.

What activities do you wish you could engage in right now in the current climate?

• More contact with the customer through a TV show
• More content that the customer is requesting from us
• Investor and personal finance education camps
• Get even more aggressive in communicating the message that customers should deal with iTrust rather than some mom and pop which might not even exist in a few months from now

Recommended Read: Money Saving Tips for Entrepreneurs (Cash is King)

What are you doing now that you were not doing previously – has anything in your execution changed?

Lalit: Not really – at Mobisy we believe that when going gets tough we really really need to focus on execution and doing it better … so really no time to think otherwise or experiment ‘if it ain’t broke, don’t try and fix it’.

Is hiring getting tougher – how will you convince potential candidates to join you when they want the certainty of a secure job in a large company?

Lalit :- Contrary to this belief, hiring is a little easier due to the hiring freeze at bigger guys, it is easier to hire a very smart fresher right now.

How are you adapting your business model to the current circumstances. How are you now thinking about revenue and monetization of business.?

Lalit :- Mobisy’s business model was always driven by revenues so that does not affect so much

What are you doing to manage attrition?

Lalit:- Attrition of employees? We have not faced that problem honestly it should be easier to retain than ever .. having said that we are a small team of 15 focused professionals and all of us are really committed towards the cause so this thought has never crossed us really.

How have your growth plans been affected by the current market situation – are being more aggressive or cautious.

Lalit :- Yes and no , scaling with VC money becomes tough I suppose apart from that not so much.

What activities do you wish you could engage in right now in the current climate?

Lalit :- Build a strong business around partnerships and revenues , exactly as we were doing before.

Early and start-up stage funding is getting difficult to raise – what would you suggest as sources of capital for someone who has not been able to so far raise funding

Friends and Family is one option. Investment by an anchor customer is another option.  Creating a business line that can generate some early cash flow is the third option.

For someone raising a series A round, what mistakes can they make in the current funding environment

Strong founding team and a large market is what most VCs look for. It is a mistake to not have either.

For someone raising a series B, what do they need to demonstrate to justify their valuation and funding needs.

They need to justify that there is enough traction in the business and the money is being raised for growth.

VC investing goes through the fear and greed cycle and VCs often follow the herd. What are you doing in the current fear cycle – are you doing lesser deals, are you waiting/watching?

We continue to invest in A grade entrepreneurs that are trying to build large companies.  We are not doing any lesser deals.

What will demonstrate that you are taking leadership in building India’s next generation of companies?

We are one of the few VCs that truly invest in early stage companies. We have invested in over 15 companies in 2 years. Hope that is signals our leadership intent

Have you have been through such a slowdown before and have invested in companies during such a slowdown that turned out to be huge wins for you? Please share.

We are one of the very few Indian VCs that have been through a downturn. Naren as an personal investor and Sandeep when he was at eventures have been through economic cycles before.  Sandeep incubated Makemytrip.com out of his office in 1999/2000 which today is one of the most successful internet companies in India.

Which industries you are most bullish about? Extension to the question – which industry do you feel would be strongly hit by recession?

We are long term investors and don’t worry about the current recession. Having said that, outsourced services will be the most impacted in the short term.

Why do you think is now a good time to start a company?

We always say that the best companies are created in tough times. It gets the entrepreneur to really focus on what is important.

But what are those services?

Asks Rajesh (@startup forum)

Now that the market is down and even India is slowly heading towards recession, I would like to understand from pluggd.in readers – what is it that is a viable idea? something that people will pay for?
apart from electricity, water, rent – what do you pay for?, say:

a. Finance app that tracks your expense?
b. a social network?
c. access to recruiters?

zenx, another reader has a great response:

All big ticket discretionary expenses are likely to go down.
OTOH, small biz is likely to push harder to get walkins into their stores! They cannot afford to “close 30% of their stores” unlike big chains/airlines etc.
Consumers will also pay for feel-good stuff that comes at an ok price.

They will pay less reluctantly for “fixed cost” services. In the Indian context, especially, the consumer has always been VFM conscious, and savings rates are good – so the behaviour may not change too dramatically. The adoption of radically new ideas and/or technology, however, might be tough. People may also pay for “tiny value adds” that help them justify/rationalize emotion-led purchases – say – cheap wireless TV multiplexers for cable connections (no need to buy 2 set top boxes!) when they buy that LCD/Plasma/Projector.

What one needs to keep in mind is that even if the service is free for consumers and advertisers area ready to spend money, you are just fine! – But what’s the likelyhood (given that ad spends too are being curtailed).

Interesting discussion – hop onto the startup forum and continue the discussion.

An interesting take on Sequoia’s presentation to it’s portfolio companies

Whiner Jerkins All Hands 10/13/08
[Thanks Ahmed for the tip]

The Wall Street as we know it doesn’t exist. This could be the onset of worst financial crisis in the last fifty years. The alarms are being sounded. It’s going to be gloomy ahead. ‘Brace yourself for the worst storm ever’. ‘It’s going to be another Great Depression’, and so on. Indians would love to believe it is going to affect them exactly the way it is affecting Americans. Flat world, isn’t it? We have believed in that myth far too long not to believe it now.

The news pours in from every quarter. It’s impossible to get away from it – every newspaper, every magazine, and every news report suggests the same. There will an economic slowdown. There will be layoffs. Startups need to conserve cash. Already cautious VCs of India become more cautious now.

I am supposed to be gloomy too. I am supposed to make negative statements too. I am supposed to say that, ‘Yeah! It’s going to be hard; it’s going to be tough; it’s going to be bleak!’

Yet, I don’t say that. I am a startup, remember. I am already in the deepest shit-hole possible. I am used to surviving in a very hostile environment. I conserve cash like nobody else’s business. I starve and yet put on a smile. I am used to it. (It’s been four years like that. I better be used to it.)

Unlike the pundits out there, I am not pessimistic.

Yes, it is a crisis. But I think it is also an opportunity in the long run; especially, if you are a technology startup aiming big sitting right here in India. Most of my competitors are based in US and Europe. The current crisis is going to hit those companies really hard who usually take lot of funds to bring a product to the market. Many of them will be cautious and conservative and therefore will shelve some of the plans on hand. The more ambitious and riskier they are, greater the likelihood of shelving them. Being a garage startup in India, we have a DNA to work on extremely low budget, spending cash very conservatively. I believe that it is an opportunity for many Indian companies who have started on this model to take on the challenge and launch products onto the world market.

Those high-spending startups may have to be cautious, because most probably they have been spending too much money unnecessarily. Whereas, we will continue to be aggressive and bold! At any day, we know that we will take only about 1/20 to 1/50 of funds what a typical heavily-invested company would take to launch new products. With some of the competitors folding and some being cautious, it’s definitely an opportunity.

Startups in India- think real. Go back to basics. Think of the real stuff for which people will pay real money. There are few basic things for which people actually pay money, like shoes, medicine, energy, TV, mobile phone, computer, broadband, communications, travel, marriage, etc. Make sure your company can make revenues, instead of creating just a perceived value. I would be cautious working on a service or a product that has a perceived value but no tangible value to the customer.

Ask yourself, will you pay for this service? And if you consider yourself a geek and an early adopter, ask your friend, mom and another fellow engineer if he would pay for this service? Get real, as real as you can be. For a moment, forget you can create value based on perception and hype. Don’t assume too many things to happen in the ecosystem. If your business model suggests that you will reap lots of money when there are lots of WiFi phones around in India to create ad hoc networks, you are assuming too many things.

If you are an investor, it’s actually the right time for you take that big bet. If you were afraid of those gorillas eating your startup’s market, this is time for you to take that bet. If you were afraid, how can this small startup in India make it big on the world market, here’s the time. While the gorillas are being cautious, you should run like a gazelle and get to that post.

Get your head out of those power point presentations and excel sheets. Take a tour of the companies that you want to invest in. Meet the team members; see the passion in their eyes. How long will you evaluate a startup based on titles and degrees of the team members? I would like to see my potential investors showing interest by coming to my office and see what we are doing instead of evaluating us just by the market projections based on a Gartner report. For all that matters, throw that market report into the nearest trashcan.

Tejas Networks, based in Bangalore, a technology product company focusing on optical networking equipment, got started in 2000, right in the middle of dot com burst. When they got started, there were nearly 200 startups in North America and Europe in the same space. While nearly 95% of them eventually folded, Tejas stood ground and eventually became a market leader in India, and is now poised to take on world markets.

The crisis in the global market was an opportunity for an Indian company. Here’s another opportunity for all of us. It knocks only once in a while.

It’s time for Indians companies to think big. Let’s make Ciscos, Apples and Nokias out of this place. Let us be brave and let us not be daunted. Let’s not chicken out. Let’s use this as the biggest opportunity that has landed at our feet. Let’s embark on this challenge. Let’s not shy away from taking the bets. Use the startup DNA to your advantage, use this time to launch the technology and products onto the world market. Let’s do it!

[Reproduced from author's blog. pic]

Early and start-up stage funding is getting difficult to raise – what would you suggest as sources of capital for someone who has not been able to so far raise funding

Angels are typically a big source of capital for seed investing.

For someone raising a series A round, what mistakes can they make in the current funding environment

This environment brings more caution and hence investors will be more sensitive to valuations, will be sensitive to people having made more progress and hence validation, burn will need to be kept low.

For someone raising a series B, what do they need to demonstrate to justify their valuation and funding needs.

How they are going to generate revenues, what will they do with the money (at the level of detail where one can validate a lot of the claims), execution plan that is thought through not just as “here is the product” but rather “here is the product, the sales strategy, and the marketing strategy”

VC investing goes through the fear and greed cycle and VCs often follow the herd. What are you doing in the current fear cycle – are you doing lesser deals, are you waiting/watching?
What will demonstrate that you are taking leadership in building India’s next generation of companies?

All investing goes thru the above cycles J else you would not have cycles at all. Leadership will be demonstrated by the same metrics – investing in companies that are building real businesses. Slower or faster is not necessarily a good metric because we look at things bottoms up and there are good companies at all times.

Have you have been through such a slowdown before and have invested in companies during such a slowdown that turned out to be huge wins for you? Please share.

In the year 2000 – invested in Daksh.

Which industries you are most bullish about?

We look at stuff bottoms up and that often is not aligned with industry views. That said, some industries that are interesting include education, retail services, mobile  VAS.

Why do you think is now a good time to start a company?

its always a good time to start a company if one has identified a need that is very well defined and can be converted to revenue. The claim that downturns are a good time to start companies is a fashionable thing to say. It is the case that a lot of the “curiosity driven” entrepreneurs get weeded out in downturns. But that does not make it easier to build companies. In downturns pros are: more resolute people start companies, everyone focuses much more on expense and revenue and hence companies are built more tightly, fewer competitors start then. On the cons side for an entrepreneur, its harder to raise money, customers are less willing to buy because many paralyzed, exits become harder. So it depends on the particular person and company and is not a generic claim that can be made.

VC investing goes through the fear and greed cycle and VCs often follow the herd. What are you doing in the current fear cycle – are you doing lesser deals, are you waiting or watching?

The current slowdown doesn’t really impact classical VCs. VC is a long term asset class and not dependent on short term fluctuations in the stock market for its returns. Early stage VCs will find the present time as good as any to invest as the really great entrepreneurs and great companies are almost always started independent of stock market momentum.

Watching carefully and doing deals is the preferred option now. Not watching and waiting.

What will demonstrate that you are taking leadership in building India’s next generation of companies?

The emergence of the next generation of quality entrepreneurial companies and entrepreneurs. “Quality” as defined by the market success and the development of the leadership team.

Early and start-up stage funding is getting difficult to raise – what would you suggest as sources of capital for someone who has not been able to so far raise funding

Well, I don’t agree that early and start up stage funding is getting difficult to raise. If anything, the environment for this stage has rather dramatically improved over the past 8 years when the first wave of young entrepreneurs emerged. There are angel networks, angels, industry, academic bodies, corporate and entrepreneurial efforts to drive match-making & funding and early stage VC funds. If someone hasn’t been able to raise early stage funding, the question to really ask is “Why Not?” The honest answer will be beneficial for all.

For someone raising a series A round, what mistakes can they make in the current funding environment

Not asking for more money! It is important to tank up on as much cash as possible without worrying excessively about dilution.

For someone raising a series B, what do they need to demonstrate to justify their valuation and funding needs.

Valuation lies in the eye of the beholder! Ensure that revenues are actually flowing in and there’s a business model that shows that cash-flow break-even and profitability can take place in a reasonable time period. The market segment they’re in should continue to be attractive and that the team has the ability and energy to scale the business after the infusion of Series B.

Have you have been through such a slowdown before and have invested in companies during such a slowdown that turned out to be huge wins for you? Please share.

The last big slowdown in the VC business was in 2001 just after 9/11 and the stock market crash in the US. We’d invested in Jareva, a server virtualisation company that pioneered a new category. It was subsequently acquired by Veritas (now Symantec) for a very happy amount.

Which industries you are most bullish about? Extension to the question – which industry do you feel would be strongly hit by recession?

Am generally bullish about technology enabled businesses that touch the Indian consumer – entertainment, education, training, retail, travel, financial services, healthcare, communication, etc. In addition, areas like logistics are very interesting.

Sectors that are dependent on accessing international markets or are dependent on credit flows will be affected.

Why do you think is now a good time to start a company?

Any time is a good time to start. Now’s a good time because only the real entrepreneurs will venture out and the plans that get funded will be those that’ve been evaluated more thoroughly.

There are tons of Indian startups who are still in closed beta – this post is specifically meant for them.

Here is a humble request asking you to come out of closed/private beta (alpha/gamma ..what’er). Given the current economic crisis, the battle is not about your competition from another player – but with the dwindling demand itself.

So, if you are a job startup – you better come out of closed beta because the demand-supply curve is not on anybody’s side – ditto with e-commerce startups. And if you are an enterprise startup, getting your first customer will be damn difficult in the recession days.

And what if my product has too many bugs?

Launch with just one feature – the most critical one that you think is a differentiator. And of course, put up the beta tag (not that it matters a lot).

In essence, the more you wait, the more you lose out – even though you will be almost ready with the ‘perfect’ product-in a month or so.

What’s your opinion?

“A good battle plan that you act on today can be better than a perfect one tomorrow.”

As we mentioned earlier, we will start publishing the interviews from VCs, startups and Industry leaders starting next week (category: Economy Downturn Startup Survival) – so stay pluGGd.in.

ppt via VB

What’er be the reason, one company that’s benefiting the most out of slowdown fears is..?

LinkedIn!

Here are the latest stats shared by LinkedIn (Sep 7):

• 50 percent increase in site usage by financial industry members
• 14 percent increase in recommendations
• 10 percent increase in invitations sent
• 7 percent increase in sign-ups
• 9 percent increase in page views
• 11 percent increase in the number of connections being made – via

Would be interesting to watch the traffic increase in Indian job sites – suddenly, the pendulum is swinging towards employers and they have more bargaining power than earlier.

So, more and more people will hop on to job sites, who in turn will have lesser jobs to fulfill.

Do you think recession will work in favor of startups (less attrition)?

What’s your take?

Rajesh Jain shares his take on the said topic.

C2 R2

In difficult times, what is needed is a combination of C2 and R2 (Cut Costs and Ramp-up Revenue). They may seem as conflicting objectives but that’s what the need of the hour is. Things are going to take longer than planned, so a rupee saved is like a rupee earned. It is not the easiest of things to do – once costs are happening, trying to contain or curtail them can be quite challenging. Someone is going to be unhappy. In easier times, one could have gotten away with a little extra spending but in uncertain times, more care needs to be taken to ensure that costs are controlled.

At the same time, there has to be an acceleration of revenue growth. One can only cut costs so much without hurting future potential and opportunities. The key is to think hard on how one can grow existing revenue streams and create new ones – without the limitations that exist. In early stage companies, I think the focus needs to be more on revenue growth. Cutting costs can only prolong a death, not eliminate it, if revenues don’t start growing. And in difficult times, businesses (customers) may also be open to looking at ideas which are different and gave them greater value for money.

In our mobility business, that is what we are now focused on – there are two primary revenue streams that we have (mobile ads and enterprise services). Even as we work on making sure theykeep increasing month-on-month, we are also thinking how some new revenue streams canhelp bridge the gap between what we are spending and what we are earning. This is what makes business so exciting and challenging! I’d love to see us add one more significant revenue stream in the coming months – I don’t know which one it will be, but there are a few potential candidates. The good thing about the mobile business is that it is all blue ocean – we are the pioneers, and have to lead the way. And that brings out the best in us – its not as much competition as innovation that will decide our success.

—

Rajesh will be publishing this article on emergic in a day or two, and gladly shared the post for us to go ahead and publish this.

Starting today, we will publish interviews from VCs, Entrepreneurs and Industry leaders (who survived the last dotcom bubble burst)

We have asked some candid (sort of hard-hitting) questions to people and if you have recommendations for any question to a VC/Startup/Industry leader, please share.

This post looks at ways in which start-ups in India can conserve their cash and find ways to save money – highly relevant in today’s context where funding is slow and growth expectations might not be playing out as expected.

Thrift and kanjoosi are going to get your start-up far, so start immediately. Here is what has worked for us at iTrust.in. If you have suggestions on how you are successfully cutting your costs and expenses, do share your ideas in the comments section.

Office space

1. Get free office space: Ask your relatives, friends, school/university if they can give you free space. This will help reduce your office rental expenses. Instead of buying new furniture, use whatever old pieces you can get from anywhere. Why take on the capex of investing in things that will add very little value to the short-term future of your venture
2. If you do open your own office, don’t hire some fancy architect to design it if your neighborhood carpenter can do the trick
3. Do up the office frugally – don’t get false ceilings, buy reject fittings and furniture, buy cheap flooring instead of more expensive carpet which costs higher to maintain, use more glass rather than wooden partitions

Business travel

1. Stay with friends/relatives when traveling for work. If you must stay in a hotel, look for cheap options that are close to your meeting locations. Share rooms with your traveling colleagues
2. Use airmiles if you have any
3. Take afternoon flights, they are cheaper
4. If you can get a hotel industry association discount card through some friend/family, get it. You can then get discounts at participating hotels/restaurants. Will come in handy when you have to entertain clients/partners

Running Your Office

1. Watch your utility bills – switch off the lights/AC/fans etc, don’t leave your computers running overnight
2. Print double sided and in economode with lower tones to save toner; use cheaper quality paper
3. Rent your non-critical office equipment like ACs, photocopiers, coffee machine
4. Install an electric hand dryer in your toilet to save on more expensive paper towels – you will be surprised how expensive the latter can get
5. Watch your stationery costs – take free pens/writing pads from any hotel, conference, vendor you get offers from (but don’t steal!)
6. Recycle scrap paper; keep the pins, rubber bands and clips that you get in the mail
7. Negotiate with each vendor – even a 5% saving from your suppliers can leads to big amounts at year end
8. Outsource certain services so you don’t have to increase your headcount – HR, Company Secretary, basic book keeping for your accounts

IT

1. Buy cheap PCs – you don’t need the branded Dell or HP desktops. If buying laptops, see if you can get good deals around holiday seasons or promos. Don’t fall for buying expensive warranties if you are getting a manufacturers warranty at the time of purchase
2. Install free open source operating system (like Ubuntu) and an office suite of products (like Star Office) or use some cloud computing software. Why pay for an expensive software license for each machine when you can get decent functionality from free sofware
3. Use Skype or another VOIP service (TringMe) – why pay for expensive long distance calls
4. Get a deal from your telephone provider for your cell phones – corporate deals are cheaper for both voice and sms
5. If you have a land line, keep your ISD and STD locked

Finance

1. Maintain a budget and compare your actually profit and loss account to how you have been performing against your budget
2. Go after the highest cost items where the bulk of your costs might be – see what can be reduced, sometimes it might not be worth losing too much sleep over the smaller costs. Don’t be penny wise and pound foolish
3. Negotiate with your bank to give your better rates on your FDs. Threaten to walk away from them if they charge you fees or don’t give you good rates
4. Don’t overspend on your credit cards or incur overdrafts
5. Stretch your payments out to your suppliers, unless they call you or send in the goons, no harm if they can provide you with some working capital to fund your business
6. Use food vouchers to give to your employees, your employees can get a tax saving, and accordingly you can give them more after-tax income even though you might be paying them a lower salary

Remember, a penny saved is a penny earned. I know of no start-up that became successful by indiscriminately spending its valuable cash. So, get frugal asap!

If you have any questions or comments please email them to startup@iTrust.in.

The author is a co-founder of a financial services start-up, www.iTrust.in.

pic credit