1 crore in year 1 ..

Found some very practical advise on LinkedIn on entrepreneurship. Sharing it here with my readers. Vijay Anand, the author is based out of Chennai and loves to call himself The Start Up Guy. From the wisdom in his post looks like he sure is..

What does it take to build a business that does 1Crore in topline in its first year.

Well, at first it seems impossible and such a big number right? But lets say we break down the numbers.

1 Crore in topline (aka total revenue) is as follows…

10 x Rs. 10 Lakhs
100 x Rs. 1 Lakh
1000 x Rs. 10,000
10000 x Rs. 1000
100,000 x Rs. 100
10,00,000 x Rs. 10

If you can sell something worth of value Rs. 10 lakhs, to 10 people, you have a one crore business. Or alternatively if you can sell Rs. 10 worth of value to 10 lakh people also you have a one crore business. The first model is a B2B enterprise model. Solve a big problem for a few or limited audience. The latter is a B2C model.

You will notice that in the six scenarios, the top two are B2B, and the bottom two are B2C — at the current scenario in India where it costs upwards of 2K in Customer Acquisition Costs (CAC) this can get very expensive and will need funding.

The sweet spot for most first time entrepreneurs, to build their first 1Cr business (ideally bootstrapping) will be the middle two options.

1000 x Rs. 10,000
10000 x Rs. 1000

Suddenly, the math doesn’t look impossible. (Didn’t say it is easy but it isn’t impossible) And it also gives you a framework to think abt business ideas.

A 1Cr topline business with say 30–40% margins, is very healthy. And also THE best way to learn as to how to build a business and make it sustainable.

I believe that the first business an entrepreneur builds needs to break even, the second one perhaps should yield a little profit but with a solid team. It is the third venture that might scale.

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