Ashok Maheshwari, one of the co-founders of DMart.
Retail Business
Retail business is a high-volume, low margin business.
It is about constantly keeping what customers want on the shelf. What is seen on the shelf sells, and what sells has to be seen on the shelf.
To plan a store of 15,000 sft, one has to target a neighborhood potential of 20,000 families, each family spending a minimum of Rs. 2,500 in a store that offers basic day-to-day needs.
There can be atleast 8,000 such stores in India. DMart currently has about 160 stores.
Capital
The way DMart was planned is that:
- the first 10 stores will fund the next 10 stores after 4 years of operation
- the 20 stores together will fund the next 20 stores after 8 years of operation
- the 40 stores will fund the next 40 stores in 12 years of operation
- the 80 stores will fund the next 80 stores in 16 years of operation
- Dmart will be have over 150 stores after 16 years of operation. This is what we predicted in 2002 and that is where Dmart is currently.
This strategy brings down the capital requirement and cost drastically.
Model
From day one, we wanted to open 'discount format' stores.
It is all about value proposition.
Before we opened the first store, we visited value stores like IKEA, Costco & Walmart.
***
Start-up / Partnership
(This is especially applicable when the other partner is more powerful. Ashok Maheshwari had moved out of the partnership after 5 years without any stake).
- Life and time are two great teachers
- You should always protect your rights
- You should document everything - even if it is your family. Keep it simple, yet don't take anything for granted.
- Choose a good partner. The business should not be sabotaged or hijacked.
- If a partner is involved in management, have a clear delegation of responsibilities and capital infusion dynamics.
So, the simple discipline for a start-up is have everything well-documented.
http://economictimes.indiatimes.com/opinion/interviews/exiting-a-business-one-has-nurtured-is-always-painful-ashok-maheshwari-entrepreneur/articleshow/58583839.cms
Retail Business
Retail business is a high-volume, low margin business.
It is about constantly keeping what customers want on the shelf. What is seen on the shelf sells, and what sells has to be seen on the shelf.
To plan a store of 15,000 sft, one has to target a neighborhood potential of 20,000 families, each family spending a minimum of Rs. 2,500 in a store that offers basic day-to-day needs.
There can be atleast 8,000 such stores in India. DMart currently has about 160 stores.
Capital
The way DMart was planned is that:
- the first 10 stores will fund the next 10 stores after 4 years of operation
- the 20 stores together will fund the next 20 stores after 8 years of operation
- the 40 stores will fund the next 40 stores in 12 years of operation
- the 80 stores will fund the next 80 stores in 16 years of operation
- Dmart will be have over 150 stores after 16 years of operation. This is what we predicted in 2002 and that is where Dmart is currently.
This strategy brings down the capital requirement and cost drastically.
Model
From day one, we wanted to open 'discount format' stores.
It is all about value proposition.
Before we opened the first store, we visited value stores like IKEA, Costco & Walmart.
***
Start-up / Partnership
(This is especially applicable when the other partner is more powerful. Ashok Maheshwari had moved out of the partnership after 5 years without any stake).
- Life and time are two great teachers
- You should always protect your rights
- You should document everything - even if it is your family. Keep it simple, yet don't take anything for granted.
- Choose a good partner. The business should not be sabotaged or hijacked.
- If a partner is involved in management, have a clear delegation of responsibilities and capital infusion dynamics.
So, the simple discipline for a start-up is have everything well-documented.
http://economictimes.indiatimes.com/opinion/interviews/exiting-a-business-one-has-nurtured-is-always-painful-ashok-maheshwari-entrepreneur/articleshow/58583839.cms
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