Do you have any minimum total consulting budget for the month and what is the duration for which consulting is sourced?
Due to the nature of our work, it is impossible to define rules since each client, their situation, their skills, the nature of business in consideration, size of business, business plan, employees under consideration, consultants involved etc are different. Because of the nature of our performance based incentives, we usually end up having long term incentive for the well being of the business. Based on the merits of each case, we may come up with some minimum consulting budgets and duration for which services are sourced because we put in a lot efforts in providing free, low cost and highly valuable services.
What is your need? Can’t I start by myself?
It is important to remember we offer two options – one to start your own business simultaneously with your job where we support you to lead the business and other is to invest in ready made plans of aspiring CEOs. Points to consider mentioned below may be individually relevant to each option or in combination to both options.
– Do you have time to lead the business with your job and can you take the risk of leaving your job?
– Will you get an opportunity to compare different business plans outside your area of expertise and hence come to know of opportunities which could have give better return on investment?
– Will you get an opportunity to diversify your entrepreneurial investment by investing in a variety of businesses? Or will you rather put all eggs in one basket and invest everything in just one business?
– Will you be able find someone who can lead the business in your budget?
– Will you be able to reduce corporate office rental costs without us if you have just a few employees?
– Will you get our finance expertise in making your business a conglomerate?
– Will any employee join your business when they know the business is not generating any revenues?
– Do you have any business experience? Usually business owners trust their capabilities more than they should.
– Businesses which start with us get priority for reviewing and investing in readymade plans (we always have a queue for this) in order to initiate new businesses in future as subsidiaries of their primary business. Will you easily get this offering in future without being associated with us now?
I feel I will not be in control of my business and the way my money is getting used. What should I do?
If you are starting your own business using our support or own 100% of business in which you invested as a readymade plan, you will definitely be in control. We try to ensure you are always informed on a daily basis by updating the shared strategy and updates document and financials spreadsheet and you can give strategic inputs even if you are one co-investor among many. You can always visit your employees and consultants and talk with them over phone. You can get involved in work as much as you want. Your consultant will form a WhatsApp group of you, your employees and consultants involved. Hence, you will always be in control of the direction of the business and will know what is happening. However, it is important to remember a business starts growing fast only when the business owner does not know insignificant, irrelevant details of what is happening.
What are the exit options for us?
Our target is to make each entity, whether it is a small business or large one when it starts, into a listed conglomerate with a number of subsidiaries over its due course using fundraising and reinvestment. You will get option to sell shares during a fund raise to new investors during a private fund raise, during an IPO or sell after your company gets listed. Alternatively, you can keep holding it and bathe in glory of its increasing share price. For some businesses, owners may prefer to withdraw dividend (and not raise capital and get listed on BSE SME or BSE) if there is not much growth potential in the business but by itself it is profitable. We have to honor the decision reached by majority of shareholders.
How is Proactibutors structured and what services will it provide?
Proactibutors has two entities – Proactibutors LLP and Proactibutors Consulting Services Pvt Ltd. Proactibutors Consulting Services Pvt Ltd is the entity that provides the business consulting services as described earlier. Another entity, Proactibutors LLP, provides NOT FOR PROFIT, AT COST shared services to the businesses formed which are not full time in nature and only those which are best shared by multiple businesses such as HR and Shared Office Space. Other requirements such as accounts, IT, administration are fulfilled provided multiple clients require similar resources. We help our clients meet their full time resource requirements by hiring employees who will be on their own business entity’s payroll.
Can I close business if I think that is the best decision for me?
If you are the majority shareholder, you can close the business. If you are closing within 6 months of starting a business and you have invested in ready made plans of our Become A CEO initiative then you may need to compensate the CEO’s salary for 2 years. Alternatively, you can even sell the business and we can help you with the same.
How much capital is required to start a company? Are there any minimum requirements?
You can form a company even with Re 1 capital. The stamp duty and government charges increase as your capital amount increases. The capital amount is just for the sake of it because all business owners put in money as and when required in the form of a loan from themselves to their business. (Investing in readymade plans requires upfront capital payment). Many of the large and famous unlisted companies still have a small, namesake share capital amount. The necessity to have the right capital structure can be decided later in case your company plans to do fund raising or wishes to get listed in which case it has certain mandatory requirements. You can have a sole proprietorship too when you start but we do not advise using the same.
It seems risky to start a business. What controls do you have in place?
Some amount of risk is bound to be there as the expected returns are much higher. Moreover, you need to decide whether it is risky or not after you discuss the business with us and we prepare a business plan for you/along with you. You should not judge beforehand. What we prepare are not normal business plans, rather, they are extremely detailed in nature which will help create a vision of actual steps that will be taken once the business starts. No investor is expected to fund before he gets the right vision of the plan working out. We try to reduce the risk as much as possible before the business is initiated by talking various steps such as involving external industry experts, talking to potential customers and using their feedback, doing extensive research and adopting a “Thinking in Advance” approach where the plan is prepared assuming it is actually being executed today. We consider the various sales and marketing channels which are best for you, develop a detailed marketing plan across the channels which are best for your business, do extensive research and competitor analysis and consider the feasibility of various finance options besides the money you put in such as equity fund raising, loan financing, venture debt, crowdfunding etc. We understand that what will actually happen may be quite different from what is planned but the planning goes a long way in the future success of the business and reducing risk of failure.
We have strict controls in place during ongoing consulting of the business where the business owner is continuously informed of what is happening in the business. If we believe things are not going to work out, we advise the business owner to close the business and liquidate the assets so that they do not lose more money and can focus on starting something else. They can take such intervening steps themselves too as they have voting rights and own the business.
It is often said among entrepreneurial circles that you can fail any number of times but you need to be right only once to succeed. We believe this is quite true but we try to ensure you get it right in the first instance.
Can Business Owners change the consultant?
Business Owners can request for a Proactibutors consultant to be replaced by another consultant in our existing network, subject to availability. They can even try the services of a new consultant using the simultaneous presence of existing consultant before they decide. Sometimes, a business just needs fresh eyes so often our consultants proactively involve other consultants subject to monthly budget.
What are the chances that a consultant leaves?
Out of the company performance based incentives Proactibutors gets as a company, the Consultant gets a very significant portion of them and they vest over the long run. Hence the Consultant has long term incentives linked to the businesses he consults which he might lose if he leaves. We understand that it is better if the Consultant stays focused on the businesses he has initiated. His time requirements are negotiated as part of initial agreements. Even if a Consultant is replaced or changed, the new Consultant is expected to consult the business in parallel with the old consultant before the old Consultant leaves and needs to present his current understanding and future plans of the business to the Business Owner before the old Consultant leaves.